[Congressional Record (Bound Edition), Volume 155 (2009), Part 21]
[Senate]
[Pages 28380-28598]
[From the U.S. Government Publishing Office, www.gpo.gov]




                           TEXT OF AMENDMENTS

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

       Strike all after the enacting clause and insert the 
     following:

     SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

       (a) Short Title.--This Act may be cited as the ``Patient 
     Protection and Affordable Care Act''.
       (b) Table of Contents.--The table of contents of this Act 
     is as follows:

Sec. 1. Short title; table of contents.

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

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

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

             ``PART A--Individual and Group Market Reforms

                    ``subpart ii--improving coverage

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

     Subtitle B--Immediate Actions to Preserve and Expand Coverage

Sec. 1101. Immediate access to insurance for uninsured individuals with 
              a preexisting condition.

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Sec. 1102. Reinsurance for early retirees.
Sec. 1103. Immediate information that allows consumers to identify 
              affordable coverage options.
Sec. 1104. Administrative simplification.
Sec. 1105. Effective date.

    Subtitle C--Quality Health Insurance Coverage for All Americans

                PART I--Health Insurance Market Reforms

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

                      ``subpart i--general reform

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

                       PART II--Other Provisions

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

        Subtitle D--Available Coverage Choices for All Americans

            PART I--Establishment of Qualified Health Plans

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

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

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

           PART III--State Flexibility Relating to Exchanges

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

      PART IV--State Flexibility to Establish Alternative Programs

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

                PART V--Reinsurance and Risk Adjustment

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

       Subtitle E--Affordable Coverage Choices for All Americans

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

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

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

                 subpart b--eligibility determinations

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

                   PART II--Small Business Tax Credit

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

           Subtitle F--Shared Responsibility for Health Care

                   PART I--Individual Responsibility

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

                   PART II--Employer Responsibilities

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

                  Subtitle G--Miscellaneous Provisions

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

                   TITLE II--ROLE OF PUBLIC PROGRAMS

                Subtitle A--Improved Access to Medicaid

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

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

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

        Subtitle C--Medicaid and CHIP Enrollment Simplification

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

             Subtitle D--Improvements to Medicaid Services

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

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

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

            Subtitle F--Medicaid Prescription Drug Coverage

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

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

Sec. 2551. Disproportionate share hospital payments.

   Subtitle H--Improved Coordination for Dual Eligible Beneficiaries

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

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

Sec. 2701. Adult health quality measures.
Sec. 2702. Payment Adjustment for Health Care-Acquired Conditions.
Sec. 2703. State option to provide health homes for enrollees with 
              chronic conditions.

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Sec. 2704. Demonstration project to evaluate integrated care around a 
              hospitalization.
Sec. 2705. Medicaid Global Payment System Demonstration Project.
Sec. 2706. Pediatric Accountable Care Organization Demonstration 
              Project.
Sec. 2707. Medicaid emergency psychiatric demonstration project.

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

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

    Subtitle K--Protections for American Indians and Alaska Natives

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

             Subtitle L--Maternal and Child Health Services

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

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

        Subtitle A--Transforming the Health Care Delivery System

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

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

       PART II--National Strategy to Improve Health Care Quality

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

      PART III--Encouraging Development of New Patient Care Models

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

       Subtitle B--Improving Medicare for Patients and Providers

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

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

                       PART II--Rural Protections

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

                  PART III--Improving Payment Accuracy

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

               Subtitle C--Provisions Relating to Part C

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

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

Sec. 3301. Medicare coverage gap discount program.
Sec. 3302. Improvement in determination of Medicare part D low-income 
              benchmark premium.
Sec. 3303. Voluntary de minimis policy for subsidy eligible individuals 
              under prescription drug plans and MA-PD plans.
Sec. 3304. Special rule for widows and widowers regarding eligibility 
              for low-income assistance.
Sec. 3305. Improved information for subsidy eligible individuals 
              reassigned to prescription drug plans and MA-PD plans.
Sec. 3306. Funding outreach and assistance for low-income programs.
Sec. 3307. Improving formulary requirements for prescription drug plans 
              and MA-PD plans with respect to certain categories or 
              classes of drugs.
Sec. 3308. Reducing part D premium subsidy for high-income 
              beneficiaries.
Sec. 3309. Elimination of cost sharing for certain dual eligible 
              individuals.
Sec. 3310. Reducing wasteful dispensing of outpatient prescription 
              drugs in long-term care facilities under prescription 
              drug plans and MA-PD plans.
Sec. 3311. Improved Medicare prescription drug plan and MA-PD plan 
              complaint system.
Sec. 3312. Uniform exceptions and appeals process for prescription drug 
              plans and MA-PD plans.

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Sec. 3313. Office of the Inspector General studies and reports.
Sec. 3314. Including costs incurred by AIDS drug assistance programs 
              and Indian Health Service in providing prescription drugs 
              toward the annual out-of-pocket threshold under part D.
Sec. 3315. Immediate reduction in coverage gap in 2010.

              Subtitle E--Ensuring Medicare Sustainability

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

              Subtitle F--Health Care Quality Improvements

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

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

  Subtitle A--Modernizing Disease Prevention and Public Health Systems

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

     Subtitle B--Increasing Access to Clinical Preventive Services

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

               Subtitle C--Creating Healthier Communities

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

    Subtitle D--Support for Prevention and Public Health Innovation

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

                  Subtitle E--Miscellaneous Provisions

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

                     TITLE V--HEALTH CARE WORKFORCE

                  Subtitle A--Purpose and Definitions

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

          Subtitle B--Innovations in the Health Care Workforce

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

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

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

   Subtitle D--Enhancing Health Care Workforce Education and Training

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

       Subtitle E--Supporting the Existing Health Care Workforce

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

Subtitle F--Strengthening Primary Care and Other Workforce Improvements

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

          Subtitle G--Improving Access to Health Care Services

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

                     Subtitle H--General Provisions

Sec. 5701. Reports.

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              TITLE VI--TRANSPARENCY AND PROGRAM INTEGRITY

         Subtitle A--Physician Ownership and Other Transparency

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

         Subtitle B--Nursing Home Transparency and Improvement

             PART I--Improving Transparency of Information

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

                     PART II--Targeting Enforcement

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

                   PART III--Improving Staff Training

Sec. 6121. Dementia and abuse prevention training.

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

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

             Subtitle D--Patient-Centered Outcomes Research

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

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

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

      Subtitle F--Additional Medicaid Program Integrity Provisions

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

          Subtitle G--Additional Program Integrity Provisions

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

                     Subtitle H--Elder Justice Act

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

     Subtitle I--Sense of the Senate Regarding Medical Malpractice

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

      TITLE VII--IMPROVING ACCESS TO INNOVATIVE MEDICAL THERAPIES

         Subtitle A--Biologics Price Competition and Innovation

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

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

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

                         TITLE VIII--CLASS ACT

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

                      TITLE IX--REVENUE PROVISIONS

                 Subtitle A--Revenue Offset Provisions

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

                      Subtitle B--Other Provisions

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

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

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

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

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

[[Page 28385]]



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

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

                    ``Subpart II--Improving Coverage

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

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

     ``SEC. 2712. PROHIBITION ON RESCISSIONS.

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

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

       ``(a) In General.--A group health plan and a health 
     insurance issuer offering group or individual health 
     insurance coverage shall provide coverage for and shall not 
     impose any cost sharing requirements for--
       ``(1) evidence-based items or services that have in effect 
     a rating of `A' or `B' in the current recommendations of the 
     United States Preventive Services Task Force;
       ``(2) immunizations that have in effect a recommendation 
     from the Advisory Committee on Immunization Practices of the 
     Centers for Disease Control and Prevention with respect to 
     the individual involved; and
       ``(3) with respect to infants, children, and adolescents, 
     evidence-informed preventive care and screenings provided for 
     in the comprehensive guidelines supported by the Health 
     Resources and Services Administration.
       ``(b) Interval.--
       ``(1) In general.--The Secretary shall establish a minimum 
     interval between the date on which a recommendation described 
     in subsection (a)(1) or (a)(2) or a guideline under 
     subsection (a)(3) is issued and the plan year with respect to 
     which the requirement described in subsection (a) is 
     effective with respect to the service described in such 
     recommendation or guideline.
       ``(2) Minimum.--The interval described in paragraph (1) 
     shall not be less than 1 year.
       ``(c) Value-based Insurance Design.--The Secretary may 
     develop guidelines to permit a group health plan and a health 
     insurance issuer offering group or individual health 
     insurance coverage to utilize value-based insurance designs.

     ``SEC. 2714. EXTENSION OF DEPENDENT COVERAGE.

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

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

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

[[Page 28386]]

       ``(e) Preemption.--The standards developed under subsection 
     (a) shall preempt any related State standards that require a 
     summary of benefits and coverage that provides less 
     information to consumers than that required to be provided 
     under this section, as determined by the Secretary.
       ``(f) Failure to Provide.--An entity described in 
     subsection (d)(3) that willfully fails to provide the 
     information required under this section shall be subject to a 
     fine of not more than $1,000 for each such failure. Such 
     failure with respect to each enrollee shall constitute a 
     separate offense for purposes of this subsection.
       ``(g) Development of Standard Definitions.--
       ``(1) In general.--The Secretary shall, by regulation, 
     provide for the development of standards for the definitions 
     of terms used in health insurance coverage, including the 
     insurance-related terms described in paragraph (2) and the 
     medical terms described in paragraph (3).
       ``(2) Insurance-related terms.--The insurance-related terms 
     described in this paragraph are premium, deductible, co-
     insurance, co-payment, out-of-pocket limit, preferred 
     provider, non-preferred provider, out-of-network co-payments, 
     UCR (usual, customary and reasonable) fees, excluded 
     services, grievance and appeals, and such other terms as the 
     Secretary determines are important to define so that 
     consumers may compare health insurance coverage and 
     understand the terms of their coverage.
       ``(3) Medical terms.--The medical terms described in this 
     paragraph are hospitalization, hospital outpatient care, 
     emergency room care, physician services, prescription drug 
     coverage, durable medical equipment, home health care, 
     skilled nursing care, rehabilitation services, hospice 
     services, emergency medical transportation, and such other 
     terms as the Secretary determines are important to define so 
     that consumers may compare the medical benefits offered by 
     health insurance and understand the extent of those medical 
     benefits (or exceptions to those benefits).

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

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

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

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

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

       ``(a) Clear Accounting for Costs.--A health insurance 
     issuer offering group or individual health insurance coverage 
     shall, with respect to each plan year, submit to the 
     Secretary a report concerning the percentage of total premium 
     revenue that such coverage expends--
       ``(1) on reimbursement for clinical services provided to 
     enrollees under such coverage;
       ``(2) for activities that improve health care quality; and
       ``(3) on all other non-claims costs, including an 
     explanation of the nature of such costs, and excluding State 
     taxes and licensing or regulatory fees.

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

[[Page 28387]]



     ``SEC. 2719. APPEALS PROCESS.

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

     SEC. 1002. HEALTH INSURANCE CONSUMER INFORMATION.

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

     ``SEC. 2793. HEALTH INSURANCE CONSUMER INFORMATION.

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

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

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

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

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

     SEC. 1004. EFFECTIVE DATES.

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

     Subtitle B--Immediate Actions to Preserve and Expand Coverage

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

       (a) In General.--Not later than 90 days after the date of 
     enactment of this Act, the Secretary shall establish a 
     temporary high risk health insurance pool program to provide 
     health insurance coverage for eligible individuals during the 
     period beginning on the date on which such program is 
     established and ending on January 1, 2014.
       (b) Administration.--
       (1) In general.--The Secretary may carry out the program 
     under this section directly or through contracts to eligible 
     entities.
       (2) Eligible entities.--To be eligible for a contract under 
     paragraph (1), an entity shall--
       (A) be a State or nonprofit private entity;
       (B) submit to the Secretary an application at such time, in 
     such manner, and containing such information as the Secretary 
     may require; and
       (C) agree to utilize contract funding to establish and 
     administer a qualified high risk pool for eligible 
     individuals.

[[Page 28388]]

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

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

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

     SEC. 1102. REINSURANCE FOR EARLY RETIREES.

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

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

       (ii) provides health benefits to early retirees.
       (C) Early retirees.--The term ``early retirees'' means 
     individuals who are age 55 and older but are not eligible for 
     coverage under title XVIII of the Social Security Act, and 
     who are not active employees of an employer maintaining, or 
     currently contributing to, the employment-based plan or of 
     any employer that has made substantial contributions to fund 
     such plan.
       (b) Participation.--
       (1) Employment-based plan eligibility.--A participating 
     employment-based plan is an employment-based plan that--
       (A) meets the requirements of paragraph (2) with respect to 
     health benefits provided under the plan; and
       (B) submits to the Secretary an application for 
     participation in the program, at such time, in such manner, 
     and containing such information as the Secretary shall 
     require.
       (2) Employment-based health benefits.--An employment-based 
     plan meets the requirements of this paragraph if the plan--
       (A) implements programs and procedures to generate cost-
     savings with respect to participants with chronic and high-
     cost conditions;
       (B) provides documentation of the actual cost of medical 
     claims involved; and
       (C) is certified by the Secretary.
       (c) Payments.--
       (1) Submission of claims.--
       (A) In general.--A participating employment-based plan 
     shall submit claims for reimbursement to the Secretary which 
     shall contain documentation of the actual costs of the items 
     and services for which each claim is being submitted.
       (B) Basis for claims.--Claims submitted under subparagraph 
     (A) shall be based on the actual amount expended by the 
     participating employment-based plan involved within the plan 
     year for the health benefits provided to an early retiree or 
     the spouse, surviving spouse, or dependent of such retiree. 
     In determining the amount of a claim for purposes of this 
     subsection, the participating

[[Page 28389]]

     employment-based plan shall take into account any negotiated 
     price concessions (such as discounts, direct or indirect 
     subsidies, rebates, and direct or indirect remunerations) 
     obtained by such plan with respect to such health benefit. 
     For purposes of determining the amount of any such claim, the 
     costs paid by the early retiree or the retiree's spouse, 
     surviving spouse, or dependent in the form of deductibles, 
     co-payments, or co-insurance shall be included in the amounts 
     paid by the participating employment-based plan.
       (2) Program payments.--If the Secretary determines that a 
     participating employment-based plan has submitted a valid 
     claim under paragraph (1), the Secretary shall reimburse such 
     plan for 80 percent of that portion of the costs attributable 
     to such claim that exceed $15,000, subject to the limits 
     contained in paragraph (3).
       (3) Limit.--To be eligible for reimbursement under the 
     program, a claim submitted by a participating employment-
     based plan shall not be less than $15,000 nor greater than 
     $90,000. Such amounts shall be adjusted each fiscal year 
     based on the percentage increase in the Medical Care 
     Component of the Consumer Price Index for all urban consumers 
     (rounded to the nearest multiple of $1,000) for the year 
     involved.
       (4) Use of payments.--Amounts paid to a participating 
     employment-based plan under this subsection shall be used to 
     lower costs for the plan. Such payments may be used to reduce 
     premium costs for an entity described in subsection 
     (a)(2)(B)(i) or to reduce premium contributions, co-payments, 
     deductibles, co-insurance, or other out-of-pocket costs for 
     plan participants. Such payments shall not be used as general 
     revenues for an entity described in subsection (a)(2)(B)(i). 
     The Secretary shall develop a mechanism to monitor the 
     appropriate use of such payments by such entities.
       (5) Payments not treated as income.--Payments received 
     under this subsection shall not be included in determining 
     the gross income of an entity described in subsection 
     (a)(2)(B)(i) that is maintaining or currently contributing to 
     a participating employment-based plan.
       (6) Appeals.--The Secretary shall establish--
       (A) an appeals process to permit participating employment-
     based plans to appeal a determination of the Secretary with 
     respect to claims submitted under this section; and
       (B) procedures to protect against fraud, waste, and abuse 
     under the program.
       (d) Audits.--The Secretary shall conduct annual audits of 
     claims data submitted by participating employment-based plans 
     under this section to ensure that such plans are in 
     compliance with the requirements of this section.
       (e) Funding.--There is appropriated to the Secretary, out 
     of any moneys in the Treasury not otherwise appropriated, 
     $5,000,000,000 to carry out the program under this section. 
     Such funds shall be available without fiscal year limitation.
       (f) Limitation.--The Secretary has the authority to stop 
     taking applications for participation in the program based on 
     the availability of funding under subsection (e).

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

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

     SEC. 1104. ADMINISTRATIVE SIMPLIFICATION.

       (a) Purpose of Administrative Simplification.--Section 261 
     of the Health Insurance Portability and Accountability Act of 
     1996 (42 U.S.C. 1320d note) is amended--
       (1) by inserting ``uniform'' before ``standards''; and
       (2) by inserting ``and to reduce the clerical burden on 
     patients, health care providers, and health plans'' before 
     the period at the end.
       (b) Operating Rules for Health Information Transactions.--
       (1) Definition of operating rules.--Section 1171 of the 
     Social Security Act (42 U.S.C. 1320d) is amended by adding at 
     the end the following:
       ``(9) Operating rules.--The term `operating rules' means 
     the necessary business rules and guidelines for the 
     electronic exchange of information that are not defined by a 
     standard or its implementation specifications as adopted for 
     purposes of this part.''.
       (2) Transaction standards; operating rules and 
     compliance.--Section 1173 of the Social Security Act (42 
     U.S.C. 1320d-2) is amended--
       (A) in subsection (a)(2), by adding at the end the 
     following new subparagraph:
       ``(J) Electronic funds transfers.'';
       (B) in subsection (a), by adding at the end the following 
     new paragraph:
       ``(4) Requirements for financial and administrative 
     transactions.--
       ``(A) In general.--The standards and associated operating 
     rules adopted by the Secretary shall--
       ``(i) to the extent feasible and appropriate, enable 
     determination of an individual's eligibility and financial 
     responsibility for specific services prior to or at the point 
     of care;
       ``(ii) be comprehensive, requiring minimal augmentation by 
     paper or other communications;
       ``(iii) provide for timely acknowledgment, response, and 
     status reporting that supports a transparent claims and 
     denial management process (including adjudication and 
     appeals); and
       ``(iv) describe all data elements (including reason and 
     remark codes) in unambiguous terms, require that such data 
     elements be required or conditioned upon set values in other 
     fields, and prohibit additional conditions (except where 
     necessary to implement State or Federal law, or to protect 
     against fraud and abuse).
       ``(B) Reduction of clerical burden.--In adopting standards 
     and operating rules for the transactions referred to under 
     paragraph (1), the Secretary shall seek to reduce the number 
     and complexity of forms (including paper and electronic 
     forms) and data entry required by patients and providers.''; 
     and
       (C) by adding at the end the following new subsections:
       ``(g) Operating Rules.--
       ``(1) In general.--The Secretary shall adopt a single set 
     of operating rules for each transaction referred to under 
     subsection (a)(1) with the goal of creating as much 
     uniformity in the implementation of the electronic standards 
     as possible. Such operating rules shall be consensus-based 
     and reflect the necessary business rules affecting health 
     plans and health care providers and the manner in which they 
     operate pursuant to standards issued under Health Insurance 
     Portability and Accountability Act of 1996.
       ``(2) Operating rules development.--In adopting operating 
     rules under this subsection, the Secretary shall consider 
     recommendations for operating rules developed by a qualified 
     nonprofit entity that meets the following requirements:
       ``(A) The entity focuses its mission on administrative 
     simplification.
       ``(B) The entity demonstrates a multi-stakeholder and 
     consensus-based process for development of operating rules, 
     including representation by or participation from health 
     plans, health care providers, vendors, relevant Federal 
     agencies, and other standard development organizations.
       ``(C) The entity has a public set of guiding principles 
     that ensure the operating rules and process are open and 
     transparent, and supports nondiscrimination and conflict of 
     interest policies that demonstrate a commitment to open, 
     fair, and nondiscriminatory practices.
       ``(D) The entity builds on the transaction standards issued 
     under Health Insurance Portability and Accountability Act of 
     1996.
       ``(E) The entity allows for public review and updates of 
     the operating rules.
       ``(3) Review and recommendations.--The National Committee 
     on Vital and Health Statistics shall--
       ``(A) advise the Secretary as to whether a nonprofit entity 
     meets the requirements under paragraph (2);
       ``(B) review the operating rules developed and recommended 
     by such nonprofit entity;

[[Page 28390]]

       ``(C) determine whether such operating rules represent a 
     consensus view of the health care stakeholders and are 
     consistent with and do not conflict with other existing 
     standards;
       ``(D) evaluate whether such operating rules are consistent 
     with electronic standards adopted for health information 
     technology; and
       ``(E) submit to the Secretary a recommendation as to 
     whether the Secretary should adopt such operating rules.
       ``(4) Implementation.--
       ``(A) In general.--The Secretary shall adopt operating 
     rules under this subsection, by regulation in accordance with 
     subparagraph (C), following consideration of the operating 
     rules developed by the non-profit entity described in 
     paragraph (2) and the recommendation submitted by the 
     National Committee on Vital and Health Statistics under 
     paragraph (3)(E) and having ensured consultation with 
     providers.
       ``(B) Adoption requirements; effective dates.--
       ``(i) Eligibility for a health plan and health claim 
     status.--The set of operating rules for eligibility for a 
     health plan and health claim status transactions shall be 
     adopted not later than July 1, 2011, in a manner ensuring 
     that such operating rules are effective not later than 
     January 1, 2013, and may allow for the use of a machine 
     readable identification card.
       ``(ii) Electronic funds transfers and health care payment 
     and remittance advice.--The set of operating rules for 
     electronic funds transfers and health care payment and 
     remittance advice transactions shall--

       ``(I) allow for automated reconciliation of the electronic 
     payment with the remittance advice; and
       ``(II) be adopted not later than July 1, 2012, in a manner 
     ensuring that such operating rules are effective not later 
     than January 1, 2014.

       ``(iii) Health claims or equivalent encounter information, 
     enrollment and disenrollment in a health plan, health plan 
     premium payments, referral certification and authorization.--
     The set of operating rules for health claims or equivalent 
     encounter information, enrollment and disenrollment in a 
     health plan, health plan premium payments, and referral 
     certification and authorization transactions shall be adopted 
     not later than July 1, 2014, in a manner ensuring that such 
     operating rules are effective not later than January 1, 2016.
       ``(C) Expedited rulemaking.--The Secretary shall promulgate 
     an interim final rule applying any standard or operating rule 
     recommended by the National Committee on Vital and Health 
     Statistics pursuant to paragraph (3). The Secretary shall 
     accept and consider public comments on any interim final rule 
     published under this subparagraph for 60 days after the date 
     of such publication.
       ``(h) Compliance.--
       ``(1) Health plan certification.--
       ``(A) Eligibility for a health plan, health claim status, 
     electronic funds transfers, health care payment and 
     remittance advice.--Not later than December 31, 2013, a 
     health plan shall file a statement with the Secretary, in 
     such form as the Secretary may require, certifying that the 
     data and information systems for such plan are in compliance 
     with any applicable standards (as described under paragraph 
     (7) of section 1171) and associated operating rules (as 
     described under paragraph (9) of such section) for electronic 
     funds transfers, eligibility for a health plan, health claim 
     status, and health care payment and remittance advice, 
     respectively.
       ``(B) Health claims or equivalent encounter information, 
     enrollment and disenrollment in a health plan, health plan 
     premium payments, health claims attachments, referral 
     certification and authorization.--Not later than December 31, 
     2015, a health plan shall file a statement with the 
     Secretary, in such form as the Secretary may require, 
     certifying that the data and information systems for such 
     plan are in compliance with any applicable standards and 
     associated operating rules for health claims or equivalent 
     encounter information, enrollment and disenrollment in a 
     health plan, health plan premium payments, health claims 
     attachments, and referral certification and authorization, 
     respectively. A health plan shall provide the same level of 
     documentation to certify compliance with such transactions as 
     is required to certify compliance with the transactions 
     specified in subparagraph (A).
       ``(2) Documentation of compliance.--A health plan shall 
     provide the Secretary, in such form as the Secretary may 
     require, with adequate documentation of compliance with the 
     standards and operating rules described under paragraph (1). 
     A health plan shall not be considered to have provided 
     adequate documentation and shall not be certified as being in 
     compliance with such standards, unless the health plan--
       ``(A) demonstrates to the Secretary that the plan conducts 
     the electronic transactions specified in paragraph (1) in a 
     manner that fully complies with the regulations of the 
     Secretary; and
       ``(B) provides documentation showing that the plan has 
     completed end-to-end testing for such transactions with their 
     partners, such as hospitals and physicians.
       ``(3) Service contracts.--A health plan shall be required 
     to ensure that any entities that provide services pursuant to 
     a contract with such health plan shall comply with any 
     applicable certification and compliance requirements (and 
     provide the Secretary with adequate documentation of such 
     compliance) under this subsection.
       ``(4) Certification by outside entity.--The Secretary may 
     designate independent, outside entities to certify that a 
     health plan has complied with the requirements under this 
     subsection, provided that the certification standards 
     employed by such entities are in accordance with any 
     standards or operating rules issued by the Secretary.
       ``(5) Compliance with revised standards and operating 
     rules.--
       ``(A) In general.--A health plan (including entities 
     described under paragraph (3)) shall file a statement with 
     the Secretary, in such form as the Secretary may require, 
     certifying that the data and information systems for such 
     plan are in compliance with any applicable revised standards 
     and associated operating rules under this subsection for any 
     interim final rule promulgated by the Secretary under 
     subsection (i) that--
       ``(i) amends any standard or operating rule described under 
     paragraph (1) of this subsection; or
       ``(ii) establishes a standard (as described under 
     subsection (a)(1)(B)) or associated operating rules (as 
     described under subsection (i)(5)) for any other financial 
     and administrative transactions.
       ``(B) Date of compliance.--A health plan shall comply with 
     such requirements not later than the effective date of the 
     applicable standard or operating rule.
       ``(6) Audits of health plans.--The Secretary shall conduct 
     periodic audits to ensure that health plans (including 
     entities described under paragraph (3)) are in compliance 
     with any standards and operating rules that are described 
     under paragraph (1) or subsection (i)(5).
       ``(i) Review and Amendment of Standards and Operating 
     Rules.--
       ``(1) Establishment.--Not later than January 1, 2014, the 
     Secretary shall establish a review committee (as described 
     under paragraph (4)).
       ``(2) Evaluations and reports.--
       ``(A) Hearings.--Not later than April 1, 2014, and not less 
     than biennially thereafter, the Secretary, acting through the 
     review committee, shall conduct hearings to evaluate and 
     review the adopted standards and operating rules established 
     under this section.
       ``(B) Report.--Not later than July 1, 2014, and not less 
     than biennially thereafter, the review committee shall 
     provide recommendations for updating and improving such 
     standards and operating rules. The review committee shall 
     recommend a single set of operating rules per transaction 
     standard and maintain the goal of creating as much uniformity 
     as possible in the implementation of the electronic 
     standards.
       ``(3) Interim final rulemaking.--
       ``(A) In general.--Any recommendations to amend adopted 
     standards and operating rules that have been approved by the 
     review committee and reported to the Secretary under 
     paragraph (2)(B) shall be adopted by the Secretary through 
     promulgation of an interim final rule not later than 90 days 
     after receipt of the committee's report.
       ``(B) Public comment.--
       ``(i) Public comment period.--The Secretary shall accept 
     and consider public comments on any interim final rule 
     published under this paragraph for 60 days after the date of 
     such publication.
       ``(ii) Effective date.--The effective date of any amendment 
     to existing standards or operating rules that is adopted 
     through an interim final rule published under this paragraph 
     shall be 25 months following the close of such public comment 
     period.
       ``(4) Review committee.--
       ``(A) Definition.--For the purposes of this subsection, the 
     term `review committee' means a committee chartered by or 
     within the Department of Health and Human services that has 
     been designated by the Secretary to carry out this 
     subsection, including--
       ``(i) the National Committee on Vital and Health 
     Statistics; or
       ``(ii) any appropriate committee as determined by the 
     Secretary.
       ``(B) Coordination of hit standards.--In developing 
     recommendations under this subsection, the review committee 
     shall ensure coordination, as appropriate, with the standards 
     that support the certified electronic health record 
     technology approved by the Office of the National Coordinator 
     for Health Information Technology.
       ``(5) Operating rules for other standards adopted by the 
     secretary.--The Secretary shall adopt a single set of 
     operating rules (pursuant to the process described under 
     subsection (g)) for any transaction for which a standard had 
     been adopted pursuant to subsection (a)(1)(B).
       ``(j) Penalties.--
       ``(1) Penalty fee.--
       ``(A) In general.--Not later than April 1, 2014, and 
     annually thereafter, the Secretary shall assess a penalty fee 
     (as determined under subparagraph (B)) against a health

[[Page 28391]]

     plan that has failed to meet the requirements under 
     subsection (h) with respect to certification and 
     documentation of compliance with--
       ``(i) the standards and associated operating rules 
     described under paragraph (1) of such subsection; and
       ``(ii) a standard (as described under subsection (a)(1)(B)) 
     and associated operating rules (as described under subsection 
     (i)(5)) for any other financial and administrative 
     transactions.
       ``(B) Fee amount.--Subject to subparagraphs (C), (D), and 
     (E), the Secretary shall assess a penalty fee against a 
     health plan in the amount of $1 per covered life until 
     certification is complete. The penalty shall be assessed per 
     person covered by the plan for which its data systems for 
     major medical policies are not in compliance and shall be 
     imposed against the health plan for each day that the plan is 
     not in compliance with the requirements under subsection (h).
       ``(C) Additional penalty for misrepresentation.--A health 
     plan that knowingly provides inaccurate or incomplete 
     information in a statement of certification or documentation 
     of compliance under subsection (h) shall be subject to a 
     penalty fee that is double the amount that would otherwise be 
     imposed under this subsection.
       ``(D) Annual fee increase.--The amount of the penalty fee 
     imposed under this subsection shall be increased on an annual 
     basis by the annual percentage increase in total national 
     health care expenditures, as determined by the Secretary.
       ``(E) Penalty limit.--A penalty fee assessed against a 
     health plan under this subsection shall not exceed, on an 
     annual basis--
       ``(i) an amount equal to $20 per covered life under such 
     plan; or
       ``(ii) an amount equal to $40 per covered life under the 
     plan if such plan has knowingly provided inaccurate or 
     incomplete information (as described under subparagraph (C)).
       ``(F) Determination of covered individuals.--The Secretary 
     shall determine the number of covered lives under a health 
     plan based upon the most recent statements and filings that 
     have been submitted by such plan to the Securities and 
     Exchange Commission.
       ``(2) Notice and dispute procedure.--The Secretary shall 
     establish a procedure for assessment of penalty fees under 
     this subsection that provides a health plan with reasonable 
     notice and a dispute resolution procedure prior to provision 
     of a notice of assessment by the Secretary of the Treasury 
     (as described under paragraph (4)(B)).
       ``(3) Penalty fee report.--Not later than May 1, 2014, and 
     annually thereafter, the Secretary shall provide the 
     Secretary of the Treasury with a report identifying those 
     health plans that have been assessed a penalty fee under this 
     subsection.
       ``(4) Collection of penalty fee.--
       ``(A) In general.--The Secretary of the Treasury, acting 
     through the Financial Management Service, shall administer 
     the collection of penalty fees from health plans that have 
     been identified by the Secretary in the penalty fee report 
     provided under paragraph (3).
       ``(B) Notice.--Not later than August 1, 2014, and annually 
     thereafter, the Secretary of the Treasury shall provide 
     notice to each health plan that has been assessed a penalty 
     fee by the Secretary under this subsection. Such notice shall 
     include the amount of the penalty fee assessed by the 
     Secretary and the due date for payment of such fee to the 
     Secretary of the Treasury (as described in subparagraph (C)).
       ``(C) Payment due date.--Payment by a health plan for a 
     penalty fee assessed under this subsection shall be made to 
     the Secretary of the Treasury not later than November 1, 
     2014, and annually thereafter.
       ``(D) Unpaid penalty fees.--Any amount of a penalty fee 
     assessed against a health plan under this subsection for 
     which payment has not been made by the due date provided 
     under subparagraph (C) shall be--
       ``(i) increased by the interest accrued on such amount, as 
     determined pursuant to the underpayment rate established 
     under section 6621 of the Internal Revenue Code of 1986; and
       ``(ii) treated as a past-due, legally enforceable debt owed 
     to a Federal agency for purposes of section 6402(d) of the 
     Internal Revenue Code of 1986.
       ``(E) Administrative fees.--Any fee charged or allocated 
     for collection activities conducted by the Financial 
     Management Service will be passed on to a health plan on a 
     pro-rata basis and added to any penalty fee collected from 
     the plan.''.
       (c) Promulgation of Rules.--
       (1) Unique health plan identifier.--The Secretary shall 
     promulgate a final rule to establish a unique health plan 
     identifier (as described in section 1173(b) of the Social 
     Security Act (42 U.S.C. 1320d-2(b))) based on the input of 
     the National Committee on Vital and Health Statistics. The 
     Secretary may do so on an interim final basis and such rule 
     shall be effective not later than October 1, 2012.
       (2) Electronic funds transfer.--The Secretary shall 
     promulgate a final rule to establish a standard for 
     electronic funds transfers (as described in section 
     1173(a)(2)(J) of the Social Security Act, as added by 
     subsection (b)(2)(A)). The Secretary may do so on an interim 
     final basis and shall adopt such standard not later than 
     January 1, 2012, in a manner ensuring that such standard is 
     effective not later than January 1, 2014.
       (3) Health claims attachments.--The Secretary shall 
     promulgate a final rule to establish a transaction standard 
     and a single set of associated operating rules for health 
     claims attachments (as described in section 1173(a)(2)(B) of 
     the Social Security Act (42 U.S.C. 1320d-2(a)(2)(B))) that is 
     consistent with the X12 Version 5010 transaction standards. 
     The Secretary may do so on an interim final basis and shall 
     adopt a transaction standard and a single set of associated 
     operating rules not later than January 1, 2014, in a manner 
     ensuring that such standard is effective not later than 
     January 1, 2016.
       (d) Expansion of Electronic Transactions in Medicare.--
     Section 1862(a) of the Social Security Act (42 U.S.C. 
     1395y(a)) is amended--
       (1) in paragraph (23), by striking the ``or'' at the end;
       (2) in paragraph (24), by striking the period and inserting 
     ``; or''; and
       (3) by inserting after paragraph (24) the following new 
     paragraph:
       ``(25) not later than January 1, 2014, for which the 
     payment is other than by electronic funds transfer (EFT) or 
     an electronic remittance in a form as specified in ASC X12 
     835 Health Care Payment and Remittance Advice or subsequent 
     standard.''.

     SEC. 1105. EFFECTIVE DATE.

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

    Subtitle C--Quality Health Insurance Coverage for All Americans

                PART I--HEALTH INSURANCE MARKET REFORMS

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

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

                     ``Subpart I--General Reform'';

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

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

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

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

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

     ``SEC. 2701. FAIR HEALTH INSURANCE PREMIUMS.

       ``(a) Prohibiting Discriminatory Premium Rates.--
       ``(1) In general.--With respect to the premium rate charged 
     by a health insurance issuer for health insurance coverage 
     offered in the individual or small group market--
       ``(A) such rate shall vary with respect to the particular 
     plan or coverage involved only by--
       ``(i) whether such plan or coverage covers an individual or 
     family;
       ``(ii) rating area, as established in accordance with 
     paragraph (2);
       ``(iii) age, except that such rate shall not vary by more 
     than 3 to 1 for adults (consistent with section 2707(c)); and
       ``(iv) tobacco use, except that such rate shall not vary by 
     more than 1.5 to 1; and
       ``(B) such rate shall not vary with respect to the 
     particular plan or coverage involved by any other factor not 
     described in subparagraph (A).
       ``(2) Rating area.--
       ``(A) In general.--Each State shall establish 1 or more 
     rating areas within that State

[[Page 28392]]

     for purposes of applying the requirements of this title.
       ``(B) Secretarial review.--The Secretary shall review the 
     rating areas established by each State under subparagraph (A) 
     to ensure the adequacy of such areas for purposes of carrying 
     out the requirements of this title. If the Secretary 
     determines a State's rating areas are not adequate, or that a 
     State does not establish such areas, the Secretary may 
     establish rating areas for that State.
       ``(3) Permissible age bands.--The Secretary, in 
     consultation with the National Association of Insurance 
     Commissioners, shall define the permissible age bands for 
     rating purposes under paragraph (1)(A)(iii).
       ``(4) Application of variations based on age or tobacco 
     use.--With respect to family coverage under a group health 
     plan or health insurance coverage, the rating variations 
     permitted under clauses (iii) and (iv) of paragraph (1)(A) 
     shall be applied based on the portion of the premium that is 
     attributable to each family member covered under the plan or 
     coverage.
       ``(5) Special rule for large group market.--If a State 
     permits health insurance issuers that offer coverage in the 
     large group market in the State to offer such coverage 
     through the State Exchange (as provided for under section 
     1312(f)(2)(B) of the Patient Protection and Affordable Care 
     Act), the provisions of this subsection shall apply to all 
     coverage offered in such market in the State.

     ``SEC. 2702. GUARANTEED AVAILABILITY OF COVERAGE.

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

     ``SEC. 2703. GUARANTEED RENEWABILITY OF COVERAGE.

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

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

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

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

       ``(ii) If reasonable under the circumstances, the plan or 
     issuer may seek verification, such as a statement from an 
     individual's physician, that a health status factor makes it 
     unreasonably difficult or medically inadvisable for the 
     individual to satisfy or attempt to satisfy the otherwise 
     applicable standard.
       ``(E) The plan or issuer involved shall disclose in all 
     plan materials describing the terms of the wellness program 
     the availability of a reasonable alternative standard (or the 
     possibility of waiver of the otherwise

[[Page 28393]]

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

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

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

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

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

     ``SEC. 2707. COMPREHENSIVE HEALTH INSURANCE COVERAGE.

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

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

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

                       PART II--OTHER PROVISIONS

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

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

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

       Any standard or requirement adopted by a State pursuant to 
     this title, or any amendment made by this title, shall be 
     applied uniformly to all health plans in each insurance 
     market to which the standard and requirements apply. The 
     preceding sentence shall also apply to a State standard or 
     requirement relating to the standard or requirement required 
     by this title (or any such

[[Page 28394]]

     amendment) that is not the same as the standard or 
     requirement but that is not preempted under section 1321(d).

     SEC. 1253. EFFECTIVE DATES.

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

        Subtitle D--Available Coverage Choices for All Americans

            PART I--ESTABLISHMENT OF QUALIFIED HEALTH PLANS

     SEC. 1301. QUALIFIED HEALTH PLAN DEFINED.

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

     SEC. 1302. ESSENTIAL HEALTH BENEFITS REQUIREMENTS.

       (a) Essential Health Benefits Package.--In this title, the 
     term ``essential health benefits package'' means, with 
     respect to any health plan, coverage that--
       (1) provides for the essential health benefits defined by 
     the Secretary under subsection (b);
       (2) limits cost-sharing for such coverage in accordance 
     with subsection (c); and
       (3) subject to subsection (e), provides either the bronze, 
     silver, gold, or platinum level of coverage described in 
     subsection (d).
       (b) Essential Health Benefits.--
       (1) In general.--Subject to paragraph (2), the Secretary 
     shall define the essential health benefits, except that such 
     benefits shall include at least the following general 
     categories and the items and services covered within the 
     categories:
       (A) Ambulatory patient services.
       (B) Emergency services.
       (C) Hospitalization.
       (D) Maternity and newborn care.
       (E) Mental health and substance use disorder services, 
     including behavioral health treatment.
       (F) Prescription drugs.
       (G) Rehabilitative and habilitative services and devices.
       (H) Laboratory services.
       (I) Preventive and wellness services and chronic disease 
     management.
       (J) Pediatric services, including oral and vision care.
       (2) Limitation.--
       (A) In general.--The Secretary shall ensure that the scope 
     of the essential health benefits under paragraph (1) is equal 
     to the scope of benefits provided under a typical employer 
     plan, as determined by the Secretary. To inform this 
     determination, the Secretary of Labor shall conduct a survey 
     of employer-sponsored coverage to determine the benefits 
     typically covered by employers, including multiemployer 
     plans, and provide a report on such survey to the Secretary.
       (B) Certification.--In defining the essential health 
     benefits described in paragraph (1), and in revising the 
     benefits under paragraph (4)(H), the Secretary shall submit a 
     report to the appropriate committees of Congress containing a 
     certification from the Chief Actuary of the Centers for 
     Medicare & Medicaid Services that such essential health 
     benefits meet the limitation described in paragraph (2).
       (3) Notice and hearing.--In defining the essential health 
     benefits described in paragraph (1), and in revising the 
     benefits under paragraph (4)(H), the Secretary shall provide 
     notice and an opportunity for public comment.
       (4) Required elements for consideration.--In defining the 
     essential health benefits under paragraph (1), the Secretary 
     shall--
       (A) ensure that such essential health benefits reflect an 
     appropriate balance among the categories described in such 
     subsection, so that benefits are not unduly weighted toward 
     any category;
       (B) not make coverage decisions, determine reimbursement 
     rates, establish incentive programs, or design benefits in 
     ways that discriminate against individuals because of their 
     age, disability, or expected length of life;
       (C) take into account the health care needs of diverse 
     segments of the population, including women, children, 
     persons with disabilities, and other groups;
       (D) ensure that health benefits established as essential 
     not be subject to denial to individuals against their wishes 
     on the basis of the individuals' age or expected length of 
     life or of the individuals' present or predicted disability, 
     degree of medical dependency, or quality of life;
       (E) provide that a qualified health plan shall not be 
     treated as providing coverage for the essential health 
     benefits described in paragraph (1) unless the plan provides 
     that--
       (i) coverage for emergency department services will be 
     provided without imposing any requirement under the plan for 
     prior authorization of services or any limitation on coverage 
     where the provider of services does not have a contractual 
     relationship with the plan for the providing of services that 
     is more restrictive than the requirements or limitations that 
     apply to emergency department services received from 
     providers who do have such a contractual relationship with 
     the plan; and
       (ii) if such services are provided out-of-network, the 
     cost-sharing requirement (expressed as a copayment amount or 
     coinsurance rate) is the same requirement that would apply if 
     such services were provided in-network;
       (F) provide that if a plan described in section 
     1311(b)(2)(B)(ii) (relating to stand-alone dental benefits 
     plans) is offered through an Exchange, another health plan 
     offered through such Exchange shall not fail to be treated as 
     a qualified health plan solely because the plan does not 
     offer coverage of benefits offered through the stand-alone 
     plan that are otherwise required under paragraph (1)(J); and
       (G) periodically review the essential health benefits under 
     paragraph (1), and provide a report to Congress and the 
     public that contains--
       (i) an assessment of whether enrollees are facing any 
     difficulty accessing needed services for reasons of coverage 
     or cost;
       (ii) an assessment of whether the essential health benefits 
     needs to be modified or updated to account for changes in 
     medical evidence or scientific advancement;
       (iii) information on how the essential health benefits will 
     be modified to address any such gaps in access or changes in 
     the evidence base;
       (iv) an assessment of the potential of additional or 
     expanded benefits to increase costs and the interactions 
     between the addition or expansion of benefits and reductions 
     in existing benefits to meet actuarial limitations described 
     in paragraph (2); and
       (H) periodically update the essential health benefits under 
     paragraph (1) to address any gaps in access to coverage or 
     changes in the evidence base the Secretary identifies in the 
     review conducted under subparagraph (G).
       (5) Rule of construction.--Nothing in this title shall be 
     construed to prohibit a health plan from providing benefits 
     in excess of the essential health benefits described in this 
     subsection.
       (c) Requirements Relating to Cost-Sharing.--
       (1) Annual limitation on cost-sharing.--
       (A) 2014.--The cost-sharing incurred under a health plan 
     with respect to self-only coverage or coverage other than 
     self-only coverage for a plan year beginning in 2014 shall 
     not exceed the dollar amounts in effect under section 
     223(c)(2)(A)(ii) of the Internal Revenue Code of 1986 for 
     self-only and family coverage, respectively, for taxable 
     years beginning in 2014.
       (B) 2015 and later.--In the case of any plan year beginning 
     in a calendar year after 2014, the limitation under this 
     paragraph shall--
       (i) in the case of self-only coverage, be equal to the 
     dollar amount under subparagraph (A) for self-only coverage 
     for plan years beginning in 2014, increased by an

[[Page 28395]]

     amount equal to the product of that amount and the premium 
     adjustment percentage under paragraph (4) for the calendar 
     year; and
       (ii) in the case of other coverage, twice the amount in 
     effect under clause (i).

     If the amount of any increase under clause (i) is not a 
     multiple of $50, such increase shall be rounded to the next 
     lowest multiple of $50.
       (2) Annual limitation on deductibles for employer-sponsored 
     plans.--
       (A) In general.--In the case of a health plan offered in 
     the small group market, the deductible under the plan shall 
     not exceed--
       (i) $2,000 in the case of a plan covering a single 
     individual; and
       (ii) $4,000 in the case of any other plan.

     The amounts under clauses (i) and (ii) may be increased by 
     the maximum amount of reimbursement which is reasonably 
     available to a participant under a flexible spending 
     arrangement described in section 106(c)(2) of the Internal 
     Revenue Code of 1986 (determined without regard to any salary 
     reduction arrangement).
       (B) Indexing of limits.--In the case of any plan year 
     beginning in a calendar year after 2014--
       (i) the dollar amount under subparagraph (A)(i) shall be 
     increased by an amount equal to the product of that amount 
     and the premium adjustment percentage under paragraph (4) for 
     the calendar year; and
       (ii) the dollar amount under subparagraph (A)(ii) shall be 
     increased to an amount equal to twice the amount in effect 
     under subparagraph (A)(i) for plan years beginning in the 
     calendar year, determined after application of clause (i).

     If the amount of any increase under clause (i) is not a 
     multiple of $50, such increase shall be rounded to the next 
     lowest multiple of $50.
       (C) Actuarial value.--The limitation under this paragraph 
     shall be applied in such a manner so as to not affect the 
     actuarial value of any health plan, including a plan in the 
     bronze level.
       (D) Coordination with preventive limits.--Nothing in this 
     paragraph shall be construed to allow a plan to have a 
     deductible under the plan apply to benefits described in 
     section 2713 of the Public Health Service Act.
       (3) Cost-sharing.--In this title--
       (A) In general.--The term ``cost-sharing'' includes--
       (i) deductibles, coinsurance, copayments, or similar 
     charges; and
       (ii) any other expenditure required of an insured 
     individual which is a qualified medical expense (within the 
     meaning of section 223(d)(2) of the Internal Revenue Code of 
     1986) with respect to essential health benefits covered under 
     the plan.
       (B) Exceptions.--Such term does not include premiums, 
     balance billing amounts for non-network providers, or 
     spending for non-covered services.
       (4) Premium adjustment percentage.--For purposes of 
     paragraphs (1)(B)(i) and (2)(B)(i), the premium adjustment 
     percentage for any calendar year is the percentage (if any) 
     by which the average per capita premium for health insurance 
     coverage in the United States for the preceding calendar year 
     (as estimated by the Secretary no later than October 1 of 
     such preceding calendar year) exceeds such average per capita 
     premium for 2013 (as determined by the Secretary).
       (d) Levels of Coverage.--
       (1) Levels of coverage defined.--The levels of coverage 
     described in this subsection are as follows:
       (A) Bronze level.--A plan in the bronze level shall provide 
     a level of coverage that is designed to provide benefits that 
     are actuarially equivalent to 60 percent of the full 
     actuarial value of the benefits provided under the plan.
       (B) Silver level.--A plan in the silver level shall provide 
     a level of coverage that is designed to provide benefits that 
     are actuarially equivalent to 70 percent of the full 
     actuarial value of the benefits provided under the plan.
       (C) Gold level.--A plan in the gold level shall provide a 
     level of coverage that is designed to provide benefits that 
     are actuarially equivalent to 80 percent of the full 
     actuarial value of the benefits provided under the plan.
       (D) Platinum level.--A plan in the platinum level shall 
     provide a level of coverage that is designed to provide 
     benefits that are actuarially equivalent to 90 percent of the 
     full actuarial value of the benefits provided under the plan.
       (2) Actuarial value.--
       (A) In general.--Under regulations issued by the Secretary, 
     the level of coverage of a plan shall be determined on the 
     basis that the essential health benefits described in 
     subsection (b) shall be provided to a standard population 
     (and without regard to the population the plan may actually 
     provide benefits to).
       (B) Employer contributions.--The Secretary may issue 
     regulations under which employer contributions to a health 
     savings account (within the meaning of section 223 of the 
     Internal Revenue Code of 1986) may be taken into account in 
     determining the level of coverage for a plan of the employer.
       (C) Application.--In determining under this title, the 
     Public Health Service Act, or the Internal Revenue Code of 
     1986 the percentage of the total allowed costs of benefits 
     provided under a group health plan or health insurance 
     coverage that are provided by such plan or coverage, the 
     rules contained in the regulations under this paragraph shall 
     apply.
       (3) Allowable variance.--The Secretary shall develop 
     guidelines to provide for a de minimis variation in the 
     actuarial valuations used in determining the level of 
     coverage of a plan to account for differences in actuarial 
     estimates.
       (4) Plan reference.--In this title, any reference to a 
     bronze, silver, gold, or platinum plan shall be treated as a 
     reference to a qualified health plan providing a bronze, 
     silver, gold, or platinum level of coverage, as the case may 
     be.
       (e) Catastrophic Plan.--
       (1) In general.--A health plan not providing a bronze, 
     silver, gold, or platinum level of coverage shall be treated 
     as meeting the requirements of subsection (d) with respect to 
     any plan year if--
       (A) the only individuals who are eligible to enroll in the 
     plan are individuals described in paragraph (2); and
       (B) the plan provides--
       (i) except as provided in clause (ii), the essential health 
     benefits determined under subsection (b), except that the 
     plan provides no benefits for any plan year until the 
     individual has incurred cost-sharing expenses in an amount 
     equal to the annual limitation in effect under subsection 
     (c)(1) for the plan year (except as provided for in section 
     2713); and
       (ii) coverage for at least three primary care visits.
       (2) Individuals eligible for enrollment.--An individual is 
     described in this paragraph for any plan year if the 
     individual--
       (A) has not attained the age of 30 before the beginning of 
     the plan year; or
       (B) has a certification in effect for any plan year under 
     this title that the individual is exempt from the requirement 
     under section 5000A of the Internal Revenue Code of 1986 by 
     reason of--
       (i) section 5000A(e)(1) of such Code (relating to 
     individuals without affordable coverage); or
       (ii) section 5000A(e)(5) of such Code (relating to 
     individuals with hardships).
       (3) Restriction to individual market.--If a health 
     insurance issuer offers a health plan described in this 
     subsection, the issuer may only offer the plan in the 
     individual market.
       (f) Child-only Plans.--If a qualified health plan is 
     offered through the Exchange in any level of coverage 
     specified under subsection (d), the issuer shall also offer 
     that plan through the Exchange in that level as a plan in 
     which the only enrollees are individuals who, as of the 
     beginning of a plan year, have not attained the age of 21, 
     and such plan shall be treated as a qualified health plan.

     SEC. 1303. SPECIAL RULES.

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

       (I) assures compliance with the requirements of paragraph 
     (2);
       (II) assures, in accordance with applicable provisions of 
     generally accepted accounting

[[Page 28396]]

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

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

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

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

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

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

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

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

     SEC. 1304. RELATED DEFINITIONS.

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

     the employer shall continue to be treated as a small employer 
     for purposes of this subtitle for the period beginning with 
     the increase and ending with the first day on which the 
     employer does not make such enrollment available to its 
     employees.
       (c) Secretary.--In this title, the term ``Secretary'' means 
     the Secretary of Health and Human Services.
       (d) State.--In this title, the term ``State'' means each of 
     the 50 States and the District of Columbia.

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

     SEC. 1311. AFFORDABLE CHOICES OF HEALTH BENEFIT PLANS.

       (a) Assistance to States to Establish American Health 
     Benefit Exchanges.--
       (1) Planning and establishment grants.--There shall be 
     appropriated to the Secretary, out of any moneys in the 
     Treasury not otherwise appropriated, an amount necessary to 
     enable the Secretary to make awards, not

[[Page 28397]]

     later than 1 year after the date of enactment of this Act, to 
     States in the amount specified in paragraph (2) for the uses 
     described in paragraph (3).
       (2) Amount specified.--For each fiscal year, the Secretary 
     shall determine the total amount that the Secretary will make 
     available to each State for grants under this subsection.
       (3) Use of funds.--A State shall use amounts awarded under 
     this subsection for activities (including planning 
     activities) related to establishing an American Health 
     Benefit Exchange, as described in subsection (b).
       (4) Renewability of grant.--
       (A) In general.--Subject to subsection (d)(4), the 
     Secretary may renew a grant awarded under paragraph (1) if 
     the State recipient of such grant--
       (i) is making progress, as determined by the Secretary, 
     toward--

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

       (ii) is meeting such other benchmarks as the Secretary may 
     establish.
       (B) Limitation.--No grant shall be awarded under this 
     subsection after January 1, 2015.
       (5) Technical assistance to facilitate participation in 
     shop exchanges.--The Secretary shall provide technical 
     assistance to States to facilitate the participation of 
     qualified small businesses in such States in SHOP Exchanges.
       (b) American Health Benefit Exchanges.--
       (1) In general.--Each State shall, not later than January 
     1, 2014, establish an American Health Benefit Exchange 
     (referred to in this title as an ``Exchange'') for the State 
     that--
       (A) facilitates the purchase of qualified health plans;
       (B) provides for the establishment of a Small Business 
     Health Options Program (in this title referred to as a ``SHOP 
     Exchange'') that is designed to assist qualified employers in 
     the State who are small employers in facilitating the 
     enrollment of their employees in qualified health plans 
     offered in the small group market in the State; and
       (C) meets the requirements of subsection (d).
       (2) Merger of individual and shop exchanges.--A State may 
     elect to provide only one Exchange in the State for providing 
     both Exchange and SHOP Exchange services to both qualified 
     individuals and qualified small employers, but only if the 
     Exchange has adequate resources to assist such individuals 
     and employers.
       (c) Responsibilities of the Secretary.--
       (1) In general.--The Secretary shall, by regulation, 
     establish criteria for the certification of health plans as 
     qualified health plans. Such criteria shall require that, to 
     be certified, a plan shall, at a minimum--
       (A) meet marketing requirements, and not employ marketing 
     practices or benefit designs that have the effect of 
     discouraging the enrollment in such plan by individuals with 
     significant health needs;
       (B) ensure a sufficient choice of providers (in a manner 
     consistent with applicable network adequacy provisions under 
     section 2702(c) of the Public Health Service Act), and 
     provide information to enrollees and prospective enrollees on 
     the availability of in-network and out-of-network providers;
       (C) include within health insurance plan networks those 
     essential community providers, where available, that serve 
     predominately low-income, medically-underserved individuals, 
     such as health care providers defined in section 340B(a)(4) 
     of the Public Health Service Act and providers described in 
     section 1927(c)(1)(D)(i)(IV) of the Social Security Act as 
     set forth by section 221 of Public Law 111-8, except that 
     nothing in this subparagraph shall be construed to require 
     any health plan to provide coverage for any specific medical 
     procedure;
       (D)(i) be accredited with respect to local performance on 
     clinical quality measures such as the Healthcare 
     Effectiveness Data and Information Set, patient experience 
     ratings on a standardized Consumer Assessment of Healthcare 
     Providers and Systems survey, as well as consumer access, 
     utilization management, quality assurance, provider 
     credentialing, complaints and appeals, network adequacy and 
     access, and patient information programs by any entity 
     recognized by the Secretary for the accreditation of health 
     insurance issuers or plans (so long as any such entity has 
     transparent and rigorous methodological and scoring 
     criteria); or
       (ii) receive such accreditation within a period established 
     by an Exchange for such accreditation that is applicable to 
     all qualified health plans;
       (E) implement a quality improvement strategy described in 
     subsection (g)(1);
       (F) utilize a uniform enrollment form that qualified 
     individuals and qualified employers may use (either 
     electronically or on paper) in enrolling in qualified health 
     plans offered through such Exchange, and that takes into 
     account criteria that the National Association of Insurance 
     Commissioners develops and submits to the Secretary;
       (G) utilize the standard format established for presenting 
     health benefits plan options; and
       (H) provide information to enrollees and prospective 
     enrollees, and to each Exchange in which the plan is offered, 
     on any quality measures for health plan performance endorsed 
     under section 399JJ of the Public Health Service Act, as 
     applicable.
       (2) Rule of construction.--Nothing in paragraph (1)(C) 
     shall be construed to require a qualified health plan to 
     contract with a provider described in such paragraph if such 
     provider refuses to accept the generally applicable payment 
     rates of such plan.
       (3) Rating system.--The Secretary shall develop a rating 
     system that would rate qualified health plans offered through 
     an Exchange in each benefits level on the basis of the 
     relative quality and price. The Exchange shall include the 
     quality rating in the information provided to individuals and 
     employers through the Internet portal established under 
     paragraph (4).
       (4) Internet portals.--The Secretary shall--
       (A) continue to operate, maintain, and update the Internet 
     portal developed under section 1103(a) and to assist States 
     in developing and maintaining their own such portal; and
       (B) make available for use by Exchanges a model template 
     for an Internet portal that may be used to direct qualified 
     individuals and qualified employers to qualified health 
     plans, to assist such individuals and employers in 
     determining whether they are eligible to participate in an 
     Exchange or eligible for a premium tax credit or cost-sharing 
     reduction, and to present standardized information (including 
     quality ratings) regarding qualified health plans offered 
     through an Exchange to assist consumers in making easy health 
     insurance choices.

     Such template shall include, with respect to each qualified 
     health plan offered through the Exchange in each rating area, 
     access to the uniform outline of coverage the plan is 
     required to provide under section 2716 of the Public Health 
     Service Act and to a copy of the plan's written policy.
       (5) Enrollment periods.--The Secretary shall require an 
     Exchange to provide for--
       (A) an initial open enrollment, as determined by the 
     Secretary (such determination to be made not later than July 
     1, 2012);
       (B) annual open enrollment periods, as determined by the 
     Secretary for calendar years after the initial enrollment 
     period;
       (C) special enrollment periods specified in section 9801 of 
     the Internal Revenue Code of 1986 and other special 
     enrollment periods under circumstances similar to such 
     periods under part D of title XVIII of the Social Security 
     Act; and
       (D) special monthly enrollment periods for Indians (as 
     defined in section 4 of the Indian Health Care Improvement 
     Act).
       (d) Requirements.--
       (1) In general.--An Exchange shall be a governmental agency 
     or nonprofit entity that is established by a State.
       (2) Offering of coverage.--
       (A) In general.--An Exchange shall make available qualified 
     health plans to qualified individuals and qualified 
     employers.
       (B) Limitation.--
       (i) In general.--An Exchange may not make available any 
     health plan that is not a qualified health plan.
       (ii) Offering of stand-alone dental benefits.--Each 
     Exchange within a State shall allow an issuer of a plan that 
     only provides limited scope dental benefits meeting the 
     requirements of section 9832(c)(2)(A) of the Internal Revenue 
     Code of 1986 to offer the plan through the Exchange (either 
     separately or in conjunction with a qualified health plan) if 
     the plan provides pediatric dental benefits meeting the 
     requirements of section 1302(b)(1)(J)).
       (3) Rules relating to additional required benefits.--
       (A) In general.--Except as provided in subparagraph (B), an 
     Exchange may make available a qualified health plan 
     notwithstanding any provision of law that may require 
     benefits other than the essential health benefits specified 
     under section 1302(b).
       (B) States may require additional benefits.--
       (i) In general.--Subject to the requirements of clause 
     (ii), a State may require that a qualified health plan 
     offered in such State offer benefits in addition to the 
     essential health benefits specified under section 1302(b).
       (ii) State must assume cost.--A State shall make payments 
     to or on behalf of an individual eligible for the premium tax 
     credit under section 36B of the Internal Revenue Code of 1986 
     and any cost-sharing reduction under section 1402 to defray 
     the cost to the individual of any additional benefits 
     described in clause (i) which are not eligible for such 
     credit or reduction under section 36B(b)(3)(D) of such Code 
     and section 1402(c)(4).
       (4) Functions.--An Exchange shall, at a minimum--
       (A) implement procedures for the certification, 
     recertification, and decertification, consistent with 
     guidelines developed by the Secretary under subsection (c), 
     of health plans as qualified health plans;
       (B) provide for the operation of a toll-free telephone 
     hotline to respond to requests for assistance;

[[Page 28398]]

       (C) maintain an Internet website through which enrollees 
     and prospective enrollees of qualified health plans may 
     obtain standardized comparative information on such plans;
       (D) assign a rating to each qualified health plan offered 
     through such Exchange in accordance with the criteria 
     developed by the Secretary under subsection (c)(3);
       (E) utilize a standardized format for presenting health 
     benefits plan options in the Exchange, including the use of 
     the uniform outline of coverage established under section 
     2715 of the Public Health Service Act;
       (F) in accordance with section 1413, inform individuals of 
     eligibility requirements for the medicaid program under title 
     XIX of the Social Security Act, the CHIP program under title 
     XXI of such Act, or any applicable State or local public 
     program and if through screening of the application by the 
     Exchange, the Exchange determines that such individuals are 
     eligible for any such program, enroll such individuals in 
     such program;
       (G) establish and make available by electronic means a 
     calculator to determine the actual cost of coverage after the 
     application of any premium tax credit under section 36B of 
     the Internal Revenue Code of 1986 and any cost-sharing 
     reduction under section 1402;
       (H) subject to section 1411, grant a certification 
     attesting that, for purposes of the individual responsibility 
     penalty under section 5000A of the Internal Revenue Code of 
     1986, an individual is exempt from the individual requirement 
     or from the penalty imposed by such section because--
       (i) there is no affordable qualified health plan available 
     through the Exchange, or the individual's employer, covering 
     the individual; or
       (ii) the individual meets the requirements for any other 
     such exemption from the individual responsibility requirement 
     or penalty;
       (I) transfer to the Secretary of the Treasury--
       (i) a list of the individuals who are issued a 
     certification under subparagraph (H), including the name and 
     taxpayer identification number of each individual;
       (ii) the name and taxpayer identification number of each 
     individual who was an employee of an employer but who was 
     determined to be eligible for the premium tax credit under 
     section 36B of the Internal Revenue Code of 1986 because--

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

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

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

       (ii) the State medicaid agency under title XIX of the 
     Social Security Act.
       (g) Rewarding Quality Through Market-Based Incentives.--
       (1) Strategy described.--A strategy described in this 
     paragraph is a payment structure that provides increased 
     reimbursement or other incentives for--
       (A) improving health outcomes through the implementation of 
     activities that shall include quality reporting, effective 
     case management, care coordination, chronic disease 
     management, medication and care compliance initiatives, 
     including through the use of the medical home model, for 
     treatment or services under the plan or coverage;
       (B) the implementation of activities to prevent hospital 
     readmissions through a comprehensive program for hospital 
     discharge that includes patient-centered education and 
     counseling, comprehensive discharge planning, and post 
     discharge reinforcement by an appropriate health care 
     professional;
       (C) the implementation of activities to improve patient 
     safety and reduce medical errors through the appropriate use 
     of best clinical practices, evidence based medicine, and 
     health information technology under the plan or coverage; and
       (D) the implementation of wellness and health promotion 
     activities.
       (2) Guidelines.--The Secretary, in consultation with 
     experts in health care quality and stakeholders, shall 
     develop guidelines concerning the matters described in 
     paragraph (1).
       (3) Requirements.--The guidelines developed under paragraph 
     (2) shall require the periodic reporting to the applicable 
     Exchange of the activities that a qualified health plan has 
     conducted to implement a strategy described in paragraph (1).
       (h) Quality Improvement.--
       (1) Enhancing patient safety.--Beginning on January 1, 
     2015, a qualified health plan may contract with--
       (A) a hospital with greater than 50 beds only if such 
     hospital--
       (i) utilizes a patient safety evaluation system as 
     described in part C of title IX of the Public Health Service 
     Act; and
       (ii) implements a mechanism to ensure that each patient 
     receives a comprehensive

[[Page 28399]]

     program for hospital discharge that includes patient-centered 
     education and counseling, comprehensive discharge planning, 
     and post discharge reinforcement by an appropriate health 
     care professional; or
       (B) a health care provider only if such provider implements 
     such mechanisms to improve health care quality as the 
     Secretary may by regulation require.
       (2) Exceptions.--The Secretary may establish reasonable 
     exceptions to the requirements described in paragraph (1).
       (3) Adjustment.--The Secretary may by regulation adjust the 
     number of beds described in paragraph (1)(A).
       (i) Navigators.--
       (1) In general.--An Exchange shall establish a program 
     under which it awards grants to entities described in 
     paragraph (2) to carry out the duties described in paragraph 
     (3).
       (2) Eligibility.--
       (A) In general.--To be eligible to receive a grant under 
     paragraph (1), an entity shall demonstrate to the Exchange 
     involved that the entity has existing relationships, or could 
     readily establish relationships, with employers and 
     employees, consumers (including uninsured and underinsured 
     consumers), or self-employed individuals likely to be 
     qualified to enroll in a qualified health plan.
       (B) Types.--Entities described in subparagraph (A) may 
     include trade, industry, and professional associations, 
     commercial fishing industry organizations, ranching and 
     farming organizations, community and consumer-focused 
     nonprofit groups, chambers of commerce, unions, small 
     business development centers, other licensed insurance agents 
     and brokers, and other entities that--
       (i) are capable of carrying out the duties described in 
     paragraph (3);
       (ii) meet the standards described in paragraph (4); and
       (iii) provide information consistent with the standards 
     developed under paragraph (5).
       (3) Duties.--An entity that serves as a navigator under a 
     grant under this subsection shall--
       (A) conduct public education activities to raise awareness 
     of the availability of qualified health plans;
       (B) distribute fair and impartial information concerning 
     enrollment in qualified health plans, and the availability of 
     premium tax credits under section 36B of the Internal Revenue 
     Code of 1986 and cost-sharing reductions under section 1402;
       (C) facilitate enrollment in qualified health plans;
       (D) provide referrals to any applicable office of health 
     insurance consumer assistance or health insurance ombudsman 
     established under section 2793 of the Public Health Service 
     Act, or any other appropriate State agency or agencies, for 
     any enrollee with a grievance, complaint, or question 
     regarding their health plan, coverage, or a determination 
     under such plan or coverage; and
       (E) provide information in a manner that is culturally and 
     linguistically appropriate to the needs of the population 
     being served by the Exchange or Exchanges.
       (4) Standards.--
       (A) In general.--The Secretary shall establish standards 
     for navigators under this subsection, including provisions to 
     ensure that any private or public entity that is selected as 
     a navigator is qualified, and licensed if appropriate, to 
     engage in the navigator activities described in this 
     subsection and to avoid conflicts of interest. Under such 
     standards, a navigator shall not--
       (i) be a health insurance issuer; or
       (ii) receive any consideration directly or indirectly from 
     any health insurance issuer in connection with the enrollment 
     of any qualified individuals or employees of a qualified 
     employer in a qualified health plan.
       (5) Fair and impartial information and services.--The 
     Secretary, in collaboration with States, shall develop 
     standards to ensure that information made available by 
     navigators is fair, accurate, and impartial.
       (6) Funding.--Grants under this subsection shall be made 
     from the operational funds of the Exchange and not Federal 
     funds received by the State to establish the Exchange.
       (j) Applicability of Mental Health Parity.--Section 2726 of 
     the Public Health Service Act shall apply to qualified health 
     plans in the same manner and to the same extent as such 
     section applies to health insurance issuers and group health 
     plans.
       (k) Conflict.--An Exchange may not establish rules that 
     conflict with or prevent the application of regulations 
     promulgated by the Secretary under this subtitle.

     SEC. 1312. CONSUMER CHOICE.

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

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

       (ii) Definitions.--In this section:

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

       (4) No penalty for transferring to minimum essential 
     coverage outside exchange.--An Exchange, or a qualified 
     health plan offered through an Exchange, shall not impose any 
     penalty or other fee on an individual who cancels enrollment 
     in a plan because the individual becomes eligible for minimum 
     essential coverage (as defined in section 5000A(f) of the 
     Internal Revenue Code of 1986 without regard to paragraph 
     (1)(C) or (D) thereof) or such coverage becomes affordable 
     (within the meaning of section 36B(c)(2)(C) of such Code).
       (e) Enrollment Through Agents or Brokers.--The Secretary 
     shall establish procedures under which a State may allow 
     agents or brokers--
       (1) to enroll individuals in any qualified health plans in 
     the individual or small group market as soon as the plan is 
     offered through an Exchange in the State; and
       (2) to assist individuals in applying for premium tax 
     credits and cost-sharing reductions for plans sold through an 
     Exchange.
     Such procedures may include the establishment of rate 
     schedules for broker commissions paid by health benefits 
     plans offered through an exchange.
       (f) Qualified Individuals and Employers; Access Limited to 
     Citizens and Lawful Residents.--
       (1) Qualified individuals.--In this title:

[[Page 28400]]

       (A) In general.--The term ``qualified individual'' means, 
     with respect to an Exchange, an individual who--
       (i) is seeking to enroll in a qualified health plan in the 
     individual market offered through the Exchange; and
       (ii) resides in the State that established the Exchange 
     (except with respect to territorial agreements under section 
     1312(f)).
       (B) Incarcerated individuals excluded.--An individual shall 
     not be treated as a qualified individual if, at the time of 
     enrollment, the individual is incarcerated, other than 
     incarceration pending the disposition of charges.
       (2) Qualified employer.--In this title:
       (A) In general.--The term ``qualified employer'' means a 
     small employer that elects to make all full-time employees of 
     such employer eligible for 1 or more qualified health plans 
     offered in the small group market through an Exchange that 
     offers qualified health plans.
       (B) Extension to large groups.--
       (i) In general.--Beginning in 2017, each State may allow 
     issuers of health insurance coverage in the large group 
     market in the State to offer qualified health plans in such 
     market through an Exchange. Nothing in this subparagraph 
     shall be construed as requiring the issuer to offer such 
     plans through an Exchange.
       (ii) Large employers eligible.--If a State under clause (i) 
     allows issuers to offer qualified health plans in the large 
     group market through an Exchange, the term ``qualified 
     employer'' shall include a large employer that elects to make 
     all full-time employees of such employer eligible for 1 or 
     more qualified health plans offered in the large group market 
     through the Exchange.
       (3) Access limited to lawful residents.--If an individual 
     is not, or is not reasonably expected to be for the entire 
     period for which enrollment is sought, a citizen or national 
     of the United States or an alien lawfully present in the 
     United States, the individual shall not be treated as a 
     qualified individual and may not be covered under a qualified 
     health plan in the individual market that is offered through 
     an Exchange.

     SEC. 1313. FINANCIAL INTEGRITY.

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

           PART III--STATE FLEXIBILITY RELATING TO EXCHANGES

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

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

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

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

[[Page 28401]]



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

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

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

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

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

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

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

     The Secretary shall notify the Secretary of the Treasury of 
     any determination under this section of a failure that 
     results in the termination of an issuer's tax-exempt status 
     under section 501(c)(29) of such Code.
       (D) Time for awarding loans and grants.--The Secretary 
     shall not later than July 1, 2013, award the loans and grants 
     under the CO-OP program and begin the distribution of amounts 
     awarded under such loans and grants.
       (3) Advisory board.--
       (A) In general.--The advisory board under this paragraph 
     shall consist of 15 members appointed by the Comptroller 
     General of the United States from among individuals with 
     qualifications described in section 1805(c)(2) of the Social 
     Security Act.
       (B) Rules relating to appointments.--
       (i) Standards.--Any individual appointed under subparagraph 
     (A) shall meet ethics and conflict of interest standards 
     protecting against insurance industry involvement and 
     interference.
       (ii) Original appointments.--The original appointment of 
     board members under subparagraph (A)(ii) shall be made no 
     later than 3 months after the date of enactment of this Act.
       (C) Vacancy.--Any vacancy on the advisory board shall be 
     filled in the same manner as the original appointment.
       (D) Pay and reimbursement.--
       (i) No compensation for members of advisory board.--Except 
     as provided in clause (ii), a member of the advisory board 
     may not receive pay, allowances, or benefits by reason of 
     their service on the board.
       (ii) Travel expenses.--Each member shall receive travel 
     expenses, including per diem in lieu of subsistence under 
     subchapter I of chapter 57 of title 5, United States Code.
       (E) Application of faca.--The Federal Advisory Committee 
     Act (5 U.S.C. App.) shall apply to the advisory board, except 
     that section 14 of such Act shall not apply.
       (F) Termination.--The advisory board shall terminate on the 
     earlier of the date that it completes its duties under this 
     section or December 31, 2015.
       (c) Qualified Nonprofit Health Insurance Issuer.--For 
     purposes of this section--
       (1) In general.--The term ``qualified nonprofit health 
     insurance issuer'' means a health insurance issuer that is an 
     organization--
       (A) that is organized under State law as a nonprofit, 
     member corporation;
       (B) substantially all of the activities of which consist of 
     the issuance of qualified health plans in the individual and 
     small group markets in each State in which it is licensed to 
     issue such plans; and
       (C) that meets the other requirements of this subsection.
       (2) Certain organizations prohibited.--An organization 
     shall not be treated as a qualified nonprofit health 
     insurance issuer if--
       (A) the organization or a related entity (or any 
     predecessor of either) was a health insurance issuer on July 
     16, 2009; or
       (B) the organization is sponsored by a State or local 
     government, any political subdivision thereof, or any 
     instrumentality of such government or political subdivision.
       (3) Governance requirements.--An organization shall not be 
     treated as a qualified nonprofit health insurance issuer 
     unless--
       (A) the governance of the organization is subject to a 
     majority vote of its members;
       (B) its governing documents incorporate ethics and conflict 
     of interest standards protecting against insurance industry 
     involvement and interference; and
       (C) as provided in regulations promulgated by the 
     Secretary, the organization is required to operate with a 
     strong consumer focus, including timeliness, responsiveness, 
     and accountability to members.
       (4) Profits inure to benefit of members.--An organization 
     shall not be treated as a qualified nonprofit health 
     insurance issuer unless any profits made by the organization 
     are required to be used to lower premiums, to improve 
     benefits, or for other programs intended to improve the 
     quality of health care delivered to its members.
       (5) Compliance with state insurance laws.--An organization 
     shall not be treated as a qualified nonprofit health 
     insurance issuer unless the organization meets all the 
     requirements that other issuers of qualified health plans are 
     required to meet in any State where the issuer offers a 
     qualified health plan, including solvency and licensure 
     requirements, rules on payments to providers, and compliance 
     with network adequacy rules, rate and form filing rules, any 
     applicable State premium assessments and any other State law 
     described in section 1324(b).
       (6) Coordination with state insurance reforms.--An 
     organization shall not be treated as a qualified nonprofit 
     health insurance issuer unless the organization does not 
     offer a health plan in a State until that State has in effect 
     (or the Secretary has implemented for the State) the market 
     reforms required by part A of title XXVII of the Public 
     Health Service Act (as amended by subtitles A and C of this 
     Act).
       (d) Establishment of Private Purchasing Council.--
       (1) In general.--Qualified nonprofit health insurance 
     issuers participating in the CO-OP program under this section 
     may establish a private purchasing council to enter into 
     collective purchasing arrangements for items and services 
     that increase administrative and other cost efficiencies, 
     including claims administration, administrative services, 
     health information technology, and actuarial services.
       (2) Council may not set payment rates.--The private 
     purchasing council established under paragraph (1) shall not 
     set payment rates for health care facilities or providers 
     participating in health insurance coverage provided by 
     qualified nonprofit health insurance issuers.
       (3) Continued application of antitrust laws.--
       (A) In general.--Nothing in this section shall be construed 
     to limit the application of the antitrust laws to any private 
     purchasing council (whether or not established under this 
     subsection) or to any qualified nonprofit health insurance 
     issuer participating in such a council.
       (B) Antitrust laws.--For purposes of this subparagraph, the 
     term ``antitrust laws'' has

[[Page 28402]]

     the meaning given the term in subsection (a) of the first 
     section of the Clayton Act (15 U.S.C. 12(a)). Such term also 
     includes section 5 of the Federal Trade Commission Act (15 
     U.S.C. 45) to the extent that such section 5 applies to 
     unfair methods of competition.
       (e) Limitation on Participation.--No representative of any 
     Federal, State, or local government (or of any political 
     subdivision or instrumentality thereof), and no 
     representative of a person described in subsection (c)(2)(A), 
     may serve on the board of directors of a qualified nonprofit 
     health insurance issuer or with a private purchasing council 
     established under subsection (d).
       (f) Limitations on Secretary.--
       (1) In general.--The Secretary shall not--
       (A) participate in any negotiations between 1 or more 
     qualified nonprofit health insurance issuers (or a private 
     purchasing council established under subsection (d)) and any 
     health care facilities or providers, including any drug 
     manufacturer, pharmacy, or hospital; and
       (B) establish or maintain a price structure for 
     reimbursement of any health benefits covered by such issuers.
       (2) Competition.--Nothing in this section shall be 
     construed as authorizing the Secretary to interfere with the 
     competitive nature of providing health benefits through 
     qualified nonprofit health insurance issuers.
       (g) Appropriations.--There are hereby appropriated, out of 
     any funds in the Treasury not otherwise appropriated, 
     $6,000,000,000 to carry out this section.
       (h) Tax Exemption for Qualified Nonprofit Health Insurance 
     Issuer.--
       (1) In general.--Section 501(c) of the Internal Revenue 
     Code of 1986 (relating to list of exempt organizations) is 
     amended by adding at the end the following:
       ``(29) CO-OP health insurance issuers.--
       ``(A) In general.--A qualified nonprofit health insurance 
     issuer (within the meaning of section 1322 of the Patient 
     Protection and Affordable Care Act) which has received a loan 
     or grant under the CO-OP program under such section, but only 
     with respect to periods for which the issuer is in compliance 
     with the requirements of such section and any agreement with 
     respect to the loan or grant.
       ``(B) Conditions for exemption.--Subparagraph (A) shall 
     apply to an organization only if--
       ``(i) the organization has given notice to the Secretary, 
     in such manner as the Secretary may by regulations prescribe, 
     that it is applying for recognition of its status under this 
     paragraph,
       ``(ii) except as provided in section 1322(c)(4) of the 
     Patient Protection and Affordable Care Act, no part of the 
     net earnings of which inures to the benefit of any private 
     shareholder or individual,
       ``(iii) no substantial part of the activities of which is 
     carrying on propaganda, or otherwise attempting, to influence 
     legislation, and
       ``(iv) the organization does not participate in, or 
     intervene in (including the publishing or distributing of 
     statements), any political campaign on behalf of (or in 
     opposition to) any candidate for public office.''.
       (2) Additional reporting requirement.--Section 6033 of such 
     Code (relating to returns by exempt organizations) is amended 
     by redesignating subsection (m) as subsection (n) and by 
     inserting after subsection (l) the following:
       ``(m) Additional Information Required From CO-OP 
     Insurers.--An organization described in section 501(c)(29) 
     shall include on the return required under subsection (a) the 
     following information:
       ``(1) The amount of the reserves required by each State in 
     which the organization is licensed to issue qualified health 
     plans.
       ``(2) The amount of reserves on hand.''.
       (3) Application of tax on excess benefit transactions.--
     Section 4958(e)(1) of such Code (defining applicable tax-
     exempt organization) is amended by striking ``paragraph (3) 
     or (4)'' and inserting ``paragraph (3), (4), or (29)''.
       (i) GAO Study and Report.--
       (1) Study.--The Comptroller General of the General 
     Accountability Office shall conduct an ongoing study on 
     competition and market concentration in the health insurance 
     market in the United States after the implementation of the 
     reforms in such market under the provisions of, and the 
     amendments made by, this Act. Such study shall include an 
     analysis of new issuers of health insurance in such market.
       (2) Report.--The Comptroller General shall, not later than 
     December 31 of each even-numbered year (beginning with 2014), 
     report to the appropriate committees of the Congress the 
     results of the study conducted under paragraph (1), including 
     any recommendations for administrative or legislative changes 
     the Comptroller General determines necessary or appropriate 
     to increase competition in the health insurance market.

     SEC. 1323. COMMUNITY HEALTH INSURANCE OPTION.

       (a) Voluntary Nature.--
       (1) No requirement for health care providers to 
     participate.--Nothing in this section shall be construed to 
     require a health care provider to participate in a community 
     health insurance option, or to impose any penalty for non-
     participation.
       (2) No requirement for individuals to join.--Nothing in 
     this section shall be construed to require an individual to 
     participate in a community health insurance option, or to 
     impose any penalty for non-participation.
       (3) State opt out.--
       (A) In general.--A State may elect to prohibit Exchanges in 
     such State from offering a community health insurance option 
     if such State enacts a law to provide for such prohibition.
       (B) Termination of opt out.--A State may repeal a law 
     described in subparagraph (A) and provide for the offering of 
     such an option through the Exchange.
       (b) Establishment of Community Health Insurance Option.--
       (1) Establishment.--The Secretary shall establish a 
     community health insurance option to offer, through the 
     Exchanges established under this title (other than Exchanges 
     in States that elect to opt out as provided for in subsection 
     (a)(3)), health care coverage that provides value, choice, 
     competition, and stability of affordable, high quality 
     coverage throughout the United States.
       (2) Community health insurance option.--In this section, 
     the term ``community health insurance option'' means health 
     insurance coverage that--
       (A) except as specifically provided for in this section, 
     complies with the requirements for being a qualified health 
     plan;
       (B) provides high value for the premium charged;
       (C) reduces administrative costs and promotes 
     administrative simplification for beneficiaries;
       (D) promotes high quality clinical care;
       (E) provides high quality customer service to 
     beneficiaries;
       (F) offers a sufficient choice of providers; and
       (G) complies with State laws (if any), except as otherwise 
     provided for in this title, relating to the laws described in 
     section 1324(b).
       (3) Essential health benefits.--
       (A) General rule.--Except as provided in subparagraph (B), 
     a community health insurance option offered under this 
     section shall provide coverage only for the essential health 
     benefits described in section 1302(b).
       (B) States may offer additional benefits.--Nothing in this 
     section shall preclude a State from requiring that benefits 
     in addition to the essential health benefits required under 
     subparagraph (A) be provided to enrollees of a community 
     health insurance option offered in such State.
       (C) Credits.--
       (i) In general.--An individual enrolled in a community 
     health insurance option under this section shall be eligible 
     for credits under section 36B of the Internal Revenue Code of 
     1986 in the same manner as an individual who is enrolled in a 
     qualified health plan.
       (ii) No additional federal cost.--A requirement by a State 
     under subparagraph (B) that benefits in addition to the 
     essential health benefits required under subparagraph (A) be 
     provided to enrollees of a community health insurance option 
     shall not affect the amount of a premium tax credit provided 
     under section 36B of the Internal Revenue Code of 1986 with 
     respect to such plan.
       (D) State must assume cost.--A State shall make payments to 
     or on behalf of an eligible individual to defray the cost of 
     any additional benefits described in subparagraph (B).
       (E) Ensuring access to all services.--Nothing in this Act 
     shall prohibit an individual enrolled in a community health 
     insurance option from paying out-of-pocket the full cost of 
     any item or service not included as an essential health 
     benefit or otherwise covered as a benefit by a health plan. 
     Nothing in subparagraph (B) shall prohibit any type of 
     medical provider from accepting an out-of-pocket payment from 
     an individual enrolled in a community health insurance option 
     for a service otherwise not included as an essential health 
     benefit.
       (F) Protecting access to end of life care.--A community 
     health insurance option offered under this section shall be 
     prohibited from limiting access to end of life care.
       (4) Cost sharing.--A community health insurance option 
     shall offer coverage at each of the levels of coverage 
     described in section 1302(d).
       (5) Premiums.--
       (A) Premiums sufficient to cover costs.--The Secretary 
     shall establish geographically adjusted premium rates in an 
     amount sufficient to cover expected costs (including claims 
     and administrative costs) using methods in general use by 
     qualified health plans.
       (B) Applicable rules.--The provisions of title XXVII of the 
     Public Health Service Act relating to premiums shall apply to 
     community health insurance options under this section, 
     including modified community rating provisions under section 
     2701 of such Act.
       (C) Collection of data.--The Secretary shall collect data 
     as necessary to set premium rates under subparagraph (A).
       (D) National pooling.--Notwithstanding any other provision 
     of law, the Secretary may treat all enrollees in community 
     health insurance options as members of a single pool.
       (E) Contingency margin.--In establishing premium rates 
     under subparagraph (A), the

[[Page 28403]]

     Secretary shall include an appropriate amount for a 
     contingency margin.
       (6) Reimbursement rates.--
       (A) Negotiated rates.--The Secretary shall negotiate rates 
     for the reimbursement of health care providers for benefits 
     covered under a community health insurance option.
       (B) Limitation.--The rates described in subparagraph (A) 
     shall not be higher, in aggregate, than the average 
     reimbursement rates paid by health insurance issuers offering 
     qualified health plans through the Exchange.
       (C) Innovation.--Subject to the limits contained in 
     subparagraph (A), a State Advisory Council established or 
     designated under subsection (d) may develop or encourage the 
     use of innovative payment policies that promote quality, 
     efficiency and savings to consumers.
       (7) Solvency and consumer protection.--
       (A) Solvency.--The Secretary shall establish a Federal 
     solvency standard to be applied with respect to a community 
     health insurance option. A community health insurance option 
     shall also be subject to the solvency standard of each State 
     in which such community health insurance option is offered.
       (B) Minimum required.--In establishing the standard 
     described under subparagraph (A), the Secretary shall require 
     a reserve fund that shall be equal to at least the dollar 
     value of the incurred but not reported claims of a community 
     health insurance option.
       (C) Consumer protections.--The consumer protection laws of 
     a State shall apply to a community health insurance option.
       (8) Requirements established in partnership with insurance 
     commissioners.--
       (A) In general.--The Secretary, in collaboration with the 
     National Association of Insurance Commissioners (in this 
     paragraph referred to as the ``NAIC''), may promulgate 
     regulations to establish additional requirements for a 
     community health insurance option.
       (B) Applicability.--Any requirement promulgated under 
     subparagraph (A) shall be applicable to such option beginning 
     90 days after the date on which the regulation involved 
     becomes final.
       (c) Start-up Fund.--
       (1) Establishment of fund.--
       (A) In general.--There is established in the Treasury of 
     the United States a trust fund to be known as the ``Health 
     Benefit Plan Start-Up Fund'' (referred to in this section as 
     the ``Start-Up Fund''), that shall consist of such amounts as 
     may be appropriated or credited to the Start-Up Fund as 
     provided for in this subsection to provide loans for the 
     initial operations of a community health insurance option. 
     Such amounts shall remain available until expended.
       (B) Funding.--There is hereby appropriated to the Start-Up 
     Fund, out of any moneys in the Treasury not otherwise 
     appropriated an amount requested by the Secretary of Health 
     and Human Services as necessary to--
       (i) pay the start-up costs associated with the initial 
     operations of a community health insurance option; and
       (ii) pay the costs of making payments on claims submitted 
     during the period that is not more than 90 days from the date 
     on which such option is offered.
       (2) Use of start-up fund.--The Secretary shall use amounts 
     contained in the Start-Up Fund to make payments (subject to 
     the repayment requirements in paragraph (4)) for the purposes 
     described in paragraph (1)(B).
       (3) Pass through of rebates.--The Secretary may establish 
     procedures for reducing the amount of payments to a 
     contracting administrator to take into account any rebates or 
     price concessions.
       (4) Repayment.--
       (A) In general.--A community health insurance option shall 
     be required to repay the Secretary of the Treasury (on such 
     terms as the Secretary may require) for any payments made 
     under paragraph (1)(B) by the date that is not later than 9 
     years after the date on which the payment is made. The 
     Secretary may require the payment of interest with respect to 
     such repayments at rates that do not exceed the market 
     interest rate (as determined by the Secretary).
       (B) Sanctions in case of for-profit conversion.--In any 
     case in which the Secretary enters into a contract with a 
     qualified entity for the offering of a community health 
     insurance option and such entity is determined to be a for-
     profit entity by the Secretary, such entity shall be--
       (i) immediately liable to the Secretary for any payments 
     received by such entity from the Start-Up Fund; and
       (ii) permanently ineligible to offer a qualified health 
     plan.
       (d) State Advisory Council.--
       (1) Establishment.--A State (other than a State that elects 
     to opt out as provided for in subsection (a)(3)) shall 
     establish or designate a public or non-profit private entity 
     to serve as the State Advisory Council to provide 
     recommendations to the Secretary on the operations and 
     policies of a community health insurance option in the State. 
     Such Council shall provide recommendations on at least the 
     following:
       (A) policies and procedures to integrate quality 
     improvement and cost containment mechanisms into the health 
     care delivery system;
       (B) mechanisms to facilitate public awareness of the 
     availability of a community health insurance option; and
       (C) alternative payment structures under a community health 
     insurance option for health care providers that encourage 
     quality improvement and cost control.
       (2) Members.--The members of the State Advisory Council 
     shall be representatives of the public and shall include 
     health care consumers and providers.
       (3) Applicability of recommendations.--The Secretary may 
     apply the recommendations of a State Advisory Council to a 
     community health insurance option in that State, in any other 
     State, or in all States.
       (e) Authority to Contract; Terms of Contract.--
       (1) Authority.--
       (A) In general.--The Secretary may enter into a contract or 
     contracts with one or more qualified entities for the purpose 
     of performing administrative functions (including functions 
     described in subsection (a)(4) of section 1874A of the Social 
     Security Act) with respect to a community health insurance 
     option in the same manner as the Secretary may enter into 
     contracts under subsection (a)(1) of such section. The 
     Secretary shall have the same authority with respect to a 
     community health insurance option under this section as the 
     Secretary has under subsections (a)(1) and (b) of section 
     1874A of the Social Security Act with respect to title XVIII 
     of such Act.
       (B) Requirements apply.--If the Secretary enters into a 
     contract with a qualified entity to offer a community health 
     insurance option, under such contract such entity--
       (i) shall meet the criteria established under paragraph 
     (2); and
       (ii) shall receive an administrative fee under paragraph 
     (7).
       (C) Limitation.--Contracts under this subsection shall not 
     involve the transfer of insurance risk to the contracting 
     administrator.
       (D) Reference.--An entity with which the Secretary has 
     entered into a contract under this paragraph shall be 
     referred to as a ``contracting administrator''.
       (2) Qualified entity.--To be qualified to be selected by 
     the Secretary to offer a community health insurance option, 
     an entity shall--
       (A) meet the criteria established under section 1874A(a)(2) 
     of the Social Security Act;
       (B) be a nonprofit entity for purposes of offering such 
     option;
       (C) meet the solvency standards applicable under subsection 
     (b)(7);
       (D) be eligible to offer health insurance or health 
     benefits coverage;
       (E) meet quality standards specified by the Secretary;
       (F) have in place effective procedures to control fraud, 
     abuse, and waste; and
       (G) meet such other requirements as the Secretary may 
     impose.

     Procedures described under subparagraph (F) shall include the 
     implementation of procedures to use beneficiary identifiers 
     to identify individuals entitled to benefits so that such an 
     individual's social security account number is not used, and 
     shall also include procedures for the use of technology 
     (including front-end, prepayment intelligent data-matching 
     technology similar to that used by hedge funds, investment 
     funds, and banks) to provide real-time data analysis of 
     claims for payment under this title to identify and 
     investigate unusual billing or order practices under this 
     title that could indicate fraud or abuse.
       (3) Term.--A contract provided for under paragraph (1) 
     shall be for a term of at least 5 years but not more than 10 
     years, as determined by the Secretary. At the end of each 
     such term, the Secretary shall conduct a competitive bidding 
     process for the purposes of renewing existing contracts or 
     selecting new qualified entities with which to enter into 
     contracts under such paragraph.
       (4) Limitation.--A contract may not be renewed under this 
     subsection unless the Secretary determines that the 
     contracting administrator has met performance requirements 
     established by the Secretary in the areas described in 
     paragraph (7)(B).
       (5) Audits.--The Inspector General shall conduct periodic 
     audits with respect to contracting administrators under this 
     subsection to ensure that the administrator involved is in 
     compliance with this section.
       (6) Revocation.--A contract awarded under this subsection 
     shall be revoked by the Secretary, upon the recommendation of 
     the Inspector General, only after notice to the contracting 
     administrator involved and an opportunity for a hearing. The 
     Secretary may revoke such contract if the Secretary 
     determines that such administrator has engaged in fraud, 
     deception, waste, abuse of power, negligence, mismanagement 
     of taxpayer dollars, or gross mismanagement. An entity that 
     has had a contract revoked under this paragraph shall not be 
     qualified to enter into a subsequent contract under this 
     subsection.
       (7) Fee for administration.--
       (A) In general.--The Secretary shall pay the contracting 
     administrator a fee for the management, administration, and 
     delivery of the benefits under this section.
       (B) Requirement for high quality administration.--The 
     Secretary may increase the fee described in subparagraph (A) 
     by not

[[Page 28404]]

     more than 10 percent, or reduce the fee described in 
     subparagraph (A) by not more than 50 percent, based on the 
     extent to which the contracting administrator, in the 
     determination of the Secretary, meets performance 
     requirements established by the Secretary, in at least the 
     following areas:
       (i) Maintaining low premium costs and low cost sharing 
     requirements, provided that such requirements are consistent 
     with section 1302.
       (ii) Reducing administrative costs and promoting 
     administrative simplification for beneficiaries.
       (iii) Promoting high quality clinical care.
       (iv) Providing high quality customer service to 
     beneficiaries.
       (C) Non-renewal.--The Secretary may not renew a contract to 
     offer a community health insurance option under this section 
     with any contracting entity that has been assessed more than 
     one reduction under subparagraph (B) during the contract 
     period.
       (8) Limitation.--Notwithstanding the terms of a contract 
     under this subsection, the Secretary shall negotiate the 
     reimbursement rates for purposes of subsection (b)(6).
       (f) Report by HHS and Insolvency Warnings.--
       (1) In general.--On an annual basis, the Secretary shall 
     conduct a study on the solvency of a community health 
     insurance option and submit to Congress a report describing 
     the results of such study.
       (2) Result.--If, in any year, the result of the study under 
     paragraph (1) is that a community health insurance option is 
     insolvent, such result shall be treated as a community health 
     insurance option solvency warning.
       (3) Submission of plan and procedure.--
       (A) In general.--If there is a community health insurance 
     option solvency warning under paragraph (2) made in a year, 
     the President shall submit to Congress, within the 15-day 
     period beginning on the date of the budget submission to 
     Congress under section 1105(a) of title 31, United States 
     Code, for the succeeding year, proposed legislation to 
     respond to such warning.
       (B) Procedure.--In the case of a legislative proposal 
     submitted by the President pursuant to subparagraph (A), such 
     proposal shall be considered by Congress using the same 
     procedures described under sections 803 and 804 of the 
     Medicare Prescription Drug, Improvement, and Modernization 
     Act of 2003 that shall be used for a medicare funding 
     warning.
       (g) Marketing Parity.--In a facility controlled by the 
     Federal Government, or by a State, where marketing or 
     promotional materials related to a community health insurance 
     option are made available to the public, making available 
     marketing or promotional materials relating to private health 
     insurance plans shall not be prohibited. Such materials 
     include informational pamphlets, guidebooks, enrollment 
     forms, or other materials determined reasonable for display.
       (h) Authorization of Appropriations.--There is authorized 
     to be appropriated such sums as may be necessary to carry out 
     this section.

     SEC. 1324. LEVEL PLAYING FIELD.

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

      PART IV--STATE FLEXIBILITY TO ESTABLISH ALTERNATIVE PROGRAMS

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

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

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

       (B) the benefits provided under the standard health plans 
     offered through the program cover at least the essential 
     health benefits described in section 1302(b).

     For purposes of subparagraph (A)(i), the amount of the 
     monthly premium an individual is required to pay under either 
     the standard health plan or the applicable second lowest cost 
     silver plan shall be determined after reduction for any 
     premium tax credits and cost-sharing reductions allowable 
     with respect to either plan.
       (b) Standard Health Plan.--In this section, the term 
     ``standard heath plan'' means a health benefits plan that the 
     State contracts with under this section--
       (1) under which the only individuals eligible to enroll are 
     eligible individuals;
       (2) that provides at least the essential health benefits 
     described in section 1302(b); and
       (3) in the case of a plan that provides health insurance 
     coverage offered by a health insurance issuer, that has a 
     medical loss ratio of at least 85 percent.
       (c) Contracting Process.--
       (1) In general.--A State basic health program shall 
     establish a competitive process for entering into contracts 
     with standard health plans under subsection (a), including 
     negotiation of premiums and cost-sharing and negotiation of 
     benefits in addition to the essential health benefits 
     described in section 1302(b).
       (2) Specific items to be considered.--A State shall, as 
     part of its competitive process under paragraph (1), include 
     at least the following:
       (A) Innovation.--Negotiation with offerors of a standard 
     health plan for the inclusion of innovative features in the 
     plan, including--
       (i) care coordination and care management for enrollees, 
     especially for those with chronic health conditions;
       (ii) incentives for use of preventive services; and
       (iii) the establishment of relationships between providers 
     and patients that maximize patient involvement in health care 
     decision-making, including providing incentives for 
     appropriate utilization under the plan.
       (B) Health and resource differences.--Consideration of, and 
     the making of suitable allowances for, differences in health 
     care needs of enrollees and differences in local availability 
     of, and access to, health care providers. Nothing in this 
     subparagraph shall be construed as allowing discrimination on 
     the basis of pre-existing conditions or other health status-
     related factors.
       (C) Managed care.--Contracting with managed care systems, 
     or with systems that offer as many of the attributes of 
     managed care as are feasible in the local health care market.
       (D) Performance measures.--Establishing specific 
     performance measures and standards for issuers of standard 
     health plans that focus on quality of care and improved 
     health outcomes, requiring such plans to report to the State 
     with respect to the measures and standards, and making the 
     performance and quality information available to enrollees in 
     a useful form.
       (3) Enhanced availability.--
       (A) Multiple plans.--A State shall, to the maximum extent 
     feasible, seek to make multiple standard health plans 
     available to eligible individuals within a State to ensure 
     individuals have a choice of such plans.
       (B) Regional compacts.--A State may negotiate a regional 
     compact with other States to include coverage of eligible 
     individuals in all such States in agreements with issuers of 
     standard health plans.
       (4) Coordination with other state programs.--A State shall 
     seek to coordinate the administration of, and provision of 
     benefits under, its program under this section with the State 
     medicaid program under title XIX of the Social Security Act, 
     the State child health plan under title XXI of such Act, and 
     other State-administered health programs to maximize the 
     efficiency of such programs and to improve the continuity of 
     care.
       (d) Transfer of Funds to States.--
       (1) In general.--If the Secretary determines that a State 
     electing the application of this section meets the 
     requirements of the program established under subsection (a), 
     the Secretary shall transfer to the State for each fiscal 
     year for which 1 or more standard

[[Page 28405]]

     health plans are operating within the State the amount 
     determined under paragraph (3).
       (2) Use of funds.--A State shall establish a trust for the 
     deposit of the amounts received under paragraph (1) and 
     amounts in the trust fund shall only be used to reduce the 
     premiums and cost-sharing of, or to provide additional 
     benefits for, eligible individuals enrolled in standard 
     health plans within the State. Amounts in the trust fund, and 
     expenditures of such amounts, shall not be included in 
     determining the amount of any non-Federal funds for purposes 
     of meeting any matching or expenditure requirement of any 
     federally-funded program.
       (3) Amount of payment.--
       (A) Secretarial determination.--
       (i) In general.--The amount determined under this paragraph 
     for any fiscal year is the amount the Secretary determines is 
     equal to 85 percent of the premium tax credits under section 
     36B of the Internal Revenue Code of 1986, and the cost-
     sharing reductions under section 1402, that would have been 
     provided for the fiscal year to eligible individuals enrolled 
     in standard health plans in the State if such eligible 
     individuals were allowed to enroll in qualified health plans 
     through an Exchange established under this subtitle.
       (ii) Specific requirements.--The Secretary shall make the 
     determination under clause (i) on a per enrollee basis and 
     shall take into account all relevant factors necessary to 
     determine the value of the premium tax credits and cost-
     sharing reductions that would have been provided to eligible 
     individuals described in clause (i), including the age and 
     income of the enrollee, whether the enrollment is for self-
     only or family coverage, geographic differences in average 
     spending for health care across rating areas, the health 
     status of the enrollee for purposes of determining risk 
     adjustment payments and reinsurance payments that would have 
     been made if the enrollee had enrolled in a qualified health 
     plan through an Exchange, and whether any reconciliation of 
     the credit or cost-sharing reductions would have occurred if 
     the enrollee had been so enrolled. This determination shall 
     take into consideration the experience of other States with 
     respect to participation in an Exchange and such credits and 
     reductions provided to residents of the other States, with a 
     special focus on enrollees with income below 200 percent of 
     poverty.
       (iii) Certification.--The Chief Actuary of the Centers for 
     Medicare & Medicaid Services, in consultation with the Office 
     of Tax Analysis of the Department of the Treasury, shall 
     certify whether the methodology used to make determinations 
     under this subparagraph, and such determinations, meet the 
     requirements of clause (ii). Such certifications shall be 
     based on sufficient data from the State and from comparable 
     States about their experience with programs created by this 
     Act.
       (B) Corrections.--The Secretary shall adjust the payment 
     for any fiscal year to reflect any error in the 
     determinations under subparagraph (A) for any preceding 
     fiscal year.
       (4) Application of special rules.--The provisions of 
     section 1303 shall apply to a State basic health program, and 
     to standard health plans offered through such program, in the 
     same manner as such rules apply to qualified health plans.
       (e) Eligible Individual.--
       (1) In general.--In this section, the term ``eligible 
     individual'' means, with respect to any State, an 
     individual--
       (A) who a resident of the State who is not eligible to 
     enroll in the State's medicaid program under title XIX of the 
     Social Security Act for benefits that at a minimum consist of 
     the essential health benefits described in section 1302(b);
       (B) whose household income exceeds 133 percent but does not 
     exceed 200 percent of the poverty line for the size of the 
     family involved;
       (C) who is not eligible for minimum essential coverage (as 
     defined in section 5000A(f) of the Internal Revenue Code of 
     1986) or is eligible for an employer-sponsored plan that is 
     not affordable coverage (as determined under section 
     5000A(e)(2) of such Code); and
       (D) who has not attained age 65 as of the beginning of the 
     plan year.

     Such term shall not include any individual who is not a 
     qualified individual under section 1312 who is eligible to be 
     covered by a qualified health plan offered through an 
     Exchange.
       (2) Eligible individuals may not use exchange.--An eligible 
     individual shall not be treated as a qualified individual 
     under section 1312 eligible for enrollment in a qualified 
     health plan offered through an Exchange established under 
     section 1311.
       (f) Secretarial Oversight.--The Secretary shall each year 
     conduct a review of each State program to ensure compliance 
     with the requirements of this section, including ensuring 
     that the State program meets--
       (1) eligibility verification requirements for participation 
     in the program;
       (2) the requirements for use of Federal funds received by 
     the program; and
       (3) the quality and performance standards under this 
     section.
       (g) Standard Health Plan Offerors.--A State may provide 
     that persons eligible to offer standard health plans under a 
     basic health program established under this section may 
     include a licensed health maintenance organization, a 
     licensed health insurance insurer, or a network of health 
     care providers established to offer services under the 
     program.
       (h) Definitions.--Any term used in this section which is 
     also used in section 36B of the Internal Revenue Code of 1986 
     shall have the meaning given such term by such section.

     SEC. 1332. WAIVER FOR STATE INNOVATION.

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

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

       (iii) a process for providing public notice and comment 
     after the application is received by the Secretary, that is 
     sufficient to ensure a meaningful level of public input and 
     that does not impose requirements that are in addition to, or 
     duplicative of, requirements imposed under the Administrative 
     Procedures Act, or requirements that are unreasonable or 
     unnecessarily burdensome with respect to State compliance;
       (iv) a process for the submission to the Secretary of 
     periodic reports by the State concerning the implementation 
     of the program under the waiver; and
       (v) a process for the periodic evaluation by the Secretary 
     of the program under the waiver.
       (C) Report.--The Secretary shall annually report to 
     Congress concerning actions taken by the Secretary with 
     respect to applications for waivers under this section.
       (5) Coordinated waiver process.--The Secretary shall 
     develop a process for coordinating and consolidating the 
     State waiver processes applicable under the provisions of 
     this section, and the existing waiver processes applicable 
     under titles XVIII, XIX, and XXI of the Social Security Act, 
     and any other Federal law relating to the provision of health 
     care items or services. Such process shall permit a State to 
     submit a single application for a waiver under any or all of 
     such provisions.
       (6) Definition.--In this section, the term ``Secretary'' 
     means--

[[Page 28406]]

       (A) the Secretary of Health and Human Services with respect 
     to waivers relating to the provisions described in 
     subparagraph (A) through (C) of paragraph (2); and
       (B) the Secretary of the Treasury with respect to waivers 
     relating to the provisions described in paragraph (2)(D).
       (b) Granting of Waivers.--
       (1) In general.--The Secretary may grant a request for a 
     waiver under subsection (a)(1) only if the Secretary 
     determines that the State plan--
       (A) will provide coverage that is at least as comprehensive 
     as the coverage defined in section 1302(b) and offered 
     through Exchanges established under this title as certified 
     by Office of the Actuary of the Centers for Medicare & 
     Medicaid Services based on sufficient data from the State and 
     from comparable States about their experience with programs 
     created by this Act and the provisions of this Act that would 
     be waived;
       (B) will provide coverage and cost sharing protections 
     against excessive out-of-pocket spending that are at least as 
     affordable as the provisions of this title would provide;
       (C) will provide coverage to at least a comparable number 
     of its residents as the provisions of this title would 
     provide; and
       (D) will not increase the Federal deficit.
       (2) Requirement to enact a law.--
       (A) In general.--A law described in this paragraph is a 
     State law that provides for State actions under a waiver 
     under this section, including the implementation of the State 
     plan under subsection (a)(1)(B).
       (B) Termination of opt out.--A State may repeal a law 
     described in subparagraph (A) and terminate the authority 
     provided under the waiver with respect to the State.
       (c) Scope of Waiver.--
       (1) In general.--The Secretary shall determine the scope of 
     a waiver of a requirement described in subsection (a)(2) 
     granted to a State under subsection (a)(1).
       (2) Limitation.--The Secretary may not waive under this 
     section any Federal law or requirement that is not within the 
     authority of the Secretary.
       (d) Determinations by Secretary.--
       (1) Time for determination.--The Secretary shall make a 
     determination under subsection (a)(1) not later than 180 days 
     after the receipt of an application from a State under such 
     subsection.
       (2) Effect of determination.--
       (A) Granting of waivers.--If the Secretary determines to 
     grant a waiver under subsection (a)(1), the Secretary shall 
     notify the State involved of such determination and the terms 
     and effectiveness of such waiver.
       (B) Denial of waiver.--If the Secretary determines a waiver 
     should not be granted under subsection (a)(1), the Secretary 
     shall notify the State involved, and the appropriate 
     committees of Congress of such determination and the reasons 
     therefore.
       (e) Term of Waiver.--No waiver under this section may 
     extend over a period of longer than 5 years unless the State 
     requests continuation of such waiver, and such request shall 
     be deemed granted unless the Secretary, within 90 days after 
     the date of its submission to the Secretary, either denies 
     such request in writing or informs the State in writing with 
     respect to any additional information which is needed in 
     order to make a final determination with respect to the 
     request.

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

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

[[Page 28407]]

     provided by certain classes of providers of health care 
     services, or a law that mandates that certain classes of 
     individuals must be covered as a group or as dependents, is 
     not a State law mandating benefit coverage by a health 
     benefits plan.

                PART V--REINSURANCE AND RISK ADJUSTMENT

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

       (a) In General.--Each State shall, not later than January 
     1, 2014--
       (1) include in the Federal standards or State law or 
     regulation the State adopts and has in effect under section 
     1321(b) the provisions described in subsection (b); and
       (2) establish (or enter into a contract with) 1 or more 
     applicable reinsurance entities to carry out the reinsurance 
     program under this section.
       (b) Model Regulation.--
       (1) In general.--In establishing the Federal standards 
     under section 1321(a), the Secretary, in consultation with 
     the National Association of Insurance Commissioners (the 
     ``NAIC''), shall include provisions that enable States to 
     establish and maintain a program under which--
       (A) health insurance issuers, and third party 
     administrators on behalf of group health plans, are required 
     to make payments to an applicable reinsurance entity for any 
     plan year beginning in the 3-year period beginning January 1, 
     2014 (as specified in paragraph (3); and
       (B) the applicable reinsurance entity collects payments 
     under subparagraph (A) and uses amounts so collected to make 
     reinsurance payments to health insurance issuers described in 
     subparagraph (A) that cover high risk individuals in the 
     individual market (excluding grandfathered health plans) for 
     any plan year beginning in such 3-year period.
       (2) High-risk individual; payment amounts.--The Secretary 
     shall include the following in the provisions under paragraph 
     (1):
       (A) Determination of high-risk individuals.--The method by 
     which individuals will be identified as high risk individuals 
     for purposes of the reinsurance program established under 
     this section. Such method shall provide for identification of 
     individuals as high-risk individuals on the basis of--
       (i) a list of at least 50 but not more than 100 medical 
     conditions that are identified as high-risk conditions and 
     that may be based on the identification of diagnostic and 
     procedure codes that are indicative of individuals with pre-
     existing, high-risk conditions; or
       (ii) any other comparable objective method of 
     identification recommended by the American Academy of 
     Actuaries.
       (B) Payment amount.--The formula for determining the amount 
     of payments that will be paid to health insurance issuers 
     described in paragraph (1)(A) that insure high-risk 
     individuals. Such formula shall provide for the equitable 
     allocation of available funds through reconciliation and may 
     be designed--
       (i) to provide a schedule of payments that specifies the 
     amount that will be paid for each of the conditions 
     identified under subparagraph (A); or
       (ii) to use any other comparable method for determining 
     payment amounts that is recommended by the American Academy 
     of Actuaries and that encourages the use of care coordination 
     and care management programs for high risk conditions.
       (3) Determination of required contributions.--
       (A) In general.--The Secretary shall include in the 
     provisions under paragraph (1) the method for determining the 
     amount each health insurance issuer and group health plan 
     described in paragraph (1)(A) contributing to the reinsurance 
     program under this section is required to contribute under 
     such paragraph for each plan year beginning in the 36-month 
     period beginning January 1, 2014. The contribution amount for 
     any plan year may be based on the percentage of revenue of 
     each issuer and the total costs of providing benefits to 
     enrollees in self-insured plans or on a specified amount per 
     enrollee and may be required to be paid in advance or 
     periodically throughout the plan year.
       (B) Specific requirements.--The method under this paragraph 
     shall be designed so that--
       (i) the contribution amount for each issuer proportionally 
     reflects each issuer's fully insured commercial book of 
     business for all major medical products and the total value 
     of all fees charged by the issuer and the costs of coverage 
     administered by the issuer as a third party administrator;
       (ii) the contribution amount can include an additional 
     amount to fund the administrative expenses of the applicable 
     reinsurance entity;
       (iii) the aggregate contribution amounts for all States 
     shall, based on the best estimates of the NAIC and without 
     regard to amounts described in clause (ii), equal 
     $10,000,000,000 for plan years beginning in 2014, 
     $6,000,000,000 for plan years beginning 2015, and 
     $4,000,000,000 for plan years beginning in 2016; and
       (iv) in addition to the aggregate contribution amounts 
     under clause (iii), each issuer's contribution amount for any 
     calendar year under clause (iii) reflects its proportionate 
     share of an additional $2,000,000,000 for 2014, an additional 
     $2,000,000,000 for 2015, and an additional $1,000,000,000 for 
     2016.

     Nothing in this subparagraph shall be construed to preclude a 
     State from collecting additional amounts from issuers on a 
     voluntary basis.
       (4) Expenditure of funds.--The provisions under paragraph 
     (1) shall provide that--
       (A) the contribution amounts collected for any calendar 
     year may be allocated and used in any of the three calendar 
     years for which amounts are collected based on the 
     reinsurance needs of a particular period or to reflect 
     experience in a prior period; and
       (B) amounts remaining unexpended as of December, 2016, may 
     be used to make payments under any reinsurance program of a 
     State in the individual market in effect in the 2-year period 
     beginning on January 1, 2017.

     Notwithstanding the preceding sentence, any contribution 
     amounts described in paragraph (3)(B)(iv) shall be deposited 
     into the general fund of the Treasury of the United States 
     and may not be used for the program established under this 
     section.
       (c) Applicable Reinsurance Entity.--For purposes of this 
     section--
       (1) In general.--The term ``applicable reinsurance entity'' 
     means a not-for-profit organization--
       (A) the purpose of which is to help stabilize premiums for 
     coverage in the individual and small group markets in a State 
     during the first 3 years of operation of an Exchange for such 
     markets within the State when the risk of adverse selection 
     related to new rating rules and market changes is greatest; 
     and
       (B) the duties of which shall be to carry out the 
     reinsurance program under this section by coordinating the 
     funding and operation of the risk-spreading mechanisms 
     designed to implement the reinsurance program.
       (2) State discretion.--A State may have more than 1 
     applicable reinsurance entity to carry out the reinsurance 
     program under this section within the State and 2 or more 
     States may enter into agreements to provide for an applicable 
     reinsurance entity to carry out such program in all such 
     States.
       (3) Entities are tax-exempt.--An applicable reinsurance 
     entity established under this section shall be exempt from 
     taxation under chapter 1 of the Internal Revenue Code of 
     1986. The preceding sentence shall not apply to the tax 
     imposed by section 511 such Code (relating to tax on 
     unrelated business taxable income of an exempt organization).
       (d) Coordination With State High-risk Pools.--The State 
     shall eliminate or modify any State high-risk pool to the 
     extent necessary to carry out the reinsurance program 
     established under this section. The State may coordinate the 
     State high-risk pool with such program to the extent not 
     inconsistent with the provisions of this section.

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

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

[[Page 28408]]

     shall reduced by any risk adjustment and reinsurance payments 
     received under section 1341 and 1343.
       (2) Target amount.--The target amount of a plan for any 
     year is an amount equal to the total premiums (including any 
     premium subsidies under any governmental program), reduced by 
     the administrative costs of the plan.

     SEC. 1343. RISK ADJUSTMENT.

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

       Subtitle E--Affordable Coverage Choices for All Americans

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

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

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

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

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

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

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

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

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

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

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

     If a taxpayer files a joint return and no credit is allowed 
     under this section with respect to 1 of the spouses by reason 
     of subsection (e), the taxpayer shall be treated as described 
     in clause (ii)(I) unless a deduction is allowed under section 
     151 for the taxable year with respect to a dependent other 
     than either spouse and subsection (e) does not apply to the 
     dependent.
       ``(C) Adjusted monthly premium.--The adjusted monthly 
     premium for an applicable second lowest cost silver plan is 
     the monthly premium which would have been charged (for the 
     rating area with respect to which the premiums under 
     paragraph (2)(A) were determined) for the plan if each 
     individual covered under a qualified health plan taken into 
     account under paragraph (2)(A) were covered by such silver 
     plan and the premium was adjusted only for the age of each 
     such individual in the manner allowed under section 2701 of 
     the Public Health Service Act. In the case of a State 
     participating in the wellness discount demonstration project 
     under section 2705(d) of the Public Health Service Act, the 
     adjusted monthly premium shall be determined without regard 
     to any premium discount or rebate under such project.
       ``(D) Additional benefits.--If--
       ``(i) a qualified health plan under section 1302(b)(5) of 
     the Patient Protection and Affordable Care Act offers 
     benefits in addition to the essential health benefits 
     required to be provided by the plan, or
       ``(ii) a State requires a qualified health plan under 
     section 1311(d)(3)(B) of such Act to cover benefits in 
     addition to the essential health benefits required to be 
     provided by the plan,

     the portion of the premium for the plan properly allocable 
     (under rules prescribed by the Secretary of Health and Human 
     Services) to such additional benefits shall not be taken into 
     account in determining either the monthly premium or the 
     adjusted monthly premium under paragraph (2).
       ``(E) Special rule for pediatric dental coverage.--For 
     purposes of determining the amount of any monthly premium, if 
     an individual enrolls in both a qualified health plan and a 
     plan described in section 1311(d)(2)(B)(ii)(I) of the Patient 
     Protection and Affordable Care Act for any plan year, the 
     portion of the premium for the plan described in such section 
     that (under regulations prescribed by the Secretary) is 
     properly allocable to pediatric dental benefits which are 
     included in the essential health benefits required to be 
     provided by a qualified health plan under section 
     1302(b)(1)(J) of such Act shall be treated as a premium 
     payable for a qualified health plan.
       ``(c) Definition and Rules Relating to Applicable 
     Taxpayers, Coverage Months, and Qualified Health Plan.--For 
     purposes of this section--
       ``(1) Applicable taxpayer.--
       ``(A) In general.--The term `applicable taxpayer' means, 
     with respect to any taxable year, a taxpayer whose household 
     income for the taxable year exceeds 100 percent but does not 
     exceed 400 percent of an amount equal to the poverty line for 
     a family of the size involved.
       ``(B) Special rule for certain individuals lawfully present 
     in the united states.--If--
       ``(i) a taxpayer has a household income which is not 
     greater than 100 percent of an amount equal to the poverty 
     line for a family of the size involved, and
       ``(ii) the taxpayer is an alien lawfully present in the 
     United States, but is not eligible for the medicaid program 
     under title XIX

[[Page 28409]]

     of the Social Security Act by reason of such alien status,

     the taxpayer shall, for purposes of the credit under this 
     section, be treated as an applicable taxpayer with a 
     household income which is equal to 100 percent of the poverty 
     line for a family of the size involved.
       ``(C) Married couples must file joint return.--If the 
     taxpayer is married (within the meaning of section 7703) at 
     the close of the taxable year, the taxpayer shall be treated 
     as an applicable taxpayer only if the taxpayer and the 
     taxpayer's spouse file a joint return for the taxable year.
       ``(D) Denial of credit to dependents.--No credit shall be 
     allowed under this section to any individual with respect to 
     whom a deduction under section 151 is allowable to another 
     taxpayer for a taxable year beginning in the calendar year in 
     which such individual's taxable year begins.
       ``(2) Coverage month.--For purposes of this subsection--
       ``(A) In general.--The term `coverage month' means, with 
     respect to an applicable taxpayer, any month if--
       ``(i) as of the first day of such month the taxpayer, the 
     taxpayer's spouse, or any dependent of the taxpayer is 
     covered by a qualified health plan described in subsection 
     (b)(2)(A) that was enrolled in through an Exchange 
     established by the State under section 1311 of the Patient 
     Protection and Affordable Care Act, and
       ``(ii) the premium for coverage under such plan for such 
     month is paid by the taxpayer (or through advance payment of 
     the credit under subsection (a) under section 1412 of the 
     Patient Protection and Affordable Care Act).
       ``(B) Exception for minimum essential coverage.--
       ``(i) In general.--The term `coverage month' shall not 
     include any month with respect to an individual if for such 
     month the individual is eligible for minimum essential 
     coverage other than eligibility for coverage described in 
     section 5000A(f)(1)(C) (relating to coverage in the 
     individual market).
       ``(ii) Minimum essential coverage.--The term `minimum 
     essential coverage' has the meaning given such term by 
     section 5000A(f).
       ``(C) Special rule for employer-sponsored minimum essential 
     coverage.--For purposes of subparagraph (B)--
       ``(i) Coverage must be affordable.--Except as provided in 
     clause (iii), an employee shall not be treated as eligible 
     for minimum essential coverage if such coverage--

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

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

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

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

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

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

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

     If the amount of any increase under clause (i) is not a 
     multiple of $50, such increase shall be rounded to the next 
     lowest multiple of $50.

[[Page 28410]]

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

``Sec. 36B. Refundable credit for coverage under a qualified health 
              plan.''.

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

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

       (a) In General.--In the case of an eligible insured 
     enrolled in a qualified health plan--
       (1) the Secretary shall notify the issuer of the plan of 
     such eligibility; and
       (2) the issuer shall reduce the cost-sharing under the plan 
     at the level and in the manner specified in subsection (c).
       (b) Eligible Insured.--In this section, the term ``eligible 
     insured'' means an individual--
       (1) who enrolls in a qualified health plan in the silver 
     level of coverage in the individual market offered through an 
     Exchange; and
       (2) whose household income exceeds 100 percent but does not 
     exceed 400 percent of the poverty line for a family of the 
     size involved.

     In the case of an individual described in section 
     36B(c)(1)(B) of the Internal Revenue Code of 1986, the 
     individual shall be treated as having household income equal 
     to 100 percent for purposes of applying this section.
       (c) Determination of Reduction in Cost-sharing.--
       (1) Reduction in out-of-pocket limit.--
       (A) In general.--The reduction in cost-sharing under this 
     subsection shall first be achieved by reducing the applicable 
     out-of pocket limit under section 1302(c)(1) in the case of--
       (i) an eligible insured whose household income is more than 
     100 percent but not more than 200 percent of the poverty line 
     for a family of the size involved, by two-thirds;
       (ii) an eligible insured whose household income is more 
     than 200 percent but not more than 300 percent of the poverty 
     line for a family of the size involved, by one-half; and
       (iii) an eligible insured whose household income is more 
     than 300 percent but not more than 400 percent of the poverty 
     line for a family of the size involved, by one-third.
       (B) Coordination with actuarial value limits.--
       (i) In general.--The Secretary shall ensure the reduction 
     under this paragraph shall not result in an increase in the 
     plan's share of the total allowed costs of benefits provided 
     under the plan above--

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

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

[[Page 28411]]

     taxpayer's household income bears to the poverty level for a 
     family of the size involved shall be made under one of the 
     following methods:
       (i) A method under which--

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

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

                 Subpart B--Eligibility Determinations

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

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

     If an enrollee changes employment or obtains additional 
     employment while enrolled in a qualified health plan for 
     which such credit or reduction is allowed, the enrollee shall 
     notify the Exchange of such change or additional employment 
     and provide the information described in this paragraph with 
     respect to the new employer.
       (5) Exemptions from individual responsibility 
     requirements.--In the case of an individual who is seeking an 
     exemption certificate under section 1311(d)(4)(H) from any 
     requirement or penalty imposed by section 5000A, the 
     following information:
       (A) In the case of an individual seeking exemption based on 
     the individual's status as a member of an exempt religious 
     sect or division, as a member of a health care sharing 
     ministry, as an Indian, or as an individual eligible for a 
     hardship exemption, such information as the Secretary shall 
     prescribe.
       (B) In the case of an individual seeking exemption based on 
     the lack of affordable coverage or the individual's status as 
     a taxpayer with household income less than 100 percent of the 
     poverty line, the information described in paragraphs (3) and 
     (4), as applicable.
       (c) Verification of Information Contained in Records of 
     Specific Federal Officials.--
       (1) Information transferred to secretary.--An Exchange 
     shall submit the information provided by an applicant under 
     subsection (b) to the Secretary for verification in 
     accordance with the requirements of this subsection and 
     subsection (d).
       (2) Citizenship or immigration status.--
       (A) Commissioner of social security.--The Secretary shall 
     submit to the Commissioner of Social Security the following 
     information for a determination as to whether the information 
     provided is consistent with the information in the records of 
     the Commissioner:
       (i) The name, date of birth, and social security number of 
     each individual for whom such information was provided under 
     subsection (b)(2).
       (ii) The attestation of an individual that the individual 
     is a citizen.
       (B) Secretary of homeland security.--
       (i) In general.--In the case of an individual--

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

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

[[Page 28412]]

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

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

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

     The Secretary may extend the 90-day period under subclause 
     (II) for enrollments occurring during 2014.
       (B) Specific actions not involving citizenship or lawful 
     presence.--
       (i) In general.--Except as provided in paragraph (3), the 
     Exchange shall, during any period before the close of the 
     period under subparagraph (A)(ii)(II), make any determination 
     under paragraphs (2), (3), and (4) of subsection (a) on the 
     basis of the information contained on the application.
       (ii) Eligibility or amount of credit or reduction.--If an 
     inconsistency involving the eligibility for, or amount of, 
     any premium tax credit or cost-sharing reduction is 
     unresolved under this subsection as of the close of the 
     period under subparagraph (A)(ii)(II), the Exchange shall 
     notify the applicant of the amount (if any) of the credit or 
     reduction that is determined on the basis of the records 
     maintained by persons under subsection (c).
       (iii) Employer affordability.--If the Secretary notifies an 
     Exchange that an enrollee is eligible for a premium tax 
     credit under section 36B of such Code or cost-sharing 
     reduction under section 1402 because the enrollee's (or 
     related individual's) employer does not provide minimum 
     essential coverage through an employer-sponsored plan or that 
     the employer does provide that coverage but it is not 
     affordable coverage, the Exchange shall notify the employer 
     of such fact and that the employer may be liable for the 
     payment assessed under section 4980H of such Code.
       (iv) Exemption.--In any case where the inconsistency 
     involving, or inability to verify, information provided under 
     subsection (b)(5) is not resolved as of the close of the 
     period under subparagraph (A)(ii)(II), the Exchange shall 
     notify an applicant that no certification of exemption from 
     any requirement or payment under section 5000A of such Code 
     will be issued.
       (C) Appeals process.--The Exchange shall also notify each 
     person receiving notice under this paragraph of the appeals 
     processes established under subsection (f).
       (f) Appeals and Redeterminations.--
       (1) In general.--The Secretary, in consultation with the 
     Secretary of the Treasury, the Secretary of Homeland 
     Security, and the Commissioner of Social Security, shall 
     establish procedures by which the Secretary or one of such 
     other Federal officers--
       (A) hears and makes decisions with respect to appeals of 
     any determination under subsection (e); and
       (B) redetermines eligibility on a periodic basis in 
     appropriate circumstances.
       (2) Employer liability.--
       (A) In general.--The Secretary shall establish a separate 
     appeals process for employers who are notified under 
     subsection (e)(4)(C) that the employer may be liable for a 
     tax imposed by section 4980H of the Internal Revenue Code of 
     1986 with respect to an employee because of a determination 
     that the employer does not provide minimum essential coverage 
     through an employer-sponsored plan or that the employer does 
     provide that coverage but it is not affordable coverage with 
     respect to an employee. Such process shall provide an 
     employer the opportunity to--
       (i) present information to the Exchange for review of the 
     determination either by the Exchange or the person making the 
     determination, including evidence of the employer-sponsored 
     plan and employer contributions to the plan; and
       (ii) have access to the data used to make the determination 
     to the extent allowable by law.

     .Such process shall be in addition to any rights of appeal 
     the employer may have under subtitle F of such Code.
       (B) Confidentiality.--Notwithstanding any provision of this 
     title (or the amendments made by this title) or section 6103 
     of the Internal Revenue Code of 1986, an employer shall not 
     be entitled to any taxpayer return information with respect 
     to an employee for purposes of determining whether the 
     employer is subject to the penalty under section 4980H of 
     such Code with respect to the employee, except that--
       (i) the employer may be notified as to the name of an 
     employee and whether or not the employee's income is above or 
     below the threshold by which the affordability of an 
     employer's health insurance coverage is measured; and
       (ii) this subparagraph shall not apply to an employee who 
     provides a waiver (at such time and in such manner as the 
     Secretary may prescribe) authorizing an employer to have 
     access to the employee's taxpayer return information.

[[Page 28413]]

       (g) Confidentiality of Applicant Information.--
       (1) In general.--An applicant for insurance coverage or for 
     a premium tax credit or cost-sharing reduction shall be 
     required to provide only the information strictly necessary 
     to authenticate identity, determine eligibility, and 
     determine the amount of the credit or reduction.
       (2) Receipt of information.--Any person who receives 
     information provided by an applicant under subsection (b) 
     (whether directly or by another person at the request of the 
     applicant), or receives information from a Federal agency 
     under subsection (c), (d), or (e), shall--
       (A) use the information only for the purposes of, and to 
     the extent necessary in, ensuring the efficient operation of 
     the Exchange, including verifying the eligibility of an 
     individual to enroll through an Exchange or to claim a 
     premium tax credit or cost-sharing reduction or the amount of 
     the credit or reduction; and
       (B) not disclose the information to any other person except 
     as provided in this section.
       (h) Penalties.--
       (1) False or fraudulent information.--
       (A) Civil penalty.--
       (i) In general.--If--

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

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

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

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

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

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

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

       (a) In General.--The Secretary shall establish a system 
     meeting the requirements of this section under which 
     residents of each State may apply for enrollment in, receive 
     a

[[Page 28414]]

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

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

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

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

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

[[Page 28415]]

     and Affordable Care Act, are authorized to collect and use 
     the names and social security account numbers of individuals 
     as required to administer the provisions of, and the 
     amendments made by, the such Act.''.
       (b) Confidentiality and Disclosure.--Paragraph (3) of 
     section 6103(a) of such Code is amended by striking ``or 
     (20)'' and inserting ``(20), or (21)''.
       (c) Procedures and Recordkeeping Related to Disclosures.--
     Paragraph (4) of section 6103(p) of such Code is amended--
       (1) by inserting ``, or any entity described in subsection 
     (l)(21),'' after ``or (20)'' in the matter preceding 
     subparagraph (A),
       (2) by inserting ``or any entity described in subsection 
     (l)(21),'' after ``or (o)(1)(A)'' in subparagraph (F)(ii), 
     and
       (3) by inserting ``or any entity described in subsection 
     (l)(21),'' after ``or (20)'' both places it appears in the 
     matter after subparagraph (F).
       (d) Unauthorized Disclosure or Inspection.--Paragraph (2) 
     of section 7213(a) of such Code is amended by striking ``or 
     (20)'' and inserting ``(20), or (21)''.

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

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

                   PART II--SMALL BUSINESS TAX CREDIT

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

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

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

       ``(a) General Rule.--For purposes of section 38, in the 
     case of an eligible small employer, the small employer health 
     insurance credit determined under this section for any 
     taxable year in the credit period is the amount determined 
     under subsection (b).
       ``(b) Health Insurance Credit Amount.--Subject to 
     subsection (c), the amount determined under this subsection 
     with respect to any eligible small employer is equal to 50 
     percent (35 percent in the case of a tax-exempt eligible 
     small employer) of the lesser of--
       ``(1) the aggregate amount of nonelective contributions the 
     employer made on behalf of its employees during the taxable 
     year under the arrangement described in subsection (d)(4) for 
     premiums for qualified health plans offered by the employer 
     to its employees through an Exchange, or
       ``(2) the aggregate amount of nonelective contributions 
     which the employer would have made during the taxable year 
     under the arrangement if each employee taken into account 
     under paragraph (1) had enrolled in a qualified health plan 
     which had a premium equal to the average premium (as 
     determined by the Secretary of Health and Human Services) for 
     the small group market in the rating area in which the 
     employee enrolls for coverage.
       ``(c) Phaseout of Credit Amount Based on Number of 
     Employees and Average Wages.--The amount of the credit 
     determined under subsection (b) without regard to this 
     subsection shall be reduced (but not below zero) by the sum 
     of the following amounts:
       ``(1) Such amount multiplied by a fraction the numerator of 
     which is the total number of full-time equivalent employees 
     of the employer in excess of 10 and the denominator of which 
     is 15.
       ``(2) Such amount multiplied by a fraction the numerator of 
     which is the average annual wages of the employer in excess 
     of the dollar amount in effect under subsection (d)(3)(B) and 
     the denominator of which is such dollar amount.
       ``(d) Eligible Small Employer.--For purposes of this 
     section--
       ``(1) In general.--The term `eligible small employer' 
     means, with respect to any taxable year, an employer--
       ``(A) which has no more than 25 full-time equivalent 
     employees for the taxable year,
       ``(B) the average annual wages of which do not exceed an 
     amount equal to twice the dollar amount in effect under 
     paragraph (3)(B) for the taxable year, and
       ``(C) which has in effect an arrangement described in 
     paragraph (4).
       ``(2) Full-time equivalent employees.--
       ``(A) In general.--The term `full-time equivalent 
     employees' means a number of employees equal to the number 
     determined by dividing--
       ``(i) the total number of hours of service for which wages 
     were paid by the employer to employees during the taxable 
     year, by
       ``(ii) 2,080.

     Such number shall be rounded to the next lowest whole number 
     if not otherwise a whole number.
       ``(B) Excess hours not counted.--If an employee works in 
     excess of 2,080 hours of service during any taxable year, 
     such excess shall not be taken into account under 
     subparagraph (A).
       ``(C) Hours of service.--The Secretary, in consultation 
     with the Secretary of Labor, shall prescribe such 
     regulations, rules, and guidance as may be necessary to 
     determine the hours of service of an employee, including 
     rules for the application of this paragraph to employees who 
     are not compensated on an hourly basis.
       ``(3) Average annual wages.--
       ``(A) In general.--The average annual wages of an eligible 
     small employer for any taxable year is the amount determined 
     by dividing--
       ``(i) the aggregate amount of wages which were paid by the 
     employer to employees during the taxable year, by
       ``(ii) the number of full-time equivalent employees of the 
     employee determined under paragraph (2) for the taxable year.

     Such amount shall be rounded to the next lowest multiple of 
     $1,000 if not otherwise such a multiple.
       ``(B) Dollar amount.--For purposes of paragraph (1)(B)--
       ``(i) 2011, 2012, and 2013.--The dollar amount in effect 
     under this paragraph for taxable years beginning in 2011, 
     2012, or 2013 is $20,000.
       ``(ii) Subsequent years.--In the case of a taxable year 
     beginning in a calendar year after 2013, the dollar amount in 
     effect under this paragraph shall be equal to $20,000, 
     multiplied by the cost-of-living adjustment determined under 
     section 1(f)(3) for the calendar year, determined by 
     substituting `calendar year 2012' for `calendar year 1992' in 
     subparagraph (B) thereof.
       ``(4) Contribution arrangement.--An arrangement is 
     described in this paragraph if it requires an eligible small 
     employer to make a nonelective contribution on behalf of each 
     employee who enrolls in a qualified health plan offered to 
     employees by the employer through an exchange in an amount 
     equal to a uniform percentage (not less than 50 percent) of 
     the premium cost of the qualified health plan.
       ``(5) Seasonal worker hours and wages not counted.--For 
     purposes of this subsection--
       ``(A) In general.--The number of hours of service worked 
     by, and wages paid to, a seasonal worker of an employer shall 
     not be taken into account in determining the full-time 
     equivalent employees and average annual wages of the employer 
     unless the worker works for the employer on more than 120 
     days during the taxable year.
       ``(B) Definition of seasonal worker.--The term `seasonal 
     worker' means a worker who performs labor or services on a 
     seasonal basis as defined by the Secretary of Labor, 
     including workers covered by section 500.20(s)(1) of title 
     29, Code of Federal Regulations and retail workers employed 
     exclusively during holiday seasons.
       ``(e) Other Rules and Definitions.--For purposes of this 
     section--
       ``(1) Employee.--
       ``(A) Certain employees excluded.--The term `employee' 
     shall not include--
       ``(i) an employee within the meaning of section 401(c)(1),
       ``(ii) any 2-percent shareholder (as defined in section 
     1372(b)) of an eligible small business which is an S 
     corporation,
       ``(iii) any 5-percent owner (as defined in section 
     416(i)(1)(B)(i)) of an eligible small business, or
       ``(iv) any individual who bears any of the relationships 
     described in subparagraphs (A) through (G) of section 
     152(d)(2) to, or is a dependent described in section 
     152(d)(2)(H) of, an individual described in clause (i), (ii), 
     or (iii).
       ``(B) Leased employees.--The term `employee' shall include 
     a leased employee within the meaning of section 414(n).
       ``(2) Credit period.--The term `credit period' means, with 
     respect to any eligible small employer, the 2-consecutive-
     taxable year period beginning with the 1st taxable year in 
     which the employer (or any predecessor) offers 1 or more 
     qualified health plans to its employees through an Exchange.
       ``(3) Nonelective contribution.--The term `nonelective 
     contribution' means an employer contribution other than an 
     employer contribution pursuant to a salary reduction 
     arrangement.
       ``(4) Wages.--The term `wages' has the meaning given such 
     term by section 3121(a) (determined without regard to any 
     dollar limitation contained in such section).
       ``(5) Aggregation and other rules made applicable.--
       ``(A) Aggregation rules.--All employers treated as a single 
     employer under subsection (b), (c), (m), or (o) of section 
     414 shall be treated as a single employer for purposes of 
     this section.

[[Page 28416]]

       ``(B) Other rules.--Rules similar to the rules of 
     subsections (c), (d), and (e) of section 52 shall apply.
       ``(f) Credit Made Available to Tax-exempt Eligible Small 
     Employers.--
       ``(1) In general.--In the case of a tax-exempt eligible 
     small employer, there shall be treated as a credit allowable 
     under subpart C (and not allowable under this subpart) the 
     lesser of--
       ``(A) the amount of the credit determined under this 
     section with respect to such employer, or
       ``(B) the amount of the payroll taxes of the employer 
     during the calendar year in which the taxable year begins.
       ``(2) Tax-exempt eligible small employer.--For purposes of 
     this section, the term `tax-exempt eligible small employer' 
     means an eligible small employer which is any organization 
     described in section 501(c) which is exempt from taxation 
     under section 501(a).
       ``(3) Payroll taxes.--For purposes of this subsection--
       ``(A) In general.--The term `payroll taxes' means--
       ``(i) amounts required to be withheld from the employees of 
     the tax-exempt eligible small employer under section 3401(a),
       ``(ii) amounts required to be withheld from such employees 
     under section 3101(b), and
       ``(iii) amounts of the taxes imposed on the tax-exempt 
     eligible small employer under section 3111(b).
       ``(B) Special rule.--A rule similar to the rule of section 
     24(d)(2)(C) shall apply for purposes of subparagraph (A).
       ``(g) Application of Section for Calendar Years 2011, 2012, 
     and 2013.--In the case of any taxable year beginning in 2011, 
     2012, or 2013, the following modifications to this section 
     shall apply in determining the amount of the credit under 
     subsection (a):
       ``(1) No credit period required.--The credit shall be 
     determined without regard to whether the taxable year is in a 
     credit period and for purposes of applying this section to 
     taxable years beginning after 2013, no credit period shall be 
     treated as beginning with a taxable year beginning before 
     2014.
       ``(2) Amount of credit.--The amount of the credit 
     determined under subsection (b) shall be determined--
       ``(A) by substituting `35 percent (25 percent in the case 
     of a tax-exempt eligible small employer)' for `50 percent (35 
     percent in the case of a tax-exempt eligible small 
     employer)',
       ``(B) by reference to an eligible small employer's 
     nonelective contributions for premiums paid for health 
     insurance coverage (within the meaning of section 9832(b)(1)) 
     of an employee, and
       ``(C) by substituting for the average premium determined 
     under subsection (b)(2) the amount the Secretary of Health 
     and Human Services determines is the average premium for the 
     small group market in the State in which the employer is 
     offering health insurance coverage (or for such area within 
     the State as is specified by the Secretary).
       ``(3) Contribution arrangement.--An arrangement shall not 
     fail to meet the requirements of subsection (d)(4) solely 
     because it provides for the offering of insurance outside of 
     an Exchange.
       ``(h) Insurance Definitions.--Any term used in this section 
     which is also used in the Public Health Service Act or 
     subtitle A of title I of the Patient Protection and 
     Affordable Care Act shall have the meaning given such term by 
     such Act or subtitle.
       ``(i) Regulations.--The Secretary shall prescribe such 
     regulations as may be necessary to carry out the provisions 
     of this section, including regulations to prevent the 
     avoidance of the 2-year limit on the credit period through 
     the use of successor entities and the avoidance of the 
     limitations under subsection (c) through the use of multiple 
     entities.''.
       (b) Credit to Be Part of General Business Credit.--Section 
     38(b) of the Internal Revenue Code of 1986 (relating to 
     current year business credit) is amended by striking ``plus'' 
     at the end of paragraph (34), by striking the period at the 
     end of paragraph (35) and inserting ``, plus'', and by 
     inserting after paragraph (35) the following:
       ``(36) the small employer health insurance credit 
     determined under section 45R.''.
       (c) Credit Allowed Against Alternative Minimum Tax.--
     Section 38(c)(4)(B) of the Internal Revenue Code of 1986 
     (defining specified credits) is amended by redesignating 
     clauses (vi), (vii), and (viii) as clauses (vii), (viii), and 
     (ix), respectively, and by inserting after clause (v) the 
     following new clause:
       ``(vi) the credit determined under section 45R,''.
       (d) Disallowance of Deduction for Certain Expenses for 
     Which Credit Allowed.--
       (1) In general.--Section 280C of the Internal Revenue Code 
     of 1986 (relating to disallowance of deduction for certain 
     expenses for which credit allowed), as amended by section 
     1401(b), is amended by adding at the end the following new 
     subsection:
       ``(h) Credit for Employee Health Insurance Expenses of 
     Small Employers.--No deduction shall be allowed for that 
     portion of the premiums for qualified health plans (as 
     defined in section 1301(a) of the Patient Protection and 
     Affordable Care Act), or for health insurance coverage in the 
     case of taxable years beginning in 2011, 2012, or 2013, paid 
     by an employer which is equal to the amount of the credit 
     determined under section 45R(a) with respect to the 
     premiums.''.
       (2) Deduction for expiring credits.--Section 196(c) of such 
     Code is amended by striking ``and'' at the end of paragraph 
     (12), by striking the period at the end of paragraph (13) and 
     inserting ``, and'', and by adding at the end the following 
     new paragraph:
       ``(14) the small employer health insurance credit 
     determined under section 45R(a).''.
       (e) Clerical Amendment.--The table of sections for subpart 
     D of part IV of subchapter A of chapter 1 of the Internal 
     Revenue Code of 1986 is amended by adding at the end the 
     following:

``Sec. 45R. Employee health insurance expenses of small employers.''.

       (f) Effective Dates.--
       (1) In general.--The amendments made by this section shall 
     apply to amounts paid or incurred in taxable years beginning 
     after December 31, 2010.
       (2) Minimum tax.--The amendments made by subsection (c) 
     shall apply to credits determined under section 45R of the 
     Internal Revenue Code of 1986 in taxable years beginning 
     after December 31, 2010, and to carrybacks of such credits.

           Subtitle F--Shared Responsibility for Health Care

                   PART I--INDIVIDUAL RESPONSIBILITY

     SEC. 1501. REQUIREMENT TO MAINTAIN MINIMUM ESSENTIAL 
                   COVERAGE.

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

[[Page 28417]]

     to creating effective health insurance markets that do not 
     require underwriting and eliminate its associated 
     administrative costs.
       (3) Supreme court ruling.--In United States v. South-
     Eastern Underwriters Association (322 U.S. 533 (1944)), the 
     Supreme Court of the United States ruled that insurance is 
     interstate commerce subject to Federal regulation.
       (b) In General.--Subtitle D of the Internal Revenue Code of 
     1986 is amended by adding at the end the following new 
     chapter:

        ``CHAPTER 48--MAINTENANCE OF MINIMUM ESSENTIAL COVERAGE

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

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

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

     If the amount of any increase under clause (i) is not a 
     multiple of $50, such increase shall be rounded to the next 
     lowest multiple of $50.
       ``(4) Terms relating to income and families.--For purposes 
     of this section--
       ``(A) Family size.--The family size involved with respect 
     to any taxpayer shall be equal to the number of individuals 
     for whom the taxpayer is allowed a deduction under section 
     151 (relating to allowance of deduction for personal 
     exemptions) for the taxable year.
       ``(B) Household income.--The term `household income' means, 
     with respect to any taxpayer for any taxable year, an amount 
     equal to the sum of--
       ``(i) the modified gross income of the taxpayer, plus
       ``(ii) the aggregate modified gross incomes of all other 
     individuals who--

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

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

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

       ``(3) Individuals not lawfully present.--Such term shall 
     not include an individual for any month if for the month the 
     individual is not a citizen or national of the United States 
     or an alien lawfully present in the United States.
       ``(4) Incarcerated individuals.--Such term shall not 
     include an individual for any month if for the month the 
     individual is incarcerated, other than incarceration pending 
     the disposition of charges.
       ``(e) Exemptions.--No penalty shall be imposed under 
     subsection (a) with respect to--
       ``(1) Individuals who cannot afford coverage.--
       ``(A) In general.--Any applicable individual for any month 
     if the applicable individual's required contribution 
     (determined on an annual basis) for coverage for the month 
     exceeds 8 percent of such individual's household income for 
     the taxable year described in section 1412(b)(1)(B) of the 
     Patient Protection and Affordable Care Act. For purposes of 
     applying this subparagraph, the taxpayer's household income 
     shall be increased by any exclusion from gross income for any 
     portion of the required contribution made through a salary 
     reduction arrangement.
       ``(B) Required contribution.--For purposes of this 
     paragraph, the term `required contribution' means--
       ``(i) in the case of an individual eligible to purchase 
     minimum essential coverage consisting of coverage through an 
     eligible-employer-sponsored plan, the portion of the annual 
     premium which would be paid by the individual (without regard 
     to whether paid through salary reduction or otherwise) for 
     self-only coverage, or
       ``(ii) in the case of an individual eligible only to 
     purchase minimum essential coverage described in subsection 
     (f)(1)(C), the annual premium for the lowest cost bronze plan 
     available in the individual market through the Exchange in 
     the State in the rating area in which the individual resides 
     (without regard to whether the individual purchased a 
     qualified health plan through the Exchange), reduced by the 
     amount of the credit allowable under section 36B for the 
     taxable year (determined as if the individual was covered by 
     a qualified health plan offered through the Exchange for the 
     entire taxable year).
       ``(C) Special rules for individuals related to employees.--
     For purposes of subparagraph (B)(i), if an applicable 
     individual is eligible for minimum essential coverage through 
     an employer by reason of a relationship to an employee, the 
     determination shall

[[Page 28418]]

     be made by reference to the affordability of the coverage to 
     the employee.
       ``(D) Indexing.--In the case of plan years beginning in any 
     calendar year after 2014, subparagraph (A) shall be applied 
     by substituting for `8 percent' the percentage the Secretary 
     of Health and Human Services determines reflects the excess 
     of the rate of premium growth between the preceding calendar 
     year and 2013 over the rate of income growth for such period.
       ``(2) Taxpayers with income under 100 percent of poverty 
     line.--Any applicable individual for any month during a 
     calendar year if the individual's household income for the 
     taxable year described in section 1412(b)(1)(B) of the 
     Patient Protection and Affordable Care Act is less than 100 
     percent of the poverty line for the size of the family 
     involved (determined in the same manner as under subsection 
     (b)(4)).
       ``(3) Members of indian tribes.--Any applicable individual 
     for any month during which the individual is a member of an 
     Indian tribe (as defined in section 45A(c)(6)).
       ``(4) Months during short coverage gaps.--
       ``(A) In general.--Any month the last day of which occurred 
     during a period in which the applicable individual was not 
     covered by minimum essential coverage for a continuous period 
     of less than 3 months.
       ``(B) Special rules.--For purposes of applying this 
     paragraph--
       ``(i) the length of a continuous period shall be determined 
     without regard to the calendar years in which months in such 
     period occur,
       ``(ii) if a continuous period is greater than the period 
     allowed under subparagraph (A), no exception shall be 
     provided under this paragraph for any month in the period, 
     and
       ``(iii) if there is more than 1 continuous period described 
     in subparagraph (A) covering months in a calendar year, the 
     exception provided by this paragraph shall only apply to 
     months in the first of such periods.

     The Secretary shall prescribe rules for the collection of the 
     penalty imposed by this section in cases where continuous 
     periods include months in more than 1 taxable year.
       ``(5) Hardships.--Any applicable individual who for any 
     month is determined by the Secretary of Health and Human 
     Services under section 1311(d)(4)(H) to have suffered a 
     hardship with respect to the capability to obtain coverage 
     under a qualified health plan.
       ``(f) Minimum Essential Coverage.--For purposes of this 
     section--
       ``(1) In general.--The term `minimum essential coverage' 
     means any of the following:
       ``(A) Government sponsored programs.--Coverage under--
       ``(i) the Medicare program under part A of title XVIII of 
     the Social Security Act,
       ``(ii) the Medicaid program under title XIX of the Social 
     Security Act,
       ``(iii) the CHIP program under title XXI of the Social 
     Security Act,
       ``(iv) the TRICARE for Life program,
       ``(v) the veteran's health care program under chapter 17 of 
     title 38, United States Code, or
       ``(vi) a health plan under section 2504(e) of title 22, 
     United States Code (relating to Peace Corps volunteers).
       ``(B) Employer-sponsored plan.--Coverage under an eligible 
     employer-sponsored plan.
       ``(C) Plans in the individual market.--Coverage under a 
     health plan offered in the individual market within a State.
       ``(D) Grandfathered health plan.--Coverage under a 
     grandfathered health plan.
       ``(E) Other coverage.--Such other health benefits coverage, 
     such as a State health benefits risk pool, as the Secretary 
     of Health and Human Services, in coordination with the 
     Secretary, recognizes for purposes of this subsection.
       ``(2) Eligible employer-sponsored plan.--The term `eligible 
     employer-sponsored plan' means, with respect to any employee, 
     a group health plan or group health insurance coverage 
     offered by an employer to the employee which is--
       ``(A) a governmental plan (within the meaning of section 
     2791(d)(8) of the Public Health Service Act), or
       ``(B) any other plan or coverage offered in the small or 
     large group market within a State.

     Such term shall include a grandfathered health plan described 
     in paragraph (1)(D) offered in a group market.
       ``(3) Excepted benefits not treated as minimum essential 
     coverage.--The term `minimum essential coverage' shall not 
     include health insurance coverage which consists of coverage 
     of excepted benefits--
       ``(A) described in paragraph (1) of subsection (c) of 
     section 2791 of the Public Health Service Act; or
       ``(B) described in paragraph (2), (3), or (4) of such 
     subsection if the benefits are provided under a separate 
     policy, certificate, or contract of insurance.
       ``(4) Individuals residing outside united states or 
     residents of territories.--Any applicable individual shall be 
     treated as having minimum essential coverage for any month--
       ``(A) if such month occurs during any period described in 
     subparagraph (A) or (B) of section 911(d)(1) which is 
     applicable to the individual, or
       ``(B) if such individual is a bona fide resident of any 
     possession of the United States (as determined under section 
     937(a)) for such month.
       ``(5) Insurance-related terms.--Any term used in this 
     section which is also used in title I of the Patient 
     Protection and Affordable Care Act shall have the same 
     meaning as when used in such title.
       ``(g) Administration and Procedure.--
       ``(1) In general.--The penalty provided by this section 
     shall be paid upon notice and demand by the Secretary, and 
     except as provided in paragraph (2), shall be assessed and 
     collected in the same manner as an assessable penalty under 
     subchapter B of chapter 68.
       ``(2) Special rules.--Notwithstanding any other provision 
     of law--
       ``(A) Waiver of criminal penalties.--In the case of any 
     failure by a taxpayer to timely pay any penalty imposed by 
     this section, such taxpayer shall not be subject to any 
     criminal prosecution or penalty with respect to such failure.
       ``(B) Limitations on liens and levies.--The Secretary shall 
     not--
       ``(i) file notice of lien with respect to any property of a 
     taxpayer by reason of any failure to pay the penalty imposed 
     by this section, or
       ``(ii) levy on any such property with respect to such 
     failure.''.
       (c) Clerical Amendment.--The table of chapters for subtitle 
     D of the Internal Revenue Code of 1986 is amended by 
     inserting after the item relating to chapter 47 the following 
     new item:

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

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

     SEC. 1502. REPORTING OF HEALTH INSURANCE COVERAGE.

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

      ``Subpart D--Information Regarding Health Insurance Coverage

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

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

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

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

       ``(iv) such other information as the Secretary may require.
       ``(2) Information relating to employer-provided coverage.--
     If minimum essential coverage provided to an individual under 
     subsection (a) consists of health insurance coverage of a 
     health insurance issuer provided through a group health plan 
     of an employer, a return described in this subsection shall 
     include--
       ``(A) the name, address, and employer identification number 
     of the employer maintaining the plan,
       ``(B) the portion of the premium (if any) required to be 
     paid by the employer, and
       ``(C) if the health insurance coverage is a qualified 
     health plan in the small group market offered through an 
     Exchange, such other information as the Secretary may require 
     for administration of the credit under section 45R (relating 
     to credit for employee health insurance expenses of small 
     employers).
       ``(c) Statements to Be Furnished to Individuals With 
     Respect to Whom Information Is Reported.--
       ``(1) In general.--Every person required to make a return 
     under subsection (a) shall furnish to each individual whose 
     name is required to be set forth in such return a written 
     statement showing--
       ``(A) the name and address of the person required to make 
     such return and the phone number of the information contact 
     for such person, and

[[Page 28419]]

       ``(B) the information required to be shown on the return 
     with respect to such individual.
       ``(2) Time for furnishing statements.--The written 
     statement required under paragraph (1) shall be furnished on 
     or before January 31 of the year following the calendar year 
     for which the return under subsection (a) was required to be 
     made.
       ``(d) Coverage Provided by Governmental Units.--In the case 
     of coverage provided by any governmental unit or any agency 
     or instrumentality thereof, the officer or employee who 
     enters into the agreement to provide such coverage (or the 
     person appropriately designated for purposes of this section) 
     shall make the returns and statements required by this 
     section.
       ``(e) Minimum Essential Coverage.--For purposes of this 
     section, the term `minimum essential coverage' has the 
     meaning given such term by section 5000A(f).''.
       (b) Assessable Penalties.--
       (1) Subparagraph (B) of section 6724(d)(1) of the Internal 
     Revenue Code of 1986 (relating to definitions) is amended by 
     striking ``or'' at the end of clause (xxii), by striking 
     ``and'' at the end of clause (xxiii) and inserting ``or'', 
     and by inserting after clause (xxiii) the following new 
     clause:
       ``(xxiv) section 6055 (relating to returns relating to 
     information regarding health insurance coverage), and''.
       (2) Paragraph (2) of section 6724(d) of such Code is 
     amended by striking ``or'' at the end of subparagraph (EE), 
     by striking the period at the end of subparagraph (FF) and 
     inserting ``, or'' and by inserting after subparagraph (FF) 
     the following new subparagraph:
       ``(GG) section 6055(c) (relating to statements relating to 
     information regarding health insurance coverage).''.
       (c) Notification of Nonenrollment.--Not later than June 30 
     of each year, the Secretary of the Treasury, acting through 
     the Internal Revenue Service and in consultation with the 
     Secretary of Health and Human Services, shall send a 
     notification to each individual who files an individual 
     income tax return and who is not enrolled in minimum 
     essential coverage (as defined in section 5000A of the 
     Internal Revenue Code of 1986). Such notification shall 
     contain information on the services available through the 
     Exchange operating in the State in which such individual 
     resides.
       (d) Conforming Amendment.--The table of subparts for part 
     III of subchapter A of chapter 61 of such Code is amended by 
     inserting after the item relating to subpart C the following 
     new item:

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

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

                   PART II--EMPLOYER RESPONSIBILITIES

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

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

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

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

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

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

     ``SEC. 18B. NOTICE TO EMPLOYEES.

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

     SEC. 1513. SHARED RESPONSIBILITY FOR EMPLOYERS.

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

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

       ``(a) Large Employers Not Offering Health Coverage.--If--
       ``(1) any applicable large employer fails to offer to its 
     full-time employees (and their dependents) the opportunity to 
     enroll in minimum essential coverage under an eligible 
     employer-sponsored plan (as defined in section 5000A(f)(2)) 
     for any month, and
       ``(2) at least one full-time employee of the applicable 
     large employer has been certified to the employer under 
     section 1411 of the Patient Protection and Affordable Care 
     Act as having enrolled for such month in a qualified health 
     plan with respect to which an applicable premium tax credit 
     or cost-sharing reduction is allowed or paid with respect to 
     the employee,

     then there is hereby imposed on the employer an assessable 
     payment equal to the product of the applicable payment amount 
     and the number of individuals employed by the employer as 
     full-time employees during such month.
       ``(b) Large Employers With Waiting Periods Exceeding 30 
     Days.--
       ``(1) In general.--In the case of any applicable large 
     employer which requires an extended waiting period to enroll 
     in any minimum essential coverage under an employer-sponsored 
     plan (as defined in section 5000A(f)(2)), there is hereby 
     imposed on the employer an assessable payment, in the amount 
     specified in paragraph (2), for each full-time employee of 
     the employer to whom the extended waiting period applies.
       ``(2) Amount.--For purposes of paragraph (1), the amount 
     specified in this paragraph for a full-time employee is--
       ``(A) in the case of an extended waiting period which 
     exceeds 30 days but does not exceed 60 days, $400, and
       ``(B) in the case of an extended waiting period which 
     exceeds 60 days, $600.
       ``(3) Extended waiting period.--The term `extended waiting 
     period' means any waiting period (as defined in section 
     2701(b)(4) of the Public Health Service Act) which exceeds 30 
     days.
       ``(c) Large Employers Offering Coverage With Employees Who 
     Qualify for Premium Tax Credits or Cost-sharing Reductions.--
       ``(1) In general.--If--
       ``(A) an applicable large employer offers to its full-time 
     employees (and their dependents) the opportunity to enroll in 
     minimum essential coverage under an eligible employer-
     sponsored plan (as defined in section 5000A(f)(2)) for any 
     month, and
       ``(B) 1 or more full-time employees of the applicable large 
     employer has been certified to the employer under section 
     1411 of the Patient Protection and Affordable Care Act as 
     having enrolled for such month in a qualified health plan 
     with respect to which an applicable premium tax credit or 
     cost-sharing reduction is allowed or paid with respect to the 
     employee,

     then there is hereby imposed on the employer an assessable 
     payment equal to the product of the number of full-time 
     employees of the applicable large employer described in 
     subparagraph (B) for such month and 400 percent of the 
     applicable payment amount.
       ``(2) Overall limitation.--The aggregate amount of tax 
     determined under paragraph (1) with respect to all employees 
     of an applicable large employer for any month shall not 
     exceed the product of the applicable payment amount and the 
     number of individuals employed by the employer as full-time 
     employees during such month.
       ``(d) Definitions and Special Rules.--For purposes of this 
     section--
       ``(1) Applicable payment amount.--The term `applicable 
     payment amount' means, with respect to any month, \1/12\ of 
     $750.
       ``(2) Applicable large employer.--
       ``(A) In general.--The term `applicable large employer' 
     means, with respect to a calendar year, an employer who 
     employed an average of at least 50 full-time employees on 
     business days during the preceding calendar year.
       ``(B) Exemption for certain employers.--
       ``(i) In general.--An employer shall not be considered to 
     employ more than 50 full-time employees if--

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

       ``(ii) Definition of seasonal workers.--The term `seasonal 
     worker' means a worker

[[Page 28420]]

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

``Sec. 4980H. Shared responsibility for employers regarding health 
              coverage.''.

       (c) Study and Report of Effect of Tax on Workers' Wages.--
       (1) In general.--The Secretary of Labor shall conduct a 
     study to determine whether employees' wages are reduced by 
     reason of the application of the assessable payments under 
     section 4980H of the Internal Revenue Code of 1986 (as added 
     by the amendments made by this section). The Secretary shall 
     make such determination on the basis of the National 
     Compensation Survey published by the Bureau of Labor 
     Statistics.
       (2) Report.--The Secretary shall report the results of the 
     study under paragraph (1) to the Committee on Ways and Means 
     of the House of Representatives and to the Committee on 
     Finance of the Senate.
       (d) Effective Date.--The amendments made by this section 
     shall apply to months beginning after December 31, 2013.

     SEC. 1514. REPORTING OF EMPLOYER HEALTH INSURANCE COVERAGE.

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

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

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


[[Page 28421]]


``Sec. 6056. Large employers required to report on health insurance 
              coverage.''.
       (d) Effective Date.--The amendments made by this section 
     shall apply to periods beginning after December 31, 2013.

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

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

                  Subtitle G--Miscellaneous Provisions

     SEC. 1551. DEFINITIONS.

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

     SEC. 1552. TRANSPARENCY IN GOVERNMENT.

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

     SEC. 1553. PROHIBITION AGAINST DISCRIMINATION ON ASSISTED 
                   SUICIDE.

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

     SEC. 1554. ACCESS TO THERAPIES.

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

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

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

     SEC. 1556. EQUITY FOR CERTAIN ELIGIBLE SURVIVORS.

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

     SEC. 1557. NONDISCRIMINATION.

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

     SEC. 1558. PROTECTIONS FOR EMPLOYEES.

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

     ``SEC. 18C. PROTECTIONS FOR EMPLOYEES.

       ``(a) Prohibition.--No employer shall discharge or in any 
     manner discriminate against any employee with respect to his 
     or her compensation, terms, conditions, or other privileges 
     of employment because the employee (or an individual acting 
     at the request of the employee) has--
       ``(1) received a credit under section 36B of the Internal 
     Revenue Code of 1986 or a subsidy under section 1402 of this 
     Act;
       ``(2) provided, caused to be provided, or is about to 
     provide or cause to be provided to the employer, the Federal 
     Government, or the attorney general of a State information 
     relating to any violation of, or any act or omission the 
     employee reasonably believes to be a violation of, any 
     provision of this title (or an amendment made by this title);
       ``(3) testified or is about to testify in a proceeding 
     concerning such violation;
       ``(4) assisted or participated, or is about to assist or 
     participate, in such a proceeding; or
       ``(5) objected to, or refused to participate in, any 
     activity, policy, practice, or assigned task that the 
     employee (or other such person) reasonably believed to be in 
     violation of any provision of this title (or amendment), or 
     any order, rule, regulation, standard, or ban under this 
     title (or amendment).
       ``(b) Complaint Procedure.--
       ``(1) In general.--An employee who believes that he or she 
     has been discharged or otherwise discriminated against by any 
     employer in violation of this section may seek relief in 
     accordance with the procedures, notifications, burdens of 
     proof, remedies, and statutes of limitation set forth in 
     section 2087(b) of title 15, United States Code.
       ``(2) No limitation on rights.--Nothing in this section 
     shall be deemed to diminish the rights, privileges, or 
     remedies of any employee under any Federal or State law or

[[Page 28422]]

     under any collective bargaining agreement. The rights and 
     remedies in this section may not be waived by any agreement, 
     policy, form, or condition of employment.''.

     SEC. 1559. OVERSIGHT.

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

     SEC. 1560. RULES OF CONSTRUCTION.

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

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

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

                     ``Subtitle C--Other Provisions

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

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

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

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

     SEC. 1562. CONFORMING AMENDMENTS.

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

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

       (B) in subsection (d), by striking ``group health 
     insurance'' each place that such term appears and inserting 
     ``group or individual health insurance''; and
       (C) in subsection (e)(1)(A), by striking ``group health 
     insurance'' and inserting ``group or individual health 
     insurance'';

[[Page 28423]]

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

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

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

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

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

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

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

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

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

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

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

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

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

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

       (C) by redesignating such section (as amended by this 
     paragraph) as section 2709 and transferring such section to 
     appear after section 2708 (as added by section 1001(5));
       (11) by redesignating subpart 4 as subpart 2;
       (12) in section 2735 (42 U.S.C. 300gg-21), as so 
     redesignated by section 1001(4)--
       (A) by striking subsection (a);
       (B) by striking ``subparts 1 through 3'' each place that 
     such appears and inserting ``subpart 1'';
       (C) by redesignating subsections (b) through (e) as 
     subsections (a) through (d), respectively; and
       (D) by redesignating such section (as amended by this 
     paragraph) as section 2722;
       (13) in section 2736 (42 U.S.C. 300gg-22), as so 
     redesignated by section 1001(4)--
       (A) in subsection (a)--
       (i) in paragraph (1), by striking ``small or large group 
     markets'' and inserting ``individual or group market''; and

[[Page 28424]]

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

     ``SEC. 715. ADDITIONAL MARKET REFORMS.

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

     ``SEC. 9815. ADDITIONAL MARKET REFORMS.

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

                   TITLE II--ROLE OF PUBLIC PROGRAMS

                Subtitle A--Improved Access to Medicaid

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

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

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

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

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


[[Page 28425]]



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

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

       ``(C) 2019 and succeeding years.--Beginning January 1, 
     2019, notwithstanding subsection (b) but subject to 
     subparagraph (D), the Federal medical assistance percentage 
     determined for a State that is one of the 50 States or the 
     District of Columbia for each fiscal year quarter occurring 
     during that period with respect to amounts expended for 
     medical assistance for newly eligible individuals described 
     in subclause (VIII) of section 1902(a)(10)(A)(i), shall be 
     increased by 32.3 percentage points.
       ``(D) Limitation.--The Federal medical assistance 
     percentage determined for a State under subparagraph (B) or 
     (C) shall in no case be more than 95 percent.
       ``(2) Definitions.--In this subsection:
       ``(A) Newly eligible.--The term `newly eligible' means, 
     with respect to an individual described in subclause (VIII) 
     of section 1902(a)(10)(A)(i), an individual who is not under 
     19 years of age (or such higher age as the State may have 
     elected) and who, on the date of enactment of the Patient 
     Protection and Affordable Care Act, is not eligible under the 
     State plan or under a waiver of the plan for full benefits or 
     for benchmark coverage described in subparagraph (A), (B), or 
     (C) of section 1937(b)(1) or benchmark equivalent coverage 
     described in section 1937(b)(2) that has an aggregate 
     actuarial value that is at least actuarially equivalent to 
     benchmark coverage described in subparagraph (A), (B), or (C) 
     of section 1937(b)(1), or is eligible but not enrolled (or is 
     on a waiting list) for such benefits or coverage through a 
     waiver under the plan that has a capped or limited enrollment 
     that is full.
       ``(B) Full benefits.--The term `full benefits' means, with 
     respect to an individual, medical assistance for all services 
     covered under the State plan under this title that is not 
     less in amount, duration, or scope, or is determined by the 
     Secretary to be substantially equivalent, to the medical 
     assistance available for an individual described in section 
     1902(a)(10)(A)(i).''.
       (4) State options to offer coverage earlier and presumptive 
     eligibility; children required to have coverage for parents 
     to be eligible.--
       (A) In general.--Subsection (k) of section 1902 of the 
     Social Security Act (as added by paragraph (2)), is amended 
     by inserting after paragraph (1) the following:
       ``(2) Beginning with the first day of any fiscal year 
     quarter that begins on or after January 1, 2011, and before 
     January 1, 2014, a State may elect through a State plan 
     amendment to provide medical assistance to individuals who 
     would be described in subclause (VIII) of subsection 
     (a)(10)(A)(i) if that subclause were effective before January 
     1, 2014. A State may elect to phase-in the extension of 
     eligibility for medical assistance to such individuals based 
     on income, so long as the State does not extend such 
     eligibility to individuals described in such subclause with 
     higher income before making individuals described in such 
     subclause with lower income eligible for medical assistance.
       ``(3) If an individual described in subclause (VIII) of 
     subsection (a)(10)(A)(i) is the parent of a child who is 
     under 19 years of age (or such higher age as the State may 
     have elected) who is eligible for medical assistance under 
     the State plan or under a waiver of such plan (under that 
     subclause or under a State plan amendment under paragraph 
     (2), the individual may not be enrolled under the State plan 
     unless the individual's child is enrolled under the State 
     plan or under a waiver of the plan or is enrolled in other 
     health insurance coverage. For purposes of the preceding 
     sentence, the term `parent' includes an individual treated as 
     a caretaker relative for purposes of carrying out section 
     1931.''.
       (B) Presumptive eligibility.--Section 1920 of the Social 
     Security Act (42 U.S.C. 1396r-1) is amended by adding at the 
     end the following:
       ``(e) If the State has elected the option to provide a 
     presumptive eligibility period under this section or section 
     1920A, the State may elect to provide a presumptive 
     eligibility period (as defined in subsection (b)(1)) for 
     individuals who are eligible for medical assistance under 
     clause (i)(VIII) of subsection (a)(10)(A) or section 1931 in 
     the same manner as the State provides for such a period under 
     this section or section 1920A, subject to such guidance as 
     the Secretary shall establish.''.
       (5) Conforming amendments.--
       (A) Section 1902(a)(10) of such Act (42 U.S.C. 
     1396a(a)(10)) is amended in the matter following subparagraph 
     (G), by striking ``and (XIV)'' and inserting ``(XIV)'' and by 
     inserting ``and (XV) the medical assistance made available to 
     an individual described in subparagraph (A)(i)(VIII) shall be 
     limited to medical assistance described in subsection 
     (k)(1)'' before the semicolon.
       (B) Section 1902(l)(2)(C) of such Act (42 U.S.C. 
     1396a(l)(2)(C)) is amended by striking ``100'' and inserting 
     ``133''.
       (C) Section 1905(a) of such Act (42 U.S.C. 1396d(a)) is 
     amended in the matter preceding paragraph (1)--
       (i) by striking ``or'' at the end of clause (xii);
       (ii) by inserting ``or'' at the end of clause (xiii); and
       (iii) by inserting after clause (xiii) the following:
       ``(xiv) individuals described in section 
     1902(a)(10)(A)(i)(VIII),''.
       (D) Section 1903(f)(4) of such Act (42 U.S.C. 1396b(f)(4)) 
     is amended by inserting ``1902(a)(10)(A)(i)(VIII),'' after 
     ``1902(a)(10)(A)(i)(VII),''.
       (E) Section 1937(a)(1)(B) of such Act (42 U.S.C. 1396u-
     7(a)(1)(B)) is amended by inserting ``subclause (VIII) of 
     section 1902(a)(10)(A)(i) or under'' after ``eligible 
     under''.
       (b) Maintenance of Medicaid Income Eligibility.--Section 
     1902 of the Social Security Act (42 U.S.C. 1396a) is 
     amended--
       (1) in subsection (a)--
       (A) by striking ``and'' at the end of paragraph (72);
       (B) by striking the period at the end of paragraph (73) and 
     inserting ``; and''; and
       (C) by inserting after paragraph (73) the following new 
     paragraph:
       ``(74) provide for maintenance of effort under the State 
     plan or under any waiver of the plan in accordance with 
     subsection (gg).''; and
       (2) by adding at the end the following new subsection:
       ``(gg) Maintenance of Effort.--
       ``(1) General requirement to maintain eligibility standards 
     until state exchange is fully operational.--Subject to the 
     succeeding paragraphs of this subsection, during the period 
     that begins on the date of enactment of the Patient 
     Protection and Affordable Care Act and ends on the date on 
     which the Secretary determines that an Exchange established 
     by the State under section 1311 of the Patient Protection and 
     Affordable Care Act is fully operational, as a condition for 
     receiving any Federal payments under section 1903(a) for 
     calendar quarters occurring during such period, a State shall 
     not have in effect eligibility standards, methodologies, or 
     procedures under the State plan under this title or under any 
     waiver of such plan that is in effect during that period, 
     that are more restrictive than the eligibility standards, 
     methodologies, or procedures, respectively, under the plan or 
     waiver that are in effect on the date of enactment of the 
     Patient Protection and Affordable Care Act.
       ``(2) Continuation of eligibility standards for children 
     until october 1, 2019.--The requirement under paragraph (1) 
     shall continue to apply to a State through September 30, 
     2019, with respect to the eligibility standards, 
     methodologies, and procedures under the State plan under this 
     title or under any waiver of such plan that are applicable to 
     determining the eligibility for medical assistance of any 
     child who is under 19 years of age (or such higher age as the 
     State may have elected).
       ``(3) Nonapplication.--During the period that begins on 
     January 1, 2011, and ends on December 31, 2013, the 
     requirement under paragraph (1) shall not apply to a State 
     with respect to nonpregnant, nondisabled adults who are 
     eligible for medical assistance under the State plan or under 
     a waiver of the plan at the option of the State and whose 
     income exceeds 133 percent of the poverty line (as defined in 
     section 2110(c)(5)) applicable to a family of the size 
     involved if, on or after December 31, 2010, the State 
     certifies to the Secretary that, with respect to the State 
     fiscal year during which the certification is

[[Page 28426]]

     made, the State has a budget deficit, or with respect to the 
     succeeding State fiscal year, the State is projected to have 
     a budget deficit. Upon submission of such a certification to 
     the Secretary, the requirement under paragraph (1) shall not 
     apply to the State with respect to any remaining portion of 
     the period described in the preceding sentence.
       ``(4) Determination of compliance.--
       ``(A) States shall apply modified gross income.--A State's 
     determination of income in accordance with subsection (e)(14) 
     shall not be considered to be eligibility standards, 
     methodologies, or procedures that are more restrictive than 
     the standards, methodologies, or procedures in effect under 
     the State plan or under a waiver of the plan on the date of 
     enactment of the Patient Protection and Affordable Care Act 
     for purposes of determining compliance with the requirements 
     of paragraph (1), (2), or (3).
       ``(B) States may expand eligibility or move waivered 
     populations into coverage under the state plan.--With respect 
     to any period applicable under paragraph (1), (2), or (3), a 
     State that applies eligibility standards, methodologies, or 
     procedures under the State plan under this title or under any 
     waiver of the plan that are less restrictive than the 
     eligibility standards, methodologies, or procedures, applied 
     under the State plan or under a waiver of the plan on the 
     date of enactment of the Patient Protection and Affordable 
     Care Act, or that makes individuals who, on such date of 
     enactment, are eligible for medical assistance under a waiver 
     of the State plan, after such date of enactment eligible for 
     medical assistance through a State plan amendment with an 
     income eligibility level that is not less than the income 
     eligibility level that applied under the waiver, or as a 
     result of the application of subclause (VIII) of section 
     1902(a)(10)(A)(i), shall not be considered to have in effect 
     eligibility standards, methodologies, or procedures that are 
     more restrictive than the standards, methodologies, or 
     procedures in effect under the State plan or under a waiver 
     of the plan on the date of enactment of the Patient 
     Protection and Affordable Care Act for purposes of 
     determining compliance with the requirements of paragraph 
     (1), (2), or (3).''.
       (c) Medicaid Benchmark Benefits Must Consist of at Least 
     Minimum Essential Coverage.--Section 1937(b) of such Act (42 
     U.S.C. 1396u-7(b)) is amended--
       (1) in paragraph (1), in the matter preceding subparagraph 
     (A), by inserting ``subject to paragraphs (5) and (6),'' 
     before ``each'';
       (2) in paragraph (2)--
       (A) in the matter preceding subparagraph (A), by inserting 
     ``subject to paragraphs (5) and (6)'' after ``subsection 
     (a)(1),'';
       (B) in subparagraph (A)--
       (i) by redesignating clauses (iv) and (v) as clauses (vi) 
     and (vii), respectively; and
       (ii) by inserting after clause (iii), the following:
       ``(iv) Coverage of prescription drugs.
       ``(v) Mental health services.''; and
       (C) in subparagraph (C)--
       (i) by striking clauses (i) and (ii); and
       (ii) by redesignating clauses (iii) and (iv) as clauses (i) 
     and (ii), respectively; and
       (3) by adding at the end the following new paragraphs:
       ``(5) Minimum standards.--Effective January 1, 2014, any 
     benchmark benefit package under paragraph (1) or benchmark 
     equivalent coverage under paragraph (2) must provide at least 
     essential health benefits as described in section 1302(b) of 
     the Patient Protection and Affordable Care Act.
       ``(6) Mental health services parity.--
       ``(A) In general.--In the case of any benchmark benefit 
     package under paragraph (1) or benchmark equivalent coverage 
     under paragraph (2) that is offered by an entity that is not 
     a medicaid managed care organization and that provides both 
     medical and surgical benefits and mental health or substance 
     use disorder benefits, the entity shall ensure that the 
     financial requirements and treatment limitations applicable 
     to such mental health or substance use disorder benefits 
     comply with the requirements of section 2705(a) of the Public 
     Health Service Act in the same manner as such requirements 
     apply to a group health plan.
       ``(B) Deemed compliance.--Coverage provided with respect to 
     an individual described in section 1905(a)(4)(B) and covered 
     under the State plan under section 1902(a)(10)(A) of the 
     services described in section 1905(a)(4)(B) (relating to 
     early and periodic screening, diagnostic, and treatment 
     services defined in section 1905(r)) and provided in 
     accordance with section 1902(a)(43), shall be deemed to 
     satisfy the requirements of subparagraph (A).''.
       (d) Annual Reports on Medicaid Enrollment.--
       (1) State reports.--Section 1902(a) of the Social Security 
     Act (42 U.S.C. 1396a(a)), as amended by subsection (b), is 
     amended--
       (A) by striking ``and'' at the end of paragraph (73);
       (B) by striking the period at the end of paragraph (74) and 
     inserting ``; and''; and
       (C) by inserting after paragraph (74) the following new 
     paragraph:
       ``(75) provide that, beginning January 2015, and annually 
     thereafter, the State shall submit a report to the Secretary 
     that contains--
       ``(A) the total number of enrolled and newly enrolled 
     individuals in the State plan or under a waiver of the plan 
     for the fiscal year ending on September 30 of the preceding 
     calendar year, disaggregated by population, including 
     children, parents, nonpregnant childless adults, disabled 
     individuals, elderly individuals, and such other categories 
     or sub-categories of individuals eligible for medical 
     assistance under the State plan or under a waiver of the plan 
     as the Secretary may require;
       ``(B) a description, which may be specified by population, 
     of the outreach and enrollment processes used by the State 
     during such fiscal year; and
       ``(C) any other data reporting determined necessary by the 
     Secretary to monitor enrollment and retention of individuals 
     eligible for medical assistance under the State plan or under 
     a waiver of the plan.''.
       (2) Reports to congress.--Beginning April 2015, and 
     annually thereafter, the Secretary of Health and Human 
     Services shall submit a report to the appropriate committees 
     of Congress on the total enrollment and new enrollment in 
     Medicaid for the fiscal year ending on September 30 of the 
     preceding calendar year on a national and State-by-State 
     basis, and shall include in each such report such 
     recommendations for administrative or legislative changes to 
     improve enrollment in the Medicaid program as the Secretary 
     determines appropriate.
       (e) State Option for Coverage for Individuals With Income 
     That Exceeds 133 Percent of the Poverty Line.--
       (1) Coverage as optional categorically needy group.--
     Section 1902 of the Social Security Act (42 U.S.C. 1396a) is 
     amended--
       (A) in subsection (a)(10)(A)(ii)--
       (i) in subclause (XVIII), by striking ``or'' at the end;
       (ii) in subclause (XIX), by adding ``or'' at the end; and
       (iii) by adding at the end the following new subclause:

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

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

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

       (a) In General.--Section 1902(e) of the Social Security Act 
     (42 U.S.C. 1396a(e)) is amended by adding at the end the 
     following:
       ``(14) Income determined using modified gross income.--
       ``(A) In general.--Notwithstanding subsection (r) or any 
     other provision of this title, except as provided in 
     subparagraph (D), for purposes of determining income 
     eligibility for medical assistance under the State plan or 
     under any waiver of such plan and for any other purpose 
     applicable under the plan or waiver for which a determination 
     of income is required, including with respect to the 
     imposition of premiums and cost-sharing, a State shall use 
     the modified gross income of an individual and, in the case 
     of an individual in a family greater than 1, the household 
     income of such family. A State

[[Page 28427]]

     shall establish income eligibility thresholds for populations 
     to be eligible for medical assistance under the State plan or 
     a waiver of the plan using modified gross income and 
     household income that are not less than the effective income 
     eligibility levels that applied under the State plan or 
     waiver on the date of enactment of the Patient Protection and 
     Affordable Care Act. For purposes of complying with the 
     maintenance of effort requirements under subsection (gg) 
     during the transition to modified gross income and household 
     income, a State shall, working with the Secretary, establish 
     an equivalent income test that ensures individuals eligible 
     for medical assistance under the State plan or under a waiver 
     of the plan on the date of enactment of the Patient 
     Protection and Affordable Care Act, do not lose coverage 
     under the State plan or under a waiver of the plan. The 
     Secretary may waive such provisions of this title and title 
     XXI as are necessary to ensure that States establish income 
     and eligibility determination systems that protect 
     beneficiaries.
       ``(B) No income or expense disregards.--No type of expense, 
     block, or other income disregard shall be applied by a State 
     to determine income eligibility for medical assistance under 
     the State plan or under any waiver of such plan or for any 
     other purpose applicable under the plan or waiver for which a 
     determination of income is required.
       ``(C) No assets test.--A State shall not apply any assets 
     or resources test for purposes of determining eligibility for 
     medical assistance under the State plan or under a waiver of 
     the plan.
       ``(D) Exceptions.--
       ``(i) Individuals eligible because of other aid or 
     assistance, elderly individuals, medically needy individuals, 
     and individuals eligible for medicare cost-sharing.--
     Subparagraphs (A), (B), and (C) shall not apply to the 
     determination of eligibility under the State plan or under a 
     waiver for medical assistance for the following:

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

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

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

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

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

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

       ``(IX) who were in foster care under the responsibility of 
     a State for more than 6 months (whether or not consecutive) 
     but are

[[Page 28428]]

     no longer in such care, who are not described in any of 
     subclauses (I) through (VII) of this clause, and who are 
     under 25 years of age;''.

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

     SEC. 2005. PAYMENTS TO TERRITORIES.

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

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

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

     SEC. 2007. MEDICAID IMPROVEMENT FUND RESCISSION.

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

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

     SEC. 2101. ADDITIONAL FEDERAL FINANCIAL PARTICIPATION FOR 
                   CHIP.

       (a) In General.--Section 2105(b) of the Social Security Act 
     (42 U.S.C. 1397ee(b)) is amended by adding at the end the 
     following: ``Notwithstanding the preceding sentence, during 
     the period that begins on October 1, 2013, and ends on 
     September 30, 2019, the enhanced FMAP determined for a State 
     for a fiscal year (or for any portion of a fiscal year 
     occurring during such period) shall be increased by 23 
     percentage points, but in no case shall exceed 100 percent. 
     The increase in the enhanced FMAP under the preceding 
     sentence shall not apply with respect to determining the 
     payment to a State under subsection (a)(1) for expenditures 
     described in subparagraph (D)(iv), paragraphs (8), (9), (11) 
     of subsection (c), or clause (4) of the first sentence of 
     section 1905(b).''.
       (b) Maintenance of Effort.--
       (1) In general.--Section 2105(d) of the Social Security Act 
     (42 U.S.C. 1397ee(d)) is amended by adding at the end the 
     following:
       ``(3) Continuation of eligibility standards for children 
     until october 1, 2019.--
       ``(A) In general.--During the period that begins on the 
     date of enactment of the Patient Protection and Affordable 
     Care Act and ends on September 30, 2019, a State shall not 
     have in effect eligibility standards, methodologies, or 
     procedures under its State child health plan (including any 
     waiver under such plan) for children (including children 
     provided medical assistance for which payment is made under 
     section 2105(a)(1)(A)) that are more restrictive than the 
     eligibility standards, methodologies, or procedures, 
     respectively, under such plan (or waiver) as in effect on the 
     date of enactment of that Act. The preceding sentence shall 
     not be construed as preventing a State during such period 
     from--
       ``(i) applying eligibility standards, methodologies, or 
     procedures for children under the State child health plan or 
     under any waiver of the plan that are less restrictive than 
     the eligibility standards, methodologies, or procedures, 
     respectively, for children under the plan or waiver that are 
     in effect on the date of enactment of such Act; or

[[Page 28429]]

       ``(ii) imposing a limitation described in section 
     2112(b)(7) for a fiscal year in order to limit expenditures 
     under the State child health plan to those for which Federal 
     financial participation is available under this section for 
     the fiscal year.
       ``(B) Assurance of exchange coverage for targeted low-
     income children unable to be provided child health assistance 
     as a result of funding shortfalls.--In the event that 
     allotments provided under section 2104 are insufficient to 
     provide coverage to all children who are eligible to be 
     targeted low-income children under the State child health 
     plan under this title, a State shall establish procedures to 
     ensure that such children are provided coverage through an 
     Exchange established by the State under section 1311 of the 
     Patient Protection and Affordable Care Act.''.
       (2) Conforming amendment to title xxi medicaid maintenance 
     of effort.--Section 2105(d)(1) of the Social Security Act (42 
     U.S.C. 1397ee(d)(1)) is amended by adding before the period 
     ``, except as required under section 1902(e)(14)''.
       (c) No Enrollment Bonus Payments for Children Enrolled 
     After Fiscal Year 2013.--Section 2105(a)(3)(F)(iii) of the 
     Social Security Act (42 U.S.C. 1397ee(a)(3)(F)(iii)) is 
     amended by inserting ``or any children enrolled on or after 
     October 1, 2013'' before the period.
       (d) Income Eligibility Determined Using Modified Gross 
     Income.--
       (1) State plan requirement.--Section 2102(b)(1)(B) of the 
     Social Security Act (42 U.S.C. 1397bb(b)(1)(B)) is amended--
       (A) in clause (iii), by striking ``and'' after the 
     semicolon;
       (B) in clause (iv), by striking the period and inserting 
     ``; and''; and
       (C) by adding at the end the following:
       ``(v) shall, beginning January 1, 2014, use modified gross 
     income and household income (as defined in section 36B(d)(2) 
     of the Internal Revenue Code of 1986) to determine 
     eligibility for child health assistance under the State child 
     health plan or under any waiver of such plan and for any 
     other purpose applicable under the plan or waiver for which a 
     determination of income is required, including with respect 
     to the imposition of premiums and cost-sharing, consistent 
     with section 1902(e)(14).''.
       (2) Conforming amendment.--Section 2107(e)(1) of the Social 
     Security Act (42 U.S.C. 1397gg(e)(1)) is amended--
       (A) by redesignating subparagraphs (E) through (L) as 
     subparagraphs (F) through (M), respectively; and
       (B) by inserting after subparagraph (D), the following:
       ``(E) Section 1902(e)(14) (relating to income determined 
     using modified gross income and household income).''.
       (e) Application of Streamlined Enrollment System.--Section 
     2107(e)(1) of the Social Security Act (42 U.S.C. 
     1397gg(e)(1)), as amended by subsection (d)(2), is amended by 
     adding at the end the following:
       ``(N) Section 1943(b) (relating to coordination with State 
     Exchanges and the State Medicaid agency).''.
       (f) CHIP Eligibility for Children Ineligible for Medicaid 
     as a Result of Elimination of Disregards.--Notwithstanding 
     any other provision of law, a State shall treat any child who 
     is determined to be ineligible for medical assistance under 
     the State Medicaid plan or under a waiver of the plan as a 
     result of the elimination of the application of an income 
     disregard based on expense or type of income, as required 
     under section 1902(e)(14) of the Social Security Act (as 
     added by this Act), as a targeted low-income child under 
     section 2110(b) (unless the child is excluded under paragraph 
     (2) of that section) and shall provide child health 
     assistance to the child under the State child health plan 
     (whether implemented under title XIX or XXI, or both, of the 
     Social Security Act).

     SEC. 2102. TECHNICAL CORRECTIONS.

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

        Subtitle C--Medicaid and CHIP Enrollment Simplification

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

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

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

       ``(a) Condition for Participation in Medicaid.--As a 
     condition of the State plan under this title and receipt of 
     any Federal financial assistance under section 1903(a) for 
     calendar quarters beginning after January 1, 2014, a State 
     shall ensure that the requirements of subsection (b) is met.
       ``(b) Enrollment Simplification and Coordination With State 
     Health Insurance Exchanges and Chip.--
       ``(1) In general.--A State shall establish procedures for--
       ``(A) enabling individuals, through an Internet website 
     that meets the requirements of paragraph (4), to apply for 
     medical assistance under the State plan or under a waiver of 
     the plan, to be enrolled in the State plan or waiver, to 
     renew their enrollment in the plan or waiver, and to consent 
     to enrollment or reenrollment in the State plan through 
     electronic signature;
       ``(B) enrolling, without any further determination by the 
     State and through such website, individuals who are 
     identified by an Exchange established by the State under 
     section 1311 of the Patient Protection and Affordable Care 
     Act as being eligible for--
       ``(i) medical assistance under the State plan or under a 
     waiver of the plan; or
       ``(ii) child health assistance under the State child health 
     plan under title XXI;
       ``(C) ensuring that individuals who apply for but are 
     determined to be ineligible for medical assistance under the 
     State plan or a waiver or ineligible for child health 
     assistance under the State child health plan under title XXI, 
     are screened for eligibility for enrollment in qualified 
     health plans offered through such an Exchange and, if 
     applicable, premium assistance for the purchase of a 
     qualified health plan under section 36B of the Internal 
     Revenue Code of 1986 (and, if applicable, advance payment of 
     such assistance under section 1412 of the Patient Protection 
     and Affordable Care Act), and, if eligible, enrolled in such 
     a plan without having to submit an additional or separate 
     application, and that such individuals receive information 
     regarding reduced cost-sharing for eligible individuals under 
     section 1402 of the Patient Protection and Affordable Care 
     Act, and any other assistance or subsidies available for 
     coverage obtained through the Exchange;
       ``(D) ensuring that the State agency responsible for 
     administering the State plan under this title (in this 
     section referred to as the `State Medicaid agency'), the 
     State agency responsible for administering the State child 
     health plan under title XXI (in this section referred to as 
     the `State CHIP agency') and an Exchange established by the 
     State under section 1311 of the Patient Protection and 
     Affordable Care Act utilize a secure electronic interface 
     sufficient to allow for a determination of an individual's 
     eligibility for such medical assistance, child health 
     assistance, or premium assistance, and enrollment

[[Page 28430]]

     in the State plan under this title, title XXI, or a qualified 
     health plan, as appropriate;
       ``(E) coordinating, for individuals who are enrolled in the 
     State plan or under a waiver of the plan and who are also 
     enrolled in a qualified health plan offered through such an 
     Exchange, and for individuals who are enrolled in the State 
     child health plan under title XXI and who are also enrolled 
     in a qualified health plan, the provision of medical 
     assistance or child health assistance to such individuals 
     with the coverage provided under the qualified health plan in 
     which they are enrolled, including services described in 
     section 1905(a)(4)(B) (relating to early and periodic 
     screening, diagnostic, and treatment services defined in 
     section 1905(r)) and provided in accordance with the 
     requirements of section 1902(a)(43); and
       ``(F) conducting outreach to and enrolling vulnerable and 
     underserved populations eligible for medical assistance under 
     this title XIX or for child health assistance under title 
     XXI, including children, unaccompanied homeless youth, 
     children and youth with special health care needs, pregnant 
     women, racial and ethnic minorities, rural populations, 
     victims of abuse or trauma, individuals with mental health or 
     substance-related disorders, and individuals with HIV/AIDS.
       ``(2) Agreements with state health insurance exchanges.--
     The State Medicaid agency and the State CHIP agency may enter 
     into an agreement with an Exchange established by the State 
     under section 1311 of the Patient Protection and Affordable 
     Care Act under which the State Medicaid agency or State CHIP 
     agency may determine whether a State resident is eligible for 
     premium assistance for the purchase of a qualified health 
     plan under section 36B of the Internal Revenue Code of 1986 
     (and, if applicable, advance payment of such assistance under 
     section 1412 of the Patient Protection and Affordable Care 
     Act), so long as the agreement meets such conditions and 
     requirements as the Secretary of the Treasury may prescribe 
     to reduce administrative costs and the likelihood of 
     eligibility errors and disruptions in coverage.
       ``(3) Streamlined enrollment system.--The State Medicaid 
     agency and State CHIP agency shall participate in and comply 
     with the requirements for the system established under 
     section 1413 of the Patient Protection and Affordable Care 
     Act (relating to streamlined procedures for enrollment 
     through an Exchange, Medicaid, and CHIP).
       ``(4) Enrollment website requirements.--The procedures 
     established by State under paragraph (1) shall include 
     establishing and having in operation, not later than January 
     1, 2014, an Internet website that is linked to any website of 
     an Exchange established by the State under section 1311 of 
     the Patient Protection and Affordable Care Act and to the 
     State CHIP agency (if different from the State Medicaid 
     agency) and allows an individual who is eligible for medical 
     assistance under the State plan or under a waiver of the plan 
     and who is eligible to receive premium credit assistance for 
     the purchase of a qualified health plan under section 36B of 
     the Internal Revenue Code of 1986 to compare the benefits, 
     premiums, and cost-sharing applicable to the individual under 
     the State plan or waiver with the benefits, premiums, and 
     cost-sharing available to the individual under a qualified 
     health plan offered through such an Exchange, including, in 
     the case of a child, the coverage that would be provided for 
     the child through the State plan or waiver with the coverage 
     that would be provided to the child through enrollment in 
     family coverage under that plan and as supplemental coverage 
     by the State under the State plan or waiver.
       ``(5) Continued need for assessment for home and community-
     based services.--Nothing in paragraph (1) shall limit or 
     modify the requirement that the State assess an individual 
     for purposes of providing home and community-based services 
     under the State plan or under any waiver of such plan for 
     individuals described in subsection (a)(10)(A)(ii)(VI).''.

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

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

             Subtitle D--Improvements to Medicaid Services

     SEC. 2301. COVERAGE FOR FREESTANDING BIRTH CENTER SERVICES.

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

     SEC. 2302. CONCURRENT CARE FOR CHILDREN.

       (a) In General.--Section 1905(o)(1) of the Social Security 
     Act (42 U.S.C. 1396d(o)(1)) is amended--
       (1) in subparagraph (A), by striking ``subparagraph (B)'' 
     and inserting ``subparagraphs (B) and (C)''; and
       (2) by adding at the end the following new subparagraph:
       ``(C) A voluntary election to have payment made for hospice 
     care for a child (as defined by the State) shall not 
     constitute a waiver of any rights of the child to be provided 
     with, or to have payment made under this title

[[Page 28431]]

     for, services that are related to the treatment of the 
     child's condition for which a diagnosis of terminal illness 
     has been made.''.
       (b) Application to CHIP.--Section 2110(a)(23) of the Social 
     Security Act (42 U.S.C. 1397jj(a)(23)) is amended by 
     inserting ``(concurrent, in the case of an individual who is 
     a child, with care related to the treatment of the child's 
     condition with respect to which a diagnosis of terminal 
     illness has been made'' after ``hospice care''.

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

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

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

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


         ``presumptive eligibility for family planning services

       ``Sec. 1920C.  (a) State Option.--State plan approved under 
     section 1902 may provide for making medical assistance 
     available to an individual described in section 1902(ii) 
     (relating to individuals who meet certain income eligibility 
     standard) during a presumptive eligibility period. In the 
     case of an individual described in section 1902(ii), such 
     medical assistance shall be limited to family planning 
     services and supplies described in 1905(a)(4)(C) and, at the 
     State's option, medical diagnosis and treatment services that 
     are provided in conjunction with a family planning service in 
     a family planning setting.
       ``(b) Definitions.--For purposes of this section:
       ``(1) Presumptive eligibility period.--The term 
     `presumptive eligibility period' means, with respect to an 
     individual described in subsection (a), the period that--
       ``(A) begins with the date on which a qualified entity 
     determines, on the basis of preliminary information, that the 
     individual is described in section 1902(ii); and
       ``(B) ends with (and includes) the earlier of--
       ``(i) the day on which a determination is made with respect 
     to the eligibility of such individual for services under the 
     State plan; or
       ``(ii) in the case of such an individual who does not file 
     an application by the last day of the month following the 
     month during which the entity makes the determination 
     referred to in subparagraph (A), such last day.
       ``(2) Qualified entity.--
       ``(A) In general.--Subject to subparagraph (B), the term 
     `qualified entity' means any entity that--
       ``(i) is eligible for payments under a State plan approved 
     under this title; and
       ``(ii) is determined by the State agency to be capable of 
     making determinations of the type described in paragraph 
     (1)(A).
       ``(B) Rule of construction.--Nothing in this paragraph 
     shall be construed as preventing a State from limiting the 
     classes of entities that may become qualified entities in 
     order to prevent fraud and abuse.
       ``(c) Administration.--
       ``(1) In general.--The State agency shall provide qualified 
     entities with--
       ``(A) such forms as are necessary for an application to be 
     made by an individual described in subsection (a) for medical 
     assistance under the State plan; and
       ``(B) information on how to assist such individuals in 
     completing and filing such forms.
       ``(2) Notification requirements.--A qualified entity that 
     determines under subsection (b)(1)(A) that an individual 
     described in subsection (a) is presumptively eligible for 
     medical assistance under a State plan shall--
       ``(A) notify the State agency of the determination within 5 
     working days after the date on which determination is made; 
     and
       ``(B) inform such individual at the time the determination 
     is made that an application for medical assistance is 
     required to be made by not later than the last day of the 
     month following the month during which the determination is 
     made.
       ``(3) Application for medical assistance.--In the case of 
     an individual described in subsection (a) who is determined 
     by a qualified entity to be presumptively eligible for 
     medical assistance under a State plan, the individual shall 
     apply for medical assistance by not later than the last day 
     of the month following the month during which the 
     determination is made.
       ``(d) Payment.--Notwithstanding any other provision of law, 
     medical assistance that--
       ``(1) is furnished to an individual described in subsection 
     (a)--
       ``(A) during a presumptive eligibility period; and
       ``(B) by a entity that is eligible for payments under the 
     State plan; and
       ``(2) is included in the care and services covered by the 
     State plan,

     shall be treated as medical assistance provided by such plan 
     for purposes of clause (4) of the first sentence of section 
     1905(b).''.
       (2) Conforming amendments.--
       (A) Section 1902(a)(47) of the Social Security Act (42 
     U.S.C. 1396a(a)(47)), as amended by section 2202(a), is 
     amended--
       (i) in subparagraph (A), by inserting before the semicolon 
     at the end the following: ``and provide for making medical 
     assistance available to individuals described in subsection 
     (a) of section 1920C during a presumptive eligibility period 
     in accordance with such section''; and
       (ii) in subparagraph (B), by striking ``or 1920B'' and 
     inserting ``1920B, or 1920C''.
       (B) Section 1903(u)(1)(D)(v) of such Act (42 U.S.C. 
     1396b(u)(1)(D)(v)), as amended by section 2202(b), is amended 
     by inserting ``or for medical assistance provided to an 
     individual described in subsection (a) of section 1920C 
     during a presumptive eligibility period under such section,'' 
     after ``1920B during a presumptive eligibility period under 
     such section,''.
       (c) Clarification of Coverage of Family Planning Services 
     and Supplies.--Section 1937(b) of the Social Security Act (42 
     U.S.C. 1396u-7(b)), as amended by section 2001(c), is amended 
     by adding at the end the following:
       ``(7) Coverage of family planning services and supplies.--
     Notwithstanding the previous provisions of this section, a 
     State may not provide for medical assistance through 
     enrollment of an individual with benchmark coverage or 
     benchmark-equivalent coverage under this section unless such 
     coverage includes for any individual described in section 
     1905(a)(4)(C), medical assistance for family planning 
     services and supplies in accordance with such section.''.
       (d) Effective Date.--The amendments made by this section 
     take effect on the date of the enactment of this Act and 
     shall apply to items and services furnished on or after such 
     date.

     SEC. 2304. CLARIFICATION OF DEFINITION OF MEDICAL ASSISTANCE.

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

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

     SEC. 2401. COMMUNITY FIRST CHOICE OPTION.

       Section 1915 of the Social Security Act (42 U.S.C. 1396n) 
     is amended by adding at the end the following:
       ``(k) State Plan Option to Provide Home and Community-based 
     Attendant Services and Supports.--

[[Page 28432]]

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

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

       ``(B) Included services and supports.--In addition to 
     assistance in accomplishing activities of daily living, 
     instrumental activities of daily living, and health related 
     tasks, the home and community-based attendant services and 
     supports made available include--
       ``(i) the acquisition, maintenance, and enhancement of 
     skills necessary for the individual to accomplish activities 
     of daily living, instrumental activities of daily living, and 
     health related tasks;
       ``(ii) back-up systems or mechanisms (such as the use of 
     beepers or other electronic devices) to ensure continuity of 
     services and supports; and
       ``(iii) voluntary training on how to select, manage, and 
     dismiss attendants.
       ``(C) Excluded services and supports.--Subject to 
     subparagraph (D), the home and community-based attendant 
     services and supports made available do not include--
       ``(i) room and board costs for the individual;
       ``(ii) special education and related services provided 
     under the Individuals with Disabilities Education Act and 
     vocational rehabilitation services provided under the 
     Rehabilitation Act of 1973;
       ``(iii) assistive technology devices and assistive 
     technology services other than those under (1)(B)(ii);
       ``(iv) medical supplies and equipment; or
       ``(v) home modifications.
       ``(D) Permissible services and supports.--The home and 
     community-based attendant services and supports may include--
       ``(i) expenditures for transition costs such as rent and 
     utility deposits, first month's rent and utilities, bedding, 
     basic kitchen supplies, and other necessities required for an 
     individual to make the transition from a nursing facility, 
     institution for mental diseases, or intermediate care 
     facility for the mentally retarded to a community-based home 
     setting where the individual resides; and
       ``(ii) expenditures relating to a need identified in an 
     individual's person-centered plan of services that increase 
     independence or substitute for human assistance, to the 
     extent that expenditures would otherwise be made for the 
     human assistance.
       ``(2) Increased federal financial participation.--For 
     purposes of payments to a State under section 1903(a)(1), 
     with respect to amounts expended by the State to provide 
     medical assistance under the State plan for home and 
     community-based attendant services and supports to eligible 
     individuals in accordance with this subsection during a 
     fiscal year quarter occurring during the period described in 
     paragraph (1), the Federal medical assistance percentage 
     applicable to the State (as determined under section 1905(b)) 
     shall be increased by 6 percentage points.
       ``(3) State requirements.--In order for a State plan 
     amendment to be approved under this subsection, the State 
     shall--
       ``(A) develop and implement such amendment in collaboration 
     with a Development and Implementation Council established by 
     the State that includes a majority of members with 
     disabilities, elderly individuals, and their representatives 
     and consults and collaborates with such individuals;
       ``(B) provide consumer controlled home and community-based 
     attendant services and supports to individuals on a statewide 
     basis, in a manner that provides such services and supports 
     in the most integrated setting appropriate to the 
     individual's needs, and without regard to the individual's 
     age, type or nature of disability, severity of disability, or 
     the form of home and community-based attendant services and 
     supports that the individual requires in order to lead an 
     independent life;
       ``(C) with respect to expenditures during the first full 
     fiscal year in which the State plan amendment is implemented, 
     maintain or exceed the level of State expenditures for 
     medical assistance that is provided under section 1905(a), 
     section 1915, section 1115, or otherwise to individuals with 
     disabilities or elderly individuals attributable to the 
     preceding fiscal year;
       ``(D) establish and maintain a comprehensive, continuous 
     quality assurance system with respect to community- based 
     attendant services and supports that--
       ``(i) includes standards for agency-based and other 
     delivery models with respect to training, appeals for denials 
     and reconsideration procedures of an individual plan, and 
     other factors as determined by the Secretary;
       ``(ii) incorporates feedback from consumers and their 
     representatives, disability organizations, providers, 
     families of disabled or elderly individuals, members of the 
     community, and others and maximizes consumer independence and 
     consumer control;
       ``(iii) monitors the health and well-being of each 
     individual who receives home and community-based attendant 
     services and supports, including a process for the mandatory 
     reporting, investigation, and resolution of allegations of 
     neglect, abuse, or exploitation in connection with the 
     provision of such services and supports; and
       ``(iv) provides information about the provisions of the 
     quality assurance required under clauses (i) through (iii) to 
     each individual receiving such services; and
       ``(E) collect and report information, as determined 
     necessary by the Secretary, for the purposes of approving the 
     State plan amendment, providing Federal oversight, and 
     conducting an evaluation under paragraph (5)(A), including 
     data regarding how the State provides home and community-
     based attendant services and supports and other home and 
     community-based services, the cost of such services and 
     supports, and how the State provides individuals with 
     disabilities who otherwise qualify for institutional care 
     under the State plan or under a waiver the choice to instead 
     receive home and community-based services in lieu of 
     institutional care.
       ``(4) Compliance with certain laws.--A State shall ensure 
     that, regardless of whether the State uses an agency-provider 
     model or other models to provide home and community-based 
     attendant services and supports under a State plan amendment 
     under this subsection, such services and supports are 
     provided in accordance with the requirements of the Fair 
     Labor Standards Act of 1938 and applicable Federal and State 
     laws regarding--
       ``(A) withholding and payment of Federal and State income 
     and payroll taxes;
       ``(B) the provision of unemployment and workers 
     compensation insurance;
       ``(C) maintenance of general liability insurance; and
       ``(D) occupational health and safety.
       ``(5) Evaluation, data collection, and report to 
     congress.--
       ``(A) Evaluation.--The Secretary shall conduct an 
     evaluation of the provision of home and community-based 
     attendant services and supports under this subsection in 
     order to determine the effectiveness of the provision of such 
     services and supports in allowing the individuals receiving 
     such services and supports to lead an independent life to the 
     maximum extent possible; the impact on the physical and 
     emotional health of the individuals who receive such 
     services; and an comparative analysis of the costs of 
     services provided under the State plan amendment under this 
     subsection and those provided under institutional care in a 
     nursing facility, institution for mental diseases, or an 
     intermediate care facility for the mentally retarded.
       ``(B) Data collection.--The State shall provide the 
     Secretary with the following information regarding the 
     provision of home and community-based attendant services and 
     supports under this subsection for each fiscal year for which 
     such services and supports are provided:
       ``(i) The number of individuals who are estimated to 
     receive home and community-based attendant services and 
     supports under this subsection during the fiscal year.

[[Page 28433]]

       ``(ii) The number of individuals that received such 
     services and supports during the preceding fiscal year.
       ``(iii) The specific number of individuals served by type 
     of disability, age, gender, education level, and employment 
     status.
       ``(iv) Whether the specific individuals have been 
     previously served under any other home and community based 
     services program under the State plan or under a waiver.
       ``(C) Reports.--Not later than--
       ``(i) December 31, 2013, the Secretary shall submit to 
     Congress and make available to the public an interim report 
     on the findings of the evaluation under subparagraph (A); and
       ``(ii) December 31, 2015, the Secretary shall submit to 
     Congress and make available to the public a final report on 
     the findings of the evaluation under subparagraph (A).
       ``(6) Definitions.--In this subsection:
       ``(A) Activities of daily living.--The term `activities of 
     daily living' includes tasks such as eating, toileting, 
     grooming, dressing, bathing, and transferring.
       ``(B) Consumer controlled.--The term `consumer controlled' 
     means a method of selecting and providing services and 
     supports that allow the individual, or where appropriate, the 
     individual's representative, maximum control of the home and 
     community-based attendant services and supports, regardless 
     of who acts as the employer of record.
       ``(C) Delivery models.--
       ``(i) Agency-provider model.--The term `agency-provider 
     model' means, with respect to the provision of home and 
     community-based attendant services and supports for an 
     individual, subject to paragraph (4), a method of providing 
     consumer controlled services and supports under which 
     entities contract for the provision of such services and 
     supports.
       ``(ii) Other models.--The term `other models' means, 
     subject to paragraph (4), methods, other than an agency-
     provider model, for the provision of consumer controlled 
     services and supports. Such models may include the provision 
     of vouchers, direct cash payments, or use of a fiscal agent 
     to assist in obtaining services.
       ``(D) Health-related tasks.--The term `health-related 
     tasks' means specific tasks related to the needs of an 
     individual, which can be delegated or assigned by licensed 
     health-care professionals under State law to be performed by 
     an attendant.
       ``(E) Individual's representative.--The term `individual's 
     representative' means a parent, family member, guardian, 
     advocate, or other authorized representative of an 
     individual.
       ``(F) Instrumental activities of daily living.--The term 
     `instrumental activities of daily living' includes (but is 
     not limited to) meal planning and preparation, managing 
     finances, shopping for food, clothing, and other essential 
     items, performing essential household chores, communicating 
     by phone or other media, and traveling around and 
     participating in the community.''.

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

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

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

       (2) Conforming amendments.--
       (A) Section 1903(f)(4) of the Social Security Act (42 
     U.S.C. 1396b(f)(4)), as amended by section 2304(a)(4)(B), is 
     amended in the matter preceding subparagraph (A), by 
     inserting ``1902(a)(10)(A)(ii)(XXII),'' after 
     ``1902(a)(10)(A)(ii)(XXI),''.
       (B) Section 1905(a) of the Social Security Act (42 U.S.C. 
     1396d(a)), as so amended, is amended in the matter preceding 
     paragraph (1)--
       (i) in clause (xv), by striking ``or'' at the end;
       (ii) in clause (xvi), by adding ``or'' at the end; and
       (iii) by inserting after clause (xvi) the following new 
     clause:
       ``(xvii) individuals who are eligible for home and 
     community-based services under

[[Page 28434]]

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

     SEC. 2403. MONEY FOLLOWS THE PERSON REBALANCING 
                   DEMONSTRATION.

       (a) Extension of Demonstration.--
       (1) In general.--Section 6071(h) of the Deficit Reduction 
     Act of 2005 (42 U.S.C. 1396a note) is amended--
       (A) in paragraph (1)(E), by striking ``fiscal year 2011'' 
     and inserting ``each of fiscal years 2011 through 2016''; and
       (B) in paragraph (2), by striking ``2011'' and inserting 
     ``2016''.
       (2) Evaluation.--Paragraphs (2) and (3) of section 6071(g) 
     of such Act is amended are each amended by striking ``2011'' 
     and inserting ``2016''.
       (b) Reduction of Institutional Residency Period.--
       (1) In general.--Section 6071(b)(2) of the Deficit 
     Reduction Act of 2005 (42 U.S.C. 1396a note) is amended--
       (A) in subparagraph (A)(i), by striking ``, for a period of 
     not less than 6 months or for such longer minimum period, not 
     to exceed 2 years, as may be specified by the State'' and 
     inserting ``for a period of not less than 90 consecutive 
     days''; and
       (B) by adding at the end the following:

     ``Any days that an individual resides in an institution on 
     the basis of having been admitted solely for purposes of 
     receiving short-term rehabilitative services for a period for 
     which payment for such services is limited under title XVIII 
     shall not be taken into account for purposes of determining 
     the 90-day period required under subparagraph (A)(i).''.
       (2) Effective date.--The amendments made by this subsection 
     take effect 30 days after the date of enactment of this Act.

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

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

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

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

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

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

            Subtitle F--Medicaid Prescription Drug Coverage

     SEC. 2501. PRESCRIPTION DRUG REBATES.

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

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

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

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

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

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

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

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

     The Secretary shall adjust such payment reduction for a 
     calendar quarter to the extent the Secretary determines, 
     based upon subsequent utilization and other data, that the 
     reduction for such quarter was greater or less than the 
     amount of payment reduction that should have been made.
       ``(ii) Manner of payment reduction.--The amount of the 
     payment reduction under

[[Page 28435]]

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

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

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

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

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

     SEC. 2503. PROVIDING ADEQUATE PHARMACY REIMBURSEMENT.

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

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

[[Page 28436]]

     long term care providers, manufacturers, or any other entity 
     that does not conduct business as a wholesaler or a retail 
     community pharmacy.

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

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

     SEC. 2551. DISPROPORTIONATE SHARE HOSPITAL PAYMENTS.

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

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

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

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

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

   Subtitle H--Improved Coordination for Dual Eligible Beneficiaries

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

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

[[Page 28437]]

       ``(B) In this paragraph, the term `dual eligible 
     individual' means an individual who is entitled to, or 
     enrolled for, benefits under part A of title XVIII, or 
     enrolled for benefits under part B of title XVIII, and is 
     eligible for medical assistance under the State plan under 
     this title or under a waiver of such plan.''.
       (b) Conforming Amendments.--
       (1) Section 1915 of such Act (42 U.S.C. 1396n) is amended--
       (A) in subsection (b), by adding at the end the following 
     new sentence: ``Subsection (h)(2) shall apply to a waiver 
     under this subsection.'';
       (B) in subsection (c)(3), in the second sentence, by 
     inserting ``(other than a waiver described in subsection 
     (h)(2))'' after ``A waiver under this subsection'';
       (C) in subsection (d)(3), in the second sentence, by 
     inserting ``(other than a waiver described in subsection 
     (h)(2))'' after ``A waiver under this subsection''.
       (2) Section 1115 of such Act (42 U.S.C. 1315) is amended--
       (A) in subsection (e)(2), by inserting ``(5 years, in the 
     case of a waiver described in section 1915(h)(2))'' after ``3 
     years''; and
       (B) in subsection (f)(6), by inserting ``(5 years, in the 
     case of a waiver described in section 1915(h)(2))'' after ``3 
     years''.

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

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

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

     SEC. 2701. ADULT HEALTH QUALITY MEASURES.

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

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

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

[[Page 28438]]

     under section 1139A(c)), to the Secretary on the--
       ``(A) State-specific adult health quality measures applied 
     by the State under the such plan, including measures 
     described in subsection (a)(5); and
       ``(B) State-specific information on the quality of health 
     care furnished to Medicaid eligible adults under such plan, 
     including information collected through external quality 
     reviews of managed care organizations under section 1932 and 
     benchmark plans under section 1937.
       ``(2) Publication.--Not later than September 30, 2014, and 
     annually thereafter, the Secretary shall collect, analyze, 
     and make publicly available the information reported by 
     States under paragraph (1).
       ``(e) Appropriation.--Out of any funds in the Treasury not 
     otherwise appropriated, there is appropriated for each of 
     fiscal years 2010 through 2014, $60,000,000 for the purpose 
     of carrying out this section. Funds appropriated under this 
     subsection shall remain available until expended.''.

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

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

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

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

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

       ``(B) Rule of construction.--Nothing in this paragraph 
     shall prevent the Secretary from establishing higher levels 
     as to the number or severity of chronic or mental health 
     conditions for purposes of determining eligibility for 
     receipt of health home services under this section.
       ``(2) Chronic condition.--The term `chronic condition' has 
     the meaning given that term by the Secretary and shall 
     include, but is not limited to, the following:
       ``(A) A mental health condition.
       ``(B) Substance use disorder.
       ``(C) Asthma.
       ``(D) Diabetes.
       ``(E) Heart disease.
       ``(F) Being overweight, as evidenced by having a Body Mass 
     Index (BMI) over 25.
       ``(3) Health home.--The term `health home' means a 
     designated provider (including a provider that operates in 
     coordination with a team of health care professionals) or a 
     health team selected by an eligible individual with chronic 
     conditions to provide health home services.
       ``(4) Health home services.--
       ``(A) In general.--The term `health home services' means 
     comprehensive and timely

[[Page 28439]]

     high-quality services described in subparagraph (B) that are 
     provided by a designated provider, a team of health care 
     professionals operating with such a provider, or a health 
     team.
       ``(B) Services described.--The services described in this 
     subparagraph are--
       ``(i) comprehensive care management;
       ``(ii) care coordination and health promotion;
       ``(iii) comprehensive transitional care, including 
     appropriate follow-up, from inpatient to other settings;
       ``(iv) patient and family support (including authorized 
     representatives);
       ``(v) referral to community and social support services, if 
     relevant; and
       ``(vi) use of health information technology to link 
     services, as feasible and appropriate.
       ``(5) Designated provider.--The term `designated provider' 
     means a physician, clinical practice or clinical group 
     practice, rural clinic, community health center, community 
     mental health center, home health agency, or any other entity 
     or provider (including pediatricians, gynecologists, and 
     obstetricians) that is determined by the State and approved 
     by the Secretary to be qualified to be a health home for 
     eligible individuals with chronic conditions on the basis of 
     documentation evidencing that the physician, practice, or 
     clinic--
       ``(A) has the systems and infrastructure in place to 
     provide health home services; and
       ``(B) satisfies the qualification standards established by 
     the Secretary under subsection (b).
       ``(6) Team of health care professionals.--The term `team of 
     health care professionals' means a team of health 
     professionals (as described in the State plan amendment) that 
     may--
       ``(A) include physicians and other professionals, such as a 
     nurse care coordinator, nutritionist, social worker, 
     behavioral health professional, or any professionals deemed 
     appropriate by the State; and
       ``(B) be free standing, virtual, or based at a hospital, 
     community health center, community mental health center, 
     rural clinic, clinical practice or clinical group practice, 
     academic health center, or any entity deemed appropriate by 
     the State and approved by the Secretary.
       ``(7) Health team.--The term `health team' has the meaning 
     given such term for purposes of section 3502 of the Patient 
     Protection and Affordable Care Act.''.
       (b) Evaluation.--
       (1) Independent evaluation.--
       (A) In general.--The Secretary shall enter into a contract 
     with an independent entity or organization to conduct an 
     evaluation and assessment of the States that have elected the 
     option to provide coordinated care through a health home for 
     Medicaid beneficiaries with chronic conditions under section 
     1945 of the Social Security Act (as added by subsection (a)) 
     for the purpose of determining the effect of such option on 
     reducing hospital admissions, emergency room visits, and 
     admissions to skilled nursing facilities.
       (B) Evaluation report.--Not later than January 1, 2017, the 
     Secretary shall report to Congress on the evaluation and 
     assessment conducted under subparagraph (A).
       (2) Survey and interim report.--
       (A) In general.--Not later than January 1, 2014, the 
     Secretary of Health and Human Services shall survey States 
     that have elected the option under section 1945 of the Social 
     Security Act (as added by subsection (a)) and report to 
     Congress on the nature, extent, and use of such option, 
     particularly as it pertains to--
       (i) hospital admission rates;
       (ii) chronic disease management;
       (iii) coordination of care for individuals with chronic 
     conditions;
       (iv) assessment of program implementation;
       (v) processes and lessons learned (as described in 
     subparagraph (B));
       (vi) assessment of quality improvements and clinical 
     outcomes under such option; and
       (vii) estimates of cost savings.
       (B)  Implementation reporting.--A State that has elected 
     the option under section 1945 of the Social Security Act (as 
     added by subsection (a)) shall report to the Secretary, as 
     necessary, on processes that have been developed and lessons 
     learned regarding provision of coordinated care through a 
     health home for Medicaid beneficiaries with chronic 
     conditions under such option.

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

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

     SEC. 2705. MEDICAID GLOBAL PAYMENT SYSTEM DEMONSTRATION 
                   PROJECT.

       (a) In General.--The Secretary of Health and Human Services 
     (referred to in this section as the ``Secretary'') shall, in 
     coordination with the Center for Medicare and Medicaid 
     Innovation (as established under section 1115A of the Social 
     Security Act, as added by section 3021 of this Act), 
     establish the Medicaid Global Payment System Demonstration 
     Project under which a participating State shall adjust the 
     payments made to an eligible safety net hospital system or 
     network from a fee-for-service payment structure to a global 
     capitated payment model.
       (b) Duration and Scope.--The demonstration project 
     conducted under this section shall operate during a period of 
     fiscal years 2010 through 2012. The Secretary shall select 
     not more than 5 States to participate in the demonstration 
     project.
       (c) Eligible Safety Net Hospital System or Network.--For 
     purposes of this section, the term ``eligible safety net 
     hospital system or network'' means a large, safety net 
     hospital system or network (as defined by the Secretary) that 
     operates within a State selected by the Secretary under 
     subsection (b).
       (d) Evaluation.--
       (1) Testing.--The Innovation Center shall test and evaluate 
     the demonstration project conducted under this section to 
     examine any changes in health care quality outcomes and 
     spending by the eligible safety net hospital systems or 
     networks.

[[Page 28440]]

       (2) Budget neutrality.--During the testing period under 
     paragraph (1), any budget neutrality requirements under 
     section 1115A(b)(3) of the Social Security Act (as so added) 
     shall not be applicable.
       (3) Modification.--During the testing period under 
     paragraph (1), the Secretary may, in the Secretary's 
     discretion, modify or terminate the demonstration project 
     conducted under this section.
       (e) Report.--Not later than 12 months after the date of 
     completion of the demonstration project under this section, 
     the Secretary shall submit to Congress a report containing 
     the results of the evaluation and testing conducted under 
     subsection (d), together with recommendations for such 
     legislation and administrative action as the Secretary 
     determines appropriate.
       (f) Authorization of Appropriations.--There are authorized 
     to be appropriated such sums as are necessary to carry out 
     this section.

     SEC. 2706. PEDIATRIC ACCOUNTABLE CARE ORGANIZATION 
                   DEMONSTRATION PROJECT.

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

     SEC. 2707. MEDICAID EMERGENCY PSYCHIATRIC DEMONSTRATION 
                   PROJECT.

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

[[Page 28441]]

       (h) Definitions.--In this section:
       (1) Emergency medical condition.--The term ``emergency 
     medical condition'' means, with respect to an individual, an 
     individual who expresses suicidal or homicidal thoughts or 
     gestures, if determined dangerous to self or others.
       (2) Federal medical assistance percentage.--The term 
     ``Federal medical assistance percentage'' has the meaning 
     given that term with respect to a State under section 1905(b) 
     of the Social Security Act (42 U.S.C. 1396d(b)).
       (3) Institution for mental diseases.--The term 
     ``institution for mental diseases'' has the meaning given to 
     that term in section 1905(i) of the Social Security Act (42 
     U.S.C. 1396d(i)).
       (4) Medical assistance.--The term ``medical assistance'' 
     has the meaning given that term in section 1905(a) of the 
     Social Security Act (42 U.S.C. 1396d(a)).
       (5) Stabilized.--The term ``stabilized'' means, with 
     respect to an individual, that the emergency medical 
     condition no longer exists with respect to the individual and 
     the individual is no longer dangerous to self or others.
       (6) State.--The term ``State'' has the meaning given that 
     term for purposes of title XIX of the Social Security Act (42 
     U.S.C. 1396 et seq.).

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

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

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

       (I) in clause (i)--

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

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

       (ii) by redesignating subparagraphs (B) and (C) as 
     subparagraphs (F) and (H), respectively;
       (iii) by inserting after subparagraph (A), the following:
       ``(B) Eligibility policies.--Medicaid and CHIP eligibility 
     policies, including a determination of the degree to which 
     Federal and State policies provide health care coverage to 
     needy populations.
       ``(C) Enrollment and retention processes.--Medicaid and 
     CHIP enrollment and retention processes, including a 
     determination of the degree to which Federal and State 
     policies encourage the enrollment of individuals who are 
     eligible for such programs and screen out individuals who are 
     ineligible, while minimizing the share of program expenses 
     devoted to such processes.
       ``(D) Coverage policies.--Medicaid and CHIP benefit and 
     coverage policies, including a determination of the degree to 
     which Federal and State policies provide access to the 
     services enrollees require to improve and maintain their 
     health and functional status.
       ``(E) Quality of care.--Medicaid and CHIP policies as they 
     relate to the quality of care provided under those programs, 
     including a determination of the degree to which Federal and 
     State policies achieve their stated goals and interact with 
     similar goals established by other purchasers of health care 
     services.'';
       (iv) by inserting after subparagraph (F) (as redesignated 
     by clause (ii) of this subparagraph), the following:
       ``(G) Interactions with medicare and medicaid.--Consistent 
     with paragraph (11), the interaction of policies under 
     Medicaid and the Medicare program under title XVIII, 
     including with respect to how such interactions affect access 
     to services, payments, and dual eligible individuals.'' and
       (v) in subparagraph (H) (as so redesignated), by inserting 
     ``and preventive, acute, and long-term services and 
     supports'' after ``barriers'';
       (C) by redesignating paragraphs (3) through (9) as 
     paragraphs (4) through (10), respectively;
       (D) by inserting after paragraph (2), the following new 
     paragraph:
       ``(3) Recommendations and reports of state-specific data.--
     MACPAC shall--
       ``(A) review national and State-specific Medicaid and CHIP 
     data; and
       ``(B) submit reports and recommendations to Congress, the 
     Secretary, and States based on such reviews.'';
       (E) in paragraph (4), as redesignated by subparagraph (C), 
     by striking ``or any other problems'' and all that follows 
     through the period and inserting ``, as well as other factors 
     that adversely affect, or have the potential to adversely 
     affect, access to care by, or the health care status of, 
     Medicaid and CHIP beneficiaries. MACPAC shall include in the 
     annual report required under paragraph (1)(D) a description 
     of all such areas or problems identified with respect to the 
     period addressed in the report.'';
       (F) in paragraph (5), as so redesignated,--
       (i) in the paragraph heading, by inserting ``and 
     regulations'' after ``reports''; and
       (ii) by striking ``If'' and inserting the following:
       ``(A) Certain secretarial reports.--If''; and
       (iii) in the second sentence, by inserting ``and the 
     Secretary'' after ``appropriate committees of Congress''; and
       (iv) by adding at the end the following:
       ``(B) Regulations.--MACPAC shall review Medicaid and CHIP 
     regulations and may comment through submission of a report to 
     the appropriate committees of Congress and the Secretary, on 
     any such regulations that affect access, quality, or 
     efficiency of health care.'';
       (G) in paragraph (10), as so redesignated, by inserting ``, 
     and shall submit with any recommendations, a report on the 
     Federal and State-specific budget consequences of the 
     recommendations'' before the period; and
       (H) by adding at the end the following:
       ``(11) Consultation and coordination with medpac.--
       ``(A) In general.--MACPAC shall consult with the Medicare 
     Payment Advisory Commission (in this paragraph referred to as 
     `MedPAC') established under section 1805 in carrying out its 
     duties under this section, as appropriate and particularly 
     with respect to the issues specified in paragraph (2) as they 
     relate to those Medicaid beneficiaries who are dually 
     eligible for Medicaid and the Medicare program under title 
     XVIII, adult Medicaid beneficiaries (who are not dually 
     eligible for Medicare), and beneficiaries under Medicare. 
     Responsibility for analysis of and recommendations to change 
     Medicare policy regarding Medicare beneficiaries, including 
     Medicare beneficiaries who are dually eligible for Medicare 
     and Medicaid, shall rest with MedPAC.
       ``(B) Information sharing.--MACPAC and MedPAC shall have 
     access to deliberations and records of the other such entity, 
     respectively, upon the request of the other such entity.
       ``(12) Consultation with states.--MACPAC shall regularly 
     consult with States in carrying out its duties under this 
     section, including with respect to developing processes for 
     carrying out such duties, and shall ensure that input from 
     States is taken into account and represented in MACPAC's 
     recommendations and reports.
       ``(13) Coordinate and consult with the federal coordinated 
     health care office.--MACPAC shall coordinate and consult with 
     the Federal Coordinated Health Care Office established under 
     section 2081 of the Patient Protection and Affordable Care 
     Act before making any recommendations regarding dual eligible 
     individuals.
       ``(14) Programmatic oversight vested in the secretary.--
     MACPAC's authority to make recommendations in accordance with 
     this section shall not affect, or be considered to duplicate, 
     the Secretary's authority to carry out Federal 
     responsibilities with respect to Medicaid and CHIP.'';
       (2) in subsection (c)(2)--
       (A) by striking subparagraphs (A) and (B) and inserting the 
     following:
       ``(A) In general.--The membership of MACPAC shall include 
     individuals who have had direct experience as enrollees or 
     parents or caregivers of enrollees in Medicaid or CHIP and 
     individuals with national recognition for their expertise in 
     Federal safety net health programs, health finance and 
     economics, actuarial science, health plans and integrated 
     delivery systems, reimbursement for health care, health 
     information technology, and other providers of health 
     services, public health, and other related fields, who 
     provide a mix of different professions, broad geographic 
     representation, and a balance between urban and rural 
     representation.
       ``(B) Inclusion.--The membership of MACPAC shall include 
     (but not be limited to) physicians, dentists, and other 
     health professionals, employers, third-party payers, and 
     individuals with expertise in the delivery of health 
     services. Such membership shall also include representatives 
     of children, pregnant women, the elderly, individuals with 
     disabilities, caregivers, and dual eligible individuals, 
     current or former representatives of State agencies 
     responsible for administering Medicaid, and current or former 
     representatives of State agencies responsible for 
     administering CHIP.''.
       (3) in subsection (d)(2), by inserting ``and State'' after 
     ``Federal'';

[[Page 28442]]

       (4) in subsection (e)(1), in the first sentence, by 
     inserting ``and, as a condition for receiving payments under 
     sections 1903(a) and 2105(a), from any State agency 
     responsible for administering Medicaid or CHIP,'' after 
     ``United States''; and
       (5) in subsection (f)--
       (A) in the subsection heading, by striking ``Authorization 
     of Appropriations'' and inserting ``Funding'';
       (B) in paragraph (1), by inserting ``(other than for fiscal 
     year 2010)'' before ``in the same manner''; and
       (C) by adding at the end the following:
       ``(3) Funding for fiscal year 2010.--
       ``(A) In general.--Out of any funds in the Treasury not 
     otherwise appropriated, there is appropriated to MACPAC to 
     carry out the provisions of this section for fiscal year 
     2010, $9,000,000.
       ``(B) Transfer of funds.--Notwithstanding section 
     2104(a)(13), from the amounts appropriated in such section 
     for fiscal year 2010, $2,000,000 is hereby transferred and 
     made available in such fiscal year to MACPAC to carry out the 
     provisions of this section.
       ``(4) Availability.--Amounts made available under 
     paragraphs (2) and (3) to MACPAC to carry out the provisions 
     of this section shall remain available until expended.''.
       (b) Conforming MedPAC Amendments.--Section 1805(b) of the 
     Social Security Act (42 U.S.C. 1395b-6(b)), is amended--
       (1) in paragraph (1)(C), by striking ``March 1 of each year 
     (beginning with 1998)'' and inserting ``March 15'';
       (2) in paragraph (1)(D), by inserting ``, and (beginning 
     with 2012) containing an examination of the topics described 
     in paragraph (9), to the extent feasible'' before the period; 
     and
       (3) by adding at the end the following:
       ``(9) Review and annual report on medicaid and commercial 
     trends.--The Commission shall review and report on aggregate 
     trends in spending, utilization, and financial performance 
     under the Medicaid program under title XIX and the private 
     market for health care services with respect to providers for 
     which, on an aggregate national basis, a significant portion 
     of revenue or services is associated with the Medicaid 
     program. Where appropriate, the Commission shall conduct such 
     review in consultation with the Medicaid and CHIP Payment and 
     Access Commission established under section 1900 (in this 
     section referred to as `MACPAC').
       ``(10) Coordinate and consult with the federal coordinated 
     health care office.--The Commission shall coordinate and 
     consult with the Federal Coordinated Health Care Office 
     established under section 2081 of the Patient Protection and 
     Affordable Care Act before making any recommendations 
     regarding dual eligible individuals.
       ``(11) Interaction of medicaid and medicare.--The 
     Commission shall consult with MACPAC in carrying out its 
     duties under this section, as appropriate. Responsibility for 
     analysis of and recommendations to change Medicare policy 
     regarding Medicare beneficiaries, including Medicare 
     beneficiaries who are dually eligible for Medicare and 
     Medicaid, shall rest with the Commission. Responsibility for 
     analysis of and recommendations to change Medicaid policy 
     regarding Medicaid beneficiaries, including Medicaid 
     beneficiaries who are dually eligible for Medicare and 
     Medicaid, shall rest with MACPAC.''.

    Subtitle K--Protections for American Indians and Alaska Natives

     SEC. 2901. SPECIAL RULES RELATING TO INDIANS.

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

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

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

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

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

             Subtitle L--Maternal and Child Health Services

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

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

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

       ``(a) Purposes.--The purposes of this section are--
       ``(1) to strengthen and improve the programs and activities 
     carried out under this title;
       ``(2) to improve coordination of services for at risk 
     communities; and
       ``(3) to identify and provide comprehensive services to 
     improve outcomes for families who reside in at risk 
     communities.
       ``(b) Requirement for All States to Assess Statewide Needs 
     and Identify at Risk Communities.--
       ``(1) In general.--Not later than 6 months after the date 
     of enactment of this section, each State shall, as a 
     condition of receiving payments from an allotment for the 
     State under section 502 for fiscal year 2011, conduct a 
     statewide needs assessment (which shall be separate from the 
     statewide needs assessment required under section 505(a)) 
     that identifies--
       ``(A) communities with concentrations of--
       ``(i) premature birth, low-birth weight infants, and infant 
     mortality, including infant death due to neglect, or other 
     indicators of at-risk prenatal, maternal, newborn, or child 
     health;
       ``(ii) poverty;
       ``(iii) crime;
       ``(iv) domestic violence;
       ``(v) high rates of high-school drop-outs;
       ``(vi) substance abuse;
       ``(vii) unemployment; or
       ``(viii) child maltreatment;
       ``(B) the quality and capacity of existing programs or 
     initiatives for early childhood home visitation in the State 
     including--
       ``(i) the number and types of individuals and families who 
     are receiving services under such programs or initiatives;
       ``(ii) the gaps in early childhood home visitation in the 
     State; and
       ``(iii) the extent to which such programs or initiatives 
     are meeting the needs of eligible families described in 
     subsection (k)(2); and
       ``(C) the State's capacity for providing substance abuse 
     treatment and counseling services to individuals and families 
     in need of such treatment or services.
       ``(2) Coordination with other assessments.--In conducting 
     the statewide needs assessment required under paragraph (1), 
     the State shall coordinate with, and take into account, other 
     appropriate needs assessments conducted by the State, as 
     determined by the Secretary, including the needs assessment 
     required under section 505(a) (both the most recently 
     completed assessment and any such assessment in progress), 
     the communitywide strategic planning and needs assessments 
     conducted in accordance with section 640(g)(1)(C) of the Head 
     Start Act, and the inventory of current unmet needs and 
     current community-based and prevention-focused programs and 
     activities to prevent child abuse and neglect, and other 
     family resource services operating in the State required 
     under section 205(3) of the Child Abuse Prevention and 
     Treatment Act.
       ``(3) Submission to the secretary.--Each State shall submit 
     to the Secretary, in such form and manner as the Secretary 
     shall require--
       ``(A) the results of the statewide needs assessment 
     required under paragraph (1); and
       ``(B) a description of how the State intends to address 
     needs identified by the assessment, particularly with respect 
     to communities identified under paragraph (1)(A), which may 
     include applying for a grant to conduct an early childhood 
     home visitation program in accordance with the requirements 
     of this section.
       ``(c) Grants for Early Childhood Home Visitation 
     Programs.--
       ``(1) Authority to make grants.--In addition to any other 
     payments made under this title to a State, the Secretary 
     shall make grants to eligible entities to enable the entities 
     to deliver services under early childhood home visitation 
     programs that satisfy the requirements of subsection (d) to 
     eligible families in order to promote improvements in 
     maternal and prenatal health, infant health, child health and 
     development, parenting related to child development outcomes, 
     school readiness, and the socioeconomic status of such 
     families, and reductions in child abuse, neglect, and 
     injuries.
       ``(2) Authority to use initial grant funds for planning or 
     implementation.--An eligible entity that receives a grant 
     under paragraph (1) may use a portion of the funds

[[Page 28443]]

     made available to the entity during the first 6 months of the 
     period for which the grant is made for planning or 
     implementation activities to assist with the establishment of 
     early childhood home visitation programs that satisfy the 
     requirements of subsection (d).
       ``(3) Grant duration.--The Secretary shall determine the 
     period of years for which a grant is made to an eligible 
     entity under paragraph (1).
       ``(4) Technical assistance.--The Secretary shall provide an 
     eligible entity that receives a grant under paragraph (1) 
     with technical assistance in administering programs or 
     activities conducted in whole or in part with grant funds.
       ``(d) Requirements.--The requirements of this subsection 
     for an early childhood home visitation program conducted with 
     a grant made under this section are as follows:
       ``(1) Quantifiable, measurable improvement in benchmark 
     areas.--
       ``(A) In general.--The eligible entity establishes, subject 
     to the approval of the Secretary, quantifiable, measurable 3- 
     and 5-year benchmarks for demonstrating that the program 
     results in improvements for the eligible families 
     participating in the program in each of the following areas:
       ``(i) Improved maternal and newborn health.
       ``(ii) Prevention of child injuries, child abuse, neglect, 
     or maltreatment, and reduction of emergency department 
     visits.
       ``(iii) Improvement in school readiness and achievement.
       ``(iv) Reduction in crime or domestic violence.
       ``(v) Improvements in family economic self-sufficiency.
       ``(vi) Improvements in the coordination and referrals for 
     other community resources and supports.
       ``(B) Demonstration of improvements after 3 years.--
       ``(i) Report to the secretary.--Not later than 30 days 
     after the end of the 3rd year in which the eligible entity 
     conducts the program, the entity submits to the Secretary a 
     report demonstrating improvement in at least 4 of the areas 
     specified in subparagraph (A).
       ``(ii) Corrective action plan.--If the report submitted by 
     the eligible entity under clause (i) fails to demonstrate 
     improvement in at least 4 of the areas specified in 
     subparagraph (A), the entity shall develop and implement a 
     plan to improve outcomes in each of the areas specified in 
     subparagraph (A), subject to approval by the Secretary. The 
     plan shall include provisions for the Secretary to monitor 
     implementation of the plan and conduct continued oversight of 
     the program, including through submission by the entity of 
     regular reports to the Secretary.
       ``(iii) Technical assistance.--

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

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

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

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

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

       ``(ii) Majority of grant funds used for evidence-based 
     models.--An eligible entity shall use not more than 25 
     percent of the amount of the grant paid to the entity for a 
     fiscal year for purposes of conducting a program using the 
     service delivery model described in clause (i)(II).
       ``(iii) Criteria for evidence of effectiveness of models.--
     The Secretary shall establish criteria for evidence of 
     effectiveness of the service delivery models and shall ensure 
     that the process for establishing the criteria is transparent 
     and provides the opportunity for public comment.
       ``(B) Additional requirements.--
       ``(i) The program adheres to a clear, consistent model that 
     satisfies the requirements of being grounded in empirically-
     based knowledge related to home visiting and linked to the 
     benchmark areas specified in paragraph (1)(A) and the 
     participant outcomes described in paragraph (2)(B) related to 
     the purposes of the program.
       ``(ii) The program employs well-trained and competent 
     staff, as demonstrated by education or training, such as 
     nurses, social workers, educators, child development 
     specialists, or other well-trained and competent staff, and 
     provides ongoing and specific training on the model being 
     delivered.
       ``(iii) The program maintains high quality supervision to 
     establish home visitor competencies.
       ``(iv) The program demonstrates strong organizational 
     capacity to implement the activities involved.
       ``(v) The program establishes appropriate linkages and 
     referral networks to other community resources and supports 
     for eligible families.
       ``(vi) The program monitors the fidelity of program 
     implementation to ensure that services are delivered pursuant 
     to the specified model.
       ``(4) Priority for serving high-risk populations.--The 
     eligible entity gives priority to providing services under 
     the program to the following:
       ``(A) Eligible families who reside in communities in need 
     of such services, as identified in the statewide needs 
     assessment required under subsection (b)(1)(A).
       ``(B) Low-income eligible families.
       ``(C) Eligible families who are pregnant women who have not 
     attained age 21.
       ``(D) Eligible families that have a history of child abuse 
     or neglect or have had interactions with child welfare 
     services.
       ``(E) Eligible families that have a history of substance 
     abuse or need substance abuse treatment.
       ``(F) Eligible families that have users of tobacco products 
     in the home.
       ``(G) Eligible families that are or have children with low 
     student achievement.
       ``(H) Eligible families with children with developmental 
     delays or disabilities.
       ``(I) Eligible families who, or that include individuals 
     who, are serving or formerly served in the Armed Forces, 
     including such families that have members of the Armed Forces 
     who have had multiple deployments outside of the United 
     States.
       ``(e) Application Requirements.--An eligible entity 
     desiring a grant under this section shall submit an 
     application to the Secretary for approval, in such manner as 
     the Secretary may require, that includes the following:
       ``(1) A description of the populations to be served by the 
     entity, including specific information regarding how the 
     entity will serve

[[Page 28444]]

     high risk populations described in subsection (d)(4).
       ``(2) An assurance that the entity will give priority to 
     serving low-income eligible families and eligible families 
     who reside in at risk communities identified in the statewide 
     needs assessment required under subsection (b)(1)(A).
       ``(3) The service delivery model or models described in 
     subsection (d)(3)(A) that the entity will use under the 
     program and the basis for the selection of the model or 
     models.
       ``(4) A statement identifying how the selection of the 
     populations to be served and the service delivery model or 
     models that the entity will use under the program for such 
     populations is consistent with the results of the statewide 
     needs assessment conducted under subsection (b).
       ``(5) The quantifiable, measurable benchmarks established 
     by the State to demonstrate that the program contributes to 
     improvements in the areas specified in subsection (d)(1)(A).
       ``(6) An assurance that the entity will obtain and submit 
     documentation or other appropriate evidence from the 
     organization or entity that developed the service delivery 
     model or models used under the program to verify that the 
     program is implemented and services are delivered according 
     to the model specifications.
       ``(7) Assurances that the entity will establish procedures 
     to ensure that--
       ``(A) the participation of each eligible family in the 
     program is voluntary; and
       ``(B) services are provided to an eligible family in 
     accordance with the individual assessment for that family.
       ``(8) Assurances that the entity will--
       ``(A) submit annual reports to the Secretary regarding the 
     program and activities carried out under the program that 
     include such information and data as the Secretary shall 
     require; and
       ``(B) participate in, and cooperate with, data and 
     information collection necessary for the evaluation required 
     under subsection (g)(2) and other research and evaluation 
     activities carried out under subsection (h)(3).
       ``(9) A description of other State programs that include 
     home visitation services, including, if applicable to the 
     State, other programs carried out under this title with funds 
     made available from allotments under section 502(c), programs 
     funded under title IV, title II of the Child Abuse Prevention 
     and Treatment Act (relating to community-based grants for the 
     prevention of child abuse and neglect), and section 645A of 
     the Head Start Act (relating to Early Head Start programs).
       ``(10) Other information as required by the Secretary.
       ``(f) Maintenance of Effort.--Funds provided to an eligible 
     entity receiving a grant under this section shall supplement, 
     and not supplant, funds from other sources for early 
     childhood home visitation programs or initiatives.
       ``(g) Evaluation.--
       ``(1) Independent, expert advisory panel.--The Secretary, 
     in accordance with subsection (h)(1)(A), shall appoint an 
     independent advisory panel consisting of experts in program 
     evaluation and research, education, and early childhood 
     development--
       ``(A) to review, and make recommendations on, the design 
     and plan for the evaluation required under paragraph (2) 
     within 1 year after the date of enactment of this section;
       ``(B) to maintain and advise the Secretary regarding the 
     progress of the evaluation; and
       ``(C) to comment, if the panel so desires, on the report 
     submitted under paragraph (3).
       ``(2) Authority to conduct evaluation.--On the basis of the 
     recommendations of the advisory panel under paragraph (1), 
     the Secretary shall, by grant, contract, or interagency 
     agreement, conduct an evaluation of the statewide needs 
     assessments submitted under subsection (b) and the grants 
     made under subsections (c) and (h)(3)(B). The evaluation 
     shall include--
       ``(A) an analysis, on a State-by-State basis, of the 
     results of such assessments, including indicators of maternal 
     and prenatal health and infant health and mortality, and 
     State actions in response to the assessments; and
       ``(B) an assessment of--
       ``(i) the effect of early childhood home visitation 
     programs on child and parent outcomes, including with respect 
     to each of the benchmark areas specified in subsection 
     (d)(1)(A) and the participant outcomes described in 
     subsection (d)(2)(B);
       ``(ii) the effectiveness of such programs on different 
     populations, including the extent to which the ability of 
     programs to improve participant outcomes varies across 
     programs and populations; and
       ``(iii) the potential for the activities conducted under 
     such programs, if scaled broadly, to improve health care 
     practices, eliminate health disparities, and improve health 
     care system quality, efficiencies, and reduce costs.
       ``(3) Report.--Not later than March 31, 2015, the Secretary 
     shall submit a report to Congress on the results of the 
     evaluation conducted under paragraph (2) and shall make the 
     report publicly available.
       ``(h) Other Provisions.--
       ``(1) Intra-agency collaboration.--The Secretary shall 
     ensure that the Maternal and Child Health Bureau and the 
     Administration for Children and Families collaborate with 
     respect to carrying out this section, including with respect 
     to--
       ``(A) reviewing and analyzing the statewide needs 
     assessments required under subsection (b), the awarding and 
     oversight of grants awarded under this section, the 
     establishment of the advisory panels required under 
     subsections (d)(1)(B)(iii)(II) and (g)(1), and the evaluation 
     and report required under subsection (g); and
       ``(B) consulting with other Federal agencies with 
     responsibility for administering or evaluating programs that 
     serve eligible families to coordinate and collaborate with 
     respect to research related to such programs and families, 
     including the Office of the Assistant Secretary for Planning 
     and Evaluation of the Department of Health and Human 
     Services, the Centers for Disease Control and Prevention, the 
     National Institute of Child Health and Human Development of 
     the National Institutes of Health, the Office of Juvenile 
     Justice and Delinquency Prevention of the Department of 
     Justice, and the Institute of Education Sciences of the 
     Department of Education.
       ``(2) Grants to eligible entities that are not states.--
       ``(A) Indian tribes, tribal organizations, or urban indian 
     organizations.--The Secretary shall specify requirements for 
     eligible entities that are Indian Tribes (or a consortium of 
     Indian Tribes), Tribal Organizations, or Urban Indian 
     Organizations to apply for and conduct an early childhood 
     home visitation program with a grant under this section. Such 
     requirements shall, to the greatest extent practicable, be 
     consistent with the requirements applicable to eligible 
     entities that are States and shall require an Indian Tribe 
     (or consortium), Tribal Organization, or Urban Indian 
     Organization to--
       ``(i) conduct a needs assessment similar to the assessment 
     required for all States under subsection (b); and
       ``(ii) establish quantifiable, measurable 3- and 5-year 
     benchmarks consistent with subsection (d)(1)(A).
       ``(B) Nonprofit organizations.--If, as of the beginning of 
     fiscal year 2012, a State has not applied or been approved 
     for a grant under this section, the Secretary may use amounts 
     appropriated under paragraph (1) of subsection (j) that are 
     available for expenditure under paragraph (3) of that 
     subsection to make a grant to an eligible entity that is a 
     nonprofit organization described in subsection (k)(1)(B) to 
     conduct an early childhood home visitation program in the 
     State. The Secretary shall specify the requirements for such 
     an organization to apply for and conduct the program which 
     shall, to the greatest extent practicable, be consistent with 
     the requirements applicable to eligible entities that are 
     States and shall require the organization to--
       ``(i) carry out the program based on the needs assessment 
     conducted by the State under subsection (b); and
       ``(ii) establish quantifiable, measurable 3- and 5-year 
     benchmarks consistent with subsection (d)(1)(A).
       ``(3) Research and other evaluation activities.--
       ``(A) In general.--The Secretary shall carry out a 
     continuous program of research and evaluation activities in 
     order to increase knowledge about the implementation and 
     effectiveness of home visiting programs, using random 
     assignment designs to the maximum extent feasible. The 
     Secretary may carry out such activities directly, or through 
     grants, cooperative agreements, or contracts.
       ``(B) Requirements.--The Secretary shall ensure that--
       ``(i) evaluation of a specific program or project is 
     conducted by persons or individuals not directly involved in 
     the operation of such program or project; and
       ``(ii) the conduct of research and evaluation activities 
     includes consultation with independent researchers, State 
     officials, and developers and providers of home visiting 
     programs on topics including research design and 
     administrative data matching.
       ``(4) Report and recommendation.--Not later than December 
     31, 2015, the Secretary shall submit a report to Congress 
     regarding the programs conducted with grants under this 
     section. The report required under this paragraph shall 
     include--
       ``(A) information regarding the extent to which eligible 
     entities receiving grants under this section demonstrated 
     improvements in each of the areas specified in subsection 
     (d)(1)(A);
       ``(B) information regarding any technical assistance 
     provided under subsection (d)(1)(B)(iii)(I), including the 
     type of any such assistance provided; and
       ``(C) recommendations for such legislative or 
     administrative action as the Secretary determines 
     appropriate.
       ``(i) Application of Other Provisions of Title.--
       ``(1) In general.--Except as provided in paragraph (2), the 
     other provisions of this title shall not apply to a grant 
     made under this section.
       ``(2) Exceptions.--The following provisions of this title 
     shall apply to a grant made under this section to the same 
     extent and in the same manner as such provisions apply to 
     allotments made under section 502(c):

[[Page 28445]]

       ``(A) Section 504(b)(6) (relating to prohibition on 
     payments to excluded individuals and entities).
       ``(B) Section 504(c) (relating to the use of funds for the 
     purchase of technical assistance).
       ``(C) Section 504(d) (relating to a limitation on 
     administrative expenditures).
       ``(D) Section 506 (relating to reports and audits), but 
     only to the extent determined by the Secretary to be 
     appropriate for grants made under this section.
       ``(E) Section 507 (relating to penalties for false 
     statements).
       ``(F) Section 508 (relating to nondiscrimination).
       ``(G) Section 509(a) (relating to the administration of the 
     grant program).
       ``(j) Appropriations.--
       ``(1) In general.--Out of any funds in the Treasury not 
     otherwise appropriated, there are appropriated to the 
     Secretary to carry out this section--
       ``(A) $100,000,000 for fiscal year 2010;
       ``(B) $250,000,000 for fiscal year 2011;
       ``(C) $350,000,000 for fiscal year 2012;
       ``(D) $400,000,000 for fiscal year 2013; and
       ``(E) $400,000,000 for fiscal year 2014.
       ``(2) Reservations.--Of the amount appropriated under this 
     subsection for a fiscal year, the Secretary shall reserve--
       ``(A) 3 percent of such amount for purposes of making 
     grants to eligible entities that are Indian Tribes (or a 
     consortium of Indian Tribes), Tribal Organizations, or Urban 
     Indian Organizations; and
       ``(B) 3 percent of such amount for purposes of carrying out 
     subsections (d)(1)(B)(iii), (g), and (h)(3).
       ``(3) Availability.--Funds made available to an eligible 
     entity under this section for a fiscal year shall remain 
     available for expenditure by the eligible entity through the 
     end of the second succeeding fiscal year after award. Any 
     funds that are not expended by the eligible entity during the 
     period in which the funds are available under the preceding 
     sentence may be used for grants to nonprofit organizations 
     under subsection (h)(2)(B).
       ``(k) Definitions.--In this section:
       ``(1) Eligible entity.--
       ``(A) In general.--The term `eligible entity' means a 
     State, an Indian Tribe, Tribal Organization, or Urban Indian 
     Organization, Puerto Rico, Guam, the Virgin Islands, the 
     Northern Mariana Islands, and American Samoa.
       ``(B) Nonprofit organizations.--Only for purposes of 
     awarding grants under subsection (h)(2)(B), such term shall 
     include a nonprofit organization with an established record 
     of providing early childhood home visitation programs or 
     initiatives in a State or several States.
       ``(2) Eligible family.--The term `eligible family' means--
       ``(A) a woman who is pregnant, and the father of the child 
     if the father is available; or
       ``(B) a parent or primary caregiver of a child, including 
     grandparents or other relatives of the child, and foster 
     parents, who are serving as the child's primary caregiver 
     from birth to kindergarten entry, and including a 
     noncustodial parent who has an ongoing relationship with, and 
     at times provides physical care for, the child.
       ``(3) Indian tribe; tribal organization.--The terms `Indian 
     Tribe' and `Tribal Organization', and `Urban Indian 
     Organization' have the meanings given such terms in section 4 
     of the Indian Health Care Improvement Act.''.

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

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

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

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

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

       ``(a) In General.--In addition to any other payments made 
     under this title to a State, the Secretary may make grants to 
     eligible entities for projects for the establishment, 
     operation, and coordination of effective and cost-efficient 
     systems for the delivery of essential services to individuals 
     with or at risk for postpartum conditions and their families.
       ``(b) Certain Activities.--To the extent practicable and 
     appropriate, the Secretary shall ensure that projects funded 
     under subsection (a) provide education and services with 
     respect to the diagnosis and management of postpartum 
     conditions for individuals with or at risk for postpartum 
     conditions and their families. The Secretary may allow such 
     projects to include the following:
       ``(1) Delivering or enhancing outpatient and home-based 
     health and support services, including case management and 
     comprehensive treatment services.
       ``(2) Delivering or enhancing inpatient care management 
     services that ensure the well-being of the mother and family 
     and the future development of the infant.
       ``(3) Improving the quality, availability, and organization 
     of health care and support services (including transportation 
     services, attendant care, homemaker services, day or respite 
     care, and providing counseling on financial assistance and 
     insurance).
       ``(4) Providing education about postpartum conditions to 
     promote earlier diagnosis and treatment. Such education may 
     include--
       ``(A) providing complete information on postpartum 
     conditions, symptoms, methods of coping with the illness, and 
     treatment resources; and
       ``(B) in the case of a grantee that is a State, hospital, 
     or birthing facility--
       ``(i) providing education to new mothers and fathers, and 
     other family members as appropriate, concerning postpartum 
     conditions before new mothers leave the health facility; and
       ``(ii) ensuring that training programs regarding such 
     education are carried out at the health facility.
       ``(c) Integration With Other Programs.--To the extent 
     practicable and appropriate, the Secretary may integrate the 
     grant program under this section with other grant programs 
     carried out by the Secretary, including the program under 
     section 330 of the Public Health Service Act.
       ``(d) Requirements.--The Secretary shall establish 
     requirements for grants made under this section that include 
     a limit on the amount of grants funds that may be used for 
     administration, accounting, reporting, or program oversight 
     functions and a requirement for each eligible entity that 
     receives a grant to submit, for each grant period, a report 
     to the Secretary that describes how grant funds were used 
     during such period.
       ``(e) Technical Assistance.--The Secretary may provide 
     technical assistance to entities seeking a grant under this 
     section in order to assist such entities in complying with 
     the requirements of this section.
       ``(f) Application of Other Provisions of Title.--
       ``(1) In general.--Except as provided in paragraph (2), the 
     other provisions of this title shall not apply to a grant 
     made under this section.
       ``(2) Exceptions.--The following provisions of this title 
     shall apply to a grant made under this section to the same 
     extent and in the same manner as such provisions apply to 
     allotments made under section 502(c):

[[Page 28446]]

       ``(A) Section 504(b)(6) (relating to prohibition on 
     payments to excluded individuals and entities).
       ``(B) Section 504(c) (relating to the use of funds for the 
     purchase of technical assistance).
       ``(C) Section 504(d) (relating to a limitation on 
     administrative expenditures).
       ``(D) Section 506 (relating to reports and audits), but 
     only to the extent determined by the Secretary to be 
     appropriate for grants made under this section.
       ``(E) Section 507 (relating to penalties for false 
     statements).
       ``(F) Section 508 (relating to nondiscrimination).
       ``(G) Section 509(a) (relating to the administration of the 
     grant program).
       ``(g) Definitions.--In this section:
       ``(1) The term `eligible entity'--
       ``(A) means a public or nonprofit private entity; and
       ``(B) includes a State or local government, public-private 
     partnership, recipient of a grant under section 330H of the 
     Public Health Service Act (relating to the Healthy Start 
     Initiative), public or nonprofit private hospital, community-
     based organization, hospice, ambulatory care facility, 
     community health center, migrant health center, public 
     housing primary care center, or homeless health center.
       ``(2) The term `postpartum condition' means postpartum 
     depression or postpartum psychosis.''.
       (c) General Provisions.--
       (1) Authorization of appropriations.--To carry out this 
     section and the amendment made by subsection (b), there are 
     authorized to be appropriated, in addition to such other sums 
     as may be available for such purpose--
       (A) $3,000,000 for fiscal year 2010; and
       (B) such sums as may be necessary for fiscal years 2011 and 
     2012.
       (2) Report by the secretary.--
       (A) Study.--The Secretary shall conduct a study on the 
     benefits of screening for postpartum conditions.
       (B) Report.--Not later than 2 years after the date of the 
     enactment of this Act, the Secretary shall complete the study 
     required by subparagraph (A) and submit a report to the 
     Congress on the results of such study.

     SEC. 2953. PERSONAL RESPONSIBILITY EDUCATION.

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

     ``SEC. 513. PERSONAL RESPONSIBILITY EDUCATION.

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

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

       ``(2) State youth population percentage.--
       ``(A) In general.--For purposes of paragraph (1)(A)(ii), 
     the State youth population percentage is, with respect to a 
     State, the proportion (expressed as a percentage) of--
       ``(i) the number of individuals who have attained age 10 
     but not attained age 20 in the State; to
       ``(ii) the number of such individuals in all States.
       ``(B) Determination of number of youth.--The number of 
     individuals described in clauses (i) and (ii) of subparagraph 
     (A) in a State shall be determined on the basis of the most 
     recent Bureau of the Census data.
       ``(3) Availability of state allotments.--Subject to 
     paragraph (4)(A), amounts allotted to a State pursuant to 
     this subsection for a fiscal year shall remain available for 
     expenditure by the State through the end of the second 
     succeeding fiscal year.
       ``(4) Authority to award grants from state allotments to 
     local organizations and entities in nonparticipating 
     states.--
       ``(A) Grants from unexpended allotments.--If a State does 
     not submit an application under this section for fiscal year 
     2010 or 2011, the State shall no longer be eligible to submit 
     an application to receive funds from the amounts allotted for 
     the State for each of fiscal years 2010 through 2014 and such 
     amounts shall be used by the Secretary to award grants under 
     this paragraph for each of fiscal years 2012 through 2014. 
     The Secretary also shall use any amounts from the allotments 
     of States that submit applications under this section for a 
     fiscal year that remain unexpended as of the end of the 
     period in which the allotments are available for expenditure 
     under paragraph (3) for awarding grants under this paragraph.
       ``(B) 3-year grants.--
       ``(i) In general.--The Secretary shall solicit applications 
     to award 3-year grants in each of fiscal years 2012, 2013, 
     and 2014 to local organizations and entities to conduct, 
     consistent with subsection (b), programs and activities in 
     States that do not submit an application for an allotment 
     under this section for fiscal year 2010 or 2011.
       ``(ii) Faith-based organizations or consortia.--The 
     Secretary may solicit and award grants under this paragraph 
     to faith-based organizations or consortia.
       ``(C) Evaluation.--An organization or entity awarded a 
     grant under this paragraph shall agree to participate in a 
     rigorous Federal evaluation.
       ``(5) Maintenance of effort.--No payment shall be made to a 
     State from the allotment determined for the State under this 
     subsection or to a local organization or entity awarded a 
     grant under paragraph (4), if the expenditure of non-federal 
     funds by the State, organization, or entity for activities, 
     programs, or initiatives for which amounts from allotments 
     and grants under this subsection may be expended is less than 
     the amount expended by the State, organization, or entity for 
     such programs or initiatives for fiscal year 2009.
       ``(6) Data collection and reporting.--A State or local 
     organization or entity receiving funds under this section 
     shall cooperate with such requirements relating to the 
     collection of data and information and reporting on outcomes 
     regarding the programs and activities carried out with such 
     funds, as the Secretary shall specify.
       ``(b) Purpose.--
       ``(1) In general.--The purpose of an allotment under 
     subsection (a)(1) to a State is to enable the State (or, in 
     the case of grants made under subsection (a)(4)(B), to enable 
     a local organization or entity) to carry out personal 
     responsibility education programs consistent with this 
     subsection.
       ``(2) Personal responsibility education programs.--
       ``(A) In general.--In this section, the term `personal 
     responsibility education program' means a program that is 
     designed to educate adolescents on--
       ``(i) both abstinence and contraception for the prevention 
     of pregnancy and sexually transmitted infections, including 
     HIV/AIDS, consistent with the requirements of subparagraph 
     (B); and
       ``(ii) at least 3 of the adulthood preparation subjects 
     described in subparagraph (C).
       ``(B) Requirements.--The requirements of this subparagraph 
     are the following:
       ``(i) The program replicates evidence-based effective 
     programs or substantially incorporates elements of effective 
     programs that have been proven on the basis of rigorous 
     scientific research to change behavior, which means delaying 
     sexual activity, increasing condom or contraceptive use for 
     sexually active youth, or reducing pregnancy among youth.
       ``(ii) The program is medically-accurate and complete.
       ``(iii) The program includes activities to educate youth 
     who are sexually active regarding responsible sexual behavior 
     with respect to both abstinence and the use of contraception.
       ``(iv) The program places substantial emphasis on both 
     abstinence and contraception for the prevention of pregnancy 
     among youth and sexually transmitted infections.
       ``(v) The program provides age-appropriate information and 
     activities.
       ``(vi) The information and activities carried out under the 
     program are provided in

[[Page 28447]]

     the cultural context that is most appropriate for individuals 
     in the particular population group to which they are 
     directed.
       ``(C) Adulthood preparation subjects.--The adulthood 
     preparation subjects described in this subparagraph are the 
     following:
       ``(i) Healthy relationships, such as positive self-esteem 
     and relationship dynamics, friendships, dating, romantic 
     involvement, marriage, and family interactions.
       ``(ii) Adolescent development, such as the development of 
     healthy attitudes and values about adolescent growth and 
     development, body image, racial and ethnic diversity, and 
     other related subjects.
       ``(iii) Financial literacy.
       ``(iv) Parent-child communication.
       ``(v) Educational and career success, such as developing 
     skills for employment preparation, job seeking, independent 
     living, financial self-sufficiency, and workplace 
     productivity.
       ``(vi) Healthy life skills, such as goal-setting, decision 
     making, negotiation, communication and interpersonal skills, 
     and stress management.
       ``(c) Reservations of Funds.--
       ``(1) Grants to implement innovative strategies.--From the 
     amount appropriated under subsection (f) for the fiscal year, 
     the Secretary shall reserve $10,000,000 of such amount for 
     purposes of awarding grants to entities to implement 
     innovative youth pregnancy prevention strategies and target 
     services to high-risk, vulnerable, and culturally under-
     represented youth populations, including youth in foster 
     care, homeless youth, youth with HIV/AIDS, pregnant women who 
     are under 21 years of age and their partners, mothers who are 
     under 21 years of age and their partners, and youth residing 
     in areas with high birth rates for youth. An entity awarded a 
     grant under this paragraph shall agree to participate in a 
     rigorous Federal evaluation of the activities carried out 
     with grant funds.
       ``(2) Other reservations.--From the amount appropriated 
     under subsection (f) for the fiscal year that remains after 
     the application of paragraph (1), the Secretary shall reserve 
     the following amounts:
       ``(A) Grants for indian tribes or tribal organizations.--
     The Secretary shall reserve 5 percent of such remainder for 
     purposes of awarding grants to Indian tribes and tribal 
     organizations in such manner, and subject to such 
     requirements, as the Secretary, in consultation with Indian 
     tribes and tribal organizations, determines appropriate.
       ``(B) Secretarial responsibilities.--
       ``(i) Reservation of funds.--The Secretary shall reserve 10 
     percent of such remainder for expenditures by the Secretary 
     for the activities described in clauses (ii) and (iii).
       ``(ii) Program support.--The Secretary shall provide, 
     directly or through a competitive grant process, research, 
     training and technical assistance, including dissemination of 
     research and information regarding effective and promising 
     practices, providing consultation and resources on a broad 
     array of teen pregnancy prevention strategies, including 
     abstinence and contraception, and developing resources and 
     materials to support the activities of recipients of grants 
     and other State, tribal, and community organizations working 
     to reduce teen pregnancy. In carrying out such functions, the 
     Secretary shall collaborate with a variety of entities that 
     have expertise in the prevention of teen pregnancy, HIV and 
     sexually transmitted infections, healthy relationships, 
     financial literacy, and other topics addressed through the 
     personal responsibility education programs.
       ``(iii) Evaluation.--The Secretary shall evaluate the 
     programs and activities carried out with funds made available 
     through allotments or grants under this section.
       ``(d) Administration.--
       ``(1) In general.--The Secretary shall administer this 
     section through the Assistant Secretary for the 
     Administration for Children and Families within the 
     Department of Health and Human Services.
       ``(2) Application of other provisions of title.--
       ``(A) In general.--Except as provided in subparagraph (B), 
     the other provisions of this title shall not apply to 
     allotments or grants made under this section.
       ``(B) Exceptions.--The following provisions of this title 
     shall apply to allotments and grants made under this section 
     to the same extent and in the same manner as such provisions 
     apply to allotments made under section 502(c):
       ``(i) Section 504(b)(6) (relating to prohibition on 
     payments to excluded individuals and entities).
       ``(ii) Section 504(c) (relating to the use of funds for the 
     purchase of technical assistance).
       ``(iii) Section 504(d) (relating to a limitation on 
     administrative expenditures).
       ``(iv) Section 506 (relating to reports and audits), but 
     only to the extent determined by the Secretary to be 
     appropriate for grants made under this section.
       ``(v) Section 507 (relating to penalties for false 
     statements).
       ``(vi) Section 508 (relating to nondiscrimination).
       ``(e) Definitions.--In this section:
       ``(1) Age-appropriate.--The term `age-appropriate', with 
     respect to the information in pregnancy prevention, means 
     topics, messages, and teaching methods suitable to particular 
     ages or age groups of children and adolescents, based on 
     developing cognitive, emotional, and behavioral capacity 
     typical for the age or age group.
       ``(2) Medically accurate and complete.--The term `medically 
     accurate and complete' means verified or supported by the 
     weight of research conducted in compliance with accepted 
     scientific methods and--
       ``(A) published in peer-reviewed journals, where 
     applicable; or
       ``(B) comprising information that leading professional 
     organizations and agencies with relevant expertise in the 
     field recognize as accurate, objective, and complete.
       ``(3) Indian tribes; tribal organizations.--The terms 
     `Indian tribe' and `Tribal organization' have the meanings 
     given such terms in section 4 of the Indian Health Care 
     Improvement Act (25 U.S.C. 1603)).
       ``(4) Youth.--The term `youth' means an individual who has 
     attained age 10 but has not attained age 20.
       ``(f) Appropriation.--For the purpose of carrying out this 
     section, there is appropriated, out of any money in the 
     Treasury not otherwise appropriated, $75,000,000 for each of 
     fiscal years 2010 through 2014. Amounts appropriated under 
     this subsection shall remain available until expended.''.

     SEC. 2954. RESTORATION OF FUNDING FOR ABSTINENCE EDUCATION.

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

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

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

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

        Subtitle A--Transforming the Health Care Delivery System

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

     SEC. 3001. HOSPITAL VALUE-BASED PURCHASING PROGRAM.

       (a) Program.--
       (1) In general.--Section 1886 of the Social Security Act 
     (42 U.S.C. 1395ww), as amended

[[Page 28448]]

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

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

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

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

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

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

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

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

[[Page 28449]]

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

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

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

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

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

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

       ``(ii) Opportunity to review and submit corrections.--The 
     Secretary shall ensure that a hospital has the opportunity to 
     review, and submit corrections for, the information to be 
     made public with respect to the hospital under clause (i) 
     prior to such information being made public.
       ``(iii) Website.--Such information shall be posted on the 
     Hospital Compare Internet website in an easily understandable 
     format.
       ``(B) Aggregate information.--The Secretary shall 
     periodically post on the Hospital Compare Internet website 
     aggregate information on the Program, including--
       ``(i) the number of hospitals receiving value-based 
     incentive payments under paragraph (6) and the range and 
     total amount of such value-based incentive payments; and
       ``(ii) the number of hospitals receiving less than the 
     maximum value-based incentive payment available to the 
     hospital for the fiscal year involved and the range and 
     amount of such payments.
       ``(11) Implementation.--
       ``(A) Appeals.--The Secretary shall establish a process by 
     which hospitals may appeal the calculation of a hospital's 
     performance assessment with respect to the performance 
     standards established under paragraph (3)(A) and the hospital 
     performance score under paragraph (5). The Secretary shall 
     ensure that such process provides for resolution of such 
     appeals in a timely manner.
       ``(B) Limitation on review.--Except as provided in 
     subparagraph (A), there shall be no administrative or 
     judicial review under section 1869, section 1878, or 
     otherwise of the following:
       ``(i) The methodology used to determine the amount of the 
     value-based incentive payment under paragraph (6) and the 
     determination of such amount.
       ``(ii) The determination of the amount of funding available 
     for such value-based incentive payments under paragraph 
     (7)(A) and the payment reduction under paragraph (7)(B)(i).
       ``(iii) The establishment of the performance standards 
     under paragraph (3) and the performance period under 
     paragraph (4).
       ``(iv) The measures specified under subsection 
     (b)(3)(B)(viii) and the measures selected under paragraph 
     (2).
       ``(v) The methodology developed under paragraph (5) that is 
     used to calculate hospital performance scores and the 
     calculation of such scores.
       ``(vi) The validation methodology specified in subsection 
     (b)(3)(B)(viii)(XI).
       ``(C) Consultation with small hospitals.--The Secretary 
     shall consult with small rural and urban hospitals on the 
     application of the Program to such hospitals.
       ``(12) Promulgation of regulations.--The Secretary shall 
     promulgate regulations to carry out the Program, including 
     the selection of measures under paragraph (2), the 
     methodology developed under paragraph (5) that is used to 
     calculate hospital performance scores, and the methodology 
     used to determine the amount of value-based incentive 
     payments under paragraph (6).''.
       (2) Amendments for reporting of hospital quality 
     information.--Section 1886(b)(3)(B)(viii) of the Social 
     Security Act (42 U.S.C. 1395ww(b)(3)(B)(viii)) is amended--
       (A) in subclause (II), by adding at the end the following 
     sentence: ``The Secretary may require hospitals to submit 
     data on measures that are not used for the determination of 
     value-based incentive payments under subsection (o).'';
       (B) in subclause (V), by striking ``beginning with fiscal 
     year 2008'' and inserting ``for fiscal years 2008 through 
     2012'';
       (C) in subclause (VII), in the first sentence, by striking 
     ``data submitted'' and inserting ``information regarding 
     measures submitted''; and
       (D) by adding at the end the following new subclauses:
       ``(VIII) Effective for payments beginning with fiscal year 
     2013, with respect to quality measures for outcomes of care, 
     the Secretary shall provide for such risk adjustment as the 
     Secretary determines to be appropriate to maintain incentives 
     for hospitals to treat patients with severe illnesses or 
     conditions.
       ``(IX)(aa) Subject to item (bb), effective for payments 
     beginning with fiscal year 2013, each measure specified by 
     the Secretary under this clause shall be endorsed by the 
     entity with a contract under section 1890(a).
       ``(bb) In the case of a specified area or medical topic 
     determined appropriate by the Secretary for which a feasible 
     and practical measure has not been endorsed by the entity 
     with a contract under section 1890(a), the Secretary may 
     specify a measure that is not so endorsed as long as due 
     consideration is given to measures that have been endorsed or 
     adopted by a consensus organization identified by the 
     Secretary.
       ``(X) To the extent practicable, the Secretary shall, with 
     input from consensus organizations and other stakeholders, 
     take steps to ensure that the measures specified by the 
     Secretary under this clause are coordinated and aligned with 
     quality measures applicable to--
       ``(aa) physicians under section 1848(k); and
       ``(bb) other providers of services and suppliers under this 
     title.
       ``(XI) The Secretary shall establish a process to validate 
     measures specified under this clause as appropriate. Such 
     process shall include the auditing of a number of randomly 
     selected hospitals sufficient to ensure validity of the 
     reporting program under this clause as a whole and shall 
     provide a hospital with an opportunity to appeal the 
     validation of measures reported by such hospital.''.
       (3) Website improvements.--Section 1886(b)(3)(B) of the 
     Social Security Act (42 U.S.C. 1395ww(b)(3)(B)), as amended 
     by section 4102(b) of the HITECH Act (Public Law 111-5), is 
     amended by adding at the end the following new clause:
       ``(x)(I) The Secretary shall develop standard Internet 
     website reports tailored to meet

[[Page 28450]]

     the needs of various stakeholders such as hospitals, 
     patients, researchers, and policymakers. The Secretary shall 
     seek input from such stakeholders in determining the type of 
     information that is useful and the formats that best 
     facilitate the use of the information.
       ``(II) The Secretary shall modify the Hospital Compare 
     Internet website to make the use and navigation of that 
     website readily available to individuals accessing it.''.
       (4) GAO study and report.--
       (A) Study.--The Comptroller General of the United States 
     shall conduct a study on the performance of the hospital 
     value-based purchasing program established under section 
     1886(o) of the Social Security Act, as added by paragraph 
     (1). Such study shall include an analysis of the impact of 
     such program on--
       (i) the quality of care furnished to Medicare 
     beneficiaries, including diverse Medicare beneficiary 
     populations (such as diverse in terms of race, ethnicity, and 
     socioeconomic status);
       (ii) expenditures under the Medicare program, including any 
     reduced expenditures under Part A of title XVIII of such Act 
     that are attributable to the improvement in the delivery of 
     inpatient hospital services by reason of such hospital value-
     based purchasing program;
       (iii) the quality performance among safety net hospitals 
     and any barriers such hospitals face in meeting the 
     performance standards applicable under such hospital value-
     based purchasing program; and
       (iv) the quality performance among small rural and small 
     urban hospitals and any barriers such hospitals face in 
     meeting the performance standards applicable under such 
     hospital value-based purchasing program.
       (B) Reports.--
       (i) Interim report.--Not later than October 1, 2015, the 
     Comptroller General of the United States shall submit to 
     Congress an interim report containing the results of the 
     study conducted under subparagraph (A), together with 
     recommendations for such legislation and administrative 
     action as the Comptroller General determines appropriate.
       (ii) Final report.--Not later than July 1, 2017, the 
     Comptroller General of the United States shall submit to 
     Congress a report containing the results of the study 
     conducted under subparagraph (A), together with 
     recommendations for such legislation and administrative 
     action as the Comptroller General determines appropriate.
       (5) HHS study and report.--
       (A) Study.--The Secretary of Health and Human Services 
     shall conduct a study on the performance of the hospital 
     value-based purchasing program established under section 
     1886(o) of the Social Security Act, as added by paragraph 
     (1). Such study shall include an analysis--
       (i) of ways to improve the hospital value-based purchasing 
     program and ways to address any unintended consequences that 
     may occur as a result of such program;
       (ii) of whether the hospital value-based purchasing program 
     resulted in lower spending under the Medicare program under 
     title XVIII of such Act or other financial savings to 
     hospitals;
       (iii) the appropriateness of the Medicare program sharing 
     in any savings generated through the hospital value-based 
     purchasing program; and
       (iv) any other area determined appropriate by the 
     Secretary.
       (B) Report.--Not later than January 1, 2016, the Secretary 
     of Health and Human Services shall submit to Congress a 
     report containing the results of the study conducted under 
     subparagraph (A), together with recommendations for such 
     legislation and administrative action as the Secretary 
     determines appropriate.
       (b) Value-Based Purchasing Demonstration Programs.--
       (1) Value-based purchasing demonstration program for 
     inpatient critical access hospitals.--
       (A) Establishment.--
       (i) In general.--Not later than 2 years after the date of 
     enactment of this Act, the Secretary of Health and Human 
     Services (in this subsection referred to as the 
     ``Secretary'') shall establish a demonstration program under 
     which the Secretary establishes a value-based purchasing 
     program under the Medicare program under title XVIII of the 
     Social Security Act for critical access hospitals (as defined 
     in paragraph (1) of section 1861(mm) of such Act (42 U.S.C. 
     1395x(mm))) with respect to inpatient critical access 
     hospital services (as defined in paragraph (2) of such 
     section) in order to test innovative methods of measuring and 
     rewarding quality and efficient health care furnished by such 
     hospitals.
       (ii) Duration.--The demonstration program under this 
     paragraph shall be conducted for a 3-year period.
       (iii) Sites.--The Secretary shall conduct the demonstration 
     program under this paragraph at an appropriate number (as 
     determined by the Secretary) of critical access hospitals. 
     The Secretary shall ensure that such hospitals are 
     representative of the spectrum of such hospitals that 
     participate in the Medicare program.
       (B) Waiver authority.--The Secretary may waive such 
     requirements of titles XI and XVIII of the Social Security 
     Act as may be necessary to carry out the demonstration 
     program under this paragraph.
       (C) Budget neutrality requirement.--In conducting the 
     demonstration program under this section, the Secretary shall 
     ensure that the aggregate payments made by the Secretary do 
     not exceed the amount which the Secretary would have paid if 
     the demonstration program under this section was not 
     implemented.
       (D) Report.--Not later than 18 months after the completion 
     of the demonstration program under this paragraph, the 
     Secretary shall submit to Congress a report on the 
     demonstration program together with--
       (i) recommendations on the establishment of a permanent 
     value-based purchasing program under the Medicare program for 
     critical access hospitals with respect to inpatient critical 
     access hospital services; and
       (ii) recommendations for such other legislation and 
     administrative action as the Secretary determines 
     appropriate.
       (2) Value-based purchasing demonstration program for 
     hospitals excluded from hospital value-based purchasing 
     program as a result of insufficient numbers of measures and 
     cases.--
       (A) Establishment.--
       (i) In general.--Not later than 2 years after the date of 
     enactment of this Act, the Secretary shall establish a 
     demonstration program under which the Secretary establishes a 
     value-based purchasing program under the Medicare program 
     under title XVIII of the Social Security Act for applicable 
     hospitals (as defined in clause (ii)) with respect to 
     inpatient hospital services (as defined in section 1861(b) of 
     the Social Security Act (42 U.S.C. 1395x(b))) in order to 
     test innovative methods of measuring and rewarding quality 
     and efficient health care furnished by such hospitals.
       (ii) Applicable hospital defined.--For purposes of this 
     paragraph, the term ``applicable hospital'' means a hospital 
     described in subclause (III) or (IV) of section 
     1886(o)(1)(C)(ii) of the Social Security Act, as added by 
     subsection (a)(1).
       (iii) Duration.--The demonstration program under this 
     paragraph shall be conducted for a 3-year period.
       (iv) Sites.--The Secretary shall conduct the demonstration 
     program under this paragraph at an appropriate number (as 
     determined by the Secretary) of applicable hospitals. The 
     Secretary shall ensure that such hospitals are representative 
     of the spectrum of such hospitals that participate in the 
     Medicare program.
       (B) Waiver authority.--The Secretary may waive such 
     requirements of titles XI and XVIII of the Social Security 
     Act as may be necessary to carry out the demonstration 
     program under this paragraph.
       (C) Budget neutrality requirement.--In conducting the 
     demonstration program under this section, the Secretary shall 
     ensure that the aggregate payments made by the Secretary do 
     not exceed the amount which the Secretary would have paid if 
     the demonstration program under this section was not 
     implemented.
       (D) Report.--Not later than 18 months after the completion 
     of the demonstration program under this paragraph, the 
     Secretary shall submit to Congress a report on the 
     demonstration program together with--
       (i) recommendations on the establishment of a permanent 
     value-based purchasing program under the Medicare program for 
     applicable hospitals with respect to inpatient hospital 
     services; and
       (ii) recommendations for such other legislation and 
     administrative action as the Secretary determines 
     appropriate.

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

       (a) Extension.--Section 1848(m) of the Social Security Act 
     (42 U.S.C. 1395w-4(m)) is amended--
       (1) in paragraph (1)--
       (A) in subparagraph (A), in the matter preceding clause 
     (i), by striking ``2010'' and inserting ``2014''; and
       (B) in subparagraph (B)--
       (i) in clause (i), by striking ``and'' at the end;
       (ii) in clause (ii), by striking the period at the end and 
     inserting a semicolon; and
       (iii) by adding at the end the following new clauses:
       ``(iii) for 2011, 1.0 percent; and
       ``(iv) for 2012, 2013, and 2014, 0.5 percent.'';
       (2) in paragraph (3)--
       (A) in subparagraph (A), in the matter preceding clause 
     (i), by inserting ``(or, for purposes of subsection (a)(8), 
     for the quality reporting period for the year)'' after 
     ``reporting period''; and
       (B) in subparagraph (C)(i), by inserting ``, or, for 
     purposes of subsection (a)(8), for a quality reporting period 
     for the year'' after ``(a)(5), for a reporting period for a 
     year'';
       (3) in paragraph (5)(E)(iv), by striking ``subsection 
     (a)(5)(A)'' and inserting ``paragraphs (5)(A) and (8)(A) of 
     subsection (a)''; and
       (4) in paragraph (6)(C)--
       (A) in clause (i)(II), by striking ``, 2009, 2010, and 
     2011'' and inserting ``and subsequent years''; and
       (B) in clause (iii)--
       (i) by inserting ``(a)(8)'' after ``(a)(5)''; and
       (ii) by striking ``under subparagraph (D)(iii) of such 
     subsection'' and inserting

[[Page 28451]]

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

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

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

     SEC. 3003. IMPROVEMENTS TO THE PHYSICIAN FEEDBACK PROGRAM.

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

[[Page 28452]]

       ``(6) Review and endorsement of episode grouper under the 
     physician feedback program.--The entity shall provide for the 
     review and, as appropriate, the endorsement of the episode 
     grouper developed by the Secretary under section 
     1848(n)(9)(A). Such review shall be conducted on an expedited 
     basis.''.

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

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

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

       Section 1866 of the Social Security Act (42 U.S.C. 1395cc) 
     is amended--
       (1) in subsection (a)(1)--
       (A) in subparagraph (U), by striking ``and'' at the end;
       (B) in subparagraph (V), by striking the period at the end 
     and inserting ``, and''; and

[[Page 28453]]

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

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

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

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

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

[[Page 28454]]

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

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

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

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

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

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

       PART II--NATIONAL STRATEGY TO IMPROVE HEALTH CARE QUALITY

     SEC. 3011. NATIONAL STRATEGY.

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

                 ``PART S--HEALTH CARE QUALITY PROGRAMS

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

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

       ``(a) Establishment of National Strategy and Priorities.--
       ``(1) National strategy.--The Secretary, through a 
     transparent collaborative process, shall establish a national 
     strategy to improve the delivery of health care services, 
     patient health outcomes, and population health.
       ``(2) Identification of priorities.--
       ``(A) In general.--The Secretary shall identify national 
     priorities for improvement in developing the strategy under 
     paragraph (1).

[[Page 28455]]

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

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

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

     SEC. 3013. QUALITY MEASURE DEVELOPMENT.

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

               ``PART D--HEALTH CARE QUALITY IMPROVEMENT

                ``Subpart I--Quality Measure Development

     ``SEC. 931. QUALITY MEASURE DEVELOPMENT.

       ``(a) Quality Measure.--In this subpart, the term `quality 
     measure' means a standard for measuring the performance and 
     improvement of population health or of health plans, 
     providers of services, and other clinicians in the delivery 
     of health care services.
       ``(b) Identification of Quality Measures.--
       ``(1) Identification.--The Secretary, in consultation with 
     the Director of the Agency for Healthcare Research and 
     Quality and the Administrator of the Centers for Medicare & 
     Medicaid Services, shall identify, not less often than 
     triennially, gaps where no quality

[[Page 28456]]

     measures exist and existing quality measures that need 
     improvement, updating, or expansion, consistent with the 
     national strategy under section 399HH, to the extent 
     available, for use in Federal health programs. In identifying 
     such gaps and existing quality measures that need 
     improvement, the Secretary shall take into consideration--
       ``(A) the gaps identified by the entity with a contract 
     under section 1890(a) of the Social Security Act and other 
     stakeholders;
       ``(B) quality measures identified by the pediatric quality 
     measures program under section 1139A of the Social Security 
     Act; and
       ``(C) quality measures identified through the Medicaid 
     Quality Measurement Program under section 1139B of the Social 
     Security Act.
       ``(2) Publication.--The Secretary shall make available to 
     the public on an Internet website a report on any gaps 
     identified under paragraph (1) and the process used to make 
     such identification.
       ``(c) Grants or Contracts for Quality Measure 
     Development.--
       ``(1) In general.--The Secretary shall award grants, 
     contracts, or intergovernmental agreements to eligible 
     entities for purposes of developing, improving, updating, or 
     expanding quality measures identified under subsection (b).
       ``(2) Prioritization in the development of quality 
     measures.--In awarding grants, contracts, or agreements under 
     this subsection, the Secretary shall give priority to the 
     development of quality measures that allow the assessment 
     of--
       ``(A) health outcomes and functional status of patients;
       ``(B) the management and coordination of health care across 
     episodes of care and care transitions for patients across the 
     continuum of providers, health care settings, and health 
     plans;
       ``(C) the experience, quality, and use of information 
     provided to and used by patients, caregivers, and authorized 
     representatives to inform decisionmaking about treatment 
     options, including the use of shared decisionmaking tools and 
     preference sensitive care (as defined in section 936);
       ``(D) the meaningful use of health information technology;
       ``(E) the safety, effectiveness, patient-centeredness, 
     appropriateness, and timeliness of care;
       ``(F) the efficiency of care;
       ``(G) the equity of health services and health disparities 
     across health disparity populations (as defined in section 
     485E) and geographic areas;
       ``(H) patient experience and satisfaction;
       ``(I) the use of innovative strategies and methodologies 
     identified under section 933; and
       ``(J) other areas determined appropriate by the Secretary.
       ``(3) Eligible entities.--To be eligible for a grant or 
     contract under this subsection, an entity shall--
       ``(A) have demonstrated expertise and capacity in the 
     development and evaluation of quality measures;
       ``(B) have adopted procedures to include in the quality 
     measure development process--
       ``(i) the views of those providers or payers whose 
     performance will be assessed by the measure; and
       ``(ii) the views of other parties who also will use the 
     quality measures (such as patients, consumers, and health 
     care purchasers);
       ``(C) collaborate with the entity with a contract under 
     section 1890(a) of the Social Security Act and other 
     stakeholders, as practicable, and the Secretary so that 
     quality measures developed by the eligible entity will meet 
     the requirements to be considered for endorsement by the 
     entity with a contract under such section 1890(a);
       ``(D) have transparent policies regarding governance and 
     conflicts of interest; and
       ``(E) submit an application to the Secretary at such time 
     and in such manner, as the Secretary may require.
       ``(4) Use of funds.--An entity that receives a grant, 
     contract, or agreement under this subsection shall use such 
     award to develop quality measures that meet the following 
     requirements:
       ``(A) Such measures support measures required to be 
     reported under the Social Security Act, where applicable, and 
     in support of gaps and existing quality measures that need 
     improvement, as described in subsection (b)(1)(A).
       ``(B) Such measures support measures developed under 
     section 1139A of the Social Security Act and the Medicaid 
     Quality Measurement Program under section 1139B of such Act, 
     where applicable.
       ``(C) To the extent practicable, data on such quality 
     measures is able to be collected using health information 
     technologies.
       ``(D) Each quality measure is free of charge to users of 
     such measure.
       ``(E) Each quality measure is publicly available on an 
     Internet website.
       ``(d) Other Activities by the Secretary.--The Secretary may 
     use amounts available under this section to update and test, 
     where applicable, quality measures endorsed by the entity 
     with a contract under section 1890(a) of the Social Security 
     Act or adopted by the Secretary.
       ``(e) Coordination of Grants.--The Secretary shall ensure 
     that grants or contracts awarded under this section are 
     coordinated with grants and contracts awarded under sections 
     1139A(5) and 1139B(4)(A) of the Social Security Act.''.
       (b) Social Security Act.--Section 1890A of the Social 
     Security Act, as added by section 3014(b), is amended by 
     adding at the end the following new subsection:
       ``(e) Development of Quality Measures.--The Administrator 
     of the Center for Medicare & Medicaid Services shall through 
     contracts develop quality measures (as determined appropriate 
     by the Administrator) for use under this Act. In developing 
     such measures, the Administrator shall consult with the 
     Director of the Agency for Healthcare Research and 
     Quality.''.
       (c) Funding.--There are authorized to be appropriated to 
     the Secretary of Health and Human Services to carry out this 
     section, $75,000,000 for each of fiscal years 2010 through 
     2014. Of the amounts appropriated under the preceding 
     sentence in a fiscal year, not less than 50 percent of such 
     amounts shall be used pursuant to subsection (e) of section 
     1890A of the Social Security Act, as added by subsection (b), 
     with respect to programs under such Act. Amounts appropriated 
     under this subsection for a fiscal year shall remain 
     available until expended.

     SEC. 3014. QUALITY MEASUREMENT.

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

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

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

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

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

[[Page 28457]]

       ``(v) areas in which evidence is insufficient to support 
     endorsement of quality measures in priority areas identified 
     by the Secretary under the national strategy established 
     under section 399HH of the Public Health Service Act and 
     where targeted research may address such gaps; and
       ``(vi) the matters described in clauses (i) and (ii) of 
     paragraph (7)(A).''.
       (b) Multi-stakeholder Group Input Into Selection of Quality 
     Measures.--Title XVIII of the Social Security Act (42 U.S.C. 
     1395 et seq.) is amended by inserting after section 1890 the 
     following:


                         ``quality measurement

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

     SEC. 3015. DATA COLLECTION; PUBLIC REPORTING.

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

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

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

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

       ``(a) Development of Performance Websites.--The Secretary 
     shall make available to the public, through standardized 
     Internet websites, performance information summarizing data 
     on quality measures. Such information shall be tailored to 
     respond to the differing needs of hospitals and other 
     institutional health care providers, physicians and other 
     clinicians, patients, consumers, researchers, policymakers, 
     States, and other stakeholders, as the Secretary may specify.
       ``(b) Information on Conditions.--The performance 
     information made publicly available on an Internet website, 
     as described in subsection (a), shall include information 
     regarding clinical conditions to the extent such information 
     is available, and the information shall, where appropriate, 
     be provider-specific and sufficiently disaggregated and 
     specific to meet the needs of patients with different 
     clinical conditions.
       ``(c) Consultation.--
       ``(1) In general.--In carrying out this section, the 
     Secretary shall consult with the entity with a contract under 
     section 1890(a) of the Social Security Act, and other 
     entities, as appropriate, to determine the type of 
     information that is useful to stakeholders and the format 
     that best facilitates use of the reports and of performance 
     reporting Internet websites.
       ``(2) Consultation with stakeholders.--The entity with a 
     contract under section 1890(a) of the Social Security Act 
     shall convene multi-stakeholder groups, as described in such 
     section, to review the design and format of each Internet 
     website made available

[[Page 28458]]

     under subsection (a) and shall transmit to the Secretary the 
     views of such multi-stakeholder groups with respect to each 
     such design and format.
       ``(d) Coordination.--Where appropriate, the Secretary shall 
     coordinate the manner in which data are presented through 
     Internet websites described in subsection (a) and for public 
     reporting of other quality measures by the Secretary, 
     including such quality measures under title XVIII of the 
     Social Security Act.
       ``(e) Authorization of Appropriations.--To carry out this 
     section, there are authorized to be appropriated such sums as 
     may be necessary for fiscal years 2010 through 2014.''.

      PART III--ENCOURAGING DEVELOPMENT OF NEW PATIENT CARE MODELS

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

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


             ``center for medicare and medicaid innovation

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

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

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

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

       ``(xvi) Facilitate inpatient care, including intensive 
     care, of hospitalized applicable individuals at their local 
     hospital through the use of electronic monitoring by 
     specialists, including intensivists and critical care 
     specialists, based at integrated health systems.
       ``(xvii) Promoting greater efficiencies and timely access 
     to outpatient services (such as outpatient physical therapy 
     services) through models that do not require a physician or 
     other health professional to refer the service or be involved 
     in establishing the plan of care for the service, when such 
     service is furnished by a health professional who has the 
     authority to furnish the service under existing State law.
       ``(xviii) Establishing comprehensive payments to Healthcare 
     Innovation Zones, consisting of groups of providers that 
     include a teaching hospital, physicians, and other clinical 
     entities, that, through their structure, operations, and 
     joint-activity deliver a full spectrum of integrated and 
     comprehensive health care services to applicable individuals 
     while also incorporating innovative methods for the clinical 
     training of future health care professionals.
       ``(C) Additional factors for consideration.--In selecting 
     models for testing under subparagraph (A), the CMI may 
     consider the following additional factors:
       ``(i) Whether the model includes a regular process for 
     monitoring and updating patient care plans in a manner that 
     is consistent with the needs and preferences of applicable 
     individuals.
       ``(ii) Whether the model places the applicable individual, 
     including family members and other informal caregivers of the 
     applicable individual, at the center of the care team of the 
     applicable individual.
       ``(iii) Whether the model provides for in-person contact 
     with applicable individuals.
       ``(iv) Whether the model utilizes technology, such as 
     electronic health records and patient-based remote monitoring 
     systems, to coordinate care over time and across settings.
       ``(v) Whether the model provides for the maintenance of a 
     close relationship between care coordinators, primary care 
     practitioners, specialist physicians, community-

[[Page 28459]]

     based organizations, and other providers of services and 
     suppliers.
       ``(vi) Whether the model relies on a team-based approach to 
     interventions, such as comprehensive care assessments, care 
     planning, and self-management coaching.
       ``(vii) Whether, under the model, providers of services and 
     suppliers are able to share information with patients, 
     caregivers, and other providers of services and suppliers on 
     a real time basis.
       ``(3) Budget neutrality.--
       ``(A) Initial period.--The Secretary shall not require, as 
     a condition for testing a model under paragraph (1), that the 
     design of such model ensure that such model is budget neutral 
     initially with respect to expenditures under the applicable 
     title.
       ``(B) Termination or modification.--The Secretary shall 
     terminate or modify the design and implementation of a model 
     unless the Secretary determines (and the Chief Actuary of the 
     Centers for Medicare & Medicaid Services, with respect to 
     program spending under the applicable title, certifies), 
     after testing has begun, that the model is expected to--
       ``(i) improve the quality of care (as determined by the 
     Administrator of the Centers for Medicare & Medicaid 
     Services) without increasing spending under the applicable 
     title;
       ``(ii) reduce spending under the applicable title without 
     reducing the quality of care; or
       ``(iii) improve the quality of care and reduce spending.

     Such termination may occur at any time after such testing has 
     begun and before completion of the testing.
       ``(4) Evaluation.--
       ``(A) In general.--The Secretary shall conduct an 
     evaluation of each model tested under this subsection. Such 
     evaluation shall include an analysis of--
       ``(i) the quality of care furnished under the model, 
     including the measurement of patient-level outcomes and 
     patient-centeredness criteria determined appropriate by the 
     Secretary; and
       ``(ii) the changes in spending under the applicable titles 
     by reason of the model.
       ``(B) Information.--The Secretary shall make the results of 
     each evaluation under this paragraph available to the public 
     in a timely fashion and may establish requirements for States 
     and other entities participating in the testing of models 
     under this section to collect and report information that the 
     Secretary determines is necessary to monitor and evaluate 
     such models.
       ``(c) Expansion of Models (Phase II).--Taking into account 
     the evaluation under subsection (b)(4), the Secretary may, 
     through rulemaking, expand (including implementation on a 
     nationwide basis) the duration and the scope of a model that 
     is being tested under subsection (b) or a demonstration 
     project under section 1866C, to the extent determined 
     appropriate by the Secretary, if--
       ``(1) the Secretary determines that such expansion is 
     expected to--
       ``(A) reduce spending under applicable title without 
     reducing the quality of care; or
       ``(B) improve the quality of care and reduce spending; and
       ``(2) the Chief Actuary of the Centers for Medicare & 
     Medicaid Services certifies that such expansion would reduce 
     program spending under applicable titles.
       ``(d) Implementation.--
       ``(1) Waiver authority.--The Secretary may waive such 
     requirements of titles XI and XVIII and of sections 
     1902(a)(1), 1902(a)(13), and 1903(m)(2)(A)(iii) as may be 
     necessary solely for purposes of carrying out this section 
     with respect to testing models described in subsection (b).
       ``(2) Limitations on review.--There shall be no 
     administrative or judicial review under section 1869, section 
     1878, or otherwise of--
       ``(A) the selection of models for testing or expansion 
     under this section;
       ``(B) the selection of organizations, sites, or 
     participants to test those models selected;
       ``(C) the elements, parameters, scope, and duration of such 
     models for testing or dissemination;
       ``(D) determinations regarding budget neutrality under 
     subsection (b)(3);
       ``(E) the termination or modification of the design and 
     implementation of a model under subsection (b)(3)(B); and
       ``(F) determinations about expansion of the duration and 
     scope of a model under subsection (c), including the 
     determination that a model is not expected to meet criteria 
     described in paragraph (1) or (2) of such subsection.
       ``(3) Administration.--Chapter 35 of title 44, United 
     States Code, shall not apply to the testing and evaluation of 
     models or expansion of such models under this section.
       ``(e) Application to CHIP.--The Center may carry out 
     activities under this section with respect to title XXI in 
     the same manner as provided under this section with respect 
     to the program under the applicable titles.
       ``(f) Funding.--
       ``(1) In general.--There are appropriated, from amounts in 
     the Treasury not otherwise appropriated--
       ``(A) $5,000,000 for the design, implementation, and 
     evaluation of models under subsection (b) for fiscal year 
     2010;
       ``(B) $10,000,000,000 for the activities initiated under 
     this section for the period of fiscal years 2011 through 
     2019; and
       ``(C) the amount described in subparagraph (B) for the 
     activities initiated under this section for each subsequent 
     10-year fiscal period (beginning with the 10-year fiscal 
     period beginning with fiscal year 2020).

     Amounts appropriated under the preceding sentence shall 
     remain available until expended.
       ``(2) Use of certain funds.--Out of amounts appropriated 
     under subparagraphs (B) and (C) of paragraph (1), not less 
     than $25,000,000 shall be made available each such fiscal 
     year to design, implement, and evaluate models under 
     subsection (b).
       ``(g) Report to Congress.--Beginning in 2012, and not less 
     than once every other year thereafter, the Secretary shall 
     submit to Congress a report on activities under this section. 
     Each such report shall describe the models tested under 
     subsection (b), including the number of individuals described 
     in subsection (a)(4)(A)(i) and of individuals described in 
     subsection (a)(4)(A)(ii) participating in such models and 
     payments made under applicable titles for services on behalf 
     of such individuals, any models chosen for expansion under 
     subsection (c), and the results from evaluations under 
     subsection (b)(4). In addition, each such report shall 
     provide such recommendations as the Secretary determines are 
     appropriate for legislative action to facilitate the 
     development and expansion of successful payment models.''.
       (b) Medicaid Conforming Amendment.--Section 1902(a) of the 
     Social Security Act (42 U.S.C. 1396a(a)), as amended by 
     section 8002(b), is amended--
       (1) in paragraph (81), by striking ``and'' at the end;
       (2) in paragraph (82), by striking the period at the end 
     and inserting ``; and''; and
       (3) by inserting after paragraph (82) the following new 
     paragraph:
       ``(83) provide for implementation of the payment models 
     specified by the Secretary under section 1115A(c) for 
     implementation on a nationwide basis unless the State 
     demonstrates to the satisfaction of the Secretary that 
     implementation would not be administratively feasible or 
     appropriate to the health care delivery system of the 
     State.''.
       (c) Revisions to Health Care Quality Demonstration 
     Program.--Subsections (b) and (f) of section 1866C of the 
     Social Security Act (42 U.S.C. 1395cc-3) are amended by 
     striking ``5-year'' each place it appears.

     SEC. 3022. MEDICARE SHARED SAVINGS PROGRAM.

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


                        ``shared savings program

       ``Sec. 1899.  (a) Establishment.--
       ``(1) In general.--Not later than January 1, 2012, the 
     Secretary shall establish a shared savings program (in this 
     section referred to as the `program') that promotes 
     accountability for a patient population and coordinates items 
     and services under parts A and B, and encourages investment 
     in infrastructure and redesigned care processes for high 
     quality and efficient service delivery. Under such program--
       ``(A) groups of providers of services and suppliers meeting 
     criteria specified by the Secretary may work together to 
     manage and coordinate care for Medicare fee-for-service 
     beneficiaries through an accountable care organization 
     (referred to in this section as an `ACO'); and
       ``(B) ACOs that meet quality performance standards 
     established by the Secretary are eligible to receive payments 
     for shared savings under subsection (d)(2).
       ``(b) Eligible ACOs.--
       ``(1) In general.--Subject to the succeeding provisions of 
     this subsection, as determined appropriate by the Secretary, 
     the following groups of providers of services and suppliers 
     which have established a mechanism for shared governance are 
     eligible to participate as ACOs under the program under this 
     section:
       ``(A) ACO professionals in group practice arrangements.
       ``(B) Networks of individual practices of ACO 
     professionals.
       ``(C) Partnerships or joint venture arrangements between 
     hospitals and ACO professionals.
       ``(D) Hospitals employing ACO professionals.
       ``(E) Such other groups of providers of services and 
     suppliers as the Secretary determines appropriate.
       ``(2) Requirements.--An ACO shall meet the following 
     requirements:
       ``(A) The ACO shall be willing to become accountable for 
     the quality, cost, and overall care of the Medicare fee-for-
     service beneficiaries assigned to it.
       ``(B) The ACO shall enter into an agreement with the 
     Secretary to participate in the program for not less than a 
     3-year period (referred to in this section as the `agreement 
     period').
       ``(C) The ACO shall have a formal legal structure that 
     would allow the organization to receive and distribute 
     payments for shared savings under subsection (d)(2) to 
     participating providers of services and suppliers.
       ``(D) The ACO shall include primary care ACO professionals 
     that are sufficient for the

[[Page 28460]]

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

     SEC. 3023. NATIONAL PILOT PROGRAM ON PAYMENT BUNDLING.

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


              ``national pilot program on payment bundling

       ``Sec. 1866D.  (a) Implementation.--
       ``(1) In general.--The Secretary shall establish a pilot 
     program for integrated care during an episode of care 
     provided to an applicable beneficiary around a 
     hospitalization in order to improve the coordination, 
     quality, and efficiency of health care services under this 
     title.
       ``(2) Definitions.--In this section:

[[Page 28461]]

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

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

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

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

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

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

       ``(ii) Requirement for provision of applicable services and 
     other appropriate services.--Applicable services and other 
     appropriate services for which payment is made under this 
     subparagraph shall be furnished or directed by the entity 
     which is participating in the pilot program.
       ``(D) Payment for post-acute care services after the 
     episode of care.--The Secretary shall establish procedures, 
     in the case where an applicable beneficiary requires 
     continued post-acute care services after the last day of the 
     episode of care, under which payment for such services shall 
     be made.
       ``(4) Quality measures.--
       ``(A) In general.--The Secretary shall establish quality 
     measures (including quality measures of process, outcome, and 
     structure) related to care provided by entities participating 
     in the pilot program. Quality measures established under the 
     preceding sentence shall include measures of the following:
       ``(i) Functional status improvement.
       ``(ii) Reducing rates of avoidable hospital readmissions.
       ``(iii) Rates of discharge to the community.
       ``(iv) Rates of admission to an emergency room after a 
     hospitalization.
       ``(v) Incidence of health care acquired infections.
       ``(vi) Efficiency measures.
       ``(vii) Measures of patient-centeredness of care.
       ``(viii) Measures of patient perception of care.
       ``(ix) Other measures, including measures of patient 
     outcomes, determined appropriate by the Secretary.
       ``(B) Reporting on quality measures.--
       ``(i) In general.--A entity shall submit data to the 
     Secretary on quality measures established under subparagraph 
     (A) during each year of the pilot program (in a form and 
     manner, subject to clause (iii), specified by the Secretary).
       ``(ii) Submission of data through electronic health 
     record.--To the extent practicable, the Secretary shall 
     specify that data on measures be submitted under clause (i) 
     through the use of an qualified electronic health record (as 
     defined in section 3000(13) of the Public Health Service Act 
     (42 U.S.C. 300jj-11(13)) in a manner specified by the 
     Secretary.

[[Page 28462]]

       ``(d) Waiver.--The Secretary may waive such provisions of 
     this title and title XI as may be necessary to carry out the 
     pilot program.
       ``(e) Independent Evaluation and Reports on Pilot 
     Program.--
       ``(1) Independent evaluation.--The Secretary shall conduct 
     an independent evaluation of the pilot program, including the 
     extent to which the pilot program has--
       ``(A) improved quality measures established under 
     subsection (c)(4)(A);
       ``(B) improved health outcomes;
       ``(C) improved applicable beneficiary access to care; and
       ``(D) reduced spending under this title.
       ``(2) Reports.--
       ``(A) Interim report.--Not later than 2 years after the 
     implementation of the pilot program, the Secretary shall 
     submit to Congress a report on the initial results of the 
     independent evaluation conducted under paragraph (1).
       ``(B) Final report.--Not later than 3 years after the 
     implementation of the pilot program, the Secretary shall 
     submit to Congress a report on the final results of the 
     independent evaluation conducted under paragraph (1).
       ``(f) Consultation.--The Secretary shall consult with 
     representatives of small rural hospitals, including critical 
     access hospitals (as defined in section 1861(mm)(1)), 
     regarding their participation in the pilot program. Such 
     consultation shall include consideration of innovative 
     methods of implementing bundled payments in hospitals 
     described in the preceding sentence, taking into 
     consideration any difficulties in doing so as a result of the 
     low volume of services provided by such hospitals.
       ``(g) Implementation Plan.--
       ``(1) In general.--Not later than January 1, 2016, the 
     Secretary shall submit a plan for the implementation of an 
     expansion of the pilot program if the Secretary determines 
     that such expansion will result in improving or not reducing 
     the quality of patient care and reducing spending under this 
     title.
       ``(h) Administration.--Chapter 35 of title 44, United 
     States Code, shall not apply to the selection, testing, and 
     evaluation of models or the expansion of such models under 
     this section.''.

     SEC. 3024. INDEPENDENCE AT HOME DEMONSTRATION PROGRAM.

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


     ``independence at home medical practice demonstration program

       ``Sec. 1866D.  (a) Establishment.--
       ``(1) In general.--The Secretary shall conduct a 
     demonstration program (in this section referred to as the 
     `demonstration program') to test a payment incentive and 
     service delivery model that utilizes physician and nurse 
     practitioner directed home-based primary care teams designed 
     to reduce expenditures and improve health outcomes in the 
     provision of items and services under this title to 
     applicable beneficiaries (as defined in subsection (d)).
       ``(2) Requirement.--The demonstration program shall test 
     whether a model described in paragraph (1), which is 
     accountable for providing comprehensive, coordinated, 
     continuous, and accessible care to high-need populations at 
     home and coordinating health care across all treatment 
     settings, results in--
       ``(A) reducing preventable hospitalizations;
       ``(B) preventing hospital readmissions;
       ``(C) reducing emergency room visits;
       ``(D) improving health outcomes commensurate with the 
     beneficiaries' stage of chronic illness;
       ``(E) improving the efficiency of care, such as by reducing 
     duplicative diagnostic and laboratory tests;
       ``(F) reducing the cost of health care services covered 
     under this title; and
       ``(G) achieving beneficiary and family caregiver 
     satisfaction.
       ``(b) Independence at Home Medical Practice.--
       ``(1) Independence at home medical practice defined.--In 
     this section:
       ``(A) In general.--The term `independence at home medical 
     practice' means a legal entity that--
       ``(i) is comprised of an individual physician or nurse 
     practitioner or group of physicians and nurse practitioners 
     that provides care as part of a team that includes 
     physicians, nurses, physician assistants, pharmacists, and 
     other health and social services staff as appropriate who 
     have experience providing home-based primary care to 
     applicable beneficiaries, make in-home visits, and are 
     available 24 hours per day, 7 days per week to carry out 
     plans of care that are tailored to the individual 
     beneficiary's chronic conditions and designed to achieve the 
     results in subsection (a);
       ``(ii) is organized at least in part for the purpose of 
     providing physicians' services;
       ``(iii) has documented experience in providing home-based 
     primary care services to high-cost chronically ill 
     beneficiaries, as determined appropriate by the Secretary;
       ``(iv) furnishes services to at least 200 applicable 
     beneficiaries (as defined in subsection (d)) during each year 
     of the demonstration program;
       ``(v) has entered into an agreement with the Secretary;
       ``(vi) uses electronic health information systems, remote 
     monitoring, and mobile diagnostic technology; and
       ``(vii) meets such other criteria as the Secretary 
     determines to be appropriate to participate in the 
     demonstration program.

     The entity shall report on quality measures (in such form, 
     manner, and frequency as specified by the Secretary, which 
     may be for the group, for providers of services and 
     suppliers, or both) and report to the Secretary (in a form, 
     manner, and frequency as specified by the Secretary) such 
     data as the Secretary determines appropriate to monitor and 
     evaluate the demonstration program.
       ``(B) Physician.--The term `physician' includes, except as 
     the Secretary may otherwise provide, any individual who 
     furnishes services for which payment may be made as 
     physicians' services and has the medical training or 
     experience to fulfill the physician's role described in 
     subparagraph (A)(i).
       ``(2) Participation of nurse practitioners and physician 
     assistants.--Nothing in this section shall be construed to 
     prevent a nurse practitioner or physician assistant from 
     participating in, or leading, a home-based primary care team 
     as part of an independence at home medical practice if--
       ``(A) all the requirements of this section are met;
       ``(B) the nurse practitioner or physician assistant, as the 
     case may be, is acting consistent with State law; and
       ``(C) the nurse practitioner or physician assistant has the 
     medical training or experience to fulfill the nurse 
     practitioner or physician assistant role described in 
     paragraph (1)(A)(i).
       ``(3) Inclusion of providers and practitioners.--Nothing in 
     this subsection shall be construed as preventing an 
     independence at home medical practice from including a 
     provider of services or a participating practitioner 
     described in section 1842(b)(18)(C) that is affiliated with 
     the practice under an arrangement structured so that such 
     provider of services or practitioner participates in the 
     demonstration program and shares in any savings under the 
     demonstration program.
       ``(4) Quality and performance standards.--The Secretary 
     shall develop quality performance standards for independence 
     at home medical practices participating in the demonstration 
     program.
       ``(c) Payment Methodology.--
       ``(1) Establishment of target spending level.--The 
     Secretary shall establish an estimated annual spending 
     target, for the amount the Secretary estimates would have 
     been spent in the absence of the demonstration, for items and 
     services covered under parts A and B furnished to applicable 
     beneficiaries for each qualifying independence at home 
     medical practice under this section. Such spending targets 
     shall be determined on a per capita basis. Such spending 
     targets shall include a risk corridor that takes into account 
     normal variation in expenditures for items and services 
     covered under parts A and B furnished to such beneficiaries 
     with the size of the corridor being related to the number of 
     applicable beneficiaries furnished services by each 
     independence at home medical practice. The spending targets 
     may also be adjusted for other factors as the Secretary 
     determines appropriate.
       ``(2) Incentive payments.--Subject to performance on 
     quality measures, a qualifying independence at home medical 
     practice is eligible to receive an incentive payment under 
     this section if actual expenditures for a year for the 
     applicable beneficiaries it enrolls are less than the 
     estimated spending target established under paragraph (1) for 
     such year. An incentive payment for such year shall be equal 
     to a portion (as determined by the Secretary) of the amount 
     by which actual expenditures (including incentive payments 
     under this paragraph) for applicable beneficiaries under 
     parts A and B for such year are estimated to be less than 5 
     percent less than the estimated spending target for such 
     year, as determined under paragraph (1).
       ``(d) Applicable Beneficiaries.--
       ``(1) Definition.--In this section, the term `applicable 
     beneficiary' means, with respect to a qualifying independence 
     at home medical practice, an individual who the practice has 
     determined--
       ``(A) is entitled to benefits under part A and enrolled for 
     benefits under part B;
       ``(B) is not enrolled in a Medicare Advantage plan under 
     part C or a PACE program under section 1894;
       ``(C) has 2 or more chronic illnesses, such as congestive 
     heart failure, diabetes, other dementias designated by the 
     Secretary, chronic obstructive pulmonary disease, ischemic 
     heart disease, stroke, Alzheimer's Disease and 
     neurodegenerative diseases, and other diseases and conditions 
     designated by the Secretary which result in high costs under 
     this title;
       ``(D) within the past 12 months has had a nonelective 
     hospital admission;
       ``(E) within the past 12 months has received acute or 
     subacute rehabilitation services;
       ``(F) has 2 or more functional dependencies requiring the 
     assistance of another person (such as bathing, dressing, 
     toileting, walking, or feeding); and

[[Page 28463]]

       ``(G) meets such other criteria as the Secretary determines 
     appropriate.
       ``(2) Patient election to participate.--The Secretary shall 
     determine an appropriate method of ensuring that applicable 
     beneficiaries have agreed to enroll in an independence at 
     home medical practice under the demonstration program. 
     Enrollment in the demonstration program shall be voluntary.
       ``(3) Beneficiary access to services.--Nothing in this 
     section shall be construed as encouraging physicians or nurse 
     practitioners to limit applicable beneficiary access to 
     services covered under this title and applicable 
     beneficiaries shall not be required to relinquish access to 
     any benefit under this title as a condition of receiving 
     services from an independence at home medical practice.
       ``(e) Implementation.--
       ``(1) Starting date.--The demonstration program shall begin 
     no later than January 1, 2012. An agreement with an 
     independence at home medical practice under the demonstration 
     program may cover not more than a 3-year period.
       ``(2) No physician duplication in demonstration 
     participation.--The Secretary shall not pay an independence 
     at home medical practice under this section that participates 
     in section 1899.
       ``(3) No beneficiary duplication in demonstration 
     participation.--The Secretary shall ensure that no applicable 
     beneficiary enrolled in an independence at home medical 
     practice under this section is participating in the programs 
     under section 1899.
       ``(4) Preference.--In approving an independence at home 
     medical practice, the Secretary shall give preference to 
     practices that are--
       ``(A) located in high-cost areas of the country;
       ``(B) have experience in furnishing health care services to 
     applicable beneficiaries in the home; and
       ``(C) use electronic medical records, health information 
     technology, and individualized plans of care.
       ``(5) Limitation on number of practices.--In selecting 
     qualified independence at home medical practices to 
     participate under the demonstration program, the Secretary 
     shall limit the number of such practices so that the number 
     of applicable beneficiaries that may participate in the 
     demonstration program does not exceed 10,000.
       ``(6) Waiver.--The Secretary may waive such provisions of 
     this title and title XI as the Secretary determines necessary 
     in order to implement the demonstration program.
       ``(7) Administration.--Chapter 35 of title 44, United 
     States Code, shall not apply to this section.
       ``(f) Evaluation and Monitoring.--
       ``(1) In general.--The Secretary shall evaluate each 
     independence at home medical practice under the demonstration 
     program to assess whether the practice achieved the results 
     described in subsection (a).
       ``(2) Monitoring applicable beneficiaries.--The Secretary 
     may monitor data on expenditures and quality of services 
     under this title after an applicable beneficiary discontinues 
     receiving services under this title through a qualifying 
     independence at home medical practice.
       ``(g) Reports to Congress.--The Secretary shall conduct an 
     independent evaluation of the demonstration program and 
     submit to Congress a final report, including best practices 
     under the demonstration program. Such report shall include an 
     analysis of the demonstration program on coordination of 
     care, expenditures under this title, applicable beneficiary 
     access to services, and the quality of health care services 
     provided to applicable beneficiaries.
       ``(h) Funding.--For purposes of administering and carrying 
     out the demonstration program, other than for payments for 
     items and services furnished under this title and incentive 
     payments under subsection (c), in addition to funds otherwise 
     appropriated, there shall be transferred to the Secretary for 
     the Center for Medicare & Medicaid Services Program 
     Management Account from the Federal Hospital Insurance Trust 
     Fund under section 1817 and the Federal Supplementary Medical 
     Insurance Trust Fund under section 1841 (in proportions 
     determined appropriate by the Secretary) $5,000,000 for each 
     of fiscal years 2010 through 2015. Amounts transferred under 
     this subsection for a fiscal year shall be available until 
     expended.
       ``(i) Termination.--
       ``(1) Mandatory termination.--The Secretary shall terminate 
     an agreement with an independence at home medical practice 
     if--
       ``(A) the Secretary estimates or determines that such 
     practice will not receive an incentive payment for the second 
     of 2 consecutive years under the demonstration program; or
       ``(B) such practice fails to meet quality standards during 
     any year of the demonstration program.
       ``(2) Permissive termination.--The Secretary may terminate 
     an agreement with an independence at home medical practice 
     for such other reasons determined appropriate by the 
     Secretary.''.

     SEC. 3025. HOSPITAL READMISSIONS REDUCTION PROGRAM.

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

[[Page 28464]]

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

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

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

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

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

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

     SEC. 3026. COMMUNITY-BASED CARE TRANSITIONS PROGRAM.

       (a) In General.--The Secretary shall establish a Community-
     Based Care Transitions Program under which the Secretary 
     provides funding to eligible entities that furnish improved 
     care transition services to high-risk Medicare beneficiaries.
       (b) Definitions.--In this section:
       (1) Eligible entity.--The term ``eligible entity'' means 
     the following:
       (A) A subsection (d) hospital (as defined in section 
     1886(d)(1)(B) of the Social Security Act (42 U.S.C. 
     1395ww(d)(1)(B))) identified by the Secretary as having a 
     high readmission rate, such as under section 1886(q) of the 
     Social Security Act, as added by section 3025.
       (B) An appropriate community-based organization that 
     provides care transition services under this section across a 
     continuum of care through arrangements with subsection (d) 
     hospitals (as so defined) to furnish the services described 
     in subsection (c)(2)(B)(i) and whose governing body includes 
     sufficient representation of multiple health care 
     stakeholders (including consumers).
       (2) High-risk medicare beneficiary.--The term ``high-risk 
     Medicare beneficiary'' means a Medicare beneficiary who has 
     attained a minimum hierarchical condition category score, as 
     determined by the Secretary, based on a diagnosis of multiple 
     chronic conditions or other risk factors associated with a 
     hospital readmission or substandard transition into post-
     hospitalization care, which may include 1 or more of the 
     following:
       (A) Cognitive impairment.
       (B) Depression.
       (C) A history of multiple readmissions.
       (D) Any other chronic disease or risk factor as determined 
     by the Secretary.
       (3) Medicare beneficiary.--The term ``Medicare 
     beneficiary'' means an individual

[[Page 28465]]

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

     SEC. 3027. EXTENSION OF GAINSHARING DEMONSTRATION.

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

       Subtitle B--Improving Medicare for Patients and Providers

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

     SEC. 3101. INCREASE IN THE PHYSICIAN PAYMENT UPDATE.

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

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

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

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

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

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

     Such adjustments shall be made without regard to adjustments 
     made pursuant to

[[Page 28466]]

     clauses (i) and (ii) and shall be made in a budget neutral 
     manner.''.

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

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

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

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

     SEC. 3105. EXTENSION OF AMBULANCE ADD-ONS.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

[[Page 28467]]

     Secretary of Health and Human Services and the Commissioner 
     of Social Security to ensure appropriate follow up pursuant 
     to any notification provided under the preceding sentence.''.
       (2) Effective date.--The amendment made by paragraph (1) 
     shall apply to elections made with respect to initial 
     enrollment periods that end after the date of the enactment 
     of this Act.
       (b) Waiver of Increase of Premium.--Section 1839(b) of the 
     Social Security Act (42 U.S.C. 1395r(b)) is amended by 
     striking ``section 1837(i)(4)'' and inserting ``subsection 
     (i)(4) or (l) of section 1837''.

     SEC. 3111. PAYMENT FOR BONE DENSITY TESTS.

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

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

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

     SEC. 3112. REVISION TO THE MEDICARE IMPROVEMENT FUND.

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

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

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

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

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

                       PART II--RURAL PROTECTIONS

     SEC. 3121. EXTENSION OF OUTPATIENT HOLD HARMLESS PROVISION.

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

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

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

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

       (a) One-year Extension.--Section 410A of the Medicare 
     Prescription Drug, Improvement, and Modernization Act of 2003 
     (Public Law 108-173; 117 Stat. 2272) is amended by adding at 
     the end the following new subsection:
       ``(g) One-Year Extension of Demonstration Program.--
       ``(1) In general.--Subject to the succeeding provisions of 
     this subsection, the Secretary shall conduct the 
     demonstration program under this section for an additional 1-
     year period (in this section referred to as the `1-year 
     extension period') that begins on the date immediately 
     following the last day of the initial 5-year period under 
     subsection (a)(5).
       ``(2) Expansion of demonstration states.--Notwithstanding 
     subsection (a)(2), during the 1-year extension period, the 
     Secretary shall expand the number of States with low 
     population densities determined by the Secretary under such 
     subsection to 20. In determining which States to include in 
     such expansion, the Secretary shall use the same criteria and 
     data that the Secretary used to determine the States under 
     such subsection for purposes of the initial 5-year period.
       ``(3) Increase in maximum number of hospitals participating 
     in the demonstration program.--Notwithstanding subsection 
     (a)(4), during the 1-year extension period, not more than 30 
     rural community hospitals may

[[Page 28468]]

     participate in the demonstration program under this section.
       ``(4) No affect on hospitals in demonstration program on 
     date of enactment.--In the case of a rural community hospital 
     that is participating in the demonstration program under this 
     section as of the last day of the initial 5-year period, the 
     Secretary shall provide for the continued participation of 
     such rural community hospital in the demonstration program 
     during the 1-year extension period unless the rural community 
     hospital makes an election, in such form and manner as the 
     Secretary may specify, to discontinue such participation.''.
       (b) Conforming Amendments.--Subsection (a)(5) of section 
     410A of the Medicare Prescription Drug, Improvement, and 
     Modernization Act of 2003 (Public Law 108-173; 117 Stat. 
     2272) is amended by inserting ``(in this section referred to 
     as the `initial 5-year period') and, as provided in 
     subsection (g), for the 1-year extension period'' after ``5-
     year period''.
       (c) Technical Amendments.--
       (1) Subsection (b) of section 410A of the Medicare 
     Prescription Drug, Improvement, and Modernization Act of 2003 
     (Public Law 108-173; 117 Stat. 2272) is amended--
       (A) in paragraph (1)(B)(ii), by striking ``2)'' and 
     inserting ``2))''; and
       (B) in paragraph (2), by inserting ``cost'' before 
     ``reporting period'' the first place such term appears in 
     each of subparagraphs (A) and (B).
       (2) Subsection (f)(1) of section 410A of the Medicare 
     Prescription Drug, Improvement, and Modernization Act of 2003 
     (Public Law 108-173; 117 Stat. 2272) is amended--
       (A) in subparagraph (A)(ii), by striking ``paragraph (2)'' 
     and inserting ``subparagraph (B)''; and
       (B) in subparagraph (B), by striking ``paragraph (1)(B)'' 
     and inserting ``subparagraph (A)(ii)''.

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

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

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

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

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

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

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

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

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

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

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

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

                  PART III--IMPROVING PAYMENT ACCURACY

     SEC. 3131. PAYMENT ADJUSTMENTS FOR HOME HEALTH CARE.

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

       ``(I) In general.--Subject to subclause (II), for 2013 and 
     subsequent years, the amount (or amounts) that would 
     otherwise be applicable under clause (i)(III) shall be 
     adjusted by a percentage determined appropriate by the 
     Secretary to reflect such factors as changes in the number of 
     visits in an episode, the mix of services in an episode, the 
     level of intensity of services in an episode,

[[Page 28469]]

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

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

     SEC. 3132. HOSPICE REFORM.

       (a) Hospice Care Payment Reforms.--
       (1) In general.--Section 1814(i) of the Social Security Act 
     (42 U.S.C. 1395f(i)), as amended by section 3004(c), is 
     amended--
       (A) by redesignating paragraph (6) as paragraph (7); and
       (B) by inserting after paragraph (5) the following new 
     paragraph:
       ``(6)(A) The Secretary shall collect additional data and 
     information as the Secretary determines appropriate to revise 
     payments for hospice care under this subsection pursuant to 
     subparagraph (D) and for other purposes as determined 
     appropriate by the Secretary. The Secretary shall begin to 
     collect such data by not later than January 1, 2011.
       ``(B) The additional data and information to be collected 
     under subparagraph (A) may include data and information on--
       ``(i) charges and payments;
       ``(ii) the number of days of hospice care which are 
     attributable to individuals who are entitled to, or enrolled 
     for, benefits under part A; and
       ``(iii) with respect to each type of service included in 
     hospice care--
       ``(I) the number of days of hospice care attributable to 
     the type of service;
       ``(II) the cost of the type of service; and
       ``(III) the amount of payment for the type of service;
       ``(iv) charitable contributions and other revenue of the 
     hospice program;
       ``(v) the number of hospice visits;
       ``(vi) the type of practitioner providing the visit; and
       ``(vii) the length of the visit and other basic information 
     with respect to the visit.
       ``(C) The Secretary may collect the additional data and 
     information under subparagraph (A) on cost reports, claims, 
     or other mechanisms as the Secretary determines to be 
     appropriate.
       ``(D)(i) Notwithstanding the preceding paragraphs of this 
     subsection, not earlier than October 1, 2013, the Secretary 
     shall, by regulation, implement revisions to the methodology 
     for determining the payment rates for routine home care and 
     other services included in hospice care under this part, as 
     the Secretary determines to be appropriate. Such revisions 
     may be based on an analysis of data and information collected 
     under subparagraph (A). Such revisions may include

[[Page 28470]]

     adjustments to per diem payments that reflect changes in 
     resource intensity in providing such care and services during 
     the course of the entire episode of hospice care.
       ``(ii) Revisions in payment implemented pursuant to clause 
     (i) shall result in the same estimated amount of aggregate 
     expenditures under this title for hospice care furnished in 
     the fiscal year in which such revisions in payment are 
     implemented as would have been made under this title for such 
     care in such fiscal year if such revisions had not been 
     implemented.
       ``(E) The Secretary shall consult with hospice programs and 
     the Medicare Payment Advisory Commission regarding the 
     additional data and information to be collected under 
     subparagraph (A) and the payment revisions under subparagraph 
     (D).''.
       (2) Conforming amendments.--Section 1814(i)(1)(C) of the 
     Social Security Act (42 U.S.C. 1395f(i)(1)(C)) is amended--
       (A) in clause (ii)--
       (i) in the matter preceding subclause (I), by inserting 
     ``(before the first fiscal year in which the payment 
     revisions described in paragraph (6)(D) are implemented)'' 
     after ``subsequent fiscal year''; and
       (ii) in subclause (VII), by inserting ``(before the first 
     fiscal year in which the payment revisions described in 
     paragraph (6)(D) are implemented), subject to clause (iv),'' 
     after ``subsequent fiscal year''; and
       (B) by adding at the end the following new clause:
       ``(iii) With respect to routine home care and other 
     services included in hospice care furnished during fiscal 
     years subsequent to the first fiscal year in which payment 
     revisions described in paragraph (6)(D) are implemented, the 
     payment rates for such care and services shall be the payment 
     rates in effect under this clause during the preceding fiscal 
     year increased by, subject to clause (iv), the market basket 
     percentage increase (as defined in section 
     1886(b)(3)(B)(iii)) for the fiscal year.''.
       (b) Adoption of MedPAC Hospice Program Eligibility 
     Recertification Recommendations.--Section 1814(a)(7) of the 
     Social Security Act (42 U.S.C. 1395f(a)(7)) is amended--
       (1) in subparagraph (B), by striking ``and'' at the end; 
     and
       (2) by adding at the end the following new subparagraph:
       ``(D) on and after January 1, 2011--
       ``(i) a hospice physician or nurse practitioner has a face-
     to-face encounter with the individual to determine continued 
     eligibility of the individual for hospice care prior to the 
     180th-day recertification and each subsequent recertification 
     under subparagraph (A)(ii) and attests that such visit took 
     place (in accordance with procedures established by the 
     Secretary); and
       ``(ii) in the case of hospice care provided an individual 
     for more than 180 days by a hospice program for which the 
     number of such cases for such program comprises more than a 
     percent (specified by the Secretary) of the total number of 
     such cases for all programs under this title, the hospice 
     care provided to such individual is medically reviewed (in 
     accordance with procedures established by the Secretary); 
     and''.

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

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

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

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

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

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

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

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

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

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

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

[[Page 28471]]

       ``(VI) The provisions of subparagraph (B)(ii)(II) shall 
     apply to adjustments to relative value units made pursuant to 
     this subparagraph in the same manner as such provisions apply 
     to adjustments under subparagraph (B)(ii)(II).

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

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

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

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

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

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

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

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

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

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

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

     SEC. 3137. HOSPITAL WAGE INDEX IMPROVEMENT.

       (a) Extension of Section 508 Hospital Reclassifications.--
       (1) In general.--Subsection (a) of section 106 of division 
     B of the Tax Relief and Health Care Act of 2006 (42 U.S.C. 
     1395 note), as amended by section 117 of the Medicare, 
     Medicaid, and SCHIP Extension Act of 2007 (Public Law 110-
     173) and section 124 of the Medicare Improvements for 
     Patients and Providers Act of 2008 (Public Law 110-275), is 
     amended by striking ``September 30, 2009'' and inserting 
     ``September 30, 2010''.
       (2) Use of particular wage index in fiscal year 2010.--For 
     purposes of implementation of the amendment made by this 
     subsection during fiscal year 2010, the Secretary shall use 
     the hospital wage index that was promulgated by the Secretary 
     in the Federal Register on August 27, 2009 (74 Fed. Reg. 
     43754), and any subsequent corrections.
       (b) Plan for Reforming the Medicare Hospital Wage Index 
     System.--
       (1) In general.--Not later than December 31, 2011, the 
     Secretary of Health and Human Services (in this section 
     referred to as the ``Secretary'') shall submit to Congress a 
     report that includes a plan to reform the hospital wage index 
     system under section 1886 of the Social Security Act.
       (2) Details.--In developing the plan under paragraph (1), 
     the Secretary shall take into account the goals for reforming 
     such system set forth in the Medicare Payment Advisory 
     Commission June 2007 report entitled ``Report to Congress: 
     Promoting Greater Efficiency in Medicare'', including 
     establishing a new hospital compensation index system that--

[[Page 28472]]

       (A) uses Bureau of Labor Statistics data, or other data or 
     methodologies, to calculate relative wages for each 
     geographic area involved;
       (B) minimizes wage index adjustments between and within 
     metropolitan statistical areas and statewide rural areas;
       (C) includes methods to minimize the volatility of wage 
     index adjustments that result from implementation of policy, 
     while maintaining budget neutrality in applying such 
     adjustments;
       (D) takes into account the effect that implementation of 
     the system would have on health care providers and on each 
     region of the country;
       (E) addresses issues related to occupational mix, such as 
     staffing practices and ratios, and any evidence on the effect 
     on quality of care or patient safety as a result of the 
     implementation of the system; and
       (F) provides for a transition.
       (3) Consultation.--In developing the plan under paragraph 
     (1), the Secretary shall consult with relevant affected 
     parties.
       (c) Use of Particular Criteria for Determining 
     Reclassifications.--Notwithstanding any other provision of 
     law, in making decisions on applications for reclassification 
     of a subsection (d) hospital (as defined in paragraph (1)(B) 
     of section 1886(d) of the Social Security Act (42 U.S.C. 
     1395ww(d)) for the purposes described in paragraph (10)(D)(v) 
     of such section for fiscal year 2011 and each subsequent 
     fiscal year (until the first fiscal year beginning on or 
     after the date that is 1 year after the Secretary of Health 
     and Human Services submits the report to Congress under 
     subsection (b)), the Geographic Classification Review Board 
     established under paragraph (10) of such section shall use 
     the average hourly wage comparison criteria used in making 
     such decisions as of September 30, 2008. The preceding 
     sentence shall be effected in a budget neutral manner.

     SEC. 3138. TREATMENT OF CERTAIN CANCER HOSPITALS.

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

     SEC. 3139. PAYMENT FOR BIOSIMILAR BIOLOGICAL PRODUCTS.

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

     SEC. 3140. MEDICARE HOSPICE CONCURRENT CARE DEMONSTRATION 
                   PROGRAM.

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

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

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

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

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

[[Page 28473]]

     under subsection (a), together with recommendations for such 
     legislation and administrative action as the Secretary 
     determines appropriate.

               Subtitle C--Provisions Relating to Part C

     SEC. 3201. MEDICARE ADVANTAGE PAYMENT.

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

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

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

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

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

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

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

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

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

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

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

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

       (3) Effective date.--The amendments made by this subsection 
     shall apply to bid amounts submitted on or after January 1, 
     2012.
       (e) MA Local Plan Service Areas.--
       (1) In general.--Section 1853(d) of the Social Security Act 
     (42 U.S.C. 1395w-23(d)) is amended--
       (A) in the subsection heading, by striking ``MA Region'' 
     and inserting ``MA Region; MA Local Plan Service Area'';
       (B) in paragraph (1), by striking subparagraph (A) and 
     inserting the following:
       ``(A) with respect to an MA local plan--
       ``(i) for years before 2012, an MA local area (as defined 
     in paragraph (2)); and
       ``(ii) for 2012 and succeeding years, a service area that 
     is an entire urban or rural area, as applicable (as described 
     in paragraph (5)); and''; and
       (C) by adding at the end the following new paragraph:
       ``(5) MA local plan service area.--For 2012 and succeeding 
     years, the service area for an MA local plan shall be an 
     entire urban or rural area in each State as follows:

[[Page 28474]]

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

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

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

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

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

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

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

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

       ``(iii) Transitional care interventions that focus on care 
     provided around a hospital inpatient episode, including 
     programs that target post-discharge patient care in order to 
     reduce unnecessary health complications and readmissions.
       ``(iv) Patient safety programs, including provisions for 
     hospital-based patient safety programs in contracts that the 
     Medicare Advantage organization offering the MA plan has with 
     hospitals.
       ``(v) Financial policies that promote systematic 
     coordination of care by primary care physicians across the 
     full spectrum of specialties and sites of care, such as 
     medical homes, capitation arrangements, or pay-for-
     performance programs.
       ``(vi) Programs that address, identify, and ameliorate 
     health care disparities among principal at-risk 
     subpopulations.
       ``(vii) Medication therapy management programs that are 
     more extensive than is required under section 1860D-4(c) (as 
     determined by the Secretary).
       ``(viii) Health information technology programs, including 
     clinical decision support and other tools to facilitate data 
     collection and ensure patient-centered, appropriate care.
       ``(ix) Such other care management and coordination programs 
     as the Secretary determines appropriate.
       ``(D) Conduct of program in urban and rural areas.--An MA 
     plan may conduct a program described in subparagraph (C) in a 
     manner appropriate for an urban or rural area, as applicable.
       ``(E) Reporting of data.--Each Medicare Advantage 
     organization shall provide to the Secretary the information 
     needed to determine whether they are eligible for a care 
     coordination and management performance bonus at a time and 
     in a manner specified by the Secretary.
       ``(F) Periodic auditing.--The Secretary shall provide for 
     the annual auditing of programs described in subparagraph (C) 
     for which an MA plan receives a care coordination and 
     management performance bonus under this paragraph. The 
     Comptroller General shall monitor auditing activities 
     conducted under this subparagraph.
       ``(2) Quality performance bonuses.--
       ``(A) Quality bonus.--For years beginning with 2014, the 
     Secretary shall, in addition to any other payment provided 
     under this part, make monthly payments, with respect to 
     coverage of an individual under this part, to an MA plan that 
     achieves at least a 3 star rating (or comparable rating) on a 
     rating system described in subparagraph (C) in an amount 
     equal to--
       ``(i) in the case of a plan that achieves a 3 star rating 
     (or comparable rating) on such system 2 percent of the 
     national monthly per capita cost for expenditures for 
     individuals enrolled under the original medicare fee-for-
     service program for the year; and
       ``(ii) in the case of a plan that achieves a 4 or 5 star 
     rating (or comparable rating on such system, 4 percent of 
     such national monthly per capita cost for the year.
       ``(B) Improved quality bonus.--For years beginning with 
     2014, in the case of an MA plan that does not receive a 
     quality bonus under subparagraph (A) and is an improved 
     quality MA plan with respect to the year (as identified by 
     the Secretary), the Secretary shall, in addition to any other 
     payment provided under this part, make monthly payments, with 
     respect to coverage of an individual under this part, to the 
     MA plan in an amount equal to 1 percent of such national 
     monthly per capita cost for the year.
       ``(C) Use of rating system.--For purposes of subparagraph 
     (A), a rating system described in this paragraph is--
       ``(i) a rating system that uses up to 5 stars to rate 
     clinical quality and enrollee satisfaction and performance at 
     the Medicare Advantage contract or MA plan level; or
       ``(ii) such other system established by the Secretary that 
     provides for the determination of a comparable quality 
     performance rating to the rating system described in clause 
     (i).
       ``(D) Data used in determining score.--
       ``(i) In general.--The rating of an MA plan under the 
     rating system described in subparagraph (C) with respect to a 
     year shall be based on based on the most recent data 
     available.
       ``(ii) Plans that fail to report data.--An MA plan which 
     does not report data that enables the Secretary to rate the 
     plan for purposes of subparagraph (A) or identify the plan 
     for purposes of subparagraph (B) shall be counted, for 
     purposes of such rating or identification, as having the 
     lowest plan performance rating and the lowest percentage 
     improvement, respectively.
       ``(3) Quality bonus for new and low enrollment ma plans.--
       ``(A) New ma plans.--For years beginning with 2014, in the 
     case of an MA plan that first submits a bid under section 
     1854(a)(1)(A)

[[Page 28475]]

     for 2012 or a subsequent year, only receives enrollments made 
     during the coverage election periods described in section 
     1851(e), and is not able to receive a bonus under 
     subparagraph (A) or (B) of paragraph (2) for the year, the 
     Secretary shall, in addition to any other payment provided 
     under this part, make monthly payments, with respect to 
     coverage of an individual under this part, to the MA plan in 
     an amount equal to 2 percent of national monthly per capita 
     cost for expenditures for individuals enrolled under the 
     original medicare fee-for-service program for the year. In 
     its fourth year of operation, the MA plan shall be paid in 
     the same manner as other MA plans with comparable enrollment.
       ``(B) Low enrollment plans.--For years beginning with 2014, 
     in the case of an MA plan that has low enrollment (as defined 
     by the Secretary) and would not otherwise be able to receive 
     a bonus under subparagraph (A) or (B) of paragraph (2) or 
     subparagraph (A) of this paragraph for the year (referred to 
     in this subparagraph as a `low enrollment plan'), the 
     Secretary shall use a regional or local mean of the rating of 
     all MA plans in the region or local area, as determined 
     appropriate by the Secretary, on measures used to determine 
     whether MA plans are eligible for a quality or an improved 
     quality bonus, as applicable, to determine whether the low 
     enrollment plan is eligible for a bonus under such a 
     subparagraph.
       ``(4) Risk adjustment.--The Secretary shall risk adjust a 
     performance bonus under this subsection in the same manner as 
     the Secretary risk adjusts beneficiary rebates described in 
     section 1854(b)(1)(C).
       ``(5) Notification.--The Secretary, in the annual 
     announcement required under subsection (b)(1)(B) for 2014 and 
     each succeeding year, shall notify the Medicare Advantage 
     organization of any performance bonus (including a care 
     coordination and management performance bonus under paragraph 
     (1), a quality performance bonus under paragraph (2), and a 
     quality bonus for new and low enrollment plans under 
     paragraph (3)) that the organization will receive under this 
     subsection with respect to the year. The Secretary shall 
     provide for the publication of the information described in 
     the previous sentence on the Internet website of the Centers 
     for Medicare & Medicaid Services.''
       (B) Conforming amendment.--Section 1853(a)(1)(B) of the 
     Social Security Act (42 U.S.C. 1395w-23(a)(1)(B)) is 
     amended--
       (i) in clause (i), by inserting ``and any performance bonus 
     under subsection (n)'' before the period at the end; and
       (ii) in clause (ii), by striking ``(G)'' and inserting 
     ``(G), plus the amount (if any) of any performance bonus 
     under subsection (n)''.
       (2) Application of performance bonuses to ma regional 
     plans.--Section 1858 of the Social Security Act (42 U.S.C. 
     1395w-27a) is amended--
       (A) in subsection (f)(1), by striking ``subsection (e)'' 
     and inserting ``subsections (e) and (i)''; and
       (B) by adding at the end the following new subsection:
       ``(i) Application of Performance Bonuses to MA Regional 
     Plans.--For years beginning with 2014, the Secretary shall 
     apply the performance bonuses under section 1853(n) (relating 
     to bonuses for care coordination and management, quality 
     performance, and new and low enrollment MA plans) to MA 
     regional plans in a similar manner as such performance 
     bonuses apply to MA plans under such subsection.''.
       (g) Grandfathering Supplemental Benefits for Current 
     Enrollees After Implementation of Competitive Bidding.--
     Section 1853 of the Social Security Act (42 U.S.C. 1395w-23), 
     as amended by subsection (f), is amended by adding at the end 
     the following new subsection:
       ``(o) Grandfathering Supplemental Benefits for Current 
     Enrolles After Implementation of Competitive Bidding.--
       ``(1) Identification of areas.--The Secretary shall 
     identify MA local areas in which, with respect to 2009, 
     average bids submitted by an MA organization under section 
     1854(a) for MA local plans in the area are not greater than 
     75 percent of the adjusted average per capita cost for the 
     year involved, determined under section 1876(a)(4), for the 
     area for individuals who are not enrolled in an MA plan under 
     this part for the year, but adjusted to exclude costs 
     attributable to payments under section 1848(o), 1886(n), and 
     1886(h).
       ``(2) Election to provide rebates to grandfathered 
     enrollees.--
       ``(A) In general.--For years beginning with 2012, each 
     Medicare Advantage organization offering an MA local plan in 
     an area identified by the Secretary under paragraph (1) may 
     elect to provide rebates to grandfathered enrollees under 
     section 1854(b)(1)(C). In the case where an MA organization 
     makes such an election, the monthly per capita dollar amount 
     of such rebates shall not exceed the applicable amount for 
     the year (as defined in subparagraph (B)).
       ``(B) Applicable amount.--For purposes of this subsection, 
     the term `applicable amount' means--
       ``(i) for 2012, the monthly per capita dollar amount of 
     such rebates provided to enrollees under the MA local plan 
     with respect to 2011; and
       ``(ii) for a subsequent year, 95 percent of the amount 
     determined under this subparagraph for the preceding year.
       ``(3) Special rules for plans in identified areas.--
     Notwithstanding any other provision of this part, the 
     following shall apply with respect to each Medicare Advantage 
     organization offering an MA local plan in an area identified 
     by the Secretary under paragraph (1) that makes an election 
     described in paragraph (2):
       ``(A) Payments.--The amount of the monthly payment under 
     this section to the Medicare Advantage organization, with 
     respect to coverage of a grandfathered enrollee under this 
     part in the area for a month, shall be equal to--
       ``(i) for 2012 and 2013, the sum of--

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

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

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

       ``(B) Requirement to submit bids under competitive 
     bidding.--The Medicare Advantage organization shall submit a 
     single bid amount under section 1854(a) for the MA local 
     plan. The Medicare Advantage organization shall remove from 
     such bid amount any effects of induced demand for care that 
     may result from the higher rebates available to grandfathered 
     enrollees under this subsection.
       ``(C) Nonapplication of bonus payments and any other 
     rebates.--The Medicare Advantage organization offering the MA 
     local plan shall not be eligible for any bonus payment under 
     subsection (n) or any rebate under this part (other than as 
     provided under this subsection) with respect to grandfathered 
     enrollees.
       ``(D) Nonapplication of uniform bid and premium amounts to 
     grandfathered enrollees.--Section 1854(c) shall not apply 
     with respect to the MA local plan.
       ``(E) Nonapplication of limitation on application of plan 
     rebates toward payment of part b premium.--Notwithstanding 
     clause (iii) of section 1854(b)(1)(C), in the case of a 
     grandfathered enrollee, a rebate under such section may be 
     used for the purpose described in clause (ii)(III) of such 
     section.
       ``(F) Risk adjustment.--The Secretary shall risk adjust 
     rebates to grandfathered enrollees under this subsection in 
     the same manner as the Secretary risk adjusts beneficiary 
     rebates described in section 1854(b)(1)(C).
       ``(4) Definition of grandfathered enrollee.--In this 
     subsection, the term `grandfathered enrollee' means an 
     individual who is enrolled (effective as of the date of 
     enactment of this subsection) in an MA local plan in an area 
     that is identified by the Secretary under paragraph (1).''.
       (h) Transitional Extra Benefits.--Section 1853 of the 
     Social Security Act (42 U.S.C. 1395w-23), as amended by 
     subsections (f) and (g), is amended by adding at the end the 
     following new subsection:
       ``(p) Transitional Extra Benefits.--
       ``(1) In general.--For years beginning with 2012, the 
     Secretary shall provide transitional rebates under section 
     1854(b)(1)(C) for the provision of extra benefits (as 
     specified by the Secretary) to enrollees described in 
     paragraph (2).
       ``(2) Enrollees described.--An enrollee described in this 
     paragraph is an individual who--
       ``(A) enrolls in an MA local plan in an applicable area; 
     and
       ``(B) experiences a significant reduction in extra benefits 
     described in clause (ii) of section 1854(b)(1)(C) as a result 
     of competitive bidding under this part (as determined by the 
     Secretary).
       ``(3) Applicable areas.--In this subsection, the term 
     `applicable area' means the following:
       ``(A) The 2 largest metropolitan statistical areas, if the 
     Secretary determines that the total amount of such extra 
     benefits for each enrollee for the month in those areas is 
     greater than $100.
       ``(B) A county where--
       ``(i) the MA area-specific non-drug monthly benchmark 
     amount for a month in 2011 is equal to the legacy urban floor 
     amount (as described in subsection (c)(1)(B)(iii)), as 
     determined by the Secretary for the area for 2011;
       ``(ii) the percentage of Medicare Advantage eligible 
     beneficiaries in the county who are enrolled in an MA plan 
     for 2009 is greater than 30 percent (as determined by the 
     Secretary); and
       ``(iii) average bids submitted by an MA organization under 
     section 1854(a) for MA local plans in the county for 2011 are 
     not greater than the adjusted average per capita cost for the 
     year involved, determined under section 1876(a)(4), for the 
     county for individuals who are not enrolled in an MA plan 
     under this

[[Page 28476]]

     part for the year, but adjusted to exclude costs attributable 
     to payments under section 1848(o), 1886(n), and 1886(h).
       ``(C) If the Secretary determines appropriate, a county 
     contiguous to an area or county described in subparagraph (A) 
     or (B), respectively.
       ``(4) Review of plan bids.--In the case of a bid submitted 
     by an MA organization under section 1854(a) for an MA local 
     plan in an applicable area, the Secretary shall review such 
     bid in order to ensure that extra benefits (as specified by 
     the Secretary) are provided to enrollees described in 
     paragraph (2).
       ``(5) Funding.--The Secretary shall provide for the 
     transfer from the Federal Hospital Insurance Trust Fund under 
     section 1817 and the Federal Supplementary Medical Insurance 
     Trust Fund established under section 1841, in such proportion 
     as the Secretary determines appropriate, of an amount not to 
     exceed $5,000,000,000 for the period of fiscal years 2012 
     through 2019 for the purpose of providing transitional 
     rebates under section 1854(b)(1)(C) for the provision of 
     extra benefits under this subsection.''.
       (i) Nonapplication of Competitive Bidding and Related 
     Provisions and Clarification of MA Payment Area for PACE 
     Programs.--
       (1) Nonapplication of competitive bidding and related 
     provisions for pace programs.--Section 1894 of the Social 
     Security Act (42 U.S.C. 1395eee) is amended--
       (A) by redesignating subsections (h) and (i) as subsections 
     (i) and (j), respectively;
       (B) by inserting after subsection (g) the following new 
     subsection:
       ``(h) Nonapplication of Competitive Bidding and Related 
     Provisions Under Part C.--With respect to a PACE program 
     under this section, the following provisions (and regulations 
     relating to such provisions) shall not apply:
       ``(1) Section 1853(j)(1)(A)(i), relating to MA area-
     specific non-drug monthly benchmark amount being based on 
     competitive bids.
       ``(2) Section 1853(d)(5), relating to the establishment of 
     MA local plan service areas.
       ``(3) Section 1853(n), relating to the payment of 
     performance bonuses.
       ``(4) Section 1853(o), relating to grandfathering 
     supplemental benefits for current enrollees after 
     implementation of competitive bidding.
       ``(5) Section 1853(p), relating to transitional extra 
     benefits.''.
       (2) Special rule for ma payment area for pace programs.--
     Section 1853(d) of the Social Security Act (42 U.S.C. 1395w-
     23(d)), as amended by subsection (e), is amended by adding at 
     the end the following new paragraph:
       ``(6) Special rule for ma payment area for pace programs.--
     For years beginning with 2012, in the case of a PACE program 
     under section 1894, the MA payment area shall be the MA local 
     area (as defined in paragraph (2)).''.

     SEC. 3202. BENEFIT PROTECTION AND SIMPLIFICATION.

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

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

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

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

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

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

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

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

     SEC. 3204. SIMPLIFICATION OF ANNUAL BENEFICIARY ELECTION 
                   PERIODS.

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

[[Page 28477]]



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

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

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

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

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

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

     SEC. 3206. EXTENSION OF REASONABLE COST CONTRACTS.

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

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

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

     SEC. 3208. MAKING SENIOR HOUSING FACILITY DEMONSTRATION 
                   PERMANENT.

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

     SEC. 3209. AUTHORITY TO DENY PLAN BIDS.

       (a) In General.--Section 1854(a)(5) of the Social Security 
     Act (42 U.S.C. 1395w-24(a)(5)) is amended by adding at the 
     end the following new subparagraph:
       ``(C) Rejection of bids.--
       ``(i) In general.--Nothing in this section shall be 
     construed as requiring the Secretary to accept any or every 
     bid submitted by an MA organization under this subsection.
       ``(ii) Authority to deny bids that propose significant 
     increases in cost sharing or decreases in benefits.--The 
     Secretary may deny a bid submitted by an MA organization for 
     an MA plan if it proposes significant increases in cost 
     sharing or decreases in benefits offered under the plan.''.
       (b) Application Under Part D.--Section 1860D-11(d) of such 
     Act (42 U.S.C. 1395w-111(d)) is amended by adding at the end 
     the following new paragraph:

[[Page 28478]]

       ``(3) Rejection of bids.--Paragraph (5)(C) of section 
     1854(a) shall apply with respect to bids submitted by a PDP 
     sponsor under subsection (b) in the same manner as such 
     paragraph applies to bids submitted by an MA organization 
     under such section 1854(a).''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to bids submitted for contract years beginning on 
     or after January 1, 2011.

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

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

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

     SEC. 3301. MEDICARE COVERAGE GAP DISCOUNT PROGRAM.

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


           ``condition for coverage of drugs under this part

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


                ``medicare coverage gap discount program

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

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

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

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

       ``(v) the establishment of procedures to ensure that the 
     discounted price for an applicable drug under this section is 
     applied before any coverage or financial assistance under 
     other health benefit plans or programs that

[[Page 28479]]

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

[[Page 28480]]

     (A), incurred costs shall include the negotiated price (as 
     defined in paragraph (6) of section 1860D-14A(g)) of an 
     applicable drug (as defined in paragraph (2) of such section) 
     of a manufacturer that is furnished to an applicable 
     beneficiary (as defined in paragraph (1) of such section) 
     under the Medicare coverage gap discount program under 
     section 1860D-14A, regardless of whether part of such costs 
     were paid by a manufacturer under such program.''.
       (2) Effective date.--The amendments made by this subsection 
     shall apply to costs incurred on or after July 1, 2010.
       (d) Conforming Amendment Permitting Prescription Drug 
     Discounts.--
       (1) In general.--Section 1128B(b)(3) of the Social Security 
     Act (42 U.S.C. 1320a-7b(b)(3)) is amended--
       (A) by striking ``and'' at the end of subparagraph (G);
       (B) in the subparagraph (H) added by section 237(d) of the 
     Medicare Prescription Drug, Improvement, and Modernization 
     Act of 2003 (Public Law 108-173; 117 Stat. 2213)--
       (i) by moving such subparagraph 2 ems to the left; and
       (ii) by striking the period at the end and inserting a 
     semicolon;
       (C) in the subparagraph (H) added by section 431(a) of such 
     Act (117 Stat. 2287)--
       (i) by redesignating such subparagraph as subparagraph (I);
       (ii) by moving such subparagraph 2 ems to the left; and
       (iii) by striking the period at the end and inserting ``; 
     and''; and
       (D) by adding at the end the following new subparagraph:
       ``(J) a discount in the price of an applicable drug (as 
     defined in paragraph (2) of section 1860D-14A(g)) of a 
     manufacturer that is furnished to an applicable beneficiary 
     (as defined in paragraph (1) of such section) under the 
     Medicare coverage gap discount program under section 1860D-
     14A.''.
       (2) Conforming amendment to definition of best price under 
     medicaid.--Section 1927(c)(1)(C)(i)(VI) of the Social 
     Security Act (42 U.S.C. 1396r-8(c)(1)(C)(i)(VI)) is amended 
     by inserting ``, or any discounts provided by manufacturers 
     under the Medicare coverage gap discount program under 
     section 1860D-14A'' before the period at the end.
       (3) Effective date.--The amendments made by this subsection 
     shall apply to drugs dispensed on or after July 1, 2010.

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

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

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

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

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

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

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

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

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

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

[[Page 28481]]



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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

[[Page 28482]]

       ``(IV) return information with respect to a taxpayer 
     described in subparagraph (A) to officers and employees of 
     the Department of Justice for use in judicial proceedings to 
     the extent necessary to carry out the purposes described in 
     clause (i).''.

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

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

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

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

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

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

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

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

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

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

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

       (ii) An assessment of--

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

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

[[Page 28483]]



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

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

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

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

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

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

              Subtitle E--Ensuring Medicare Sustainability

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

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

       ``(I) the total percentage of the non-elderly insured 
     population for the preceding rate year (based on the most 
     recent estimates available from the Director of the 
     Congressional Budget Office before a vote in either

[[Page 28484]]

     House on the Patient Protection and Affordable Care Act that, 
     if determined in the affirmative, would clear such Act for 
     enrollment); over
       ``(II) the total percentage of the non-elderly insured 
     population for such preceding rate year (as estimated by the 
     Secretary); exceeds

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

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

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

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

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

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

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

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

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

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

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

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

       ``(ii) 5 percentage points.''.
       (g) Hospice Care.--Section 1814(i)(1)(C) of the Social 
     Security Act (42 U.S.C. 1395f(i)(1)(C)), as amended by 
     section 3132, is amended by adding at the end the following 
     new clauses:
       ``(iv) After determining the market basket percentage 
     increase under clause (ii)(VII) or (iii), as applicable, with 
     respect to fiscal year 2013 and each subsequent fiscal year, 
     the Secretary shall reduce such percentage--
       ``(I) for 2013 and each subsequent fiscal year, by the 
     productivity adjustment described in section 
     1886(b)(3)(B)(xi)(II); and
       ``(II) subject to clause (v), for each of fiscal years 2013 
     through 2019, by 0.5 percentage point.

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

[[Page 28485]]

       ``(ii) for each of 2010 through 2019, by the adjustment 
     described in subparagraph (G).
     The application of this subparagraph may result in the 
     increase factor under subparagraph (C)(iv) being less than 
     0.0 for a year, and may result in payment rates under the 
     payment system under this subsection for a year being less 
     than such payment rates for the preceding year.
       ``(G) Other adjustment.--
       ``(i) Adjustment.--For purposes of subparagraph (F)(ii), 
     the adjustment described in this subparagraph is--

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

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

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

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

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

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

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

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

     ``The application of subparagraph (L)(ii) may result in the 
     covered item update under this paragraph being less than 0.0 
     for a year, and may result in payment rates under this 
     subsection for a year being less than such payment rates for 
     the preceding year.''.
       (n) Prosthetic Devices, Orthotics, and Prosthetics.--
     Section 1834(h)(4) of the Social Security Act (42 U.S.C. 
     1395m(h)(4)) is amended--
       (1) in subparagraph (A)--
       (A) in clause (ix), by striking ``and'' at the end;
       (B) in clause (x)--
       (i) by striking ``a subsequent year'' and inserting ``for 
     each of 2007 through 2010''; and
       (ii) by inserting ``and'' after the semicolon at the end;
       (C) by adding at the end the following new clause:
       ``(xi) for 2011 and each subsequent year--

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

       (D) by adding at the end the following flush sentence:

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

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

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

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

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

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

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

     SEC. 3403. INDEPENDENT MEDICARE ADVISORY BOARD.

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


                 ``independent medicare advisory board

       ``Sec. 1899A.  (a) Establishment.--There is established an 
     independent board to be known as the `Independent Medicare 
     Advisory Board'.

[[Page 28486]]

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

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

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

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

       ``(iii) Start-up period.--The Board may not submit a 
     proposal under clause (i) prior to January 15, 2014.
       ``(B) Required information.--Each proposal submitted by the 
     Board under subparagraph (A)(i) shall include--
       ``(i) the recommendations described in paragraph (2)(A)(i);
       ``(ii) an explanation of each recommendation contained in 
     the proposal and the reasons for including such 
     recommendation;
       ``(iii) an actuarial opinion by the Chief Actuary of the 
     Centers for Medicare & Medicaid Services certifying that the 
     proposal meets the requirements of subparagraphs (A)(i) and 
     (C) of paragraph (2);
       ``(iv) a legislative proposal that implements the 
     recommendations; and
       ``(v) other information determined appropriate by the 
     Board.

[[Page 28487]]

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

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

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

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

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

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

       ``(ii) the projected excess for the implementation year 
     (expressed as a percent) determined under subparagraph (A).
       ``(8) Per capita rate of growth in national health 
     expenditures.--In each determination year (beginning in 
     2018), the Chief Actuary of the Centers for Medicare & 
     Medicaid Services shall project the per capita rate of growth 
     in national health expenditures for the implementation year. 
     Such rate of growth for an implementation year shall be 
     calculated as the projected 5-year average (ending with such 
     year) percentage increase in national health care 
     expenditures.
       ``(d) Congressional Consideration.--
       ``(1) Introduction.--
       ``(A) In general.--On the day on which a proposal is 
     submitted by the President to the House of Representatives 
     and the Senate under subsection (c)(4), the legislative 
     proposal (described in subsection (c)(3)(B)(iv)) contained in 
     the proposal shall be introduced (by request) in the Senate 
     by the majority leader of the Senate or by Members of the 
     Senate designated by the majority leader of the Senate and 
     shall be introduced (by request) in the House by the majority 
     leader of the House or by Members of the House designated by 
     the majority leader of the House.
       ``(B) Not in session.--If either House is not in session on 
     the day on which such legislative proposal is submitted, the 
     legislative proposal shall be introduced in that House, as 
     provided in subparagraph (A), on the first day thereafter on 
     which that House is in session.
       ``(C) Any member.--If the legislative proposal is not 
     introduced in either House within 5 days on which that House 
     is in session after the day on which the legislative proposal 
     is submitted, then any Member of that House may introduce the 
     legislative proposal.
       ``(D) Referral.--The legislation introduced under this 
     paragraph shall be referred by the Presiding Officers of the 
     respective Houses to the Committee on Finance in the Senate 
     and to the Committee on Energy and Commerce and the Committee 
     on Ways and Means in the House of Representatives.
       ``(2) Committee consideration of proposal.--
       ``(A) Reporting bill.--Not later than April 1 of any 
     proposal year in which a proposal is submitted by the 
     President to Congress under this section, the Committee on 
     Ways and Means and the Committee on Energy and Commerce of 
     the House of Representatives and the Committee on Finance of 
     the Senate may report the bill referred to the Committee 
     under paragraph (1)(D) with committee amendments related to 
     the Medicare program.
       ``(B) Calculations.--In determining whether a committee 
     amendment meets the requirement of subparagraph (A), the 
     reductions in Medicare program spending during the 3-month 
     period immediately preceding the implementation year shall be 
     counted to the extent that such reductions are a result of 
     the implementation provisions in the committee amendment for 
     a change in the payment rate for an item or service that was 
     effective during such period pursuant to such amendment.
       ``(C) Committee jurisdiction.--Notwithstanding rule XV of 
     the Standing Rules of the Senate, a committee amendment 
     described in subparagraph (A) may include matter not within 
     the jurisdiction of the Committee on Finance if that matter 
     is relevant to a proposal contained in the bill submitted 
     under subsection (c)(3).
       ``(D) Discharge.--If, with respect to the House involved, 
     the committee has not reported the bill by the date required 
     by subparagraph (A), the committee shall be discharged from 
     further consideration of the proposal.
       ``(3) Limitation on changes to the board recommendations.--
       ``(A) In general.--It shall not be in order in the Senate 
     or the House of Representatives to consider any bill, 
     resolution, or amendment, pursuant to this subsection or 
     conference report thereon, that fails to satisfy the 
     requirements of subparagraphs (A)(i) and (C) of subsection 
     (c)(2).
       ``(B) Limitation on changes to the board recommendations in 
     other legislation.--It shall not be in order in the Senate or 
     the House of Representatives to consider any bill, 
     resolution, amendment, or conference report (other than 
     pursuant to this section) that would repeal or otherwise 
     change the recommendations of the Board if that change would 
     fail to satisfy the requirements of subparagraphs (A)(i) and 
     (C) of subsection (c)(2).
       ``(C) Limitation on changes to this subsection.--It shall 
     not be in order in the Senate or the House of Representatives 
     to consider any bill, resolution, amendment, or conference 
     report that would repeal or otherwise change this subsection.
       ``(D) Waiver.--This paragraph may be waived or suspended in 
     the Senate only by the affirmative vote of three-fifths of 
     the Members, duly chosen and sworn.
       ``(E) Appeals.--An affirmative vote of three-fifths of the 
     Members of the Senate, duly chosen and sworn, shall be 
     required in the Senate to sustain an appeal of the ruling of 
     the Chair on a point of order raised under this paragraph.
       ``(4) Expedited procedure.--
       ``(A) Consideration.--A motion to proceed to the 
     consideration of the bill in the Senate is not debatable.
       ``(B) Amendment.--
       ``(i) Time limitation.--Debate in the Senate on any 
     amendment to a bill under this section shall be limited to 1 
     hour, to be equally divided between, and controlled by, the 
     mover and the manager of the bill, and debate on any 
     amendment to an amendment, debatable motion, or appeal shall 
     be limited to 30 minutes, to be equally divided between, and 
     controlled by, the mover and the manager of the bill, except 
     that in the event the manager of the bill is in favor of any 
     such amendment, motion, or appeal, the time in opposition 
     thereto shall be controlled by the minority leader or such 
     leader's designee.

[[Page 28488]]

       ``(ii) Germane.--No amendment that is not germane to the 
     provisions of such bill shall be received.
       ``(iii) Additional time.--The leaders, or either of them, 
     may, from the time under their control on the passage of the 
     bill, allot additional time to any Senator during the 
     consideration of any amendment, debatable motion, or appeal.
       ``(iv) Amendment not in order.--It shall not be in order to 
     consider an amendment that would cause the bill to result in 
     a net reduction in total Medicare program spending in the 
     implementation year that is less than the applicable savings 
     target established under subsection (c)(7)(B) for such 
     implementation year.
       ``(v) Waiver and appeals.--This paragraph may be waived or 
     suspended in the Senate only by the affirmative vote of 
     three-fifths of the Members, duly chosen and sworn. An 
     affirmative vote of three-fifths of the Members of the 
     Senate, duly chosen and sworn, shall be required in the 
     Senate to sustain an appeal of the ruling of the Chair on a 
     point of order raised under this section.
       ``(C) Consideration by the other house.--
       ``(i) In general.--The expedited procedures provided in 
     this subsection for the consideration of a bill introduced 
     pursuant to paragraph (1) shall not apply to such a bill that 
     is received by one House from the other House if such a bill 
     was not introduced in the receiving House.
       ``(ii) Before passage.--If a bill that is introduced 
     pursuant to paragraph (1) is received by one House from the 
     other House, after introduction but before disposition of 
     such a bill in the receiving House, then the following shall 
     apply:

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

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

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

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

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

       ``(F) Veto.--If the President vetoes the bill debate on a 
     veto message in the Senate under this subsection shall be 1 
     hour equally divided between the majority and minority 
     leaders or their designees.
       ``(5) Rules of the senate and house of representatives.--
     This subsection and subsection (f)(2) are enacted by 
     Congress--
       ``(A) as an exercise of the rulemaking power of the Senate 
     and the House of Representatives, respectively, and is deemed 
     to be part of the rules of each House, respectively, but 
     applicable only with respect to the procedure to be followed 
     in that House in the case of bill under this section, and it 
     supersedes other rules only to the extent that it is 
     inconsistent with such rules; and
       ``(B) with full recognition of the constitutional right of 
     either House to change the rules (so far as they relate to 
     the procedure of that House) at any time, in the same manner, 
     and to the same extent as in the case of any other rule of 
     that House.
       ``(e) Implementation of Proposal.--
       ``(1) In general.--Notwithstanding any other provision of 
     law, the Secretary shall, except as provided in paragraph 
     (3), implement the recommendations contained in a proposal 
     submitted by the President to Congress pursuant to this 
     section on August 15 of the year in which the proposal is so 
     submitted.
       ``(2) Application.--
       ``(A) In general.--A recommendation described in paragraph 
     (1) shall apply as follows:
       ``(i) In the case of a recommendation that is a change in 
     the payment rate for an item or service under Medicare in 
     which payment rates change on a fiscal year basis (or a cost 
     reporting period basis that relates to a fiscal year), on a 
     calendar year basis (or a cost reporting period basis that 
     relates to a calendar year), or on a rate year basis (or a 
     cost reporting period basis that relates to a rate year), 
     such recommendation shall apply to items and services 
     furnished on the first day of the first fiscal year, calendar 
     year, or rate year (as the case may be) that begins after 
     such August 15.
       ``(ii) In the case of a recommendation relating to payments 
     to plans under parts C and D, such recommendation shall apply 
     to plan years beginning on the first day of the first 
     calendar year that begins after such August 15.
       ``(iii) In the case of any other recommendation, such 
     recommendation shall be addressed in the regular regulatory 
     process timeframe and shall apply as soon as practicable.
       ``(B) Interim final rulemaking.--The Secretary may use 
     interim final rulemaking to implement any recommendation 
     described in paragraph (1).
       ``(3) Exception.--The Secretary shall not be required to 
     implement the recommendations contained in a proposal 
     submitted in a proposal year by the President to Congress 
     pursuant to this section if--
       ``(A) prior to August 15 of the proposal year, Federal 
     legislation is enacted that includes the following provision: 
     `This Act supercedes the recommendations of the Board 
     contained in the proposal submitted, in the year which 
     includes the date of enactment of this Act, to Congress under 
     section 1899A of the Social Security Act.'; and
       ``(B) in the case of implementation year 2020 and 
     subsequent implementation years, a joint resolution described 
     in subsection (f)(1) is enacted not later than August 15, 
     2017.
       ``(4) No affect on authority to implement certain 
     provisions.--Nothing in paragraph (3) shall be construed to 
     affect the authority of the Secretary to implement any 
     recommendation contained in a proposal or advisory report 
     under this section to the extent that the Secretary otherwise 
     has the authority to implement such recommendation 
     administratively.
       ``(5) Limitation on review.--There shall be no 
     administrative or judicial review under section 1869, section 
     1878, or otherwise of the implementation by the Secretary 
     under this subsection of the recommendations contained in a 
     proposal.
       ``(f) Joint Resolution Required To Discontinue the Board.--
       ``(1) In general.--For purposes of subsection (e)(3)(B), a 
     joint resolution described in this paragraph means only a 
     joint resolution--
       ``(A) that is introduced in 2017 by not later than February 
     1 of such year;
       ``(B) which does not have a preamble;
       ``(C) the title of which is as follows: `Joint resolution 
     approving the discontinuation of the process for 
     consideration and automatic implementation of the annual 
     proposal of

[[Page 28489]]

     the Independent Medicare Advisory Board under section 1899A 
     of the Social Security Act'; and
       ``(D) the matter after the resolving clause of which is as 
     follows: `That Congress approves the discontinuation of the 
     process for consideration and automatic implementation of the 
     annual proposal of the Independent Medicare Advisory Board 
     under section 1899A of the Social Security Act.'.
       ``(2) Procedure.--
       ``(A) Referral.--A joint resolution described in paragraph 
     (1) shall be referred to the Committee on Ways and Means and 
     the Committee on Energy and Commerce of the House of 
     Representatives and the Committee on Finance of the Senate.
       ``(B) Discharge.--In the Senate, if the committee to which 
     is referred a joint resolution described in paragraph (1) has 
     not reported such joint resolution (or an identical joint 
     resolution) at the end of 20 days after the joint resolution 
     described in paragraph (1) is introduced, such committee may 
     be discharged from further consideration of such joint 
     resolution upon a petition supported in writing by 30 Members 
     of the Senate, and such joint resolution shall be placed on 
     the calendar.
       ``(C) Consideration.--
       ``(i) In general.--In the Senate, when the committee to 
     which a joint resolution is referred has reported, or when a 
     committee is discharged (under subparagraph (C)) from further 
     consideration of a joint resolution described in paragraph 
     (1), it is at any time thereafter in order (even though a 
     previous motion to the same effect has been disagreed to) for 
     a motion to proceed to the consideration of the joint 
     resolution to be made, and all points of order against the 
     joint resolution (and against consideration of the joint 
     resolution) are waived, except for points of order under the 
     Congressional Budget act of 1974 or under budget resolutions 
     pursuant to that Act. The motion is not debatable. A motion 
     to reconsider the vote by which the motion is agreed to or 
     disagreed to shall not be in order. If a motion to proceed to 
     the consideration of the joint resolution is agreed to, the 
     joint resolution shall remain the unfinished business of the 
     Senate until disposed of.
       ``(ii) Debate limitation.--In the Senate, consideration of 
     the joint resolution, and on all debatable motions and 
     appeals in connection therewith, shall be limited to not more 
     than 10 hours, which shall be divided equally between the 
     majority leader and the minority leader, or their designees. 
     A motion further to limit debate is in order and not 
     debatable. An amendment to, or a motion to postpone, or a 
     motion to proceed to the consideration of other business, or 
     a motion to recommit the joint resolution is not in order.
       ``(iii) Passage.--In the Senate, immediately following the 
     conclusion of the debate on a joint resolution described in 
     paragraph (1), and a single quorum call at the conclusion of 
     the debate if requested in accordance with the rules of the 
     Senate, the vote on passage of the joint resolution shall 
     occur.
       ``(iv) Appeals.--Appeals from the decisions of the Chair 
     relating to the application of the rules of the Senate to the 
     procedure relating to a joint resolution described in 
     paragraph (1) shall be decided without debate.
       ``(D) Other house acts first.--If, before the passage by 1 
     House of a joint resolution of that House described in 
     paragraph (1), that House receives from the other House a 
     joint resolution described in paragraph (1), then the 
     following procedures shall apply:
       ``(i) The joint resolution of the other House shall not be 
     referred to a committee.
       ``(ii) With respect to a joint resolution described in 
     paragraph (1) of the House receiving the joint resolution--

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

       ``(E) Excluded days.--For purposes of determining the 
     period specified in subparagraph (B), there shall be excluded 
     any days either House of Congress is adjourned for more than 
     3 days during a session of Congress.
       ``(F) Majority required for adoption.--A joint resolution 
     considered under this subsection shall require an affirmative 
     vote of three-fifths of the Members, duly chosen and sworn, 
     for adoption.
       ``(3) Termination.--If a joint resolution described in 
     paragraph (1) is enacted not later than August 15, 2017--
       ``(A) the Chief Actuary of the Medicare & Medicaid Services 
     shall not--
       ``(i) make any determinations under subsection (c)(6) after 
     May 1, 2017; or
       ``(ii) provide any opinion pursuant to subsection 
     (c)(3)(B)(iii) after January 16, 2018;
       ``(B) the Board shall not submit any proposals or advisory 
     reports to Congress under this section after January 16, 
     2018; and
       ``(C) the Board and the consumer advisory council under 
     subsection (k) shall terminate on August 16, 2018.
       ``(g) Board Membership; Terms of Office; Chairperson; 
     Removal.--
       ``(1) Membership.--
       ``(A) In general.--The Board shall be composed of--
       ``(i) 15 members appointed by the President, by and with 
     the advice and consent of the Senate; and
       ``(ii) the Secretary, the Administrator of the Center for 
     Medicare & Medicaid Services, and the Administrator of the 
     Health Resources and Services Administration, all of whom 
     shall serve ex officio as nonvoting members of the Board.
       ``(B) Qualifications.--
       ``(i) In general.--The appointed membership of the Board 
     shall include individuals with national recognition for their 
     expertise in health finance and economics, actuarial science, 
     health facility management, health plans and integrated 
     delivery systems, reimbursement of health facilities, 
     allopathic and osteopathic physicians, and other providers of 
     health services, and other related fields, who provide a mix 
     of different professionals, broad geographic representation, 
     and a balance between urban and rural representatives.
       ``(ii) Inclusion.--The appointed membership of the Board 
     shall include (but not be limited to) physicians and other 
     health professionals, experts in the area of pharmaco-
     economics or prescription drug benefit programs, employers, 
     third-party payers, individuals skilled in the conduct and 
     interpretation of biomedical, health services, and health 
     economics research and expertise in outcomes and 
     effectiveness research and technology assessment. Such 
     membership shall also include representatives of consumers 
     and the elderly.
       ``(iii) Majority nonproviders.--Individuals who are 
     directly involved in the provision or management of the 
     delivery of items and services covered under this title shall 
     not constitute a majority of the appointed membership of the 
     Board.
       ``(C) Ethical disclosure.--The President shall establish a 
     system for public disclosure by appointed members of the 
     Board of financial and other potential conflicts of interest 
     relating to such members. Appointed members of the Board 
     shall be treated as officers in the executive branch for 
     purposes of applying title I of the Ethics in Government Act 
     of 1978 (Public Law 95-521).
       ``(D) Conflicts of interest.--No individual may serve as an 
     appointed member if that individual engages in any other 
     business, vocation, or employment.
       ``(E) Consultation with congress.--In selecting individuals 
     for nominations for appointments to the Board, the President 
     shall consult with--
       ``(i) the majority leader of the Senate concerning the 
     appointment of 3 members;
       ``(ii) the Speaker of the House of Representatives 
     concerning the appointment of 3 members;
       ``(iii) the minority leader of the Senate concerning the 
     appointment of 3 members; and
       ``(iv) the minority leader of the House of Representatives 
     concerning the appointment of 3 members.
       ``(2) Term of office.--Each appointed member shall hold 
     office for a term of 6 years except that--
       ``(A) a member may not serve more than 2 full consecutive 
     terms (but may be reappointed to 2 full consecutive terms 
     after being appointed to fill a vacancy on the Board);
       ``(B) a member appointed to fill a vacancy occurring prior 
     to the expiration of the term for which that member's 
     predecessor was appointed shall be appointed for the 
     remainder of such term;
       ``(C) a member may continue to serve after the expiration 
     of the member's term until a successor has taken office; and
       ``(D) of the members first appointed under this section, 5 
     shall be appointed for a term of 1 year, 5 shall be appointed 
     for a term of 3 years, and 5 shall be appointed for a term of 
     6 years, the term of each to be designated by the President 
     at the time of nomination.
       ``(3) Chairperson.--
       ``(A) In general.--The Chairperson shall be appointed by 
     the President, by and with the advice and consent of the 
     Senate, from among the members of the Board.
       ``(B) Duties.--The Chairperson shall be the principal 
     executive officer of the Board, and shall exercise all of the 
     executive and administrative functions of the Board, 
     including functions of the Board with respect to--
       ``(i) the appointment and supervision of personnel employed 
     by the Board;
       ``(ii) the distribution of business among personnel 
     appointed and supervised by the Chairperson and among 
     administrative units of the Board; and
       ``(iii) the use and expenditure of funds.
       ``(C) Governance.--In carrying out any of the functions 
     under subparagraph (B), the Chairperson shall be governed by 
     the general policies established by the Board and by the 
     decisions, findings, and determinations the Board shall by 
     law be authorized to make.
       ``(D) Requests for appropriations.--Requests or estimates 
     for regular, supplemental, or deficiency appropriations on 
     behalf of the Board may not be submitted by the Chairperson 
     without the prior approval of a majority vote of the Board.
       ``(4) Removal.--Any appointed member may be removed by the 
     President for neglect of duty or malfeasance in office, but 
     for no other cause.
       ``(h) Vacancies; Quorum; Seal; Vice Chairperson; Voting on 
     Reports.--

[[Page 28490]]

       ``(1) Vacancies.--No vacancy on the Board shall impair the 
     right of the remaining members to exercise all the powers of 
     the Board.
       ``(2) Quorum.--A majority of the appointed members of the 
     Board shall constitute a quorum for the transaction of 
     business, but a lesser number of members may hold hearings.
       ``(3) Seal.--The Board shall have an official seal, of 
     which judicial notice shall be taken.
       ``(4) Vice chairperson.--The Board shall annually elect a 
     Vice Chairperson to act in the absence or disability of the 
     Chairperson or in case of a vacancy in the office of the 
     Chairperson.
       ``(5) Voting on proposals.--Any proposal of the Board must 
     be approved by the majority of appointed members present.
       ``(i) Powers of the Board.--
       ``(1) Hearings.--The Board may hold such hearings, sit and 
     act at such times and places, take such testimony, and 
     receive such evidence as the Board considers advisable to 
     carry out this section.
       ``(2) Authority to inform research priorities for data 
     collection.--The Board may advise the Secretary on priorities 
     for health services research, particularly as such priorities 
     pertain to necessary changes and issues regarding payment 
     reforms under Medicare.
       ``(3) Obtaining official data.--The Board may secure 
     directly from any department or agency of the United States 
     information necessary to enable it to carry out this section. 
     Upon request of the Chairperson, the head of that department 
     or agency shall furnish that information to the Board on an 
     agreed upon schedule.
       ``(4) Postal services.--The Board may use the United States 
     mails in the same manner and under the same conditions as 
     other departments and agencies of the Federal Government.
       ``(5) Gifts.--The Board may accept, use, and dispose of 
     gifts or donations of services or property.
       ``(6) Offices.--The Board shall maintain a principal office 
     and such field offices as it determines necessary, and may 
     meet and exercise any of its powers at any other place.
       ``(j) Personnel Matters.--
       ``(1) Compensation of members and chairperson.--Each 
     appointed member, other than the Chairperson, shall be 
     compensated at a rate equal to the annual rate of basic pay 
     prescribed for level III of the Executive Schedule under 
     section 5315 of title 5, United States Code. The Chairperson 
     shall be compensated at a rate equal to the daily equivalent 
     of the annual rate of basic pay prescribed for level II of 
     the Executive Schedule under section 5315 of title 5, United 
     States Code.
       ``(2) Travel expenses.--The appointed members shall be 
     allowed travel expenses, including per diem in lieu of 
     subsistence, at rates authorized for employees of agencies 
     under subchapter I of chapter 57 of title 5, United States 
     Code, while away from their homes or regular places of 
     business in the performance of services for the Board.
       ``(3) Staff.--
       ``(A) In general.--The Chairperson may, without regard to 
     the civil service laws and regulations, appoint and terminate 
     an executive director and such other additional personnel as 
     may be necessary to enable the Board to perform its duties. 
     The employment of an executive director shall be subject to 
     confirmation by the Board.
       ``(B) Compensation.--The Chairperson may fix the 
     compensation of the executive director and other personnel 
     without regard to chapter 51 and subchapter III of chapter 53 
     of title 5, United States Code, relating to classification of 
     positions and General Schedule pay rates, except that the 
     rate of pay for the executive director and other personnel 
     may not exceed the rate payable for level V of the Executive 
     Schedule under section 5316 of such title.
       ``(4) Detail of government employees.--Any Federal 
     Government employee may be detailed to the Board without 
     reimbursement, and such detail shall be without interruption 
     or loss of civil service status or privilege.
       ``(5) Procurement of temporary and intermittent services.--
     The Chairperson may procure temporary and intermittent 
     services under section 3109(b) of title 5, United States 
     Code, at rates for individuals which do not exceed the daily 
     equivalent of the annual rate of basic pay prescribed for 
     level V of the Executive Schedule under section 5316 of such 
     title.
       ``(k) Consumer Advisory Council.--
       ``(1) In general.--There is established a consumer advisory 
     council to advise the Board on the impact of payment policies 
     under this title on consumers.
       ``(2) Membership.--
       ``(A) Number and appointment.--The consumer advisory 
     council shall be composed of 10 consumer representatives 
     appointed by the Comptroller General of the United States, 1 
     from among each of the 10 regions established by the 
     Secretary as of the date of enactment of this section.
       ``(B) Qualifications.--The membership of the council shall 
     represent the interests of consumers and particular 
     communities.
       ``(3) Duties.--The consumer advisory council shall, subject 
     to the call of the Board, meet not less frequently than 2 
     times each year in the District of Columbia.
       ``(4) Open meetings.--Meetings of the consumer advisory 
     council shall be open to the public.
       ``(5) Election of officers.--Members of the consumer 
     advisory council shall elect their own officers.
       ``(6) Application of faca.--The Federal Advisory Committee 
     Act (5 U.S.C. App.) shall apply to the consumer advisory 
     council except that section 14 of such Act shall not apply.
       ``(l) Definitions.--In this section:
       ``(1) Board; chairperson; member.--The terms `Board', 
     `Chairperson', and `Member' mean the Independent Medicare 
     Advisory Board established under subsection (a) and the 
     Chairperson and any Member thereof, respectively.
       ``(2) Medicare.--The term `Medicare' means the program 
     established under this title, including parts A, B, C, and D.
       ``(3) Medicare beneficiary.--The term `Medicare 
     beneficiary' means an individual who is entitled to, or 
     enrolled for, benefits under part A or enrolled for benefits 
     under part B.
       ``(4) Medicare program spending.--The term `Medicare 
     program spending' means program spending under parts A, B, 
     and D net of premiums.
       ``(m) Funding.--
       ``(1) In general.--There are appropriated to the Board to 
     carry out its duties and functions--
       ``(A) for fiscal year 2012, $15,000,000; and
       ``(B) for each subsequent fiscal year, the amount 
     appropriated under this paragraph for the previous fiscal 
     year increased by the annual percentage increase in the 
     Consumer Price Index for All Urban Consumers (all items; 
     United States city average) as of June of the previous fiscal 
     year.
       ``(2) From trust funds.--Sixty percent of amounts 
     appropriated under paragraph (1) shall be derived by transfer 
     from the Federal Hospital Insurance Trust Fund under section 
     1817 and 40 percent of amounts appropriated under such 
     paragraph shall be derived by transfer from the Federal 
     Supplementary Medical Insurance Trust Fund under section 
     1841.''.
       (2) Lobbying cooling-off period for members of the 
     independent medicare advisory board.--Section 207(c) of title 
     18, United States Code, is amended by inserting at the end 
     the following:
       ``(3) Members of the independent medicare advisory board.--
       ``(A) In general.--Paragraph (1) shall apply to a member of 
     the Independent Medicare Advisory Board under section 1899A.
       ``(B) Agencies and congress.--For purposes of paragraph 
     (1), the agency in which the individual described in 
     subparagraph (A) served shall be considered to be the 
     Independent Medicare Advisory Board, the Department of Health 
     and Human Services, and the relevant committees of 
     jurisdiction of Congress, including the Committee on Ways and 
     Means and the Committee on Energy and Commerce of the House 
     of Representatives and the Committee on Finance of the 
     Senate.''.
       (b) GAO Study and Report on Determination and 
     Implementation of Payment and Coverage Policies Under the 
     Medicare Program.--
       (1) Initial study and report.--
       (A) Study.--The Comptroller General of the United States 
     (in this section referred to as the ``Comptroller General'') 
     shall conduct a study on changes to payment policies, 
     methodologies, and rates and coverage policies and 
     methodologies under the Medicare program under title XVIII of 
     the Social Security Act as a result of the recommendations 
     contained in the proposals made by the Independent Medicare 
     Advisory Board under section 1899A of such Act (as added by 
     subsection (a)), including an analysis of the effect of such 
     recommendations on--
       (i) Medicare beneficiary access to providers and items and 
     services;
       (ii) the affordability of Medicare premiums and cost-
     sharing (including deductibles, coinsurance, and copayments);
       (iii) the potential impact of changes on other government 
     or private-sector purchasers and payers of care; and
       (iv) quality of patient care, including patient experience, 
     outcomes, and other measures of care.
       (B) Report.--Not later than July 1, 2015, the Comptroller 
     General shall submit to Congress a report containing the 
     results of the study conducted under subparagraph (A), 
     together with recommendations for such legislation and 
     administrative action as the Comptroller General determines 
     appropriate.
       (2) Subsequent studies and reports.--The Comptroller 
     General shall periodically conduct such additional studies 
     and submit reports to Congress on changes to Medicare 
     payments policies, methodologies, and rates and coverage 
     policies and methodologies as the Comptroller General 
     determines appropriate, in consultation with the Committee on 
     Ways and Means and the Committee on Energy and Commerce of 
     the House of Representatives and the Committee on Finance of 
     the Senate.
       (c) Conforming Amendments.--Section 1805(b) of the Social 
     Security Act (42 U.S.C. 1395b-6(b)) is amended--
       (1) by redesignating paragraphs (4) through (8) as 
     paragraphs (5) through (9), respectively; and

[[Page 28491]]

       (2) by inserting after paragraph (3) the following:
       ``(4) Review and comment on the independent medicare 
     advisory board or secretarial proposal.--If the Independent 
     Medicare Advisory Board (as established under subsection (a) 
     of section 1899A) or the Secretary submits a proposal to the 
     Commission under such section in a year, the Commission shall 
     review the proposal and, not later than March 1 of that year, 
     submit to the Committee on Ways and Means and the Committee 
     on Energy and Commerce of the House of Representatives and 
     the Committee on Finance of the Senate written comments on 
     such proposal. Such comments may include such recommendations 
     as the Commission deems appropriate.''.

              Subtitle F--Health Care Quality Improvements

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

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

         ``Subpart II--Health Care Quality Improvement Programs

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

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

[[Page 28492]]

       ``(1) the cost to Federal health programs;
       ``(2) consumer assessment of health care experience;
       ``(3) provider assessment of such processes or systems and 
     opportunities to minimize distress and injury to the health 
     care workforce;
       ``(4) the potential impact of such processes or systems on 
     health status and function of patients, including vulnerable 
     populations including children;
       ``(5) the areas of insufficient evidence identified under 
     subsection (c)(2)(B); and
       ``(6) the evolution of meaningful use of health information 
     technology, as defined in section 3000.
       ``(f) Coordination.--The Center shall coordinate its 
     activities with activities conducted by the Center for 
     Medicare and Medicaid Innovation established under section 
     1115A of the Social Security Act.
       ``(g) Funding.--There is authorized to be appropriated to 
     carry out this section $20,000,000 for fiscal years 2010 
     through 2014.

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

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

     SEC. 3502. ESTABLISHING COMMUNITY HEALTH TEAMS TO SUPPORT THE 
                   PATIENT-CENTERED MEDICAL HOME.

       (a) In General.--The Secretary of Health and Human Services 
     (referred to in this section as the ``Secretary'') shall 
     establish a program to provide grants to or enter into 
     contracts with eligible entities to establish community-based 
     interdisciplinary, interprofessional teams (referred to in 
     this section as ``health teams'') to support primary care 
     practices, including obstetrics and gynecology practices, 
     within the hospital service areas served by the eligible 
     entities. Grants or contracts shall be used to--
       (1) establish health teams to provide support services to 
     primary care providers; and
       (2) provide capitated payments to primary care providers as 
     determined by the Secretary.
       (b) Eligible Entities.--To be eligible to receive a grant 
     or contract under subsection (a), an entity shall--
       (1)(A) be a State or State-designated entity; or
       (B) be an Indian tribe or tribal organization, as defined 
     in section 4 of the Indian Health Care Improvement Act;
       (2) submit a plan for achieving long-term financial 
     sustainability within 3 years;
       (3) submit a plan for incorporating prevention initiatives 
     and patient education and care management resources into the 
     delivery of health care that is integrated with community-
     based prevention and treatment resources, where available;
       (4) ensure that the health team established by the entity 
     includes an interdisciplinary, interprofessional team of 
     health care providers, as determined by the Secretary; such 
     team may include medical specialists, nurses, pharmacists, 
     nutritionists, dieticians, social workers, behavioral and 
     mental health providers (including substance use disorder 
     prevention and treatment providers), doctors of chiropractic, 
     licensed complementary and alternative medicine 
     practitioners, and physicians' assistants;
       (5) agree to provide services to eligible individuals with 
     chronic conditions, as described in section 1945 of the 
     Social Security Act (as added by section 2703), in accordance 
     with the payment methodology established under subsection (c) 
     of such section; and
       (6) submit to the Secretary an application at such time, in 
     such manner, and containing such information as the Secretary 
     may require.
       (c) Requirements for Health Teams.--A health team 
     established pursuant to a grant or contract under subsection 
     (a) shall--
       (1) establish contractual agreements with primary care 
     providers to provide support services;
       (2) support patient-centered medical homes, defined as a 
     mode of care that includes--
       (A) personal physicians;
       (B) whole person orientation;
       (C) coordinated and integrated care;
       (D) safe and high-quality care through evidence-informed 
     medicine, appropriate use of health information technology, 
     and continuous quality improvements;
       (E) expanded access to care; and
       (F) payment that recognizes added value from additional 
     components of patient-centered care;
       (3) collaborate with local primary care providers and 
     existing State and community based resources to coordinate 
     disease prevention, chronic disease management, transitioning 
     between health care providers and settings and case 
     management for patients, including children, with priority 
     given to those amenable to prevention and with chronic 
     diseases or conditions identified by the Secretary;

[[Page 28493]]

       (4) in collaboration with local health care providers, 
     develop and implement interdisciplinary, interprofessional 
     care plans that integrate clinical and community preventive 
     and health promotion services for patients, including 
     children, with a priority given to those amenable to 
     prevention and with chronic diseases or conditions identified 
     by the Secretary;
       (5) incorporate health care providers, patients, 
     caregivers, and authorized representatives in program design 
     and oversight;
       (6) provide support necessary for local primary care 
     providers to--
       (A) coordinate and provide access to high-quality health 
     care services;
       (B) coordinate and provide access to preventive and health 
     promotion services;
       (C) provide access to appropriate specialty care and 
     inpatient services;
       (D) provide quality-driven, cost-effective, culturally 
     appropriate, and patient- and family-centered health care;
       (E) provide access to pharmacist-delivered medication 
     management services, including medication reconciliation;
       (F) provide coordination of the appropriate use of 
     complementary and alternative (CAM) services to those who 
     request such services;
       (G) promote effective strategies for treatment planning, 
     monitoring health outcomes and resource use, sharing 
     information, treatment decision support, and organizing care 
     to avoid duplication of service and other medical management 
     approaches intended to improve quality and value of health 
     care services;
       (H) provide local access to the continuum of health care 
     services in the most appropriate setting, including access to 
     individuals that implement the care plans of patients and 
     coordinate care, such as integrative health care 
     practitioners;
       (I) collect and report data that permits evaluation of the 
     success of the collaborative effort on patient outcomes, 
     including collection of data on patient experience of care, 
     and identification of areas for improvement; and
       (J) establish a coordinated system of early identification 
     and referral for children at risk for developmental or 
     behavioral problems such as through the use of infolines, 
     health information technology, or other means as determined 
     by the Secretary;
       (7) provide 24-hour care management and support during 
     transitions in care settings including--
       (A) a transitional care program that provides onsite visits 
     from the care coordinator, assists with the development of 
     discharge plans and medication reconciliation upon admission 
     to and discharge from the hospitals, nursing home, or other 
     institution setting;
       (B) discharge planning and counseling support to providers, 
     patients, caregivers, and authorized representatives;
       (C) assuring that post-discharge care plans include 
     medication management, as appropriate;
       (D) referrals for mental and behavioral health services, 
     which may include the use of infolines; and
       (E) transitional health care needs from adolescence to 
     adulthood;
       (8) serve as a liaison to community prevention and 
     treatment programs;
       (9) demonstrate a capacity to implement and maintain health 
     information technology that meets the requirements of 
     certified EHR technology (as defined in section 3000 of the 
     Public Health Service Act (42 U.S.C. 300jj)) to facilitate 
     coordination among members of the applicable care team and 
     affiliated primary care practices; and
       (10) where applicable, report to the Secretary information 
     on quality measures used under section 399JJ of the Public 
     Health Service Act.
       (d) Requirement for Primary Care Providers.--A provider who 
     contracts with a care team shall--
       (1) provide a care plan to the care team for each patient 
     participant;
       (2) provide access to participant health records; and
       (3) meet regularly with the care team to ensure integration 
     of care.
       (e) Reporting to Secretary.--An entity that receives a 
     grant or contract under subsection (a) shall submit to the 
     Secretary a report that describes and evaluates, as requested 
     by the Secretary, the activities carried out by the entity 
     under subsection (c).
       (f) Definition of Primary Care.--In this section, the term 
     ``primary care'' means the provision of integrated, 
     accessible health care services by clinicians who are 
     accountable for addressing a large majority of personal 
     health care needs, developing a sustained partnership with 
     patients, and practicing in the context of family and 
     community.

     SEC. 3503. MEDICATION MANAGEMENT SERVICES IN TREATMENT OF 
                   CHRONIC DISEASE.

       Title IX of the Public Health Service Act (42 U.S.C. 299 et 
     seq.), as amended by section 3501, is further amended by 
     inserting after section 934 the following:

     ``SEC. 935. GRANTS OR CONTRACTS TO IMPLEMENT MEDICATION 
                   MANAGEMENT SERVICES IN TREATMENT OF CHRONIC 
                   DISEASES.

       ``(a) In General.--The Secretary, acting through the 
     Patient Safety Research Center established in section 933 
     (referred to in this section as the `Center'), shall 
     establish a program to provide grants or contracts to 
     eligible entities to implement medication management 
     (referred to in this section as `MTM') services provided by 
     licensed pharmacists, as a collaborative, multidisciplinary, 
     inter-professional approach to the treatment of chronic 
     diseases for targeted individuals, to improve the quality of 
     care and reduce overall cost in the treatment of such 
     diseases. The Secretary shall commence the program under this 
     section not later than May 1, 2010.
       ``(b) Eligible Entities.--To be eligible to receive a grant 
     or contract under subsection (a), an entity shall--
       ``(1) provide a setting appropriate for MTM services, as 
     recommended by the experts described in subsection (e);
       ``(2) submit to the Secretary a plan for achieving long-
     term financial sustainability;
       ``(3) where applicable, submit a plan for coordinating MTM 
     services through local community health teams established in 
     section 3502 of the Patient Protection and Affordable Care 
     Act or in collaboration with primary care extension programs 
     established in section 399W;
       ``(4) submit a plan for meeting the requirements under 
     subsection (c); and
       ``(5) submit to the Secretary such other information as the 
     Secretary may require.
       ``(c) MTM Services to Targeted Individuals.--The MTM 
     services provided with the assistance of a grant or contract 
     awarded under subsection (a) shall, as allowed by State law 
     including applicable collaborative pharmacy practice 
     agreements, include--
       ``(1) performing or obtaining necessary assessments of the 
     health and functional status of each patient receiving such 
     MTM services;
       ``(2) formulating a medication treatment plan according to 
     therapeutic goals agreed upon by the prescriber and the 
     patient or caregiver or authorized representative of the 
     patient;
       ``(3) selecting, initiating, modifying, recommending 
     changes to, or administering medication therapy;
       ``(4) monitoring, which may include access to, ordering, or 
     performing laboratory assessments, and evaluating the 
     response of the patient to therapy, including safety and 
     effectiveness;
       ``(5) performing an initial comprehensive medication review 
     to identify, resolve, and prevent medication-related 
     problems, including adverse drug events, quarterly targeted 
     medication reviews for ongoing monitoring, and additional 
     followup interventions on a schedule developed 
     collaboratively with the prescriber;
       ``(6) documenting the care delivered and communicating 
     essential information about such care, including a summary of 
     the medication review, and the recommendations of the 
     pharmacist to other appropriate health care providers of the 
     patient in a timely fashion;
       ``(7) providing education and training designed to enhance 
     the understanding and appropriate use of the medications by 
     the patient, caregiver, and other authorized representative;
       ``(8) providing information, support services, and 
     resources and strategies designed to enhance patient 
     adherence with therapeutic regimens;
       ``(9) coordinating and integrating MTM services within the 
     broader health care management services provided to the 
     patient; and
       ``(10) such other patient care services allowed under 
     pharmacist scopes of practice in use in other Federal 
     programs that have implemented MTM services.
       ``(d) Targeted Individuals.--MTM services provided by 
     licensed pharmacists under a grant or contract awarded under 
     subsection (a) shall be offered to targeted individuals who--
       ``(1) take 4 or more prescribed medications (including 
     over-the-counter medications and dietary supplements);
       ``(2) take any `high risk' medications;
       ``(3) have 2 or more chronic diseases, as identified by the 
     Secretary; or
       ``(4) have undergone a transition of care, or other 
     factors, as determined by the Secretary, that are likely to 
     create a high risk of medication-related problems.
       ``(e) Consultation With Experts.--In designing and 
     implementing MTM services provided under grants or contracts 
     awarded under subsection (a), the Secretary shall consult 
     with Federal, State, private, public-private, and academic 
     entities, pharmacy and pharmacist organizations, health care 
     organizations, consumer advocates, chronic disease groups, 
     and other stakeholders involved with the research, 
     dissemination, and implementation of pharmacist-delivered MTM 
     services, as the Secretary determines appropriate. The 
     Secretary, in collaboration with this group, shall determine 
     whether it is possible to incorporate rapid cycle process 
     improvement concepts in use in other Federal programs that 
     have implemented MTM services.
       ``(f) Reporting to the Secretary.--An entity that receives 
     a grant or contract under subsection (a) shall submit to the 
     Secretary a report that describes and evaluates, as requested 
     by the Secretary, the activities carried out under subsection 
     (c), including quality measures endorsed by the entity with a 
     contract under section 1890 of the Social Security Act, as 
     determined by the Secretary.

[[Page 28494]]

       ``(g) Evaluation and Report.--The Secretary shall submit to 
     the relevant committees of Congress a report which shall--
       ``(1) assess the clinical effectiveness of pharmacist-
     provided services under the MTM services program, as compared 
     to usual care, including an evaluation of whether enrollees 
     maintained better health with fewer hospitalizations and 
     emergency room visits than similar patients not enrolled in 
     the program;
       ``(2) assess changes in overall health care resource use by 
     targeted individuals;
       ``(3) assess patient and prescriber satisfaction with MTM 
     services;
       ``(4) assess the impact of patient-cost sharing 
     requirements on medication adherence and recommendations for 
     modifications;
       ``(5) identify and evaluate other factors that may impact 
     clinical and economic outcomes, including demographic 
     characteristics, clinical characteristics, and health 
     services use of the patient, as well as characteristics of 
     the regimen, pharmacy benefit, and MTM services provided; and
       ``(6) evaluate the extent to which participating 
     pharmacists who maintain a dispensing role have a conflict of 
     interest in the provision of MTM services, and if such 
     conflict is found, provide recommendations on how such a 
     conflict might be appropriately addressed.
       ``(h) Grants or Contracts to Fund Development of 
     Performance Measures.--The Secretary may, through the quality 
     measure development program under section 931 of the Public 
     Health Service Act, award grants or contracts to eligible 
     entities for the purpose of funding the development of 
     performance measures that assess the use and effectiveness of 
     medication therapy management services.''.

     SEC. 3504. DESIGN AND IMPLEMENTATION OF REGIONALIZED SYSTEMS 
                   FOR EMERGENCY CARE.

       (a) In General.--Title XII of the Public Health Service Act 
     (42 U.S.C. 300d et seq.) is amended--
       (1) in section 1203--
       (A) in the section heading, by inserting ``FOR TRAUMA 
     SYSTEMS'' after ``GRANTS''; and
       (B) in subsection (a), by striking ``Administrator of the 
     Health Resources and Services Administration'' and inserting 
     ``Assistant Secretary for Preparedness and Response'';
       (2) by inserting after section 1203 the following:

     ``SEC. 1204. COMPETITIVE GRANTS FOR REGIONALIZED SYSTEMS FOR 
                   EMERGENCY CARE RESPONSE.

       ``(a) In General.--The Secretary, acting through the 
     Assistant Secretary for Preparedness and Response, shall 
     award not fewer than 4 multiyear contracts or competitive 
     grants to eligible entities to support pilot projects that 
     design, implement, and evaluate innovative models of 
     regionalized, comprehensive, and accountable emergency care 
     and trauma systems.
       ``(b) Eligible Entity; Region.--In this section:
       ``(1) Eligible entity.--The term `eligible entity' means--
       ``(A) a State or a partnership of 1 or more States and 1 or 
     more local governments; or
       ``(B) an Indian tribe (as defined in section 4 of the 
     Indian Health Care Improvement Act) or a partnership of 1 or 
     more Indian tribes.
       ``(2) Region.--The term `region' means an area within a 
     State, an area that lies within multiple States, or a similar 
     area (such as a multicounty area), as determined by the 
     Secretary.
       ``(3) Emergency services.--The term `emergency services' 
     includes acute, prehospital, and trauma care.
       ``(c) Pilot Projects.--The Secretary shall award a contract 
     or grant under subsection (a) to an eligible entity that 
     proposes a pilot project to design, implement, and evaluate 
     an emergency medical and trauma system that--
       ``(1) coordinates with public health and safety services, 
     emergency medical services, medical facilities, trauma 
     centers, and other entities in a region to develop an 
     approach to emergency medical and trauma system access 
     throughout the region, including 9-1-1 Public Safety 
     Answering Points and emergency medical dispatch;
       ``(2) includes a mechanism, such as a regional medical 
     direction or transport communications system, that operates 
     throughout the region to ensure that the patient is taken to 
     the medically appropriate facility (whether an initial 
     facility or a higher-level facility) in a timely fashion;
       ``(3) allows for the tracking of prehospital and hospital 
     resources, including inpatient bed capacity, emergency 
     department capacity, trauma center capacity, on-call 
     specialist coverage, ambulance diversion status, and the 
     coordination of such tracking with regional communications 
     and hospital destination decisions; and
       ``(4) includes a consistent region-wide prehospital, 
     hospital, and interfacility data management system that--
       ``(A) submits data to the National EMS Information System, 
     the National Trauma Data Bank, and others;
       ``(B) reports data to appropriate Federal and State 
     databanks and registries; and
       ``(C) contains information sufficient to evaluate key 
     elements of prehospital care, hospital destination decisions, 
     including initial hospital and interfacility decisions, and 
     relevant health outcomes of hospital care.
       ``(d) Application.--
       ``(1) In general.--An eligible entity that seeks a contract 
     or grant described in subsection (a) shall submit to the 
     Secretary an application at such time and in such manner as 
     the Secretary may require.
       ``(2) Application information.--Each application shall 
     include--
       ``(A) an assurance from the eligible entity that the 
     proposed system--
       ``(i) has been coordinated with the applicable State Office 
     of Emergency Medical Services (or equivalent State office);
       ``(ii) includes consistent indirect and direct medical 
     oversight of prehospital, hospital, and interfacility 
     transport throughout the region;
       ``(iii) coordinates prehospital treatment and triage, 
     hospital destination, and interfacility transport throughout 
     the region;
       ``(iv) includes a categorization or designation system for 
     special medical facilities throughout the region that is 
     integrated with transport and destination protocols;
       ``(v) includes a regional medical direction, patient 
     tracking, and resource allocation system that supports day-
     to-day emergency care and surge capacity and is integrated 
     with other components of the national and State emergency 
     preparedness system; and
       ``(vi) addresses pediatric concerns related to integration, 
     planning, preparedness, and coordination of emergency medical 
     services for infants, children and adolescents; and
       ``(B) such other information as the Secretary may require.
       ``(e) Requirement of Matching Funds.--
       ``(1) In general.--The Secretary may not make a grant under 
     this section unless the State (or consortia of States) 
     involved agrees, with respect to the costs to be incurred by 
     the State (or consortia) in carrying out the purpose for 
     which such grant was made, to make available non-Federal 
     contributions (in cash or in kind under paragraph (2)) toward 
     such costs in an amount equal to not less than $1 for each $3 
     of Federal funds provided in the grant. Such contributions 
     may be made directly or through donations from public or 
     private entities.
       ``(2) Non-federal contributions.--Non-Federal contributions 
     required in paragraph (1) may be in cash or in kind, fairly 
     evaluated, including equipment or services (and excluding 
     indirect or overhead costs). Amounts provided by the Federal 
     Government, or services assisted or subsidized to any 
     significant extent by the Federal Government, may not be 
     included in determining the amount of such non-Federal 
     contributions.
       ``(f) Priority.--The Secretary shall give priority for the 
     award of the contracts or grants described in subsection (a) 
     to any eligible entity that serves a population in a 
     medically underserved area (as defined in section 330(b)(3)).
       ``(g) Report.--Not later than 90 days after the completion 
     of a pilot project under subsection (a), the recipient of 
     such contract or grant described in shall submit to the 
     Secretary a report containing the results of an evaluation of 
     the program, including an identification of--
       ``(1) the impact of the regional, accountable emergency 
     care and trauma system on patient health outcomes for various 
     critical care categories, such as trauma, stroke, cardiac 
     emergencies, neurological emergencies, and pediatric 
     emergencies;
       ``(2) the system characteristics that contribute to the 
     effectiveness and efficiency of the program (or lack 
     thereof);
       ``(3) methods of assuring the long-term financial 
     sustainability of the emergency care and trauma system;
       ``(4) the State and local legislation necessary to 
     implement and to maintain the system;
       ``(5) the barriers to developing regionalized, accountable 
     emergency care and trauma systems, as well as the methods to 
     overcome such barriers; and
       ``(6) recommendations on the utilization of available 
     funding for future regionalization efforts.
       ``(h) Dissemination of Findings.--The Secretary shall, as 
     appropriate, disseminate to the public and to the appropriate 
     Committees of the Congress, the information contained in a 
     report made under subsection (g).''; and
       (3) in section 1232--
       (A) in subsection (a), by striking ``appropriated'' and all 
     that follows through the period at the end and inserting 
     ``appropriated $24,000,000 for each of fiscal years 2010 
     through 2014.''; and
       (B) by inserting after subsection (c) the following:
       ``(d) Authority.--For the purpose of carrying out parts A 
     through C, beginning on the date of enactment of the Patient 
     Protection and Affordable Care Act, the Secretary shall 
     transfer authority in administering grants and related 
     authorities under such parts from the Administrator of the 
     Health Resources and Services Administration to the Assistant 
     Secretary for Preparedness and Response.''.
       (b) Support for Emergency Medicine Research.--Part H of 
     title IV of the Public Health Service Act (42 U.S.C. 289 et 
     seq.) is

[[Page 28495]]

     amended by inserting after the section 498C the following:

     ``SEC. 498D. SUPPORT FOR EMERGENCY MEDICINE RESEARCH.

       ``(a) Emergency Medical Research.--The Secretary shall 
     support Federal programs administered by the National 
     Institutes of Health, the Agency for Healthcare Research and 
     Quality, the Health Resources and Services Administration, 
     the Centers for Disease Control and Prevention, and other 
     agencies involved in improving the emergency care system to 
     expand and accelerate research in emergency medical care 
     systems and emergency medicine, including--
       ``(1) the basic science of emergency medicine;
       ``(2) the model of service delivery and the components of 
     such models that contribute to enhanced patient health 
     outcomes;
       ``(3) the translation of basic scientific research into 
     improved practice; and
       ``(4) the development of timely and efficient delivery of 
     health services.
       ``(b) Pediatric Emergency Medical Research.--The Secretary 
     shall support Federal programs administered by the National 
     Institutes of Health, the Agency for Healthcare Research and 
     Quality, the Health Resources and Services Administration, 
     the Centers for Disease Control and Prevention, and other 
     agencies to coordinate and expand research in pediatric 
     emergency medical care systems and pediatric emergency 
     medicine, including--
       ``(1) an examination of the gaps and opportunities in 
     pediatric emergency care research and a strategy for the 
     optimal organization and funding of such research;
       ``(2) the role of pediatric emergency services as an 
     integrated component of the overall health system;
       ``(3) system-wide pediatric emergency care planning, 
     preparedness, coordination, and funding;
       ``(4) pediatric training in professional education; and
       ``(5) research in pediatric emergency care, specifically on 
     the efficacy, safety, and health outcomes of medications used 
     for infants, children, and adolescents in emergency care 
     settings in order to improve patient safety.
       ``(c) Impact Research.--The Secretary shall support 
     research to determine the estimated economic impact of, and 
     savings that result from, the implementation of coordinated 
     emergency care systems.
       ``(d) Authorization of Appropriations.--There are 
     authorized to be appropriated to carry out this section such 
     sums as may be necessary for each of fiscal years 2010 
     through 2014.''.

     SEC. 3505. TRAUMA CARE CENTERS AND SERVICE AVAILABILITY.

       (a) Trauma Care Centers.--
       (1) Grants for trauma care centers.--Section 1241 of the 
     Public Health Service Act (42 U.S.C. 300d-41) is amended by 
     striking subsections (a) and (b) and inserting the following:
       ``(a) In General.--The Secretary shall establish 3 programs 
     to award grants to qualified public, nonprofit Indian Health 
     Service, Indian tribal, and urban Indian trauma centers--
       ``(1) to assist in defraying substantial uncompensated care 
     costs;
       ``(2) to further the core missions of such trauma centers, 
     including by addressing costs associated with patient 
     stabilization and transfer, trauma education and outreach, 
     coordination with local and regional trauma systems, 
     essential personnel and other fixed costs, and expenses 
     associated with employee and non-employee physician services; 
     and
       ``(3) to provide emergency relief to ensure the continued 
     and future availability of trauma services.
       ``(b) Minimum Qualifications of Trauma Centers.--
       ``(1) Participation in trauma care system operating under 
     certain professional guidelines.--Except as provided in 
     paragraph (2), the Secretary may not award a grant to a 
     trauma center under subsection (a) unless the trauma center 
     is a participant in a trauma system that substantially 
     complies with section 1213.
       ``(2) Exemption.--Paragraph (1) shall not apply to trauma 
     centers that are located in States with no existing trauma 
     care system.
       ``(3) Qualification for substantial uncompensated care 
     costs.--The Secretary shall award substantial uncompensated 
     care grants under subsection (a)(1) only to trauma centers 
     meeting at least 1 of the criteria in 1 of the following 3 
     categories:
       ``(A) Category a.--The criteria for category A are as 
     follows:
       ``(i) At least 40 percent of the visits in the emergency 
     department of the hospital in which the trauma center is 
     located were charity or self-pay patients.
       ``(ii) At least 50 percent of the visits in such emergency 
     department were Medicaid (under title XIX of the Social 
     Security Act (42 U.S.C. 1396 et seq.)) and charity and self-
     pay patients combined.
       ``(B) Category b.--The criteria for category B are as 
     follows:
       ``(i) At least 35 percent of the visits in the emergency 
     department were charity or self-pay patients.
       ``(ii) At least 50 percent of the visits in the emergency 
     department were Medicaid and charity and self-pay patients 
     combined.
       ``(C) Category c.--The criteria for category C are as 
     follows:
       ``(i) At least 20 percent of the visits in the emergency 
     department were charity or self-pay patients.
       ``(ii) At least 30 percent of the visits in the emergency 
     department were Medicaid and charity and self-pay patients 
     combined.
       ``(4) Trauma centers in 1115 waiver states.--
     Notwithstanding paragraph (3), the Secretary may award a 
     substantial uncompensated care grant to a trauma center under 
     subsection (a)(1) if the trauma center qualifies for funds 
     under a Low Income Pool or Safety Net Care Pool established 
     through a waiver approved under section 1115 of the Social 
     Security Act (42 U.S.C. 1315).
       ``(5) Designation.--The Secretary may not award a grant to 
     a trauma center unless such trauma center is verified by the 
     American College of Surgeons or designated by an equivalent 
     State or local agency.
       ``(c) Additional Requirements.--The Secretary may not award 
     a grant to a trauma center under subsection (a)(1) unless 
     such trauma center--
       ``(1) submits to the Secretary a plan satisfactory to the 
     Secretary that demonstrates a continued commitment to serving 
     trauma patients regardless of their ability to pay; and
       ``(2) has policies in place to assist patients who cannot 
     pay for part or all of the care they receive, including a 
     sliding fee scale, and to ensure fair billing and collection 
     practices.''.
       (2) Considerations in making grants.--Section 1242 of the 
     Public Health Service Act (42 U.S.C. 300d-42) is amended by 
     striking subsections (a) and (b) and inserting the following:
       ``(a) Substantial Uncompensated Care Awards.--
       ``(1) In general.--The Secretary shall establish an award 
     basis for each eligible trauma center for grants under 
     section 1241(a)(1) according to the percentage described in 
     paragraph (2), subject to the requirements of section 
     1241(b)(3).
       ``(2) Percentages.--The applicable percentages are as 
     follows:
       ``(A) With respect to a category A trauma center, 100 
     percent of the uncompensated care costs.
       ``(B) With respect to a category B trauma center, not more 
     than 75 percent of the uncompensated care costs.
       ``(C) With respect to a category C trauma center, not more 
     than 50 percent of the uncompensated care costs.
       ``(b) Core Mission Awards.--
       ``(1) In general.--In awarding grants under section 
     1241(a)(2), the Secretary shall--
       ``(A) reserve 25 percent of the amount allocated for core 
     mission awards for Level III and Level IV trauma centers; and
       ``(B) reserve 25 percent of the amount allocated for core 
     mission awards for large urban Level I and II trauma 
     centers--
       ``(i) that have at least 1 graduate medical education 
     fellowship in trauma or trauma related specialties for which 
     demand is exceeding supply;
       ``(ii) for which--

       ``(I) annual uncompensated care costs exceed $10,000,000; 
     or
       ``(II) at least 20 percent of emergency department visits 
     are charity or self-pay or Medicaid patients; and

       ``(iii) that are not eligible for substantial uncompensated 
     care awards under section 1241(a)(1).
       ``(c) Emergency Awards.--In awarding grants under section 
     1241(a)(3), the Secretary shall--
       ``(1) give preference to any application submitted by a 
     trauma center that provides trauma care in a geographic area 
     in which the availability of trauma care has significantly 
     decreased or will significantly decrease if the center is 
     forced to close or downgrade service or growth in demand for 
     trauma services exceeds capacity; and
       ``(2) reallocate any emergency awards funds not obligated 
     due to insufficient, or a lack of qualified, applications to 
     the significant uncompensated care award program.''.
       (3) Certain agreements.--Section 1243 of the Public Health 
     Service Act (42 U.S.C. 300d-43) is amended by striking 
     subsections (a), (b), and (c) and inserting the following:
       ``(a) Maintenance of Financial Support.--The Secretary may 
     require a trauma center receiving a grant under section 
     1241(a) to maintain access to trauma services at comparable 
     levels to the prior year during the grant period.
       ``(b) Trauma Care Registry.--The Secretary may require the 
     trauma center receiving a grant under section 1241(a) to 
     provide data to a national and centralized registry of trauma 
     cases, in accordance with guidelines developed by the 
     American College of Surgeons, and as the Secretary may 
     otherwise require.''.
       (4) General provisions.--Section 1244 of the Public Health 
     Service Act (42 U.S.C. 300d-44) is amended by striking 
     subsections (a), (b), and (c) and inserting the following:
       ``(a) Application.--The Secretary may not award a grant to 
     a trauma center under section 1241(a) unless such center 
     submits an application for the grant to the Secretary and the 
     application is in such form, is made in such manner, and 
     contains such agreements, assurances, and information as the

[[Page 28496]]

     Secretary determines to be necessary to carry out this part.
       ``(b) Limitation on Duration of Support.--The period during 
     which a trauma center receives payments under a grant under 
     section 1241(a)(3) shall be for 3 fiscal years, except that 
     the Secretary may waive such requirement for a center and 
     authorize such center to receive such payments for 1 
     additional fiscal year.
       ``(c) Limitation on Amount of Grant.--Notwithstanding 
     section 1242(a), a grant under section 1241 may not be made 
     in an amount exceeding $2,000,000 for each fiscal year.
       ``(d) Eligibility.--Except as provided in section 
     1242(b)(1)(B)(iii), acquisition of, or eligibility for, a 
     grant under section 1241(a) shall not preclude a trauma 
     center from being eligible for other grants described in such 
     section.
       ``(e) Funding Distribution.--Of the total amount 
     appropriated for a fiscal year under section 1245, 70 percent 
     shall be used for substantial uncompensated care awards under 
     section 1241(a)(1), 20 percent shall be used for core mission 
     awards under section 1241(a)(2), and 10 percent shall be used 
     for emergency awards under section 1241(a)(3).
       ``(f) Minimum Allowance.--Notwithstanding subsection (e), 
     if the amount appropriated for a fiscal year under section 
     1245 is less than $25,000,000, all available funding for such 
     fiscal year shall be used for substantial uncompensated care 
     awards under section 1241(a)(1).
       ``(g) Substantial Uncompensated Care Award Distribution and 
     Proportional Share.--Notwithstanding section 1242(a), of the 
     amount appropriated for substantial uncompensated care grants 
     for a fiscal year, the Secretary shall--
       ``(1) make available--
       ``(A) 50 percent of such funds for category A trauma center 
     grantees;
       ``(B) 35 percent of such funds for category B trauma center 
     grantees; and
       ``(C) 15 percent of such funds for category C trauma center 
     grantees; and
       ``(2) provide available funds within each category in a 
     manner proportional to the award basis specified in section 
     1242(a)(2) to each eligible trauma center.
       ``(h) Report.--Beginning 2 years after the date of 
     enactment of the Patient Protection and Affordable Care Act, 
     and every 2 years thereafter, the Secretary shall biennially 
     report to Congress regarding the status of the grants made 
     under section 1241 and on the overall financial stability of 
     trauma centers.''.
       (5) Authorization of appropriations.--Section 1245 of the 
     Public Health Service Act (42 U.S.C. 300d-45) is amended to 
     read as follows:

     ``SEC. 1245. AUTHORIZATION OF APPROPRIATIONS.

       ``For the purpose of carrying out this part, there are 
     authorized to be appropriated $100,000,000 for fiscal year 
     2009, and such sums as may be necessary for each of fiscal 
     years 2010 through 2015. Such authorization of appropriations 
     is in addition to any other authorization of appropriations 
     or amounts that are available for such purpose.''.
       (6) Definition.--Part D of title XII of the Public Health 
     Service Act (42 U.S.C. 300d-41 et seq.) is amended by adding 
     at the end the following:

     ``SEC. 1246. DEFINITION.

       ``In this part, the term `uncompensated care costs' means 
     unreimbursed costs from serving self-pay, charity, or 
     Medicaid patients, without regard to payment under section 
     1923 of the Social Security Act, all of which are 
     attributable to emergency care and trauma care, including 
     costs related to subsequent inpatient admissions to the 
     hospital.''.
       (b) Trauma Service Availability.--Title XII of the Public 
     Health Service Act (42 U.S.C. 300d et seq.) is amended by 
     adding at the end the following:

                 ``PART H--TRAUMA SERVICE AVAILABILITY

     ``SEC. 1281. GRANTS TO STATES.

       ``(a) Establishment.--To promote universal access to trauma 
     care services provided by trauma centers and trauma-related 
     physician specialties, the Secretary shall provide funding to 
     States to enable such States to award grants to eligible 
     entities for the purposes described in this section.
       ``(b) Awarding of Grants by States.--Each State may award 
     grants to eligible entities within the State for the purposes 
     described in subparagraph (d).
       ``(c) Eligibility.--
       ``(1) In general.--To be eligible to receive a grant under 
     subsection (b) an entity shall--
       ``(A) be--
       ``(i) a public or nonprofit trauma center or consortium 
     thereof that meets that requirements of paragraphs (1), (2), 
     and (5) of section 1241(b);
       ``(ii) a safety net public or nonprofit trauma center that 
     meets the requirements of paragraphs (1) through (5) of 
     section 1241(b); or
       ``(iii) a hospital in an underserved area (as defined by 
     the State) that seeks to establish new trauma services; and
       ``(B) submit to the State an application at such time, in 
     such manner, and containing such information as the State may 
     require.
       ``(2) Limitation.--A State shall use at least 40 percent of 
     the amount available to the State under this part for a 
     fiscal year to award grants to safety net trauma centers 
     described in paragraph (1)(A)(ii).
       ``(d) Use of Funds.--The recipient of a grant under 
     subsection (b) shall carry out 1 or more of the following 
     activities consistent with subsection (b):
       ``(1) Providing trauma centers with funding to support 
     physician compensation in trauma-related physician 
     specialties where shortages exist in the region involved, 
     with priority provided to safety net trauma centers described 
     in subsection (c)(1)(A)(ii).
       ``(2) Providing for individual safety net trauma center 
     fiscal stability and costs related to having service that is 
     available 24 hours a day, 7 days a week, with priority 
     provided to safety net trauma centers described in subsection 
     (c)(1)(A)(ii) located in urban, border, and rural areas.
       ``(3) Reducing trauma center overcrowding at specific 
     trauma centers related to throughput of trauma patients.
       ``(4) Establishing new trauma services in underserved areas 
     as defined by the State.
       ``(5) Enhancing collaboration between trauma centers and 
     other hospitals and emergency medical services personnel 
     related to trauma service availability.
       ``(6) Making capital improvements to enhance access and 
     expedite trauma care, including providing helipads and 
     associated safety infrastructure.
       ``(7) Enhancing trauma surge capacity at specific trauma 
     centers.
       ``(8) Ensuring expedient receipt of trauma patients 
     transported by ground or air to the appropriate trauma 
     center.
       ``(9) Enhancing interstate trauma center collaboration.
       ``(e) Limitation.--
       ``(1) In general.--A State may use not more than 20 percent 
     of the amount available to the State under this part for a 
     fiscal year for administrative costs associated with awarding 
     grants and related costs.
       ``(2) Maintenance of effort.--The Secretary may not provide 
     funding to a State under this part unless the State agrees 
     that such funds will be used to supplement and not supplant 
     State funding otherwise available for the activities and 
     costs described in this part.
       ``(f) Distribution of Funds.--The following shall apply 
     with respect to grants provided in this part:
       ``(1) Less than $10,000,000.--If the amount of 
     appropriations for this part in a fiscal year is less than 
     $10,000,000, the Secretary shall divide such funding evenly 
     among only those States that have 1 or more trauma centers 
     eligible for funding under section 1241(b)(3)(A).
       ``(2) Less than $20,000,000.--If the amount of 
     appropriations in a fiscal year is less than $20,000,000, the 
     Secretary shall divide such funding evenly among only those 
     States that have 1 or more trauma centers eligible for 
     funding under subparagraphs (A) and (B) of section 
     1241(b)(3).
       ``(3) Less than $30,000,000.--If the amount of 
     appropriations for this part in a fiscal year is less than 
     $30,000,000, the Secretary shall divide such funding evenly 
     among only those States that have 1 or more trauma centers 
     eligible for funding under section 1241(b)(3).
       ``(4) $30,000,000 or more.--If the amount of appropriations 
     for this part in a fiscal year is $30,000,000 or more, the 
     Secretary shall divide such funding evenly among all States.

     ``SEC. 1282. AUTHORIZATION OF APPROPRIATIONS.

       ``For the purpose of carrying out this part, there is 
     authorized to be appropriated $100,000,000 for each of fiscal 
     years 2010 through 2015.''.

     SEC. 3506. PROGRAM TO FACILITATE SHARED DECISIONMAKING.

       Part D of title IX of the Public Health Service Act, as 
     amended by section 3503, is further amended by adding at the 
     end the following:

     ``SEC. 936. PROGRAM TO FACILITATE SHARED DECISIONMAKING.

       ``(a) Purpose.--The purpose of this section is to 
     facilitate collaborative processes between patients, 
     caregivers or authorized representatives, and clinicians that 
     engages the patient, caregiver or authorized representative 
     in decisionmaking, provides patients, caregivers or 
     authorized representatives with information about trade-offs 
     among treatment options, and facilitates the incorporation of 
     patient preferences and values into the medical plan.
       ``(b) Definitions.--In this section:
       ``(1) Patient decision aid.--The term `patient decision 
     aid' means an educational tool that helps patients, 
     caregivers or authorized representatives understand and 
     communicate their beliefs and preferences related to their 
     treatment options, and to decide with their health care 
     provider what treatments are best for them based on their 
     treatment options, scientific evidence, circumstances, 
     beliefs, and preferences.
       ``(2) Preference sensitive care.--The term `preference 
     sensitive care' means medical care for which the clinical 
     evidence does not clearly support one treatment option such 
     that the appropriate course of treatment depends on the 
     values of the patient or the preferences of the patient, 
     caregivers or authorized representatives regarding the 
     benefits, harms and scientific evidence for

[[Page 28497]]

     each treatment option, the use of such care should depend on 
     the informed patient choice among clinically appropriate 
     treatment options.
       ``(c) Establishment of Independent Standards for Patient 
     Decision Aids for Preference Sensitive Care.--
       ``(1) Contract with entity to establish standards and 
     certify patient decision aids.--
       ``(A) In general.--For purposes of supporting consensus-
     based standards for patient decision aids for preference 
     sensitive care and a certification process for patient 
     decision aids for use in the Federal health programs and by 
     other interested parties, the Secretary shall have in effect 
     a contract with the entity with a contract under section 1890 
     of the Social Security Act. Such contract shall provide that 
     the entity perform the duties described in paragraph (2).
       ``(B) Timing for first contract.--As soon as practicable 
     after the date of the enactment of this section, the 
     Secretary shall enter into the first contract under 
     subparagraph (A).
       ``(C) Period of contract.--A contract under subparagraph 
     (A) shall be for a period of 18 months (except such contract 
     may be renewed after a subsequent bidding process).
       ``(2) Duties.--The following duties are described in this 
     paragraph:
       ``(A) Develop and identify standards for patient decision 
     aids.--The entity shall synthesize evidence and convene a 
     broad range of experts and key stakeholders to develop and 
     identify consensus-based standards to evaluate patient 
     decision aids for preference sensitive care.
       ``(B) Endorse patient decision aids.--The entity shall 
     review patient decision aids and develop a certification 
     process whether patient decision aids meet the standards 
     developed and identified under subparagraph (A). The entity 
     shall give priority to the review and certification of 
     patient decision aids for preference sensitive care.
       ``(d) Program to Develop, Update and Patient Decision Aids 
     to Assist Health Care Providers and Patients.--
       ``(1) In general.--The Secretary, acting through the 
     Director, and in coordination with heads of other relevant 
     agencies, such as the Director of the Centers for Disease 
     Control and Prevention and the Director of the National 
     Institutes of Health, shall establish a program to award 
     grants or contracts--
       ``(A) to develop, update, and produce patient decision aids 
     for preference sensitive care to assist health care providers 
     in educating patients, caregivers, and authorized 
     representatives concerning the relative safety, relative 
     effectiveness (including possible health outcomes and impact 
     on functional status), and relative cost of treatment or, 
     where appropriate, palliative care options;
       ``(B) to test such materials to ensure such materials are 
     balanced and evidence based in aiding health care providers 
     and patients, caregivers, and authorized representatives to 
     make informed decisions about patient care and can be easily 
     incorporated into a broad array of practice settings; and
       ``(C) to educate providers on the use of such materials, 
     including through academic curricula.
       ``(2) Requirements for patient decision aids.--Patient 
     decision aids developed and produced pursuant to a grant or 
     contract under paragraph (1)--
       ``(A) shall be designed to engage patients, caregivers, and 
     authorized representatives in informed decisionmaking with 
     health care providers;
       ``(B) shall present up-to-date clinical evidence about the 
     risks and benefits of treatment options in a form and manner 
     that is age-appropriate and can be adapted for patients, 
     caregivers, and authorized representatives from a variety of 
     cultural and educational backgrounds to reflect the varying 
     needs of consumers and diverse levels of health literacy;
       ``(C) shall, where appropriate, explain why there is a lack 
     of evidence to support one treatment option over another; and
       ``(D) shall address health care decisions across the age 
     span, including those affecting vulnerable populations 
     including children.
       ``(3) Distribution.--The Director shall ensure that patient 
     decision aids produced with grants or contracts under this 
     section are available to the public.
       ``(4) Nonduplication of efforts.--The Director shall ensure 
     that the activities under this section of the Agency and 
     other agencies, including the Centers for Disease Control and 
     Prevention and the National Institutes of Health, are free of 
     unnecessary duplication of effort.
       ``(e) Grants to Support Shared Decisionmaking 
     Implementation.--
       ``(1) In general.--The Secretary shall establish a program 
     to provide for the phased-in development, implementation, and 
     evaluation of shared decisionmaking using patient decision 
     aids to meet the objective of improving the understanding of 
     patients of their medical treatment options.
       ``(2) Shared decisionmaking resource centers.--
       ``(A) In general.--The Secretary shall provide grants for 
     the establishment and support of Shared Decisionmaking 
     Resource Centers (referred to in this subsection as 
     `Centers') to provide technical assistance to providers and 
     to develop and disseminate best practices and other 
     information to support and accelerate adoption, 
     implementation, and effective use of patient decision aids 
     and shared decisionmaking by providers.
       ``(B) Objectives.--The objective of a Center is to enhance 
     and promote the adoption of patient decision aids and shared 
     decisionmaking through--
       ``(i) providing assistance to eligible providers with the 
     implementation and effective use of, and training on, patient 
     decision aids; and
       ``(ii) the dissemination of best practices and research on 
     the implementation and effective use of patient decision 
     aids.
       ``(3) Shared decisionmaking participation grants.--
       ``(A) In general.--The Secretary shall provide grants to 
     health care providers for the development and implementation 
     of shared decisionmaking techniques and to assess the use of 
     such techniques.
       ``(B) Preference.--In order to facilitate the use of best 
     practices, the Secretary shall provide a preference in making 
     grants under this subsection to health care providers who 
     participate in training by Shared Decisionmaking Resource 
     Centers or comparable training.
       ``(C) Limitation.--Funds under this paragraph shall not be 
     used to purchase or implement use of patient decision aids 
     other than those certified under the process identified in 
     subsection (c).
       ``(4) Guidance.--The Secretary may issue guidance to 
     eligible grantees under this subsection on the use of patient 
     decision aids.
       ``(f) Funding.--For purposes of carrying out this section 
     there are authorized to be appropriated such sums as may be 
     necessary for fiscal year 2010 and each subsequent fiscal 
     year.''.

     SEC. 3507. PRESENTATION OF PRESCRIPTION DRUG BENEFIT AND RISK 
                   INFORMATION.

       (a) In General.--The Secretary of Health and Human Services 
     (referred to in this section as the ``Secretary''), acting 
     through the Commissioner of Food and Drugs, shall determine 
     whether the addition of quantitative summaries of the 
     benefits and risks of prescription drugs in a standardized 
     format (such as a table or drug facts box) to the promotional 
     labeling or print advertising of such drugs would improve 
     health care decisionmaking by clinicians and patients and 
     consumers.
       (b) Review and Consultation.--In making the determination 
     under subsection (a), the Secretary shall review all 
     available scientific evidence and research on decisionmaking 
     and social and cognitive psychology and consult with drug 
     manufacturers, clinicians, patients and consumers, experts in 
     health literacy, representatives of racial and ethnic 
     minorities, and experts in women's and pediatric health.
       (c) Report.--Not later than 1 year after the date of 
     enactment of this Act, the Secretary shall submit to Congress 
     a report that provides--
       (1) the determination by the Secretary under subsection 
     (a); and
       (2) the reasoning and analysis underlying that 
     determination.
       (d) Authority.--If the Secretary determines under 
     subsection (a) that the addition of quantitative summaries of 
     the benefits and risks of prescription drugs in a 
     standardized format (such as a table or drug facts box) to 
     the promotional labeling or print advertising of such drugs 
     would improve health care decisionmaking by clinicians and 
     patients and consumers, then the Secretary, not later than 3 
     years after the date of submission of the report under 
     subsection (c), shall promulgate proposed regulations as 
     necessary to implement such format.
       (e) Clarification.--Nothing in this section shall be 
     construed to restrict the existing authorities of the 
     Secretary with respect to benefit and risk information.

     SEC. 3508. DEMONSTRATION PROGRAM TO INTEGRATE QUALITY 
                   IMPROVEMENT AND PATIENT SAFETY TRAINING INTO 
                   CLINICAL EDUCATION OF HEALTH PROFESSIONALS.

       (a) In General.--The Secretary may award grants to eligible 
     entities or consortia under this section to carry out 
     demonstration projects to develop and implement academic 
     curricula that integrates quality improvement and patient 
     safety in the clinical education of health professionals. 
     Such awards shall be made on a competitive basis and pursuant 
     to peer review.
       (b) Eligibility.--To be eligible to receive a grant under 
     subsection (a), an entity or consortium shall--
       (1) submit to the Secretary an application at such time, in 
     such manner, and containing such information as the Secretary 
     may require;
       (2) be or include--
       (A) a health professions school;
       (B) a school of public health;
       (C) a school of social work;
       (D) a school of nursing;
       (E) a school of pharmacy;
       (F) an institution with a graduate medical education 
     program; or
       (G) a school of health care administration;
       (3) collaborate in the development of curricula described 
     in subsection (a) with an organization that accredits such 
     school or institution;

[[Page 28498]]

       (4) provide for the collection of data regarding the 
     effectiveness of the demonstration project; and
       (5) provide matching funds in accordance with subsection 
     (c).
       (c) Matching Funds.--
       (1) In general.--The Secretary may award a grant to an 
     entity or consortium under this section only if the entity or 
     consortium agrees to make available non-Federal contributions 
     toward the costs of the program to be funded under the grant 
     in an amount that is not less than $1 for each $5 of Federal 
     funds provided under the grant.
       (2) Determination of amount contributed.--Non-Federal 
     contributions under paragraph (1) may be in cash or in-kind, 
     fairly evaluated, including equipment or services. Amounts 
     provided by the Federal Government, or services assisted or 
     subsidized to any significant extent by the Federal 
     Government, may not be included in determining the amount of 
     such contributions.
       (d) Evaluation.--The Secretary shall take such action as 
     may be necessary to evaluate the projects funded under this 
     section and publish, make publicly available, and disseminate 
     the results of such evaluations on as wide a basis as is 
     practicable.
       (e) Reports.--Not later than 2 years after the date of 
     enactment of this section, and annually thereafter, the 
     Secretary shall submit to the Committee on Health, Education, 
     Labor, and Pensions and the Committee on Finance of the 
     Senate and the Committee on Energy and Commerce and the 
     Committee on Ways and Means of the House of Representatives a 
     report that--
       (1) describes the specific projects supported under this 
     section; and
       (2) contains recommendations for Congress based on the 
     evaluation conducted under subsection (d).

     SEC. 3509. IMPROVING WOMEN'S HEALTH.

       (a) Health and Human Services Office on Women's Health.--
       (1) Establishment.--Part A of title II of the Public Health 
     Service Act (42 U.S.C. 202 et seq.) is amended by adding at 
     the end the following:

     ``SEC. 229. HEALTH AND HUMAN SERVICES OFFICE ON WOMEN'S 
                   HEALTH.

       ``(a) Establishment of Office.--There is established within 
     the Office of the Secretary, an Office on Women's Health 
     (referred to in this section as the `Office'). The Office 
     shall be headed by a Deputy Assistant Secretary for Women's 
     Health who may report to the Secretary.
       ``(b) Duties.--The Secretary, acting through the Office, 
     with respect to the health concerns of women, shall--
       ``(1) establish short-range and long-range goals and 
     objectives within the Department of Health and Human Services 
     and, as relevant and appropriate, coordinate with other 
     appropriate offices on activities within the Department that 
     relate to disease prevention, health promotion, service 
     delivery, research, and public and health care professional 
     education, for issues of particular concern to women 
     throughout their lifespan;
       ``(2) provide expert advice and consultation to the 
     Secretary concerning scientific, legal, ethical, and policy 
     issues relating to women's health;
       ``(3) monitor the Department of Health and Human Services' 
     offices, agencies, and regional activities regarding women's 
     health and identify needs regarding the coordination of 
     activities, including intramural and extramural 
     multidisciplinary activities;
       ``(4) establish a Department of Health and Human Services 
     Coordinating Committee on Women's Health, which shall be 
     chaired by the Deputy Assistant Secretary for Women's Health 
     and composed of senior level representatives from each of the 
     agencies and offices of the Department of Health and Human 
     Services;
       ``(5) establish a National Women's Health Information 
     Center to--
       ``(A) facilitate the exchange of information regarding 
     matters relating to health information, health promotion, 
     preventive health services, research advances, and education 
     in the appropriate use of health care;
       ``(B) facilitate access to such information;
       ``(C) assist in the analysis of issues and problems 
     relating to the matters described in this paragraph; and
       ``(D) provide technical assistance with respect to the 
     exchange of information (including facilitating the 
     development of materials for such technical assistance);
       ``(6) coordinate efforts to promote women's health programs 
     and policies with the private sector; and
       ``(7) through publications and any other means appropriate, 
     provide for the exchange of information between the Office 
     and recipients of grants, contracts, and agreements under 
     subsection (c), and between the Office and health 
     professionals and the general public.
       ``(c) Grants and Contracts Regarding Duties.--
       ``(1) Authority.--In carrying out subsection (b), the 
     Secretary may make grants to, and enter into cooperative 
     agreements, contracts, and interagency agreements with, 
     public and private entities, agencies, and organizations.
       ``(2) Evaluation and dissemination.--The Secretary shall 
     directly or through contracts with public and private 
     entities, agencies, and organizations, provide for 
     evaluations of projects carried out with financial assistance 
     provided under paragraph (1) and for the dissemination of 
     information developed as a result of such projects.
       ``(d) Reports.--Not later than 1 year after the date of 
     enactment of this section, and every second year thereafter, 
     the Secretary shall prepare and submit to the appropriate 
     committees of Congress a report describing the activities 
     carried out under this section during the period for which 
     the report is being prepared.
       ``(e) Authorization of Appropriations.--For the purpose of 
     carrying out this section, there are authorized to be 
     appropriated such sums as may be necessary for each of the 
     fiscal years 2010 through 2014.''.
       (2) Transfer of functions.--There are transferred to the 
     Office on Women's Health (established under section 229 of 
     the Public Health Service Act, as added by this section), all 
     functions exercised by the Office on Women's Health of the 
     Public Health Service prior to the date of enactment of this 
     section, including all personnel and compensation authority, 
     all delegation and assignment authority, and all remaining 
     appropriations. All orders, determinations, rules, 
     regulations, permits, agreements, grants, contracts, 
     certificates, licenses, registrations, privileges, and other 
     administrative actions that--
       (A) have been issued, made, granted, or allowed to become 
     effective by the President, any Federal agency or official 
     thereof, or by a court of competent jurisdiction, in the 
     performance of functions transferred under this paragraph; 
     and
       (B) are in effect at the time this section takes effect, or 
     were final before the date of enactment of this section and 
     are to become effective on or after such date,

     shall continue in effect according to their terms until 
     modified, terminated, superseded, set aside, or revoked in 
     accordance with law by the President, the Secretary, or other 
     authorized official, a court of competent jurisdiction, or by 
     operation of law.
       (b) Centers for Disease Control and Prevention Office of 
     Women's Health.--Part A of title III of the Public Health 
     Service Act (42 U.S.C. 241 et seq.) is amended by adding at 
     the end the following:

     ``SEC. 310A. CENTERS FOR DISEASE CONTROL AND PREVENTION 
                   OFFICE OF WOMEN'S HEALTH.

       ``(a) Establishment.--There is established within the 
     Office of the Director of the Centers for Disease Control and 
     Prevention, an office to be known as the Office of Women's 
     Health (referred to in this section as the `Office'). The 
     Office shall be headed by a director who shall be appointed 
     by the Director of such Centers.
       ``(b) Purpose.--The Director of the Office shall--
       ``(1) report to the Director of the Centers for Disease 
     Control and Prevention on the current level of the Centers' 
     activity regarding women's health conditions across, where 
     appropriate, age, biological, and sociocultural contexts, in 
     all aspects of the Centers' work, including prevention 
     programs, public and professional education, services, and 
     treatment;
       ``(2) establish short-range and long-range goals and 
     objectives within the Centers for women's health and, as 
     relevant and appropriate, coordinate with other appropriate 
     offices on activities within the Centers that relate to 
     prevention, research, education and training, service 
     delivery, and policy development, for issues of particular 
     concern to women;
       ``(3) identify projects in women's health that should be 
     conducted or supported by the Centers;
       ``(4) consult with health professionals, nongovernmental 
     organizations, consumer organizations, women's health 
     professionals, and other individuals and groups, as 
     appropriate, on the policy of the Centers with regard to 
     women; and
       ``(5) serve as a member of the Department of Health and 
     Human Services Coordinating Committee on Women's Health 
     (established under section 229(b)(4)).
       ``(c) Definition.--As used in this section, the term 
     `women's health conditions', with respect to women of all 
     age, ethnic, and racial groups, means diseases, disorders, 
     and conditions--
       ``(1) unique to, significantly more serious for, or 
     significantly more prevalent in women; and
       ``(2) for which the factors of medical risk or type of 
     medical intervention are different for women, or for which 
     there is reasonable evidence that indicates that such factors 
     or types may be different for women.
       ``(d) Authorization of Appropriations.--For the purpose of 
     carrying out this section, there are authorized to be 
     appropriated such sums as may be necessary for each of the 
     fiscal years 2010 through 2014.''.
       (c) Office of Women's Health Research.--Section 486(a) of 
     the Public Health Service Act (42 U.S.C. 287d(a)) is amended 
     by inserting ``and who shall report directly to the 
     Director'' before the period at the end thereof.
       (d) Substance Abuse and Mental Health Services 
     Administration.--Section 501(f) of the Public Health Service 
     Act (42 U.S.C. 290aa(f)) is amended--
       (1) in paragraph (1), by inserting ``who shall report 
     directly to the Administrator'' before the period;

[[Page 28499]]

       (2) by redesignating paragraph (4) as paragraph (5); and
       (3) by inserting after paragraph (3), the following:
       ``(4) Office.--Nothing in this subsection shall be 
     construed to preclude the Secretary from establishing within 
     the Substance Abuse and Mental Health Administration an 
     Office of Women's Health.''.
       (e) Agency for Healthcare Research and Quality Activities 
     Regarding Women's Health.--Part C of title IX of the Public 
     Health Service Act (42 U.S.C. 299c et seq.) is amended--
       (1) by redesignating sections 925 and 926 as sections 926 
     and 927, respectively; and
       (2) by inserting after section 924 the following:

     ``SEC. 925. ACTIVITIES REGARDING WOMEN'S HEALTH.

       ``(a) Establishment.--There is established within the 
     Office of the Director, an Office of Women's Health and 
     Gender-Based Research (referred to in this section as the 
     `Office'). The Office shall be headed by a director who shall 
     be appointed by the Director of Healthcare and Research 
     Quality.
       ``(b) Purpose.--The official designated under subsection 
     (a) shall--
       ``(1) report to the Director on the current Agency level of 
     activity regarding women's health, across, where appropriate, 
     age, biological, and sociocultural contexts, in all aspects 
     of Agency work, including the development of evidence reports 
     and clinical practice protocols and the conduct of research 
     into patient outcomes, delivery of health care services, 
     quality of care, and access to health care;
       ``(2) establish short-range and long-range goals and 
     objectives within the Agency for research important to 
     women's health and, as relevant and appropriate, coordinate 
     with other appropriate offices on activities within the 
     Agency that relate to health services and medical 
     effectiveness research, for issues of particular concern to 
     women;
       ``(3) identify projects in women's health that should be 
     conducted or supported by the Agency;
       ``(4) consult with health professionals, nongovernmental 
     organizations, consumer organizations, women's health 
     professionals, and other individuals and groups, as 
     appropriate, on Agency policy with regard to women; and
       ``(5) serve as a member of the Department of Health and 
     Human Services Coordinating Committee on Women's Health 
     (established under section 229(b)(4)).''.
       ``(c) Authorization of Appropriations.--For the purpose of 
     carrying out this section, there are authorized to be 
     appropriated such sums as may be necessary for each of the 
     fiscal years 2010 through 2014.''.
       (f) Health Resources and Services Administration Office of 
     Women's Health.--Title VII of the Social Security Act (42 
     U.S.C. 901 et seq.) is amended by adding at the end the 
     following:

     ``SEC. 713. OFFICE OF WOMEN'S HEALTH.

       ``(a) Establishment.--The Secretary shall establish within 
     the Office of the Administrator of the Health Resources and 
     Services Administration, an office to be known as the Office 
     of Women's Health. The Office shall be headed by a director 
     who shall be appointed by the Administrator.
       ``(b) Purpose.--The Director of the Office shall--
       ``(1) report to the Administrator on the current 
     Administration level of activity regarding women's health 
     across, where appropriate, age, biological, and sociocultural 
     contexts;
       ``(2) establish short-range and long-range goals and 
     objectives within the Health Resources and Services 
     Administration for women's health and, as relevant and 
     appropriate, coordinate with other appropriate offices on 
     activities within the Administration that relate to health 
     care provider training, health service delivery, research, 
     and demonstration projects, for issues of particular concern 
     to women;
       ``(3) identify projects in women's health that should be 
     conducted or supported by the bureaus of the Administration;
       ``(4) consult with health professionals, nongovernmental 
     organizations, consumer organizations, women's health 
     professionals, and other individuals and groups, as 
     appropriate, on Administration policy with regard to women; 
     and
       ``(5) serve as a member of the Department of Health and 
     Human Services Coordinating Committee on Women's Health 
     (established under section 229(b)(4) of the Public Health 
     Service Act).
       ``(c) Continued Administration of Existing Programs.--The 
     Director of the Office shall assume the authority for the 
     development, implementation, administration, and evaluation 
     of any projects carried out through the Health Resources and 
     Services Administration relating to women's health on the 
     date of enactment of this section.
       ``(d) Definitions.--For purposes of this section:
       ``(1) Administration.--The term `Administration' means the 
     Health Resources and Services Administration.
       ``(2) Administrator.--The term `Administrator' means the 
     Administrator of the Health Resources and Services 
     Administration.
       ``(3) Office.--The term `Office' means the Office of 
     Women's Health established under this section in the 
     Administration.
       ``(e) Authorization of Appropriations.--For the purpose of 
     carrying out this section, there are authorized to be 
     appropriated such sums as may be necessary for each of the 
     fiscal years 2010 through 2014.''.
       (g) Food and Drug Administration Office of Women's 
     Health.--Chapter X of the Federal Food, Drug, and Cosmetic 
     Act (21 U.S.C. 391 et seq.) is amended by adding at the end 
     the following:

     ``SEC. 1011. OFFICE OF WOMEN'S HEALTH.

       ``(a) Establishment.--There is established within the 
     Office of the Commissioner, an office to be known as the 
     Office of Women's Health (referred to in this section as the 
     `Office'). The Office shall be headed by a director who shall 
     be appointed by the Commissioner of Food and Drugs.
       ``(b) Purpose.--The Director of the Office shall--
       ``(1) report to the Commissioner of Food and Drugs on 
     current Food and Drug Administration (referred to in this 
     section as the `Administration') levels of activity regarding 
     women's participation in clinical trials and the analysis of 
     data by sex in the testing of drugs, medical devices, and 
     biological products across, where appropriate, age, 
     biological, and sociocultural contexts;
       ``(2) establish short-range and long-range goals and 
     objectives within the Administration for issues of particular 
     concern to women's health within the jurisdiction of the 
     Administration, including, where relevant and appropriate, 
     adequate inclusion of women and analysis of data by sex in 
     Administration protocols and policies;
       ``(3) provide information to women and health care 
     providers on those areas in which differences between men and 
     women exist;
       ``(4) consult with pharmaceutical, biologics, and device 
     manufacturers, health professionals with expertise in women's 
     issues, consumer organizations, and women's health 
     professionals on Administration policy with regard to women;
       ``(5) make annual estimates of funds needed to monitor 
     clinical trials and analysis of data by sex in accordance 
     with needs that are identified; and
       ``(6) serve as a member of the Department of Health and 
     Human Services Coordinating Committee on Women's Health 
     (established under section 229(b)(4) of the Public Health 
     Service Act).
       ``(c) Authorization of Appropriations.--For the purpose of 
     carrying out this section, there are authorized to be 
     appropriated such sums as may be necessary for each of the 
     fiscal years 2010 through 2014.''.
       (h) No New Regulatory Authority.--Nothing in this section 
     and the amendments made by this section may be construed as 
     establishing regulatory authority or modifying any existing 
     regulatory authority.
       (i) Limitation on Termination.--Notwithstanding any other 
     provision of law, a Federal office of women's health 
     (including the Office of Research on Women's Health of the 
     National Institutes of Health) or Federal appointive position 
     with primary responsibility over women's health issues 
     (including the Associate Administrator for Women's Services 
     under the Substance Abuse and Mental Health Services 
     Administration) that is in existence on the date of enactment 
     of this section shall not be terminated, reorganized, or have 
     any of it's powers or duties transferred unless such 
     termination, reorganization, or transfer is approved by 
     Congress through the adoption of a concurrent resolution of 
     approval.
       (j) Rule of Construction.--Nothing in this section (or the 
     amendments made by this section) shall be construed to limit 
     the authority of the Secretary of Health and Human Services 
     with respect to women's health, or with respect to activities 
     carried out through the Department of Health and Human 
     Services on the date of enactment of this section.

     SEC. 3510. PATIENT NAVIGATOR PROGRAM.

       Section 340A of the Public Health Service Act (42 U.S.C. 
     256a) is amended--
       (1) by striking subsection (d)(3) and inserting the 
     following:
       ``(3) Limitations on grant period.--In carrying out this 
     section, the Secretary shall ensure that the total period of 
     a grant does not exceed 4 years.'';
       (2) in subsection (e), by adding at the end the following:
       ``(3) Minimum core proficiencies.--The Secretary shall not 
     award a grant to an entity under this section unless such 
     entity provides assurances that patient navigators recruited, 
     assigned, trained, or employed using grant funds meet minimum 
     core proficiencies, as defined by the entity that submits the 
     application, that are tailored for the main focus or 
     intervention of the navigator involved.''; and
       (3) in subsection (m)--
       (A) in paragraph (1), by striking ``and $3,500,000 for 
     fiscal year 2010.'' and inserting ``$3,500,000 for fiscal 
     year 2010, and such sums as may be necessary for each of 
     fiscal years 2011 through 2015.''; and
       (B) in paragraph (2), by striking ``2010'' and inserting 
     ``2015''.

     SEC. 3511. AUTHORIZATION OF APPROPRIATIONS.

       Except where otherwise provided in this subtitle (or an 
     amendment made by this subtitle), there is authorized to be 
     appropriated

[[Page 28500]]

     such sums as may be necessary to carry out this subtitle (and 
     such amendments made by this subtitle).

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

  Subtitle A--Modernizing Disease Prevention and Public Health Systems

     SEC. 4001. NATIONAL PREVENTION, HEALTH PROMOTION AND PUBLIC 
                   HEALTH COUNCIL.

       (a) Establishment.--The President shall establish, within 
     the Department of Health and Human Services, a council to be 
     known as the ``National Prevention, Health Promotion and 
     Public Health Council'' (referred to in this section as the 
     ``Council'').
       (b) Chairperson.--The President shall appoint the Surgeon 
     General to serve as the chairperson of the Council.
       (c) Composition.--The Council shall be composed of--
       (1) the Secretary of Health and Human Services;
       (2) the Secretary of Agriculture;
       (3) the Secretary of Education;
       (4) the Chairman of the Federal Trade Commission;
       (5) the Secretary of Transportation;
       (6) the Secretary of Labor;
       (7) the Secretary of Homeland Security;
       (8) the Administrator of the Environmental Protection 
     Agency;
       (9) the Director of the Office of National Drug Control 
     Policy;
       (10) the Director of the Domestic Policy Council;
       (11) the Assistant Secretary for Indian Affairs;
       (12) the Chairman of the Corporation for National and 
     Community Service; and
       (13) the head of any other Federal agency that the 
     chairperson determines is appropriate.
       (d) Purposes and Duties.--The Council shall--
       (1) provide coordination and leadership at the Federal 
     level, and among all Federal departments and agencies, with 
     respect to prevention, wellness and health promotion 
     practices, the public health system, and integrative health 
     care in the United States;
       (2) after obtaining input from relevant stakeholders, 
     develop a national prevention, health promotion, public 
     health, and integrative health care strategy that 
     incorporates the most effective and achievable means of 
     improving the health status of Americans and reducing the 
     incidence of preventable illness and disability in the United 
     States;
       (3) provide recommendations to the President and Congress 
     concerning the most pressing health issues confronting the 
     United States and changes in Federal policy to achieve 
     national wellness, health promotion, and public health goals, 
     including the reduction of tobacco use, sedentary behavior, 
     and poor nutrition;
       (4) consider and propose evidence-based models, policies, 
     and innovative approaches for the promotion of transformative 
     models of prevention, integrative health, and public health 
     on individual and community levels across the United States;
       (5) establish processes for continual public input, 
     including input from State, regional, and local leadership 
     communities and other relevant stakeholders, including Indian 
     tribes and tribal organizations;
       (6) submit the reports required under subsection (g); and
       (7) carry out other activities determined appropriate by 
     the President.
       (e) Meetings.--The Council shall meet at the call of the 
     Chairperson.
       (f) Advisory Group.--
       (1) In general.--The President shall establish an Advisory 
     Group to the Council to be known as the ``Advisory Group on 
     Prevention, Health Promotion, and Integrative and Public 
     Health'' (hereafter referred to in this section as the 
     ``Advisory Group''). The Advisory Group shall be within the 
     Department of Health and Human Services and report to the 
     Surgeon General.
       (2) Composition.--
       (A) In general.--The Advisory Group shall be composed of 
     not more than 25 non-Federal members to be appointed by the 
     President.
       (B) Representation.--In appointing members under 
     subparagraph (A), the President shall ensure that the 
     Advisory Group includes a diverse group of licensed health 
     professionals, including integrative health practitioners who 
     have expertise in--
       (i) worksite health promotion;
       (ii) community services, including community health 
     centers;
       (iii) preventive medicine;
       (iv) health coaching;
       (v) public health education;
       (vi) geriatrics; and
       (vii) rehabilitation medicine.
       (3) Purposes and duties.--The Advisory Group shall develop 
     policy and program recommendations and advise the Council on 
     lifestyle-based chronic disease prevention and management, 
     integrative health care practices, and health promotion.
       (g) National Prevention and Health Promotion Strategy.--Not 
     later than 1 year after the date of enactment of this Act, 
     the Chairperson, in consultation with the Council, shall 
     develop and make public a national prevention, health 
     promotion and public health strategy, and shall review and 
     revise such strategy periodically. Such strategy shall--
       (1) set specific goals and objectives for improving the 
     health of the United States through federally-supported 
     prevention, health promotion, and public health programs, 
     consistent with ongoing goal setting efforts conducted by 
     specific agencies;
       (2) establish specific and measurable actions and timelines 
     to carry out the strategy, and determine accountability for 
     meeting those timelines, within and across Federal 
     departments and agencies; and
       (3) make recommendations to improve Federal efforts 
     relating to prevention, health promotion, public health, and 
     integrative health care practices to ensure Federal efforts 
     are consistent with available standards and evidence.
       (h) Report.--Not later than July 1, 2010, and annually 
     thereafter through January 1, 2015, the Council shall submit 
     to the President and the relevant committees of Congress, a 
     report that--
       (1) describes the activities and efforts on prevention, 
     health promotion, and public health and activities to develop 
     a national strategy conducted by the Council during the 
     period for which the report is prepared;
       (2) describes the national progress in meeting specific 
     prevention, health promotion, and public health goals defined 
     in the strategy and further describes corrective actions 
     recommended by the Council and taken by relevant agencies and 
     organizations to meet these goals;
       (3) contains a list of national priorities on health 
     promotion and disease prevention to address lifestyle 
     behavior modification (smoking cessation, proper nutrition, 
     appropriate exercise, mental health, behavioral health, 
     substance use disorder, and domestic violence screenings) and 
     the prevention measures for the 5 leading disease killers in 
     the United States;
       (4) contains specific science-based initiatives to achieve 
     the measurable goals of Healthy People 2010 regarding 
     nutrition, exercise, and smoking cessation, and targeting the 
     5 leading disease killers in the United States;
       (5) contains specific plans for consolidating Federal 
     health programs and Centers that exist to promote healthy 
     behavior and reduce disease risk (including eliminating 
     programs and offices determined to be ineffective in meeting 
     the priority goals of Healthy People 2010);
       (6) contains specific plans to ensure that all Federal 
     health care programs are fully coordinated with science-based 
     prevention recommendations by the Director of the Centers for 
     Disease Control and Prevention; and
       (7) contains specific plans to ensure that all non-
     Department of Health and Human Services prevention programs 
     are based on the science-based guidelines developed by the 
     Centers for Disease Control and Prevention under paragraph 
     (4).
       (i) Periodic Reviews.--The Secretary and the Comptroller 
     General of the United States shall jointly conduct periodic 
     reviews, not less than every 5 years, and evaluations of 
     every Federal disease prevention and health promotion 
     initiative, program, and agency. Such reviews shall be 
     evaluated based on effectiveness in meeting metrics-based 
     goals with an analysis posted on such agencies' public 
     Internet websites.

     SEC. 4002. PREVENTION AND PUBLIC HEALTH FUND.

       (a) Purpose.--It is the purpose of this section to 
     establish a Prevention and Public Health Fund (referred to in 
     this section as the ``Fund''), to be administered through the 
     Department of Health and Human Services, Office of the 
     Secretary, to provide for expanded and sustained national 
     investment in prevention and public health programs to 
     improve health and help restrain the rate of growth in 
     private and public sector health care costs.
       (b) Funding.--There are hereby authorized to be 
     appropriated, and appropriated, to the Fund, out of any 
     monies in the Treasury not otherwise appropriated--
       (1) for fiscal year 2010, $500,000,000;
       (2) for fiscal year 2011, $750,000,000;
       (3) for fiscal year 2012, $1,000,000,000;
       (4) for fiscal year 2013, $1,250,000,000;
       (5) for fiscal year 2014, $1,500,000,000; and
       (6) for fiscal year 2015, and each fiscal year thereafter, 
     $2,000,000,000.
       (c) Use of Fund.--The Secretary shall transfer amounts in 
     the Fund to accounts within the Department of Health and 
     Human Services to increase funding, over the fiscal year 2008 
     level, for programs authorized by the Public Health Service 
     Act, for prevention, wellness, and public health activities 
     including prevention research and health screenings, such as 
     the Community Transformation grant program, the Education and 
     Outreach Campaign for Preventive Benefits, and immunization 
     programs.
       (d) Transfer Authority.--The Committee on Appropriations of 
     the Senate and the Committee on Appropriations of the House 
     of Representatives may provide for the transfer of funds in 
     the Fund to eligible activities under this section, subject 
     to subsection (c).

     SEC. 4003. CLINICAL AND COMMUNITY PREVENTIVE SERVICES.

       (a) Preventive Services Task Force.--Section 915 of the 
     Public Health Service Act (42 U.S.C. 299b-4) is amended by 
     striking subsection (a) and inserting the following:

[[Page 28501]]

       ``(a) Preventive Services Task Force.--
       ``(1) Establishment and purpose.--The Director shall 
     convene an independent Preventive Services Task Force 
     (referred to in this subsection as the `Task Force') to be 
     composed of individuals with appropriate expertise. Such Task 
     Force shall review the scientific evidence related to the 
     effectiveness, appropriateness, and cost-effectiveness of 
     clinical preventive services for the purpose of developing 
     recommendations for the health care community, and updating 
     previous clinical preventive recommendations, to be published 
     in the Guide to Clinical Preventive Services (referred to in 
     this section as the `Guide'), for individuals and 
     organizations delivering clinical services, including primary 
     care professionals, health care systems, professional 
     societies, employers, community organizations, non-profit 
     organizations, Congress and other policy-makers, governmental 
     public health agencies, health care quality organizations, 
     and organizations developing national health objectives. Such 
     recommendations shall consider clinical preventive best 
     practice recommendations from the Agency for Healthcare 
     Research and Quality, the National Institutes of Health, the 
     Centers for Disease Control and Prevention, the Institute of 
     Medicine, specialty medical associations, patient groups, and 
     scientific societies.
       ``(2) Duties.--The duties of the Task Force shall include--
       ``(A) the development of additional topic areas for new 
     recommendations and interventions related to those topic 
     areas, including those related to specific sub-populations 
     and age groups;
       ``(B) at least once during every 5-year period, review 
     interventions and update recommendations related to existing 
     topic areas, including new or improved techniques to assess 
     the health effects of interventions;
       ``(C) improved integration with Federal Government health 
     objectives and related target setting for health improvement;
       ``(D) the enhanced dissemination of recommendations;
       ``(E) the provision of technical assistance to those health 
     care professionals, agencies and organizations that request 
     help in implementing the Guide recommendations; and
       ``(F) the submission of yearly reports to Congress and 
     related agencies identifying gaps in research, such as 
     preventive services that receive an insufficient evidence 
     statement, and recommending priority areas that deserve 
     further examination, including areas related to populations 
     and age groups not adequately addressed by current 
     recommendations.
       ``(3) Role of agency.--The Agency shall provide ongoing 
     administrative, research, and technical support for the 
     operations of the Task Force, including coordinating and 
     supporting the dissemination of the recommendations of the 
     Task Force, ensuring adequate staff resources, and assistance 
     to those organizations requesting it for implementation of 
     the Guide's recommendations.
       ``(4) Coordination with community preventive services task 
     force.--The Task Force shall take appropriate steps to 
     coordinate its work with the Community Preventive Services 
     Task Force and the Advisory Committee on Immunization 
     Practices, including the examination of how each task force's 
     recommendations interact at the nexus of clinic and 
     community.
       ``(5) Operation.--Operation. In carrying out the duties 
     under paragraph (2), the Task Force is not subject to the 
     provisions of Appendix 2 of title 5, United States Code.
       ``(6) Independence.--All members of the Task Force convened 
     under this subsection, and any recommendations made by such 
     members, shall be independent and, to the extent practicable, 
     not subject to political pressure.
       ``(7) Authorization of appropriations.--There are 
     authorized to be appropriated such sums as may be necessary 
     for each fiscal year to carry out the activities of the Task 
     Force.''.
       (b) Community Preventive Services Task Force.--
       (1) In general.--Part P of title III of the Public Health 
     Service Act, as amended by paragraph (2), is amended by 
     adding at the end the following:

     ``SEC. 399U. COMMUNITY PREVENTIVE SERVICES TASK FORCE.

       ``(a) Establishment and Purpose.--The Director of the 
     Centers for Disease Control and Prevention shall convene an 
     independent Community Preventive Services Task Force 
     (referred to in this subsection as the `Task Force') to be 
     composed of individuals with appropriate expertise. Such Task 
     Force shall review the scientific evidence related to the 
     effectiveness, appropriateness, and cost-effectiveness of 
     community preventive interventions for the purpose of 
     developing recommendations, to be published in the Guide to 
     Community Preventive Services (referred to in this section as 
     the `Guide'), for individuals and organizations delivering 
     population-based services, including primary care 
     professionals, health care systems, professional societies, 
     employers, community organizations, non-profit organizations, 
     schools, governmental public health agencies, Indian tribes, 
     tribal organizations and urban Indian organizations, medical 
     groups, Congress and other policy-makers. Community 
     preventive services include any policies, programs, processes 
     or activities designed to affect or otherwise affecting 
     health at the population level.
       ``(b) Duties.--The duties of the Task Force shall include--
       ``(1) the development of additional topic areas for new 
     recommendations and interventions related to those topic 
     areas, including those related to specific populations and 
     age groups, as well as the social, economic and physical 
     environments that can have broad effects on the health and 
     disease of populations and health disparities among sub-
     populations and age groups;
       ``(2) at least once during every 5-year period, review 
     interventions and update recommendations related to existing 
     topic areas, including new or improved techniques to assess 
     the health effects of interventions, including health impact 
     assessment and population health modeling;
       ``(3) improved integration with Federal Government health 
     objectives and related target setting for health improvement;
       ``(4) the enhanced dissemination of recommendations;
       ``(5) the provision of technical assistance to those health 
     care professionals, agencies, and organizations that request 
     help in implementing the Guide recommendations; and
       ``(6) providing yearly reports to Congress and related 
     agencies identifying gaps in research and recommending 
     priority areas that deserve further examination, including 
     areas related to populations and age groups not adequately 
     addressed by current recommendations.
       ``(c) Role of Agency.--The Director shall provide ongoing 
     administrative, research, and technical support for the 
     operations of the Task Force, including coordinating and 
     supporting the dissemination of the recommendations of the 
     Task Force, ensuring adequate staff resources, and assistance 
     to those organizations requesting it for implementation of 
     Guide recommendations.
       ``(d) Coordination With Preventive Services Task Force.--
     The Task Force shall take appropriate steps to coordinate its 
     work with the U.S. Preventive Services Task Force and the 
     Advisory Committee on Immunization Practices, including the 
     examination of how each task force's recommendations interact 
     at the nexus of clinic and community.
       ``(e) Operation.--In carrying out the duties under 
     subsection (b), the Task Force shall not be subject to the 
     provisions of Appendix 2 of title 5, United States Code.
       ``(f) Authorization of Appropriations.--There are 
     authorized to be appropriated such sums as may be necessary 
     for each fiscal year to carry out the activities of the Task 
     Force.''.
       (2) Technical amendments.--
       (A) Section 399R of the Public Health Service Act (as added 
     by section 2 of the ALS Registry Act (Public Law 110-373; 122 
     Stat. 4047)) is redesignated as section 399S.
       (B) Section 399R of such Act (as added by section 3 of the 
     Prenatally and Postnatally Diagnosed Conditions Awareness Act 
     (Public Law 110-374; 122 Stat. 4051)) is redesignated as 
     section 399T.

     SEC. 4004. EDUCATION AND OUTREACH CAMPAIGN REGARDING 
                   PREVENTIVE BENEFITS.

       (a) In General.--The Secretary of Health and Human Services 
     (referred to in this section as the ``Secretary'') shall 
     provide for the planning and implementation of a national 
     public-private partnership for a prevention and health 
     promotion outreach and education campaign to raise public 
     awareness of health improvement across the life span. Such 
     campaign shall include the dissemination of information 
     that--
       (1) describes the importance of utilizing preventive 
     services to promote wellness, reduce health disparities, and 
     mitigate chronic disease;
       (2) promotes the use of preventive services recommended by 
     the United States Preventive Services Task Force and the 
     Community Preventive Services Task Force;
       (3) encourages healthy behaviors linked to the prevention 
     of chronic diseases;
       (4) explains the preventive services covered under health 
     plans offered through a Gateway;
       (5) describes additional preventive care supported by the 
     Centers for Disease Control and Prevention, the Health 
     Resources and Services Administration, the Substance Abuse 
     and Mental Health Services Administration, the Advisory 
     Committee on Immunization Practices, and other appropriate 
     agencies; and
       (6) includes general health promotion information.
       (b) Consultation.--In coordinating the campaign under 
     subsection (a), the Secretary shall consult with the 
     Institute of Medicine to provide ongoing advice on evidence-
     based scientific information for policy, program development, 
     and evaluation.
       (c) Media Campaign.--
       (1) In general.--Not later than 1 year after the date of 
     enactment of this Act, the Secretary, acting through the 
     Director of the Centers for Disease Control and Prevention, 
     shall establish and implement a national science-based media 
     campaign on health promotion and disease prevention.
       (2) Requirement of campaign.--The campaign implemented 
     under paragraph (1)--

[[Page 28502]]

       (A) shall be designed to address proper nutrition, regular 
     exercise, smoking cessation, obesity reduction, the 5 leading 
     disease killers in the United States, and secondary 
     prevention through disease screening promotion;
       (B) shall be carried out through competitively bid 
     contracts awarded to entities providing for the professional 
     production and design of such campaign;
       (C) may include the use of television, radio, Internet, and 
     other commercial marketing venues and may be targeted to 
     specific age groups based on peer-reviewed social research;
       (D) shall not be duplicative of any other Federal efforts 
     relating to health promotion and disease prevention; and
       (E) may include the use of humor and nationally recognized 
     positive role models.
       (3) Evaluation.--The Secretary shall ensure that the 
     campaign implemented under paragraph (1) is subject to an 
     independent evaluation every 2 years and shall report every 2 
     years to Congress on the effectiveness of such campaigns 
     towards meeting science-based metrics.
       (d) Website.--The Secretary, in consultation with private-
     sector experts, shall maintain or enter into a contract to 
     maintain an Internet website to provide science-based 
     information on guidelines for nutrition, regular exercise, 
     obesity reduction, smoking cessation, and specific chronic 
     disease prevention. Such website shall be designed to provide 
     information to health care providers and consumers.
       (e) Dissemination of Information Through Providers.--The 
     Secretary, acting through the Centers for Disease Control and 
     Prevention, shall develop and implement a plan for the 
     dissemination of health promotion and disease prevention 
     information consistent with national priorities, to health 
     care providers who participate in Federal programs, including 
     programs administered by the Indian Health Service, the 
     Department of Veterans Affairs, the Department of Defense, 
     and the Health Resources and Services Administration, and 
     Medicare and Medicaid.
       (f) Personalized Prevention Plans.--
       (1) Contract.--The Secretary, acting through the Director 
     of the Centers for Disease Control and Prevention, shall 
     enter into a contract with a qualified entity for the 
     development and operation of a Federal Internet website 
     personalized prevention plan tool.
       (2) Use.--The website developed under paragraph (1) shall 
     be designed to be used as a source of the most up-to-date 
     scientific evidence relating to disease prevention for use by 
     individuals. Such website shall contain a component that 
     enables an individual to determine their disease risk (based 
     on personal health and family history, BMI, and other 
     relevant information) relating to the 5 leading diseases in 
     the United States, and obtain personalized suggestions for 
     preventing such diseases.
       (g) Internet Portal.--The Secretary shall establish an 
     Internet portal for accessing risk-assessment tools developed 
     and maintained by private and academic entities.
       (h) Priority Funding.--Funding for the activities 
     authorized under this section shall take priority over 
     funding provided through the Centers for Disease Control and 
     Prevention for grants to States and other entities for 
     similar purposes and goals as provided for in this section. 
     Not to exceed $500,000,000 shall be expended on the campaigns 
     and activities required under this section.
       (i) Public Awareness of Preventive and Obesity-related 
     Services.--
       (1) Information to states.--The Secretary of Health and 
     Human Services shall provide guidance and relevant 
     information to States and health care providers regarding 
     preventive and obesity-related services that are available to 
     Medicaid enrollees, including obesity screening and 
     counseling for children and adults.
       (2) Information to enrollees.--Each State shall design a 
     public awareness campaign to educate Medicaid enrollees 
     regarding availability and coverage of such services, with 
     the goal of reducing incidences of obesity.
       (3) Report.--Not later than January 1, 2011, and every 3 
     years thereafter through January 1, 2017, the Secretary of 
     Health and Human Services shall report to Congress on the 
     status and effectiveness of efforts under paragraphs (1) and 
     (2), including summaries of the States' efforts to increase 
     awareness of coverage of obesity-related services.
       (j) Authorization of Appropriations.--There are authorized 
     to be appropriated such sums as may be necessary to carry out 
     this section.

     Subtitle B--Increasing Access to Clinical Preventive Services

     SEC. 4101. SCHOOL-BASED HEALTH CENTERS.

       (a) Grants for the Establishment of School-based Health 
     Centers.--
       (1) Program.--The Secretary of Health and Human Services 
     (in this subsection referred to as the ``Secretary'') shall 
     establish a program to award grants to eligible entities to 
     support the operation of school-based health centers.
       (2) Eligibility.--To be eligible for a grant under this 
     subsection, an entity shall--
       (A) be a school-based health center or a sponsoring 
     facility of a school-based health center; and
       (B) submit an application at such time, in such manner, and 
     containing such information as the Secretary may require, 
     including at a minimum an assurance that funds awarded under 
     the grant shall not be used to provide any service that is 
     not authorized or allowed by Federal, State, or local law.
       (3) Preference.--In awarding grants under this section, the 
     Secretary shall give preference to awarding grants for 
     school-based health centers that serve a large population of 
     children eligible for medical assistance under the State 
     Medicaid plan under title XIX of the Social Security Act or 
     under a waiver of such plan or children eligible for child 
     health assistance under the State child health plan under 
     title XXI of that Act (42 U.S.C. 1397aa et seq.).
       (4) Limitation on use of funds.--An eligible entity shall 
     use funds provided under a grant awarded under this 
     subsection only for expenditures for facilities (including 
     the acquisition or improvement of land, or the acquisition, 
     construction, expansion, replacement, or other improvement of 
     any building or other facility), equipment, or similar 
     expenditures, as specified by the Secretary. No funds 
     provided under a grant awarded under this section shall be 
     used for expenditures for personnel or to provide health 
     services.
       (5) Appropriations.--Out of any funds in the Treasury not 
     otherwise appropriated, there is appropriated for each of 
     fiscal years 2010 through 2013, $50,000,000 for the purpose 
     of carrying out this subsection. Funds appropriated under 
     this paragraph shall remain available until expended.
       (6) Definitions.--In this subsection, the terms ``school-
     based health center'' and ``sponsoring facility'' have the 
     meanings given those terms in section 2110(c)(9) of the 
     Social Security Act (42 U.S.C. 1397jj(c)(9)).
       (b) Grants for the Operation of School-based Health 
     Centers.--Part Q of title III of the Public Health Service 
     Act (42 U.S.C. 280h et seq.) is amended by adding at the end 
     the following:

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

       ``(a) Definitions; Establishment of Criteria.--In this 
     section:
       ``(1) Comprehensive primary health services.--The term 
     `comprehensive primary health services' means the core 
     services offered by school-based health centers, which shall 
     include the following:
       ``(A) Physical.--Comprehensive health assessments, 
     diagnosis, and treatment of minor, acute, and chronic medical 
     conditions, and referrals to, and follow-up for, specialty 
     care and oral health services.
       ``(B) Mental health.--Mental health and substance use 
     disorder assessments, crisis intervention, counseling, 
     treatment, and referral to a continuum of services including 
     emergency psychiatric care, community support programs, 
     inpatient care, and outpatient programs.
       ``(2) Medically underserved children and adolescents.--
       ``(A) In general.--The term `medically underserved children 
     and adolescents' means a population of children and 
     adolescents who are residents of an area designated as a 
     medically underserved area or a health professional shortage 
     area by the Secretary.
       ``(B) Criteria.--The Secretary shall prescribe criteria for 
     determining the specific shortages of personal health 
     services for medically underserved children and adolescents 
     under subparagraph (A) that shall--
       ``(i) take into account any comments received by the 
     Secretary from the chief executive officer of a State and 
     local officials in a State; and
       ``(ii) include factors indicative of the health status of 
     such children and adolescents of an area, including the 
     ability of the residents of such area to pay for health 
     services, the accessibility of such services, the 
     availability of health professionals to such children and 
     adolescents, and other factors as determined appropriate by 
     the Secretary.
       ``(3) School-based health center.--The term `school-based 
     health center' means a health clinic that--
       ``(A) meets the definition of a school-based health center 
     under section 2110(c)(9)(A) of the Social Security Act and is 
     administered by a sponsoring facility (as defined in section 
     2110(c)(9)(B) of the Social Security Act);
       ``(B) provides, at a minimum, comprehensive primary health 
     services during school hours to children and adolescents by 
     health professionals in accordance with established 
     standards, community practice, reporting laws, and other 
     State laws, including parental consent and notification laws 
     that are not inconsistent with Federal law; and
       ``(C) does not perform abortion services.
       ``(b) Authority to Award Grants.--The Secretary shall award 
     grants for the costs of the operation of school-based health 
     centers (referred to in this section as `SBHCs') that meet 
     the requirements of this section.
       ``(c) Applications.--To be eligible to receive a grant 
     under this section, an entity shall--
       ``(1) be an SBHC (as defined in subsection (a)(3)); and
       ``(2) submit to the Secretary an application at such time, 
     in such manner, and containing--
       ``(A) evidence that the applicant meets all criteria 
     necessary to be designated an SBHC;

[[Page 28503]]

       ``(B) evidence of local need for the services to be 
     provided by the SBHC;
       ``(C) an assurance that--
       ``(i) SBHC services will be provided to those children and 
     adolescents for whom parental or guardian consent has been 
     obtained in cooperation with Federal, State, and local laws 
     governing health care service provision to children and 
     adolescents;
       ``(ii) the SBHC has made and will continue to make every 
     reasonable effort to establish and maintain collaborative 
     relationships with other health care providers in the 
     catchment area of the SBHC;
       ``(iii) the SBHC will provide on-site access during the 
     academic day when school is in session and 24-hour coverage 
     through an on-call system and through its backup health 
     providers to ensure access to services on a year-round basis 
     when the school or the SBHC is closed;
       ``(iv) the SBHC will be integrated into the school 
     environment and will coordinate health services with school 
     personnel, such as administrators, teachers, nurses, 
     counselors, and support personnel, as well as with other 
     community providers co-located at the school;
       ``(v) the SBHC sponsoring facility assumes all 
     responsibility for the SBHC administration, operations, and 
     oversight; and
       ``(vi) the SBHC will comply with Federal, State, and local 
     laws concerning patient privacy and student records, 
     including regulations promulgated under the Health Insurance 
     Portability and Accountability Act of 1996 and section 444 of 
     the General Education Provisions Act; and
       ``(D) such other information as the Secretary may require.
       ``(d) Preferences and Consideration.--In reviewing 
     applications:
       ``(1) The Secretary may give preference to applicants who 
     demonstrate an ability to serve the following:
       ``(A) Communities that have evidenced barriers to primary 
     health care and mental health and substance use disorder 
     prevention services for children and adolescents.
       ``(B) Communities with high per capita numbers of children 
     and adolescents who are uninsured, underinsured, or enrolled 
     in public health insurance programs.
       ``(C) Populations of children and adolescents that have 
     historically demonstrated difficulty in accessing health and 
     mental health and substance use disorder prevention services.
       ``(2) The Secretary may give consideration to whether an 
     applicant has received a grant under subsection (a) of 
     section 4101 of the Patient Protection and Affordable Care 
     Act.
       ``(e) Waiver of Requirements.--The Secretary may--
       ``(1) under appropriate circumstances, waive the 
     application of all or part of the requirements of this 
     subsection with respect to an SBHC for not to exceed 2 years; 
     and
       ``(2) upon a showing of good cause, waive the requirement 
     that the SBHC provide all required comprehensive primary 
     health services for a designated period of time to be 
     determined by the Secretary.
       ``(f) Use of Funds.--
       ``(1) Funds.--Funds awarded under a grant under this 
     section--
       ``(A) may be used for--
       ``(i) acquiring and leasing equipment (including the costs 
     of amortizing the principle of, and paying interest on, loans 
     for such equipment);
       ``(ii) providing training related to the provision of 
     required comprehensive primary health services and additional 
     health services;
       ``(iii) the management and operation of health center 
     programs;
       ``(iv) the payment of salaries for physicians, nurses, and 
     other personnel of the SBHC; and
       ``(B) may not be used to provide abortions.
       ``(2) Construction.--The Secretary may award grants which 
     may be used to pay the costs associated with expanding and 
     modernizing existing buildings for use as an SBHC, including 
     the purchase of trailers or manufactured buildings to install 
     on the school property.
       ``(3) Limitations.--
       ``(A) In general.--Any provider of services that is 
     determined by a State to be in violation of a State law 
     described in subsection (a)(3)(B) with respect to activities 
     carried out at a SBHC shall not be eligible to receive 
     additional funding under this section.
       ``(B) No overlapping grant period.--No entity that has 
     received funding under section 330 for a grant period shall 
     be eligible for a grant under this section for with respect 
     to the same grant period.
       ``(g) Matching Requirement.--
       ``(1) In general.--Each eligible entity that receives a 
     grant under this section shall provide, from non-Federal 
     sources, an amount equal to 20 percent of the amount of the 
     grant (which may be provided in cash or in-kind) to carry out 
     the activities supported by the grant.
       ``(2) Waiver.--The Secretary may waive all or part of the 
     matching requirement described in paragraph (1) for any 
     fiscal year for the SBHC if the Secretary determines that 
     applying the matching requirement to the SBHC would result in 
     serious hardship or an inability to carry out the purposes of 
     this section.
       ``(h) Supplement, Not Supplant.--Grant funds provided under 
     this section shall be used to supplement, not supplant, other 
     Federal or State funds.
       ``(i) Evaluation.--The Secretary shall develop and 
     implement a plan for evaluating SBHCs and monitoring quality 
     performance under the awards made under this section.
       ``(j) Age Appropriate Services.--An eligible entity 
     receiving funds under this section shall only provide age 
     appropriate services through a SBHC funded under this section 
     to an individual.
       ``(k) Parental Consent.--An eligible entity receiving funds 
     under this section shall not provide services through a SBHC 
     funded under this section to an individual without the 
     consent of the parent or guardian of such individual if such 
     individual is considered a minor under applicable State law.
       ``(l) Authorization of Appropriations.--For purposes of 
     carrying out this section, there are authorized to be 
     appropriated such sums as may be necessary for each of the 
     fiscal years 2010 through 2014.''.

     SEC. 4102. ORAL HEALTHCARE PREVENTION ACTIVITIES.

       (a) In General.--Title III of the Public Health Service Act 
     (42 U.S.C. 241 et seq.), as amended by section 3025, is 
     amended by adding at the end the following:

            ``PART T--ORAL HEALTHCARE PREVENTION ACTIVITIES

     ``SEC. 399LL. ORAL HEALTHCARE PREVENTION EDUCATION CAMPAIGN.

       ``(a) Establishment.--The Secretary, acting through the 
     Director of the Centers for Disease Control and Prevention 
     and in consultation with professional oral health 
     organizations, shall, subject to the availability of 
     appropriations, establish a 5-year national, public education 
     campaign (referred to in this section as the `campaign') that 
     is focused on oral healthcare prevention and education, 
     including prevention of oral disease such as early childhood 
     and other caries, periodontal disease, and oral cancer.
       ``(b) Requirements.--In establishing the campaign, the 
     Secretary shall--
       ``(1) ensure that activities are targeted towards specific 
     populations such as children, pregnant women, parents, the 
     elderly, individuals with disabilities, and ethnic and racial 
     minority populations, including Indians, Alaska Natives and 
     Native Hawaiians (as defined in section 4(c) of the Indian 
     Health Care Improvement Act) in a culturally and 
     linguistically appropriate manner; and
       ``(2) utilize science-based strategies to convey oral 
     health prevention messages that include, but are not limited 
     to, community water fluoridation and dental sealants.
       ``(c) Planning and Implementation.--Not later than 2 years 
     after the date of enactment of this section, the Secretary 
     shall begin implementing the 5-year campaign. During the 2-
     year period referred to in the previous sentence, the 
     Secretary shall conduct planning activities with respect to 
     the campaign.

     ``SEC. 399LL-1. RESEARCH-BASED DENTAL CARIES DISEASE 
                   MANAGEMENT.

       ``(a) In General.--The Secretary, acting through the 
     Director of the Centers for Disease Control and Prevention, 
     shall award demonstration grants to eligible entities to 
     demonstrate the effectiveness of research-based dental caries 
     disease management activities.
       ``(b) Eligibility.--To be eligible for a grant under this 
     section, an entity shall--
       ``(1) be a community-based provider of dental services (as 
     defined by the Secretary), including a Federally-qualified 
     health center, a clinic of a hospital owned or operated by a 
     State (or by an instrumentality or a unit of government 
     within a State), a State or local department of health, a 
     dental program of the Indian Health Service, an Indian tribe 
     or tribal organization, or an urban Indian organization (as 
     such terms are defined in section 4 of the Indian Health Care 
     Improvement Act), a health system provider, a private 
     provider of dental services, medical, dental, public health, 
     nursing, nutrition educational institutions, or national 
     organizations involved in improving children's oral health; 
     and
       ``(2) submit to the Secretary an application at such time, 
     in such manner, and containing such information as the 
     Secretary may require.
       ``(c) Use of Funds.--A grantee shall use amounts received 
     under a grant under this section to demonstrate the 
     effectiveness of research-based dental caries disease 
     management activities.
       ``(d) Use of Information.--The Secretary shall utilize 
     information generated from grantees under this section in 
     planning and implementing the public education campaign under 
     section 399LL.

     ``SEC. 399LL-2. AUTHORIZATION OF APPROPRIATIONS.

       ``There is authorized to be appropriated to carry out this 
     part, such sums as may be necessary.''.
       (b) School-based Sealant Programs.--Section 317M(c)(1) of 
     the Public Health Service Act (42 U.S.C. 247b-14(c)(1)) is 
     amended by striking ``may award grants to States and Indian 
     tribes'' and inserting ``shall award a grant to each of the 
     50 States and territories and to Indians, Indian tribes, 
     tribal organizations and urban Indian organizations (as such 
     terms are defined in section 4 of the Indian Health Care 
     Improvement Act)''.

[[Page 28504]]

       (c) Oral Health Infrastructure.--Section 317M of the Public 
     Health Service Act (42 U.S.C. 247b-14) is amended--
       (1) by redesignating subsections (d) and (e) as subsections 
     (e) and (f), respectively; and
       (2) by inserting after subsection (c), the following:
       ``(d) Oral Health Infrastructure.--
       ``(1) Cooperative agreements.--The Secretary, acting 
     through the Director of the Centers for Disease Control and 
     Prevention, shall enter into cooperative agreements with 
     State, territorial, and Indian tribes or tribal organizations 
     (as those terms are defined in section 4 of the Indian Health 
     Care Improvement Act) to establish oral health leadership and 
     program guidance, oral health data collection and 
     interpretation, (including determinants of poor oral health 
     among vulnerable populations), a multi-dimensional delivery 
     system for oral health, and to implement science-based 
     programs (including dental sealants and community water 
     fluoridation) to improve oral health.
       ``(2) Authorization of appropriations.--There is authorized 
     to be appropriated such sums as necessary to carry out this 
     subsection for fiscal years 2010 through 2014.''.
       (d) Updating National Oral Healthcare Surveillance 
     Activities.--
       (1) PRAMS.--
       (A) In general.--The Secretary of Health and Human Services 
     (referred to in this subsection as the ``Secretary'') shall 
     carry out activities to update and improve the Pregnancy Risk 
     Assessment Monitoring System (referred to in this section as 
     ``PRAMS'') as it relates to oral healthcare.
       (B) State reports and mandatory measurements.--
       (i) In general.--Not later than 5 years after the date of 
     enactment of this Act, and every 5 years thereafter, a State 
     shall submit to the Secretary a report concerning activities 
     conducted within the State under PRAMS.
       (ii) Measurements.--The oral healthcare measurements 
     developed by the Secretary for use under PRAMS shall be 
     mandatory with respect to States for purposes of the State 
     reports under clause (i).
       (C) Funding.--There is authorized to be appropriated to 
     carry out this paragraph, such sums as may be necessary.
       (2) National health and nutrition examination survey.--The 
     Secretary shall develop oral healthcare components that shall 
     include tooth-level surveillance for inclusion in the 
     National Health and Nutrition Examination Survey. Such 
     components shall be updated by the Secretary at least every 6 
     years. For purposes of this paragraph, the term ``tooth-level 
     surveillance'' means a clinical examination where an examiner 
     looks at each dental surface, on each tooth in the mouth and 
     as expanded by the Division of Oral Health of the Centers for 
     Disease Control and Prevention.
       (3) Medical expenditures panel survey.--The Secretary shall 
     ensure that the Medical Expenditures Panel Survey by the 
     Agency for Healthcare Research and Quality includes the 
     verification of dental utilization, expenditure, and coverage 
     findings through conduct of a look-back analysis.
       (4) National oral health surveillance system.--
       (A) Appropriations.--There is authorized to be 
     appropriated, such sums as may be necessary for each of 
     fiscal years 2010 through 2014 to increase the participation 
     of States in the National Oral Health Surveillance System 
     from 16 States to all 50 States, territories, and District of 
     Columbia.
       (B) Requirements.--The Secretary shall ensure that the 
     National Oral Health Surveillance System include the 
     measurement of early childhood caries.

     SEC. 4103. MEDICARE COVERAGE OF ANNUAL WELLNESS VISIT 
                   PROVIDING A PERSONALIZED PREVENTION PLAN.

       (a) Coverage of Personalized Prevention Plan Services.--
       (1) In general.--Section 1861(s)(2) of the Social Security 
     Act (42 U.S.C. 1395x(s)(2)) is amended--
       (A) in subparagraph (DD), by striking ``and'' at the end;
       (B) in subparagraph (EE), by adding ``and'' at the end; and
       (C) by adding at the end the following new subparagraph:
       ``(FF) personalized prevention plan services (as defined in 
     subsection (hhh));''.
       (2) Conforming amendments.--Clauses (i) and (ii) of section 
     1861(s)(2)(K) of the Social Security Act (42 U.S.C. 
     1395x(s)(2)(K)) are each amended by striking ``subsection 
     (ww)(1)'' and inserting ``subsections (ww)(1) and (hhh)''.
       (b) Personalized Prevention Plan Services Defined.--Section 
     1861 of the Social Security Act (42 U.S.C. 1395x) is amended 
     by adding at the end the following new subsection:

                        ``Annual Wellness Visit

       ``(hhh)(1) The term `personalized prevention plan services' 
     means the creation of a plan for an individual--
       ``(A) that includes a health risk assessment (that meets 
     the guidelines established by the Secretary under paragraph 
     (4)(A)) of the individual that is completed prior to or as 
     part of the same visit with a health professional described 
     in paragraph (3); and
       ``(B) that--
       ``(i) takes into account the results of the health risk 
     assessment; and
       ``(ii) may contain the elements described in paragraph (2).
       ``(2) Subject to paragraph (4)(H), the elements described 
     in this paragraph are the following:
       ``(A) The establishment of, or an update to, the 
     individual's medical and family history.
       ``(B) A list of current providers and suppliers that are 
     regularly involved in providing medical care to the 
     individual (including a list of all prescribed medications).
       ``(C) A measurement of height, weight, body mass index (or 
     waist circumference, if appropriate), blood pressure, and 
     other routine measurements.
       ``(D) Detection of any cognitive impairment.
       ``(E) The establishment of, or an update to, the following:
       ``(i) A screening schedule for the next 5 to 10 years, as 
     appropriate, based on recommendations of the United States 
     Preventive Services Task Force and the Advisory Committee on 
     Immunization Practices, and the individual's health status, 
     screening history, and age-appropriate preventive services 
     covered under this title.
       ``(ii) A list of risk factors and conditions for which 
     primary, secondary, or tertiary prevention interventions are 
     recommended or are underway, including any mental health 
     conditions or any such risk factors or conditions that have 
     been identified through an initial preventive physical 
     examination (as described under subsection (ww)(1)), and a 
     list of treatment options and their associated risks and 
     benefits.
       ``(F) The furnishing of personalized health advice and a 
     referral, as appropriate, to health education or preventive 
     counseling services or programs aimed at reducing identified 
     risk factors and improving self-management, or community-
     based lifestyle interventions to reduce health risks and 
     promote self-management and wellness, including weight loss, 
     physical activity, smoking cessation, fall prevention, and 
     nutrition.
       ``(G) Any other element determined appropriate by the 
     Secretary.
       ``(3) A health professional described in this paragraph 
     is--
       ``(A) a physician;
       ``(B) a practitioner described in clause (i) of section 
     1842(b)(18)(C); or
       ``(C) a medical professional (including a health educator, 
     registered dietitian, or nutrition professional) or a team of 
     medical professionals, as determined appropriate by the 
     Secretary, under the supervision of a physician.
       ``(4)(A) For purposes of paragraph (1)(A), the Secretary, 
     not later than 1 year after the date of enactment of this 
     subsection, shall establish publicly available guidelines for 
     health risk assessments. Such guidelines shall be developed 
     in consultation with relevant groups and entities and shall 
     provide that a health risk assessment--
       ``(i) identify chronic diseases, injury risks, modifiable 
     risk factors, and urgent health needs of the individual; and
       ``(ii) may be furnished--
       ``(I) through an interactive telephonic or web-based 
     program that meets the standards established under 
     subparagraph (B);
       ``(II) during an encounter with a health care professional;
       ``(III) through community-based prevention programs; or
       ``(IV) through any other means the Secretary determines 
     appropriate to maximize accessibility and ease of use by 
     beneficiaries, while ensuring the privacy of such 
     beneficiaries.
       ``(B) Not later than 1 year after the date of enactment of 
     this subsection, the Secretary shall establish standards for 
     interactive telephonic or web-based programs used to furnish 
     health risk assessments under subparagraph (A)(ii)(I). The 
     Secretary may utilize any health risk assessment developed 
     under section 4004(f) of the Patient Protection and 
     Affordable Care Act as part of the requirement to develop a 
     personalized prevention plan to comply with this 
     subparagraph.
       ``(C)(i) Not later than 18 months after the date of 
     enactment of this subsection, the Secretary shall develop and 
     make available to the public a health risk assessment model. 
     Such model shall meet the guidelines under subparagraph (A) 
     and may be used to meet the requirement under paragraph 
     (1)(A).
       ``(ii) Any health risk assessment that meets the guidelines 
     under subparagraph (A) and is approved by the Secretary may 
     be used to meet the requirement under paragraph (1)(A).
       ``(D) The Secretary may coordinate with community-based 
     entities (including State Health Insurance Programs, Area 
     Agencies on Aging, Aging and Disability Resource Centers, and 
     the Administration on Aging) to--
       ``(i) ensure that health risk assessments are accessible to 
     beneficiaries; and
       ``(ii) provide appropriate support for the completion of 
     health risk assessments by beneficiaries.
       ``(E) The Secretary shall establish procedures to make 
     beneficiaries and providers aware of the requirement that a 
     beneficiary complete a health risk assessment prior to or at 
     the same time as receiving personalized prevention plan 
     services.

[[Page 28505]]

       ``(F) To the extent practicable, the Secretary shall 
     encourage the use of, integration with, and coordination of 
     health information technology (including use of technology 
     that is compatible with electronic medical records and 
     personal health records) and may experiment with the use of 
     personalized technology to aid in the development of self-
     management skills and management of and adherence to provider 
     recommendations in order to improve the health status of 
     beneficiaries.
       ``(G)(i) A beneficiary shall only be eligible to receive an 
     initial preventive physical examination (as defined under 
     subsection (ww)(1)) at any time during the 12-month period 
     after the date that the beneficiary's coverage begins under 
     part B and shall be eligible to receive personalized 
     prevention plan services under this subsection provided that 
     the beneficiary has not received such services within the 
     preceding 12-month period.
       ``(ii) The Secretary shall establish procedures to make 
     beneficiaries aware of the option to select an initial 
     preventive physical examination or personalized prevention 
     plan services during the period of 12 months after the date 
     that a beneficiary's coverage begins under part B, which 
     shall include information regarding any relevant differences 
     between such services.
       ``(H) The Secretary shall issue guidance that--
       ``(i) identifies elements under paragraph (2) that are 
     required to be provided to a beneficiary as part of their 
     first visit for personalized prevention plan services; and
       ``(ii) establishes a yearly schedule for appropriate 
     provision of such elements thereafter.''.
       (c) Payment and Elimination of Cost-Sharing.--
       (1) Payment and elimination of coinsurance.--Section 
     1833(a)(1) of the Social Security Act (42 U.S.C. 1395l(a)(1)) 
     is amended--
       (A) in subparagraph (N), by inserting ``other than 
     personalized prevention plan services (as defined in section 
     1861(hhh)(1))'' after ``(as defined in section 1848(j)(3))'';
       (B) by striking ``and'' before ``(W)''; and
       (C) by inserting before the semicolon at the end the 
     following: ``, and (X) with respect to personalized 
     prevention plan services (as defined in section 
     1861(hhh)(1)), the amount paid shall be 100 percent of the 
     lesser of the actual charge for the services or the amount 
     determined under the payment basis determined under section 
     1848''.
       (2) Payment under physician fee schedule.--Section 
     1848(j)(3) of the Social Security Act (42 U.S.C. 1395w-
     4(j)(3)) is amended by inserting ``(2)(FF) (including 
     administration of the health risk assessment) ,'' after 
     ``(2)(EE),''.
       (3) Elimination of coinsurance in outpatient hospital 
     settings.--
       (A) Exclusion from opd fee schedule.--Section 
     1833(t)(1)(B)(iv) of the Social Security Act (42 U.S.C. 
     1395l(t)(1)(B)(iv)) is amended by striking ``and diagnostic 
     mammography'' and inserting ``, diagnostic mammography, or 
     personalized prevention plan services (as defined in section 
     1861(hhh)(1))''.
       (B) Conforming amendments.--Section 1833(a)(2) of the 
     Social Security Act (42 U.S.C. 1395l(a)(2)) is amended--
       (i) in subparagraph (F), by striking ``and'' at the end;
       (ii) in subparagraph (G)(ii), by striking the comma at the 
     end and inserting ``; and''; and
       (iii) by inserting after subparagraph (G)(ii) the following 
     new subparagraph:
       ``(H) with respect to personalized prevention plan services 
     (as defined in section 1861(hhh)(1)) furnished by an 
     outpatient department of a hospital, the amount determined 
     under paragraph (1)(X),''.
       (4) Waiver of application of deductible.--The first 
     sentence of section 1833(b) of the Social Security Act (42 
     U.S.C. 1395l(b)) is amended--
       (A) by striking ``and'' before ``(9)''; and
       (B) by inserting before the period the following: ``, and 
     (10) such deductible shall not apply with respect to 
     personalized prevention plan services (as defined in section 
     1861(hhh)(1))''.
       (d) Frequency Limitation.--Section 1862(a) of the Social 
     Security Act (42 U.S.C. 1395y(a)) is amended--
       (1) in paragraph (1)--
       (A) in subparagraph (N), by striking ``and'' at the end;
       (B) in subparagraph (O), by striking the semicolon at the 
     end and inserting ``, and''; and
       (C) by adding at the end the following new subparagraph:
       ``(P) in the case of personalized prevention plan services 
     (as defined in section 1861(hhh)(1)), which are performed 
     more frequently than is covered under such section;''; and
       (2) in paragraph (7), by striking ``or (K)'' and inserting 
     ``(K), or (P)''.
       (e) Effective Date.--The amendments made by this section 
     shall apply to services furnished on or after January 1, 
     2011.

     SEC. 4104. REMOVAL OF BARRIERS TO PREVENTIVE SERVICES IN 
                   MEDICARE.

       (a) Definition of Preventive Services.--Section 1861(ddd) 
     of the Social Security Act (42 U.S.C. 1395x(ddd)) is 
     amended--
       (1) in the heading, by inserting ``; Preventive Services'' 
     after ``Services'';
       (2) in paragraph (1), by striking ``not otherwise described 
     in this title'' and inserting ``not described in subparagraph 
     (A) or (C) of paragraph (3)''; and
       (3) by adding at the end the following new paragraph:
       ``(3) The term `preventive services' means the following:
       ``(A) The screening and preventive services described in 
     subsection (ww)(2) (other than the service described in 
     subparagraph (M) of such subsection).
       ``(B) An initial preventive physical examination (as 
     defined in subsection (ww)).
       ``(C) Personalized prevention plan services (as defined in 
     subsection (hhh)(1)).''.
       (b) Coinsurance.--
       (1) General application.--
       (A) In general.--Section 1833(a)(1) of the Social Security 
     Act (42 U.S.C. 1395l(a)(1)), as amended by section 
     4103(c)(1), is amended--
       (i) in subparagraph (T), by inserting ``(or 100 percent if 
     such services are recommended with a grade of A or B by the 
     United States Preventive Services Task Force for any 
     indication or population and are appropriate for the 
     individual)'' after ``80 percent'';
       (ii) in subparagraph (W)--

       (I) in clause (i), by inserting ``(if such subparagraph 
     were applied, by substituting `100 percent' for `80 
     percent')'' after ``subparagraph (D)''; and
       (II) in clause (ii), by striking ``80 percent'' and 
     inserting ``100 percent'';

       (iii) by striking ``and'' before ``(X)''; and
       (iv) by inserting before the semicolon at the end the 
     following: ``, and (Y) with respect to preventive services 
     described in subparagraphs (A) and (B) of section 
     1861(ddd)(3) that are appropriate for the individual and, in 
     the case of such services described in subparagraph (A), are 
     recommended with a grade of A or B by the United States 
     Preventive Services Task Force for any indication or 
     population, the amount paid shall be 100 percent of the 
     lesser of the actual charge for the services or the amount 
     determined under the fee schedule that applies to such 
     services under this part''.
       (2) Elimination of coinsurance in outpatient hospital 
     settings.--
       (A) Exclusion from opd fee schedule.--Section 
     1833(t)(1)(B)(iv) of the Social Security Act (42 U.S.C. 
     1395l(t)(1)(B)(iv)), as amended by section 4103(c)(3)(A), is 
     amended--
       (i) by striking ``or'' before ``personalized prevention 
     plan services''; and
       (ii) by inserting before the period the following: ``, or 
     preventive services described in subparagraphs (A) and (B) of 
     section 1861(ddd)(3) that are appropriate for the individual 
     and, in the case of such services described in subparagraph 
     (A), are recommended with a grade of A or B by the United 
     States Preventive Services Task Force for any indication or 
     population''.
       (B) Conforming amendments.--Section 1833(a)(2) of the 
     Social Security Act (42 U.S.C. 1395l(a)(2)), as amended by 
     section 4103(c)(3)(B), is amended--
       (i) in subparagraph (G)(ii), by striking ``and'' after the 
     semicolon at the end;
       (ii) in subparagraph (H), by striking the comma at the end 
     and inserting ``; and''; and
       (iii) by inserting after subparagraph (H) the following new 
     subparagraph:
       ``(I) with respect to preventive services described in 
     subparagraphs (A) and (B) of section 1861(ddd)(3) that are 
     appropriate for the individual and are furnished by an 
     outpatient department of a hospital and, in the case of such 
     services described in subparagraph (A), are recommended with 
     a grade of A or B by the United States Preventive Services 
     Task Force for any indication or population, the amount 
     determined under paragraph (1)(W) or (1)(Y),''.
       (c) Waiver of Application of Deductible for Preventive 
     Services and Colorectal Cancer Screening Tests.--Section 
     1833(b) of the Social Security Act (42 U.S.C. 1395l(b)), as 
     amended by section 4103(c)(4), is amended--
       (1) in paragraph (1), by striking ``items and services 
     described in section 1861(s)(10)(A)'' and inserting 
     ``preventive services described in subparagraph (A) of 
     section 1861(ddd)(3) that are recommended with a grade of A 
     or B by the United States Preventive Services Task Force for 
     any indication or population and are appropriate for the 
     individual.''; and
       (2) by adding at the end the following new sentence: 
     ``Paragraph (1) of the first sentence of this subsection 
     shall apply with respect to a colorectal cancer screening 
     test regardless of the code that is billed for the 
     establishment of a diagnosis as a result of the test, or for 
     the removal of tissue or other matter or other procedure that 
     is furnished in connection with, as a result of, and in the 
     same clinical encounter as the screening test.''.
       (d) Effective Date.--The amendments made by this section 
     shall apply to items and services furnished on or after 
     January 1, 2011.

     SEC. 4105. EVIDENCE-BASED COVERAGE OF PREVENTIVE SERVICES IN 
                   MEDICARE.

       (a) Authority to Modify or Eliminate Coverage of Certain 
     Preventive Services.--Section 1834 of the Social Security Act 
     (42 U.S.C. 1395m) is amended by adding at the end the 
     following new subsection:
       ``(n) Authority To Modify or Eliminate Coverage of Certain 
     Preventive Services.--Notwithstanding any other provision of 
     this title, effective beginning on January

[[Page 28506]]

     1, 2010, if the Secretary determines appropriate, the 
     Secretary may--
       ``(1) modify--
       ``(A) the coverage of any preventive service described in 
     subparagraph (A) of section 1861(ddd)(3) to the extent that 
     such modification is consistent with the recommendations of 
     the United States Preventive Services Task Force; and
       ``(B) the services included in the initial preventive 
     physical examination described in subparagraph (B) of such 
     section; and
       ``(2) provide that no payment shall be made under this 
     title for a preventive service described in subparagraph (A) 
     of such section that has not received a grade of A, B, C, or 
     I by such Task Force.''.
       (b) Construction.--Nothing in the amendment made by 
     paragraph (1) shall be construed to affect the coverage of 
     diagnostic or treatment services under title XVIII of the 
     Social Security Act.

     SEC. 4106. IMPROVING ACCESS TO PREVENTIVE SERVICES FOR 
                   ELIGIBLE ADULTS IN MEDICAID.

       (a) Clarification of Inclusion of Services.--Section 
     1905(a)(13) of the Social Security Act (42 U.S.C. 
     1396d(a)(13)) is amended to read as follows:
       ``(13) other diagnostic, screening, preventive, and 
     rehabilitative services, including--
       ``(A) any clinical preventive services that are assigned a 
     grade of A or B by the United States Preventive Services Task 
     Force;
       ``(B) with respect to an adult individual, approved 
     vaccines recommended by the Advisory Committee on 
     Immunization Practices (an advisory committee established by 
     the Secretary, acting through the Director of the Centers for 
     Disease Control and Prevention) and their administration; and
       ``(C) any medical or remedial services (provided in a 
     facility, a home, or other setting) recommended by a 
     physician or other licensed practitioner of the healing arts 
     within the scope of their practice under State law, for the 
     maximum reduction of physical or mental disability and 
     restoration of an individual to the best possible functional 
     level;''.
       (b) Increased Fmap.--Section 1905(b) of the Social Security 
     Act (42 U.S.C. 1396d(b)), as amended by sections 
     2001(a)(3)(A) and 2004(c)(1), is amended in the first 
     sentence--
       (1) by striking ``, and (4)'' and inserting ``, (4)''; and
       (2) by inserting before the period the following: ``, and 
     (5) in the case of a State that provides medical assistance 
     for services and vaccines described in subparagraphs (A) and 
     (B) of subsection (a)(13), and prohibits cost-sharing for 
     such services and vaccines, the Federal medical assistance 
     percentage, as determined under this subsection and 
     subsection (y) (without regard to paragraph (1)(C) of such 
     subsection), shall be increased by 1 percentage point with 
     respect to medical assistance for such services and vaccines 
     and for items and services described in subsection 
     (a)(4)(D)''.
       (c) Effective Date.--The amendments made under this section 
     shall take effect on January 1, 2013.

     SEC. 4107. COVERAGE OF COMPREHENSIVE TOBACCO CESSATION 
                   SERVICES FOR PREGNANT WOMEN IN MEDICAID.

       (a) Requiring Coverage of Counseling and Pharmacotherapy 
     for Cessation of Tobacco Use by Pregnant Women.--Section 1905 
     of the Social Security Act (42 U.S.C. 1396d), as amended by 
     sections 2001(a)(3)(B) and 2303, is further amended--
       (1) in subsection (a)(4)--
       (A) by striking ``and'' before ``(C)''; and
       (B) by inserting before the semicolon at the end the 
     following new subparagraph: ``; and (D) counseling and 
     pharmacotherapy for cessation of tobacco use by pregnant 
     women (as defined in subsection (bb))''; and
       (2) by adding at the end the following:
       ``(bb)(1) For purposes of this title, the term `counseling 
     and pharmacotherapy for cessation of tobacco use by pregnant 
     women' means diagnostic, therapy, and counseling services and 
     pharmacotherapy (including the coverage of prescription and 
     nonprescription tobacco cessation agents approved by the Food 
     and Drug Administration) for cessation of tobacco use by 
     pregnant women who use tobacco products or who are being 
     treated for tobacco use that is furnished--
       ``(A) by or under the supervision of a physician; or
       ``(B) by any other health care professional who--
       ``(i) is legally authorized to furnish such services under 
     State law (or the State regulatory mechanism provided by 
     State law) of the State in which the services are furnished; 
     and
       ``(ii) is authorized to receive payment for other services 
     under this title or is designated by the Secretary for this 
     purpose.
       ``(2) Subject to paragraph (3), such term is limited to--
       ``(A) services recommended with respect to pregnant women 
     in `Treating Tobacco Use and Dependence: 2008 Update: A 
     Clinical Practice Guideline', published by the Public Health 
     Service in May 2008, or any subsequent modification of such 
     Guideline; and
       ``(B) such other services that the Secretary recognizes to 
     be effective for cessation of tobacco use by pregnant women.
       ``(3) Such term shall not include coverage for drugs or 
     biologicals that are not otherwise covered under this 
     title.''.
       (b) Exception From Optional Restriction Under Medicaid 
     Prescription Drug Coverage.--Section 1927(d)(2)(F) of the 
     Social Security Act (42 U.S.C. 1396r-8(d)(2)(F)), as 
     redesignated by section 2502(a), is amended by inserting 
     before the period at the end the following: ``, except, in 
     the case of pregnant women when recommended in accordance 
     with the Guideline referred to in section 1905(bb)(2)(A), 
     agents approved by the Food and Drug Administration under the 
     over-the-counter monograph process for purposes of promoting, 
     and when used to promote, tobacco cessation''.
       (c) Removal of Cost-Sharing for Counseling and 
     Pharmacotherapy for Cessation of Tobacco Use by Pregnant 
     Women.--
       (1) General cost-sharing limitations.--Section 1916 of the 
     Social Security Act (42 U.S.C. 1396o) is amended in each of 
     subsections (a)(2)(B) and (b)(2)(B) by inserting ``, and 
     counseling and pharmacotherapy for cessation of tobacco use 
     by pregnant women (as defined in section 1905(bb)) and 
     covered outpatient drugs (as defined in subsection (k)(2) of 
     section 1927 and including nonprescription drugs described in 
     subsection (d)(2) of such section) that are prescribed for 
     purposes of promoting, and when used to promote, tobacco 
     cessation by pregnant women in accordance with the Guideline 
     referred to in section 1905(bb)(2)(A)'' after ``complicate 
     the pregnancy''.
       (2) Application to alternative cost-sharing.--Section 
     1916A(b)(3)(B)(iii) of such Act (42 U.S.C. 1396o-
     1(b)(3)(B)(iii)) is amended by inserting ``, and counseling 
     and pharmacotherapy for cessation of tobacco use by pregnant 
     women (as defined in section 1905(bb))'' after ``complicate 
     the pregnancy''.
       (d) Effective Date.--The amendments made by this section 
     shall take effect on October 1, 2010.

     SEC. 4108. INCENTIVES FOR PREVENTION OF CHRONIC DISEASES IN 
                   MEDICAID.

       (a) Initiatives.--
       (1) Establishment.--
       (A) In general.--The Secretary shall award grants to States 
     to carry out initiatives to provide incentives to Medicaid 
     beneficiaries who--
       (i) successfully participate in a program described in 
     paragraph (3); and
       (ii) upon completion of such participation, demonstrate 
     changes in health risk and outcomes, including the adoption 
     and maintenance of healthy behaviors by meeting specific 
     targets (as described in subsection (c)(2)).
       (B) Purpose.--The purpose of the initiatives under this 
     section is to test approaches that may encourage behavior 
     modification and determine scalable solutions.
       (2) Duration.--
       (A) Initiation of program; resources.--The Secretary shall 
     awards grants to States beginning on January 1, 2011, or 
     beginning on the date on which the Secretary develops program 
     criteria, whichever is earlier. The Secretary shall develop 
     program criteria for initiatives under this section using 
     relevant evidence-based research and resources, including the 
     Guide to Community Preventive Services, the Guide to Clinical 
     Preventive Services, and the National Registry of Evidence-
     Based Programs and Practices.
       (B) Duration of program.--A State awarded a grant to carry 
     out initiatives under this section shall carry out such 
     initiatives within the 5-year period beginning on January 1, 
     2011, or beginning on the date on which the Secretary 
     develops program criteria, whichever is earlier. Initiatives 
     under this section shall be carried out by a State for a 
     period of not less than 3 years.
       (3) Program described.--
       (A) In general.--A program described in this paragraph is a 
     comprehensive, evidence-based, widely available, and easily 
     accessible program, proposed by the State and approved by the 
     Secretary, that is designed and uniquely suited to address 
     the needs of Medicaid beneficiaries and has demonstrated 
     success in helping individuals achieve one or more of the 
     following:
       (i) Ceasing use of tobacco products.
       (ii) Controlling or reducing their weight.
       (iii) Lowering their cholesterol.
       (iv) Lowering their blood pressure.
       (v) Avoiding the onset of diabetes or, in the case of a 
     diabetic, improving the management of that condition.
       (B) Co-morbidities.--A program under this section may also 
     address co-morbidities (including depression) that are 
     related to any of the conditions described in subparagraph 
     (A).
       (C) Waiver authority.--The Secretary may waive the 
     requirements of section 1902(a)(1) (relating to 
     statewideness) of the Social Security Act for a State awarded 
     a grant to conduct an initiative under this section and shall 
     ensure that a State makes any program described in 
     subparagraph (A) available and accessible to Medicaid 
     beneficiaries.
       (D) Flexibility in implementation.--A State may enter into 
     arrangements with providers participating in Medicaid, 
     community-based organizations, faith-based organizations, 
     public-private partnerships, Indian tribes, or similar 
     entities or organizations to carry out programs described in 
     subparagraph (A).
       (4) Application.--Following the development of program 
     criteria by the Secretary, a

[[Page 28507]]

     State may submit an application, in such manner and 
     containing such information as the Secretary may require, 
     that shall include a proposal for programs described in 
     paragraph (3)(A) and a plan to make Medicaid beneficiaries 
     and providers participating in Medicaid who reside in the 
     State aware and informed about such programs.
       (b) Education and Outreach Campaign.--
       (1) State awareness.--The Secretary shall conduct an 
     outreach and education campaign to make States aware of the 
     grants under this section.
       (2) Provider and beneficiary education.--A State awarded a 
     grant to conduct an initiative under this section shall 
     conduct an outreach and education campaign to make Medicaid 
     beneficiaries and providers participating in Medicaid who 
     reside in the State aware of the programs described in 
     subsection (a)(3) that are to be carried out by the State 
     under the grant.
       (c) Impact.--A State awarded a grant to conduct an 
     initiative under this section shall develop and implement a 
     system to--
       (1) track Medicaid beneficiary participation in the program 
     and validate changes in health risk and outcomes with 
     clinical data, including the adoption and maintenance of 
     health behaviors by such beneficiaries;
       (2) to the extent practicable, establish standards and 
     health status targets for Medicaid beneficiaries 
     participating in the program and measure the degree to which 
     such standards and targets are met;
       (3) evaluate the effectiveness of the program and provide 
     the Secretary with such evaluations;
       (4) report to the Secretary on processes that have been 
     developed and lessons learned from the program; and
       (5) report on preventive services as part of reporting on 
     quality measures for Medicaid managed care programs.
       (d) Evaluations and Reports.--
       (1) Independent assessment.--The Secretary shall enter into 
     a contract with an independent entity or organization to 
     conduct an evaluation and assessment of the initiatives 
     carried out by States under this section, for the purpose of 
     determining--
       (A) the effect of such initiatives on the use of health 
     care services by Medicaid beneficiaries participating in the 
     program;
       (B) the extent to which special populations (including 
     adults with disabilities, adults with chronic illnesses, and 
     children with special health care needs) are able to 
     participate in the program;
       (C) the level of satisfaction of Medicaid beneficiaries 
     with respect to the accessibility and quality of health care 
     services provided through the program; and
       (D) the administrative costs incurred by State agencies 
     that are responsible for administration of the program.
       (2) State reporting.--A State awarded a grant to carry out 
     initiatives under this section shall submit reports to the 
     Secretary, on a semi-annual basis, regarding the programs 
     that are supported by the grant funds. Such report shall 
     include information, as specified by the Secretary, 
     regarding--
       (A) the specific uses of the grant funds;
       (B) an assessment of program implementation and lessons 
     learned from the programs;
       (C) an assessment of quality improvements and clinical 
     outcomes under such programs; and
       (D) estimates of cost savings resulting from such programs.
       (3) Initial report.--Not later than January 1, 2014, the 
     Secretary shall submit to Congress an initial report on such 
     initiatives based on information provided by States through 
     reports required under paragraph (2). The initial report 
     shall include an interim evaluation of the effectiveness of 
     the initiatives carried out with grants awarded under this 
     section and a recommendation regarding whether funding for 
     expanding or extending the initiatives should be extended 
     beyond January 1, 2016.
       (4) Final report.--Not later than July 1, 2016, the 
     Secretary shall submit to Congress a final report on the 
     program that includes the results of the independent 
     assessment required under paragraph (1), together with 
     recommendations for such legislation and administrative 
     action as the Secretary determines appropriate.
       (e) No Effect on Eligibility for, or Amount of, Medicaid or 
     Other Benefits.--Any incentives provided to a Medicaid 
     beneficiary participating in a program described in 
     subsection (a)(3) shall not be taken into account for 
     purposes of determining the beneficiary's eligibility for, or 
     amount of, benefits under the Medicaid program or any program 
     funded in whole or in part with Federal funds.
       (f) Funding.--Out of any funds in the Treasury not 
     otherwise appropriated, there are appropriated for the 5-year 
     period beginning on January 1, 2011, $100,000,000 to the 
     Secretary to carry out this section. Amounts appropriated 
     under this subsection shall remain available until expended.
       (g) Definitions.--In this section:
       (1) Medicaid beneficiary.--The term ``Medicaid 
     beneficiary'' means an individual who is eligible for medical 
     assistance under a State plan or waiver under title XIX of 
     the Social Security Act (42 U.S.C. 1396 et seq.) and is 
     enrolled in such plan or waiver.
       (2) State.--The term ``State'' has the meaning given that 
     term for purposes of title XIX of the Social Security Act (42 
     U.S.C. 1396 et seq.).

               Subtitle C--Creating Healthier Communities

     SEC. 4201. COMMUNITY TRANSFORMATION GRANTS.

       (a) In General.--The Secretary of Health and Human Services 
     (referred to in this section as the ``Secretary''), acting 
     through the Director of the Centers for Disease Control and 
     Prevention (referred to in this section as the ``Director''), 
     shall award competitive grants to State and local 
     governmental agencies and community-based organizations for 
     the implementation, evaluation, and dissemination of 
     evidence-based community preventive health activities in 
     order to reduce chronic disease rates, prevent the 
     development of secondary conditions, address health 
     disparities, and develop a stronger evidence-base of 
     effective prevention programming.
       (b) Eligibility.--To be eligible to receive a grant under 
     subsection (a), an entity shall--
       (1) be--
       (A) a State governmental agency;
       (B) a local governmental agency;
       (C) a national network of community-based organizations;
       (D) a State or local non-profit organization; or
       (E) an Indian tribe; and
       (2) submit to the Director an application at such time, in 
     such a manner, and containing such information as the 
     Director may require, including a description of the program 
     to be carried out under the grant; and
       (3) demonstrate a history or capacity, if funded, to 
     develop relationships necessary to engage key stakeholders 
     from multiple sectors within and beyond health care and 
     across a community, such as healthy futures corps and health 
     care providers.
       (c) Use of Funds.--
       (1) In general.--An eligible entity shall use amounts 
     received under a grant under this section to carry out 
     programs described in this subsection.
       (2) Community transformation plan.--
       (A) In general.--An eligible entity that receives a grant 
     under this section shall submit to the Director (for 
     approval) a detailed plan that includes the policy, 
     environmental, programmatic, and as appropriate 
     infrastructure changes needed to promote healthy living and 
     reduce disparities.
       (B) Activities.--Activities within the plan may focus on 
     (but not be limited to)--
       (i) creating healthier school environments, including 
     increasing healthy food options, physical activity 
     opportunities, promotion of healthy lifestyle, emotional 
     wellness, and prevention curricula, and activities to prevent 
     chronic diseases;
       (ii) creating the infrastructure to support active living 
     and access to nutritious foods in a safe environment;
       (iii) developing and promoting programs targeting a variety 
     of age levels to increase access to nutrition, physical 
     activity and smoking cessation, improve social and emotional 
     wellness, enhance safety in a community, or address any other 
     chronic disease priority area identified by the grantee;
       (iv) assessing and implementing worksite wellness 
     programming and incentives;
       (v) working to highlight healthy options at restaurants and 
     other food venues;
       (vi) prioritizing strategies to reduce racial and ethnic 
     disparities, including social, economic, and geographic 
     determinants of health; and
       (vii) addressing special populations needs, including all 
     age groups and individuals with disabilities, and individuals 
     in both urban and rural areas.
       (3) Community-based prevention health activities.--
       (A) In general.--An eligible entity shall use amounts 
     received under a grant under this section to implement a 
     variety of programs, policies, and infrastructure 
     improvements to promote healthier lifestyles.
       (B) Activities.--An eligible entity shall implement 
     activities detailed in the community transformation plan 
     under paragraph (2).
       (C) In-kind support.--An eligible entity may provide in-
     kind resources such as staff, equipment, or office space in 
     carrying out activities under this section.
       (4) Evaluation.--
       (A) In general.--An eligible entity shall use amounts 
     provided under a grant under this section to conduct 
     activities to measure changes in the prevalence of chronic 
     disease risk factors among community members participating in 
     preventive health activities.
       (B) Types of measures.--In carrying out subparagraph (A), 
     the eligible entity shall, with respect to residents in the 
     community, measure--
       (i) changes in weight;
       (ii) changes in proper nutrition;
       (iii) changes in physical activity;
       (iv) changes in tobacco use prevalence;
       (v) changes in emotional well-being and overall mental 
     health;
       (vi) other factors using community-specific data from the 
     Behavioral Risk Factor Surveillance Survey; and
       (vii) other factors as determined by the Secretary.
       (C) Reporting.--An eligible entity shall annually submit to 
     the Director a report containing an evaluation of activities 
     carried out under the grant.

[[Page 28508]]

       (5) Dissemination.--A grantee under this section shall--
       (A) meet at least annually in regional or national meetings 
     to discuss challenges, best practices, and lessons learned 
     with respect to activities carried out under the grant; and
       (B) develop models for the replication of successful 
     programs and activities and the mentoring of other eligible 
     entities.
       (d) Training.--
       (1) In general.--The Director shall develop a program to 
     provide training for eligible entities on effective 
     strategies for the prevention and control of chronic disease 
     and the link between physical, emotional, and social well-
     being.
       (2) Community transformation plan.--The Director shall 
     provide appropriate feedback and technical assistance to 
     grantees to establish community transformation plans.
       (3) Evaluation.--The Director shall provide a literature 
     review and framework for the evaluation of programs conducted 
     as part of the grant program under this section, in addition 
     to working with academic institutions or other entities with 
     expertise in outcome evaluation.
       (e) Prohibition.--A grantee shall not use funds provided 
     under a grant under this section to create video games or to 
     carry out any other activities that may lead to higher rates 
     of obesity or inactivity.
       (f) Authorization of Appropriations.--There are authorized 
     to be appropriated to carry out this section, such sums as 
     may be necessary for each fiscal years 2010 through 2014.

     SEC. 4202. HEALTHY AGING, LIVING WELL; EVALUATION OF 
                   COMMUNITY-BASED PREVENTION AND WELLNESS 
                   PROGRAMS FOR MEDICARE BENEFICIARIES.

       (a) Healthy Aging, Living Well.--
       (1) In general.--The Secretary of Health and Human Services 
     (referred to in this section as the ``Secretary''), acting 
     through the Director of the Centers for Disease Control and 
     Prevention, shall award grants to State or local health 
     departments and Indian tribes to carry out 5-year pilot 
     programs to provide public health community interventions, 
     screenings, and where necessary, clinical referrals for 
     individuals who are between 55 and 64 years of age.
       (2) Eligibility.--To be eligible to receive a grant under 
     paragraph (1), an entity shall--
       (A) be--
       (i) a State health department;
       (ii) a local health department; or
       (iii) an Indian tribe;
       (B) submit to the Secretary an application at such time, in 
     such manner, and containing such information as the Secretary 
     may require including a description of the program to be 
     carried out under the grant;
       (C) design a strategy for improving the health of the 55-
     to-64 year-old population through community-based public 
     health interventions; and
       (D) demonstrate the capacity, if funded, to develop the 
     relationships necessary with relevant health agencies, health 
     care providers, community-based organizations, and insurers 
     to carry out the activities described in paragraph (3), such 
     relationships to include the identification of a community-
     based clinical partner, such as a community health center or 
     rural health clinic.
       (3) Use of funds.--
       (A) In general.--A State or local health department shall 
     use amounts received under a grant under this subsection to 
     carry out a program to provide the services described in this 
     paragraph to individuals who are between 55 and 64 years of 
     age.
       (B) Public health interventions.--
       (i) In general.--In developing and implementing such 
     activities, a grantee shall collaborate with the Centers for 
     Disease Control and Prevention and the Administration on 
     Aging, and relevant local agencies and organizations.
       (ii) Types of intervention activities.--Intervention 
     activities conducted under this subparagraph may include 
     efforts to improve nutrition, increase physical activity, 
     reduce tobacco use and substance abuse, improve mental 
     health, and promote healthy lifestyles among the target 
     population.
       (C) Community preventive screenings.--
       (i) In general.--In addition to community-wide public 
     health interventions, a State or local health department 
     shall use amounts received under a grant under this 
     subsection to conduct ongoing health screening to identify 
     risk factors for cardiovascular disease, cancer, stroke, and 
     diabetes among individuals in both urban and rural areas who 
     are between 55 and 64 years of age.
       (ii) Types of screening activities.--Screening activities 
     conducted under this subparagraph may include--

       (I) mental health/behavioral health and substance use 
     disorders;
       (II) physical activity, smoking, and nutrition; and
       (III) any other measures deemed appropriate by the 
     Secretary.

       (iii) Monitoring.--Grantees under this section shall 
     maintain records of screening results under this subparagraph 
     to establish the baseline data for monitoring the targeted 
     population.
       (D) Clinical referral/treatment for chronic diseases.--
       (i) In general.--A State or local health department shall 
     use amounts received under a grant under this subsection to 
     ensure that individuals between 55 and 64 years of age who 
     are found to have chronic disease risk factors through the 
     screening activities described in subparagraph (C)(ii), 
     receive clinical referral/treatment for follow-up services to 
     reduce such risk.
       (ii) Mechanism.--

       (I) Identification and determination of status.--With 
     respect to each individual with risk factors for or having 
     heart disease, stroke, diabetes, or any other condition for 
     which such individual was screened under subparagraph (C), a 
     grantee under this section shall determine whether or not 
     such individual is covered under any public or private health 
     insurance program.
       (II) Insured individuals.--An individual determined to be 
     covered under a health insurance program under subclause (I) 
     shall be referred by the grantee to the existing providers 
     under such program or, if such individual does not have a 
     current provider, to a provider who is in-network with 
     respect to the program involved.
       (III) Uninsured individuals.--With respect to an individual 
     determined to be uninsured under subclause (I), the grantee's 
     community-based clinical partner described in paragraph 
     (4)(D) shall assist the individual in determining eligibility 
     for available public coverage options and identify other 
     appropriate community health care resources and assistance 
     programs.

       (iii) Public health intervention program.--A State or local 
     health department shall use amounts received under a grant 
     under this subsection to enter into contracts with community 
     health centers or rural health clinics and mental health and 
     substance use disorder service providers to assist in the 
     referral/treatment of at risk patients to community resources 
     for clinical follow-up and help determine eligibility for 
     other public programs.
       (E) Grantee evaluation.--An eligible entity shall use 
     amounts provided under a grant under this subsection to 
     conduct activities to measure changes in the prevalence of 
     chronic disease risk factors among participants.
       (4) Pilot program evaluation.--The Secretary shall conduct 
     an annual evaluation of the effectiveness of the pilot 
     program under this subsection. In determining such 
     effectiveness, the Secretary shall consider changes in the 
     prevalence of uncontrolled chronic disease risk factors among 
     new Medicare enrollees (or individuals nearing enrollment, 
     including those who are 63 and 64 years of age) who reside in 
     States or localities receiving grants under this section as 
     compared with national and historical data for those States 
     and localities for the same population.
       (5) Authorization of appropriations.--There are authorized 
     to be appropriated to carry out this subsection, such sums as 
     may be necessary for each of fiscal years 2010 through 2014.
       (b) Evaluation and Plan for Community-based Prevention and 
     Wellness Programs for Medicare Beneficiaries.--
       (1) In general.--The Secretary shall conduct an evaluation 
     of community-based prevention and wellness programs and 
     develop a plan for promoting healthy lifestyles and chronic 
     disease self-management for Medicare beneficiaries.
       (2) Medicare evaluation of prevention and wellness 
     programs.--
       (A) In general.--The Secretary shall evaluate community 
     prevention and wellness programs including those that are 
     sponsored by the Administration on Aging, are evidence-based, 
     and have demonstrated potential to help Medicare 
     beneficiaries (particularly beneficiaries that have attained 
     65 years of age) reduce their risk of disease, disability, 
     and injury by making healthy lifestyle choices, including 
     exercise, diet, and self-management of chronic diseases.
       (B) Evaluation.--The evaluation under subparagraph (A) 
     shall consist of the following:
       (i) Evidence review.--The Secretary shall review available 
     evidence, literature, best practices, and resources that are 
     relevant to programs that promote healthy lifestyles and 
     reduce risk factors for the Medicare population. The 
     Secretary may determine the scope of the evidence review and 
     such issues to be considered, which shall include, at a 
     minimum--

       (I) physical activity, nutrition, and obesity;
       (II) falls;
       (III) chronic disease self-management; and
       (IV) mental health.

       (ii) Independent evaluation of evidence-based community 
     prevention and wellness programs.--The Administrator of the 
     Centers for Medicare & Medicaid Services, in consultation 
     with the Assistant Secretary for Aging, shall, to the extent 
     feasible and practicable, conduct an evaluation of existing 
     community prevention and wellness programs that are sponsored 
     by the Administration on Aging to assess the extent to which 
     Medicare beneficiaries who participate in such programs--

       (I) reduce their health risks, improve their health 
     outcomes, and adopt and maintain healthy behaviors;
       (II) improve their ability to manage their chronic 
     conditions; and

[[Page 28509]]

       (III) reduce their utilization of health services and 
     associated costs under the Medicare program for conditions 
     that are amenable to improvement under such programs.

       (3) Report.--Not later than September 30, 2013, the 
     Secretary shall submit to Congress a report that includes--
       (A) recommendations for such legislation and administrative 
     action as the Secretary determines appropriate to promote 
     healthy lifestyles and chronic disease self-management for 
     Medicare beneficiaries;
       (B) any relevant findings relating to the evidence review 
     under paragraph (2)(B)(i); and
       (C) the results of the evaluation under paragraph 
     (2)(B)(ii).
       (4) Funding.--For purposes of carrying out this subsection, 
     the Secretary shall provide for the transfer, from the 
     Federal Hospital Insurance Trust Fund under section 1817 of 
     the Social Security Act (42 U.S.C. 1395i) and the Federal 
     Supplemental Medical Insurance Trust Fund under section 1841 
     of such Act (42 U.S.C. 1395t), in such proportion as the 
     Secretary determines appropriate, of $50,000,000 to the 
     Centers for Medicare & Medicaid Services Program Management 
     Account. Amounts transferred under the preceding sentence 
     shall remain available until expended.
       (5) Administration.--Chapter 35 of title 44, United States 
     Code shall not apply to the this subsection.
       (6) Medicare beneficiary.--In this subsection, the term 
     ``Medicare beneficiary'' means an individual who is entitled 
     to benefits under part A of title XVIII of the Social 
     Security Act and enrolled under part B of such title.

     SEC. 4203. REMOVING BARRIERS AND IMPROVING ACCESS TO WELLNESS 
                   FOR INDIVIDUALS WITH DISABILITIES.

       Title V of the Rehabilitation Act of 1973 (29 U.S.C. 791 et 
     seq.) is amended by adding at the end of the following:

     ``SEC. 510. ESTABLISHMENT OF STANDARDS FOR ACCESSIBLE MEDICAL 
                   DIAGNOSTIC EQUIPMENT.

       ``(a) Standards.--Not later than 24 months after the date 
     of enactment of the Affordable Health Choices Act, the 
     Architectural and Transportation Barriers Compliance Board 
     shall, in consultation with the Commissioner of the Food and 
     Drug Administration, promulgate regulatory standards in 
     accordance with the Administrative Procedure Act (2 U.S.C. 
     551 et seq.) setting forth the minimum technical criteria for 
     medical diagnostic equipment used in (or in conjunction with) 
     physician's offices, clinics, emergency rooms, hospitals, and 
     other medical settings. The standards shall ensure that such 
     equipment is accessible to, and usable by, individuals with 
     accessibility needs, and shall allow independent entry to, 
     use of, and exit from the equipment by such individuals to 
     the maximum extent possible.
       ``(b) Medical Diagnostic Equipment Covered.--The standards 
     issued under subsection (a) for medical diagnostic equipment 
     shall apply to equipment that includes examination tables, 
     examination chairs (including chairs used for eye 
     examinations or procedures, and dental examinations or 
     procedures), weight scales, mammography equipment, x-ray 
     machines, and other radiological equipment commonly used for 
     diagnostic purposes by health professionals.
       ``(c) Review and Amendment.--The Architectural and 
     Transportation Barriers Compliance Board, in consultation 
     with the Commissioner of the Food and Drug Administration, 
     shall periodically review and, as appropriate, amend the 
     standards in accordance with the Administrative Procedure Act 
     (2 U.S.C. 551 et seq.).''.

     SEC. 4204. IMMUNIZATIONS.

       (a) State Authority to Purchase Recommended Vaccines for 
     Adults.--Section 317 of the Public Health Service Act (42 
     U.S.C. 247b) is amended by adding at the end the following:
       ``(l) Authority to Purchase Recommended Vaccines for 
     Adults.--
       ``(1) In general.--The Secretary may negotiate and enter 
     into contracts with manufacturers of vaccines for the 
     purchase and delivery of vaccines for adults as provided for 
     under subsection (e).
       ``(2) State purchase.--A State may obtain additional 
     quantities of such adult vaccines (subject to amounts 
     specified to the Secretary by the State in advance of 
     negotiations) through the purchase of vaccines from 
     manufacturers at the applicable price negotiated by the 
     Secretary under this subsection.''.
       (b) Demonstration Program to Improve Immunization 
     Coverage.--Section 317 of the Public Health Service Act (42 
     U.S.C. 247b), as amended by subsection (a), is further 
     amended by adding at the end the following:
       ``(m) Demonstration Program to Improve Immunization 
     Coverage.--
       ``(1) In general.--The Secretary, acting through the 
     Director of the Centers for Disease Control and Prevention, 
     shall establish a demonstration program to award grants to 
     States to improve the provision of recommended immunizations 
     for children, adolescents, and adults through the use of 
     evidence-based, population-based interventions for high-risk 
     populations.
       ``(2) State plan.--To be eligible for a grant under 
     paragraph (1), a State shall submit to the Secretary an 
     application at such time, in such manner, and containing such 
     information as the Secretary may require, including a State 
     plan that describes the interventions to be implemented under 
     the grant and how such interventions match with local needs 
     and capabilities, as determined through consultation with 
     local authorities.
       ``(3) Use of funds.--Funds received under a grant under 
     this subsection shall be used to implement interventions that 
     are recommended by the Task Force on Community Preventive 
     Services (as established by the Secretary, acting through the 
     Director of the Centers for Disease Control and Prevention) 
     or other evidence-based interventions, including--
       ``(A) providing immunization reminders or recalls for 
     target populations of clients, patients, and consumers;
       ``(B) educating targeted populations and health care 
     providers concerning immunizations in combination with one or 
     more other interventions;
       ``(C) reducing out-of-pocket costs for families for 
     vaccines and their administration;
       ``(D) carrying out immunization-promoting strategies for 
     participants or clients of public programs, including 
     assessments of immunization status, referrals to health care 
     providers, education, provision of on-site immunizations, or 
     incentives for immunization;
       ``(E) providing for home visits that promote immunization 
     through education, assessments of need, referrals, provision 
     of immunizations, or other services;
       ``(F) providing reminders or recalls for immunization 
     providers;
       ``(G) conducting assessments of, and providing feedback to, 
     immunization providers;
       ``(H) any combination of one or more interventions 
     described in this paragraph; or
       ``(I) immunization information systems to allow all States 
     to have electronic databases for immunization records.
       ``(4) Consideration.--In awarding grants under this 
     subsection, the Secretary shall consider any reviews or 
     recommendations of the Task Force on Community Preventive 
     Services.
       ``(5) Evaluation.--Not later than 3 years after the date on 
     which a State receives a grant under this subsection, the 
     State shall submit to the Secretary an evaluation of progress 
     made toward improving immunization coverage rates among high-
     risk populations within the State.
       ``(6) Report to congress.--Not later than 4 years after the 
     date of enactment of the Affordable Health Choices Act, the 
     Secretary shall submit to Congress a report concerning the 
     effectiveness of the demonstration program established under 
     this subsection together with recommendations on whether to 
     continue and expand such program.
       ``(7) Authorization of appropriations.--There is authorized 
     to be appropriated to carry out this subsection, such sums as 
     may be necessary for each of fiscal years 2010 through 
     2014.''.
       (c) Reauthorization of Immunization Program.--Section 
     317(j) of the Public Health Service Act (42 U.S.C. 247b(j)) 
     is amended--
       (1) in paragraph (1), by striking ``for each of the fiscal 
     years 1998 through 2005''; and
       (2) in paragraph (2), by striking ``after October 1, 
     1997,''.
       (d) Rule of Construction Regarding Access to 
     Immunizations.--Nothing in this section (including the 
     amendments made by this section), or any other provision of 
     this Act (including any amendments made by this Act) shall be 
     construed to decrease children's access to immunizations.
       (e) GAO Study and Report on Medicare Beneficiary Access to 
     Vaccines.--
       (1) Study.--The Comptroller General of the United States 
     (in this section referred to as the ``Comptroller General'') 
     shall conduct a study on the ability of Medicare 
     beneficiaries who were 65 years of age or older to access 
     routinely recommended vaccines covered under the prescription 
     drug program under part D of title XVIII of the Social 
     Security Act over the period since the establishment of such 
     program. Such study shall include the following:
       (A) An analysis and determination of--
       (i) the number of Medicare beneficiaries who were 65 years 
     of age or older and were eligible for a routinely recommended 
     vaccination that was covered under part D;
       (ii) the number of such beneficiaries who actually received 
     a routinely recommended vaccination that was covered under 
     part D; and
       (iii) any barriers to access by such beneficiaries to 
     routinely recommended vaccinations that were covered under 
     part D.
       (B) A summary of the findings and recommendations by 
     government agencies, departments, and advisory bodies (as 
     well as relevant professional organizations) on the impact of 
     coverage under part D of routinely recommended adult 
     immunizations for access to such immunizations by Medicare 
     beneficiaries.
       (2) Report.--Not later than June 1, 2011, the Comptroller 
     General shall submit to the appropriate committees of 
     jurisdiction of the House of Representatives and the Senate a 
     report containing the results of the study conducted under 
     paragraph (1), together with recommendations for such 
     legislation and administrative action as the Comptroller 
     General determines appropriate.

[[Page 28510]]

       (3) Funding.--Out of any funds in the Treasury not 
     otherwise appropriated, there are appropriated $1,000,000 for 
     fiscal year 2010 to carry out this subsection.

     SEC. 4205. NUTRITION LABELING OF STANDARD MENU ITEMS AT CHAIN 
                   RESTAURANTS.

       (a) Technical Amendments.--Section 403(q)(5)(A) of the 
     Federal Food, Drug, and Cosmetic Act (21 U.S.C. 343(q)(5)(A)) 
     is amended--
       (1) in subitem (i), by inserting at the beginning ``except 
     as provided in clause (H)(ii)(III),''; and
       (2) in subitem (ii), by inserting at the beginning ``except 
     as provided in clause (H)(ii)(III),''.
       (b) Labeling Requirements.--Section 403(q)(5) of the 
     Federal Food, Drug, and Cosmetic Act (21 U.S.C. 343(q)(5)) is 
     amended by adding at the end the following:
       ``(H) Restaurants, Retail Food Establishments, and Vending 
     Machines.--
       ``(i) General requirements for restaurants and similar 
     retail food establishments.--Except for food described in 
     subclause (vii), in the case of food that is a standard menu 
     item that is offered for sale in a restaurant or similar 
     retail food establishment that is part of a chain with 20 or 
     more locations doing business under the same name (regardless 
     of the type of ownership of the locations) and offering for 
     sale substantially the same menu items, the restaurant or 
     similar retail food establishment shall disclose the 
     information described in subclauses (ii) and (iii).
       ``(ii) Information required to be disclosed by restaurants 
     and retail food establishments.--Except as provided in 
     subclause (vii), the restaurant or similar retail food 
     establishment shall disclose in a clear and conspicuous 
     manner--
       ``(I)(aa) in a nutrient content disclosure statement 
     adjacent to the name of the standard menu item, so as to be 
     clearly associated with the standard menu item, on the menu 
     listing the item for sale, the number of calories contained 
     in the standard menu item, as usually prepared and offered 
     for sale; and
       ``(bb) a succinct statement concerning suggested daily 
     caloric intake, as specified by the Secretary by regulation 
     and posted prominently on the menu and designed to enable the 
     public to understand, in the context of a total daily diet, 
     the significance of the caloric information that is provided 
     on the menu;
       ``(II)(aa) in a nutrient content disclosure statement 
     adjacent to the name of the standard menu item, so as to be 
     clearly associated with the standard menu item, on the menu 
     board, including a drive-through menu board, the number of 
     calories contained in the standard menu item, as usually 
     prepared and offered for sale; and
       ``(bb) a succinct statement concerning suggested daily 
     caloric intake, as specified by the Secretary by regulation 
     and posted prominently on the menu board, designed to enable 
     the public to understand, in the context of a total daily 
     diet, the significance of the nutrition information that is 
     provided on the menu board;
       ``(III) in a written form, available on the premises of the 
     restaurant or similar retail establishment and to the 
     consumer upon request, the nutrition information required 
     under clauses (C) and (D) of subparagraph (1); and
       ``(IV) on the menu or menu board, a prominent, clear, and 
     conspicuous statement regarding the availability of the 
     information described in item (III).
       ``(iii) Self-service food and food on display.--Except as 
     provided in subclause (vii), in the case of food sold at a 
     salad bar, buffet line, cafeteria line, or similar self-
     service facility, and for self-service beverages or food that 
     is on display and that is visible to customers, a restaurant 
     or similar retail food establishment shall place adjacent to 
     each food offered a sign that lists calories per displayed 
     food item or per serving.
       ``(iv) Reasonable basis.--For the purposes of this clause, 
     a restaurant or similar retail food establishment shall have 
     a reasonable basis for its nutrient content disclosures, 
     including nutrient databases, cookbooks, laboratory analyses, 
     and other reasonable means, as described in section 101.10 of 
     title 21, Code of Federal Regulations (or any successor 
     regulation) or in a related guidance of the Food and Drug 
     Administration.
       ``(v) Menu variability and combination meals.--The 
     Secretary shall establish by regulation standards for 
     determining and disclosing the nutrient content for standard 
     menu items that come in different flavors, varieties, or 
     combinations, but which are listed as a single menu item, 
     such as soft drinks, ice cream, pizza, doughnuts, or 
     children's combination meals, through means determined by the 
     Secretary, including ranges, averages, or other methods.
       ``(vi) Additional information.--If the Secretary determines 
     that a nutrient, other than a nutrient required under 
     subclause (ii)(III), should be disclosed for the purpose of 
     providing information to assist consumers in maintaining 
     healthy dietary practices, the Secretary may require, by 
     regulation, disclosure of such nutrient in the written form 
     required under subclause (ii)(III).
       ``(vii) Nonapplicability to certain food.--
       ``(I) In general.--Subclauses (i) through (vi) do not apply 
     to--
       ``(aa) items that are not listed on a menu or menu board 
     (such as condiments and other items placed on the table or 
     counter for general use);
       ``(bb) daily specials, temporary menu items appearing on 
     the menu for less than 60 days per calendar year, or custom 
     orders; or
       ``(cc) such other food that is part of a customary market 
     test appearing on the menu for less than 90 days, under terms 
     and conditions established by the Secretary.
       ``(II) Written forms.--Subparagraph (5)(C) shall apply to 
     any regulations promulgated under subclauses (ii)(III) and 
     (vi).
       ``(viii) Vending machines.--
       ``(I) In general.--In the case of an article of food sold 
     from a vending machine that--
       ``(aa) does not permit a prospective purchaser to examine 
     the Nutrition Facts Panel before purchasing the article or 
     does not otherwise provide visible nutrition information at 
     the point of purchase; and
       ``(bb) is operated by a person who is engaged in the 
     business of owning or operating 20 or more vending machines,

     the vending machine operator shall provide a sign in close 
     proximity to each article of food or the selection button 
     that includes a clear and conspicuous statement disclosing 
     the number of calories contained in the article.
       ``(ix) Voluntary provision of nutrition information.--
       ``(I) In general.--An authorized official of any restaurant 
     or similar retail food establishment or vending machine 
     operator not subject to the requirements of this clause may 
     elect to be subject to the requirements of such clause, by 
     registering biannually the name and address of such 
     restaurant or similar retail food establishment or vending 
     machine operator with the Secretary, as specified by the 
     Secretary by regulation.
       ``(II) Registration.--Within 120 days of enactment of this 
     clause, the Secretary shall publish a notice in the Federal 
     Register specifying the terms and conditions for 
     implementation of item (I), pending promulgation of 
     regulations.
       ``(III) Rule of construction.--Nothing in this subclause 
     shall be construed to authorize the Secretary to require an 
     application, review, or licensing process for any entity to 
     register with the Secretary, as described in such item.
       ``(x) Regulations.--
       ``(I) Proposed regulation.--Not later than 1 year after the 
     date of enactment of this clause, the Secretary shall 
     promulgate proposed regulations to carry out this clause.
       ``(II) Contents.--In promulgating regulations, the 
     Secretary shall--
       ``(aa) consider standardization of recipes and methods of 
     preparation, reasonable variation in serving size and 
     formulation of menu items, space on menus and menu boards, 
     inadvertent human error, training of food service workers, 
     variations in ingredients, and other factors, as the 
     Secretary determines; and
       ``(bb) specify the format and manner of the nutrient 
     content disclosure requirements under this subclause.
       ``(III) Reporting.--The Secretary shall submit to the 
     Committee on Health, Education, Labor, and Pensions of the 
     Senate and the Committee on Energy and Commerce of the House 
     of Representatives a quarterly report that describes the 
     Secretary's progress toward promulgating final regulations 
     under this subparagraph.
       ``(xi) Definition.--In this clause, the term `menu' or 
     `menu board' means the primary writing of the restaurant or 
     other similar retail food establishment from which a consumer 
     makes an order selection.''
       (c) National Uniformity.--Section 403A(a)(4) of the Federal 
     Food, Drug, and Cosmetic Act (21 U.S.C. 343-1(a)(4)) is 
     amended by striking ``except a requirement for nutrition 
     labeling of food which is exempt under subclause (i) or (ii) 
     of section 403(q)(5)(A)'' and inserting ``except that this 
     paragraph does not apply to food that is offered for sale in 
     a restaurant or similar retail food establishment that is not 
     part of a chain with 20 or more locations doing business 
     under the same name (regardless of the type of ownership of 
     the locations) and offering for sale substantially the same 
     menu items unless such restaurant or similar retail food 
     establishment complies with the voluntary provision of 
     nutrition information requirements under section 
     403(q)(5)(H)(ix)''.
       (d) Rule of Construction.--Nothing in the amendments made 
     by this section shall be construed--
       (1) to preempt any provision of State or local law, unless 
     such provision establishes or continues into effect nutrient 
     content disclosures of the type required under section 
     403(q)(5)(H) of the Federal Food, Drug, and Cosmetic Act (as 
     added by subsection (b)) and is expressly preempted under 
     subsection (a)(4) of such section;
       (2) to apply to any State or local requirement respecting a 
     statement in the labeling of food that provides for a warning 
     concerning the safety of the food or component of the food; 
     or
       (3) except as provided in section 403(q)(5)(H)(ix) of the 
     Federal Food, Drug, and Cosmetic Act (as added by subsection

[[Page 28511]]

     (b)), to apply to any restaurant or similar retail food 
     establishment other than a restaurant or similar retail food 
     establishment described in section 403(q)(5)(H)(i) of such 
     Act.

     SEC. 4206. DEMONSTRATION PROJECT CONCERNING INDIVIDUALIZED 
                   WELLNESS PLAN.

       Section 330 of the Public Health Service Act (42 U.S.C. 
     245b) is amended by adding at the end the following:
       ``(s) Demonstration Program for Individualized Wellness 
     Plans.--
       ``(1) In general.--The Secretary shall establish a pilot 
     program to test the impact of providing at-risk populations 
     who utilize community health centers funded under this 
     section an individualized wellness plan that is designed to 
     reduce risk factors for preventable conditions as identified 
     by a comprehensive risk-factor assessment.
       ``(2) Agreements.--The Secretary shall enter into 
     agreements with not more than 10 community health centers 
     funded under this section to conduct activities under the 
     pilot program under paragraph (1).
       ``(3) Wellness plans.--
       ``(A) In general.--An individualized wellness plan prepared 
     under the pilot program under this subsection may include one 
     or more of the following as appropriate to the individual's 
     identified risk factors:
       ``(i) Nutritional counseling.
       ``(ii) A physical activity plan.
       ``(iii) Alcohol and smoking cessation counseling and 
     services.
       ``(iv) Stress management.
       ``(v) Dietary supplements that have health claims approved 
     by the Secretary.
       ``(vi) Compliance assistance provided by a community health 
     center employee.
       ``(B) Risk factors.--Wellness plan risk factors shall 
     include--
       ``(i) weight;
       ``(ii) tobacco and alcohol use;
       ``(iii) exercise rates;
       ``(iv) nutritional status; and
       ``(v) blood pressure.
       ``(C) Comparisons.--Individualized wellness plans shall 
     make comparisons between the individual involved and a 
     control group of individuals with respect to the risk factors 
     described in subparagraph (B).
       ``(4) Authorization of appropriations.--There is authorized 
     to be appropriated to carry out this subsection, such sums as 
     may be necessary.''.

     SEC. 4207. REASONABLE BREAK TIME FOR NURSING MOTHERS.

       Section 7 of the Fair Labor Standards Act of 1938 (29 
     U.S.C. 207) is amended by adding at the end the following:
       ``(r)(1) An employer shall provide--
       ``(A) a reasonable break time for an employee to express 
     breast milk for her nursing child for 1 year after the 
     child's birth each time such employee has need to express the 
     milk; and
       ``(B) a place, other than a bathroom, that is shielded from 
     view and free from intrusion from coworkers and the public, 
     which may be used by an employee to express breast milk.
       ``(2) An employer shall not be required to compensate an 
     employee receiving reasonable break time under paragraph (1) 
     for any work time spent for such purpose.
       ``(3) An employer that employs less than 50 employees shall 
     not be subject to the requirements of this subsection, if 
     such requirements would impose an undue hardship by causing 
     the employer significant difficulty or expense when 
     considered in relation to the size, financial resources, 
     nature, or structure of the employer's business.
       ``(4) Nothing in this subsection shall preempt a State law 
     that provides greater protections to employees than the 
     protections provided for under this subsection.''.

    Subtitle D--Support for Prevention and Public Health Innovation

     SEC. 4301. RESEARCH ON OPTIMIZING THE DELIVERY OF PUBLIC 
                   HEALTH SERVICES.

       (a) In General.--The Secretary of Health and Human Services 
     (referred to in this section as the ``Secretary''), acting 
     through the Director of the Centers for Disease Control and 
     Prevention, shall provide funding for research in the area of 
     public health services and systems.
       (b) Requirements of Research.--Research supported under 
     this section shall include--
       (1) examining evidence-based practices relating to 
     prevention, with a particular focus on high priority areas as 
     identified by the Secretary in the National Prevention 
     Strategy or Healthy People 2020, and including comparing 
     community-based public health interventions in terms of 
     effectiveness and cost;
       (2) analyzing the translation of interventions from 
     academic settings to real world settings; and
       (3) identifying effective strategies for organizing, 
     financing, or delivering public health services in real world 
     community settings, including comparing State and local 
     health department structures and systems in terms of 
     effectiveness and cost.
       (c) Existing Partnerships.--Research supported under this 
     section shall be coordinated with the Community Preventive 
     Services Task Force and carried out by building on existing 
     partnerships within the Federal Government while also 
     considering initiatives at the State and local levels and in 
     the private sector.
       (d) Annual Report.--The Secretary shall, on an annual 
     basis, submit to Congress a report concerning the activities 
     and findings with respect to research supported under this 
     section.

     SEC. 4302. UNDERSTANDING HEALTH DISPARITIES: DATA COLLECTION 
                   AND ANALYSIS.

       (a) Uniform Categories and Collection Requirements.--The 
     Public Health Service Act (42 U.S.C. 201 et seq.) is amended 
     by adding at the end the following:

          ``TITLE XXXI--DATA COLLECTION, ANALYSIS, AND QUALITY

     ``SEC. 3101. DATA COLLECTION, ANALYSIS, AND QUALITY.

       ``(a) Data Collection.--
       ``(1) In general.--The Secretary shall ensure that, by not 
     later than 2 years after the date of enactment of this title, 
     any federally conducted or supported health care or public 
     health program, activity or survey (including Current 
     Population Surveys and American Community Surveys conducted 
     by the Bureau of Labor Statistics and the Bureau of the 
     Census) collects and reports, to the extent practicable--
       ``(A) data on race, ethnicity, sex, primary language, and 
     disability status for applicants, recipients, or 
     participants;
       ``(B) data at the smallest geographic level such as State, 
     local, or institutional levels if such data can be 
     aggregated;
       ``(C) sufficient data to generate statistically reliable 
     estimates by racial, ethnic, sex, primary language, and 
     disability status subgroups for applicants, recipients or 
     participants using, if needed, statistical oversamples of 
     these subpopulations; and
       ``(D) any other demographic data as deemed appropriate by 
     the Secretary regarding health disparities.
       ``(2) Collection standards.--In collecting data described 
     in paragraph (1), the Secretary or designee shall--
       ``(A) use Office of Management and Budget standards, at a 
     minimum, for race and ethnicity measures;
       ``(B) develop standards for the measurement of sex, primary 
     language, and disability status;
       ``(C) develop standards for the collection of data 
     described in paragraph (1) that, at a minimum--
       ``(i) collects self-reported data by the applicant, 
     recipient, or participant; and
       ``(ii) collects data from a parent or legal guardian if the 
     applicant, recipient, or participant is a minor or legally 
     incapacitated;
       ``(D) survey health care providers and establish other 
     procedures in order to assess access to care and treatment 
     for individuals with disabilities and to identify--
       ``(i) locations where individuals with disabilities access 
     primary, acute (including intensive), and long-term care;
       ``(ii) the number of providers with accessible facilities 
     and equipment to meet the needs of the individuals with 
     disabilities, including medical diagnostic equipment that 
     meets the minimum technical criteria set forth in section 510 
     of the Rehabilitation Act of 1973; and
       ``(iii) the number of employees of health care providers 
     trained in disability awareness and patient care of 
     individuals with disabilities; and
       ``(E) require that any reporting requirement imposed for 
     purposes of measuring quality under any ongoing or federally 
     conducted or supported health care or public health program, 
     activity, or survey includes requirements for the collection 
     of data on individuals receiving health care items or 
     services under such programs activities by race, ethnicity, 
     sex, primary language, and disability status.
       ``(3) Data management.--In collecting data described in 
     paragraph (1), the Secretary, acting through the National 
     Coordinator for Health Information Technology shall--
       ``(A) develop national standards for the management of data 
     collected; and
       ``(B) develop interoperability and security systems for 
     data management.
       ``(b) Data Analysis.--
       ``(1) In general.--For each federally conducted or 
     supported health care or public health program or activity, 
     the Secretary shall analyze data collected under paragraph 
     (a) to detect and monitor trends in health disparities (as 
     defined for purposes of section 485E) at the Federal and 
     State levels.
       ``(c) Data Reporting and Dissemination.--
       ``(1) In general.--The Secretary shall make the analyses 
     described in (b) available to--
       ``(A) the Office of Minority Health;
       ``(B) the National Center on Minority Health and Health 
     Disparities;
       ``(C) the Agency for Healthcare Research and Quality;
       ``(D) the Centers for Disease Control and Prevention;
       ``(E) the Centers for Medicare & Medicaid Services;
       ``(F) the Indian Health Service and epidemiology centers 
     funded under the Indian Health Care Improvement Act;
       ``(G) the Office of Rural Health;
       ``(H) other agencies within the Department of Health and 
     Human Services; and
       ``(I) other entities as determined appropriate by the 
     Secretary.
       ``(2) Reporting of data.--The Secretary shall report data 
     and analyses described in (a) and (b) through--

[[Page 28512]]

       ``(A) public postings on the Internet websites of the 
     Department of Health and Human Services; and
       ``(B) any other reporting or dissemination mechanisms 
     determined appropriate by the Secretary.
       ``(3) Availability of data.--The Secretary may make data 
     described in (a) and (b) available for additional research, 
     analyses, and dissemination to other Federal agencies, non-
     governmental entities, and the public, in accordance with any 
     Federal agency's data user agreements.
       ``(d) Limitations on Use of Data.--Nothing in this section 
     shall be construed to permit the use of information collected 
     under this section in a manner that would adversely affect 
     any individual.
       ``(e) Protection and Sharing of Data.--
       ``(1) Privacy and other safeguards.--The Secretary shall 
     ensure (through the promulgation of regulations or otherwise) 
     that--
       ``(A) all data collected pursuant to subsection (a) is 
     protected--
       ``(i) under privacy protections that are at least as broad 
     as those that the Secretary applies to other health data 
     under the regulations promulgated under section 264(c) of the 
     Health Insurance Portability and Accountability Act of 1996 
     (Public Law 104-191; 110 Stat. 2033); and
       ``(ii) from all inappropriate internal use by any entity 
     that collects, stores, or receives the data, including use of 
     such data in determinations of eligibility (or continued 
     eligibility) in health plans, and from other inappropriate 
     uses, as defined by the Secretary; and
       ``(B) all appropriate information security safeguards are 
     used in the collection, analysis, and sharing of data 
     collected pursuant to subsection (a).
       ``(2) Data sharing.--The Secretary shall establish 
     procedures for sharing data collected pursuant to subsection 
     (a), measures relating to such data, and analyses of such 
     data, with other relevant Federal and State agencies 
     including the agencies, centers, and entities within the 
     Department of Health and Human Services specified in 
     subsection (c)(1).
       ``(f) Data on Rural Underserved Populations.--The Secretary 
     shall ensure that any data collected in accordance with this 
     section regarding racial and ethnic minority groups are also 
     collected regarding underserved rural and frontier 
     populations.
       ``(g) Authorization of Appropriations.--For the purpose of 
     carrying out this section, there are authorized to be 
     appropriated such sums as may be necessary for each of fiscal 
     years 2010 through 2014.
       ``(h) Requirement for Implementation.--Notwithstanding any 
     other provision of this section, data may not be collected 
     under this section unless funds are directly appropriated for 
     such purpose in an appropriations Act.
       ``(i) Consultation.--The Secretary shall consult with the 
     Director of the Office of Personnel Management, the Secretary 
     of Defense, the Secretary of Veterans Affairs, the Director 
     of the Bureau of the Census, the Commissioner of Social 
     Security, and the head of other appropriate Federal agencies 
     in carrying out this section.''.
       (b) Addressing Health Care Disparities in Medicaid and 
     CHIP.--
       (1) Standardized collection requirements included in state 
     plans.--
       (A) Medicaid.--Section 1902(a) of the Social Security Act 
     (42 U.S.C. 1396a(a)), as amended by section 2001(d), is 
     amended--
       (i) in paragraph 4), by striking ``and'' at the end;
       (ii) in paragraph (75), by striking the period at the end 
     and inserting ``; and''; and
       (iii) by inserting after paragraph (75) the following new 
     paragraph:
       ``(76) provide that any data collected under the State plan 
     meets the requirements of section 3101 of the Public Health 
     Service Act.''.
       (B) CHIP.--Section 2108(e) of the Social Security Act (42 
     U.S.C. 1397hh(e)) is amended by adding at the end the 
     following new paragraph:
       ``(7) Data collected and reported in accordance with 
     section 3101 of the Public Health Service Act, with respect 
     to individuals enrolled in the State child health plan (and, 
     in the case of enrollees under 19 years of age, their parents 
     or legal guardians), including data regarding the primary 
     language of such individuals, parents, and legal 
     guardians.''.
       (2) Extending medicare requirement to address health 
     disparities data collection to medicaid and chip.--Title XIX 
     of the Social Security Act (42 U.S.C. 1396 et seq.), as 
     amended by section 2703 is amended by adding at the end the 
     following new section:

     ``SEC. 1946. ADDRESSING HEALTH CARE DISPARITIES.

       ``(a) Evaluating Data Collection Approaches.--The Secretary 
     shall evaluate approaches for the collection of data under 
     this title and title XXI, to be performed in conjunction with 
     existing quality reporting requirements and programs under 
     this title and title XXI, that allow for the ongoing, 
     accurate, and timely collection and evaluation of data on 
     disparities in health care services and performance on the 
     basis of race, ethnicity, sex, primary language, and 
     disability status. In conducting such evaluation, the 
     Secretary shall consider the following objectives:
       ``(1) Protecting patient privacy.
       ``(2) Minimizing the administrative burdens of data 
     collection and reporting on States, providers, and health 
     plans participating under this title or title XXI.
       ``(3) Improving program data under this title and title XXI 
     on race, ethnicity, sex, primary language, and disability 
     status.
       ``(b) Reports to Congress.--
       ``(1) Report on evaluation.--Not later than 18 months after 
     the date of the enactment of this section, the Secretary 
     shall submit to Congress a report on the evaluation conducted 
     under subsection (a). Such report shall, taking into 
     consideration the results of such evaluation--
       ``(A) identify approaches (including defining 
     methodologies) for identifying and collecting and evaluating 
     data on health care disparities on the basis of race, 
     ethnicity, sex, primary language, and disability status for 
     the programs under this title and title XXI; and
       ``(B) include recommendations on the most effective 
     strategies and approaches to reporting HEDIS quality measures 
     as required under section 1852(e)(3) and other nationally 
     recognized quality performance measures, as appropriate, on 
     such bases.
       ``(2) Reports on data analyses.--Not later than 4 years 
     after the date of the enactment of this section, and 4 years 
     thereafter, the Secretary shall submit to Congress a report 
     that includes recommendations for improving the 
     identification of health care disparities for beneficiaries 
     under this title and under title XXI based on analyses of the 
     data collected under subsection (c).
       ``(c) Implementing Effective Approaches.--Not later than 24 
     months after the date of the enactment of this section, the 
     Secretary shall implement the approaches identified in the 
     report submitted under subsection (b)(1) for the ongoing, 
     accurate, and timely collection and evaluation of data on 
     health care disparities on the basis of race, ethnicity, sex, 
     primary language, and disability status.''.

     SEC. 4303. CDC AND EMPLOYER-BASED WELLNESS PROGRAMS.

       Title III of the Public Health Service Act (42 U.S.C. 241 
     et seq.), by section 4102, is further amended by adding at 
     the end the following:

               ``PART U--EMPLOYER-BASED WELLNESS PROGRAM

     ``SEC. 399MM. TECHNICAL ASSISTANCE FOR EMPLOYER-BASED 
                   WELLNESS PROGRAMS.

       ``In order to expand the utilization of evidence-based 
     prevention and health promotion approaches in the workplace, 
     the Director shall--
       ``(1) provide employers (including small, medium, and large 
     employers, as determined by the Director) with technical 
     assistance, consultation, tools, and other resources in 
     evaluating such employers' employer-based wellness programs, 
     including--
       ``(A) measuring the participation and methods to increase 
     participation of employees in such programs;
       ``(B) developing standardized measures that assess policy, 
     environmental and systems changes necessary to have a 
     positive health impact on employees' health behaviors, health 
     outcomes, and health care expenditures; and
       ``(C) evaluating such programs as they relate to changes in 
     the health status of employees, the absenteeism of employees, 
     the productivity of employees, the rate of workplace injury, 
     and the medical costs incurred by employees; and
       ``(2) build evaluation capacity among workplace staff by 
     training employers on how to evaluate employer-based wellness 
     programs by ensuring evaluation resources, technical 
     assistance, and consultation are available to workplace staff 
     as needed through such mechanisms as web portals, call 
     centers, or other means.

     ``SEC. 399MM-1. NATIONAL WORKSITE HEALTH POLICIES AND 
                   PROGRAMS STUDY.

       ``(a) In General.--In order to assess, analyze, and monitor 
     over time data about workplace policies and programs, and to 
     develop instruments to assess and evaluate comprehensive 
     workplace chronic disease prevention and health promotion 
     programs, policies and practices, not later than 2 years 
     after the date of enactment of this part, and at regular 
     intervals (to be determined by the Director) thereafter, the 
     Director shall conduct a national worksite health policies 
     and programs survey to assess employer-based health policies 
     and programs.
       ``(b) Report.--Upon the completion of each study under 
     subsection (a), the Director shall submit to Congress a 
     report that includes the recommendations of the Director for 
     the implementation of effective employer-based health 
     policies and programs.

     ``SEC. 399MM-2. PRIORITIZATION OF EVALUATION BY SECRETARY.

       ``The Secretary shall evaluate, in accordance with this 
     part, all programs funded through the Centers for Disease 
     Control and Prevention before conducting such an evaluation 
     of privately funded programs unless an entity with a 
     privately funded wellness program requests such an 
     evaluation.

[[Page 28513]]



     ``SEC. 399MM-3. PROHIBITION OF FEDERAL WORKPLACE WELLNESS 
                   REQUIREMENTS.

       ``Notwithstanding any other provision of this part, any 
     recommendations, data, or assessments carried out under this 
     part shall not be used to mandate requirements for workplace 
     wellness programs.''.

     SEC. 4304. EPIDEMIOLOGY-LABORATORY CAPACITY GRANTS.

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

     ``Subtitle C--Strengthening Public Health Surveillance Systems

     ``SEC. 2821. EPIDEMIOLOGY-LABORATORY CAPACITY GRANTS.

       ``(a) In General.--Subject to the availability of 
     appropriations, the Secretary, acting through the Director of 
     the Centers for Disease Control and Prevention, shall 
     establish an Epidemiology and Laboratory Capacity Grant 
     Program to award grants to State health departments as well 
     as local health departments and tribal jurisdictions that 
     meet such criteria as the Director determines appropriate. 
     Academic centers that assist State and eligible local and 
     tribal health departments may also be eligible for funding 
     under this section as the Director determines appropriate. 
     Grants shall be awarded under this section to assist public 
     health agencies in improving surveillance for, and response 
     to, infectious diseases and other conditions of public health 
     importance by--
       ``(1) strengthening epidemiologic capacity to identify and 
     monitor the occurrence of infectious diseases and other 
     conditions of public health importance;
       ``(2) enhancing laboratory practice as well as systems to 
     report test orders and results electronically;
       ``(3) improving information systems including developing 
     and maintaining an information exchange using national 
     guidelines and complying with capacities and functions 
     determined by an advisory council established and appointed 
     by the Director; and
       ``(4) developing and implementing prevention and control 
     strategies.
       ``(b) Authorization of Appropriations.--There are 
     authorized to be appropriated to carry out this section 
     $190,000,000 for each of fiscal years 2010 through 2013, of 
     which--
       ``(1) not less than $95,000,000 shall be made available 
     each such fiscal year for activities under paragraphs (1) and 
     (4) of subsection (a);
       ``(2) not less than $60,000,000 shall be made available 
     each such fiscal year for activities under subsection (a)(3); 
     and
       ``(3) not less than $32,000,000 shall be made available 
     each such fiscal year for activities under subsection 
     (a)(2).''.

     SEC. 4305. ADVANCING RESEARCH AND TREATMENT FOR PAIN CARE 
                   MANAGEMENT.

       (a) Institute of Medicine Conference on Pain.--
       (1) Convening.--Not later than 1 year after funds are 
     appropriated to carry out this subsection, the Secretary of 
     Health and Human Services shall seek to enter into an 
     agreement with the Institute of Medicine of the National 
     Academies to convene a Conference on Pain (in this subsection 
     referred to as ``the Conference'').
       (2) Purposes.--The purposes of the Conference shall be to--
       (A) increase the recognition of pain as a significant 
     public health problem in the United States;
       (B) evaluate the adequacy of assessment, diagnosis, 
     treatment, and management of acute and chronic pain in the 
     general population, and in identified racial, ethnic, gender, 
     age, and other demographic groups that may be 
     disproportionately affected by inadequacies in the 
     assessment, diagnosis, treatment, and management of pain;
       (C) identify barriers to appropriate pain care;
       (D) establish an agenda for action in both the public and 
     private sectors that will reduce such barriers and 
     significantly improve the state of pain care research, 
     education, and clinical care in the United States.
       (3) Other appropriate entity.--If the Institute of Medicine 
     declines to enter into an agreement under paragraph (1), the 
     Secretary of Health and Human Services may enter into such 
     agreement with another appropriate entity.
       (4) Report.--A report summarizing the Conference's findings 
     and recommendations shall be submitted to the Congress not 
     later than June 30, 2011.
       (5) Authorization of appropriations.--For the purpose of 
     carrying out this subsection, there is authorized to be 
     appropriated such sums as may be necessary for each of fiscal 
     years 2010 and 2011.
       (b) Pain Research at National Institutes of Health.--Part B 
     of title IV of the Public Health Service Act (42 U.S.C. 284 
     et seq.) is amended by adding at the end the following:

     ``SEC. 409J. PAIN RESEARCH.

       ``(a) Research Initiatives.--
       ``(1) In general.--The Director of NIH is encouraged to 
     continue and expand, through the Pain Consortium, an 
     aggressive program of basic and clinical research on the 
     causes of and potential treatments for pain.
       ``(2) Annual recommendations.--Not less than annually, the 
     Pain Consortium, in consultation with the Division of Program 
     Coordination, Planning, and Strategic Initiatives, shall 
     develop and submit to the Director of NIH recommendations on 
     appropriate pain research initiatives that could be 
     undertaken with funds reserved under section 402A(c)(1) for 
     the Common Fund or otherwise available for such initiatives.
       ``(3) Definition.--In this subsection, the term `Pain 
     Consortium' means the Pain Consortium of the National 
     Institutes of Health or a similar trans-National Institutes 
     of Health coordinating entity designated by the Secretary for 
     purposes of this subsection.
       ``(b) Interagency Pain Research Coordinating Committee.--
       ``(1) Establishment.--The Secretary shall establish not 
     later than 1 year after the date of the enactment of this 
     section and as necessary maintain a committee, to be known as 
     the Interagency Pain Research Coordinating Committee (in this 
     section referred to as the `Committee'), to coordinate all 
     efforts within the Department of Health and Human Services 
     and other Federal agencies that relate to pain research.
       ``(2) Membership.--
       ``(A) In general.--The Committee shall be composed of the 
     following voting members:
       ``(i) Not more than 7 voting Federal representatives 
     appoint by the Secretary from agencies that conduct pain care 
     research and treatment.
       ``(ii) 12 additional voting members appointed under 
     subparagraph (B).
       ``(B) Additional members.--The Committee shall include 
     additional voting members appointed by the Secretary as 
     follows:
       ``(i) 6 non-Federal members shall be appointed from among 
     scientists, physicians, and other health professionals.
       ``(ii) 6 members shall be appointed from members of the 
     general public, who are representatives of leading research, 
     advocacy, and service organizations for individuals with 
     pain-related conditions.
       ``(C) Nonvoting members.--The Committee shall include such 
     nonvoting members as the Secretary determines to be 
     appropriate.
       ``(3) Chairperson.--The voting members of the Committee 
     shall select a chairperson from among such members. The 
     selection of a chairperson shall be subject to the approval 
     of the Director of NIH.
       ``(4) Meetings.--The Committee shall meet at the call of 
     the chairperson of the Committee or upon the request of the 
     Director of NIH, but in no case less often than once each 
     year.
       ``(5) Duties.--The Committee shall--
       ``(A) develop a summary of advances in pain care research 
     supported or conducted by the Federal agencies relevant to 
     the diagnosis, prevention, and treatment of pain and diseases 
     and disorders associated with pain;
       ``(B) identify critical gaps in basic and clinical research 
     on the symptoms and causes of pain;
       ``(C) make recommendations to ensure that the activities of 
     the National Institutes of Health and other Federal agencies 
     are free of unnecessary duplication of effort;
       ``(D) make recommendations on how best to disseminate 
     information on pain care; and
       ``(E) make recommendations on how to expand partnerships 
     between public entities and private entities to expand 
     collaborative, cross-cutting research.
       ``(6) Review.--The Secretary shall review the necessity of 
     the Committee at least once every 2 years.''.
       (c) Pain Care Education and Training.--Part D of title VII 
     of the Public Health Service Act (42 U.S.C. 294 et seq.) is 
     amended by adding at the end the following new section:

     ``SEC. 759. PROGRAM FOR EDUCATION AND TRAINING IN PAIN CARE.

       ``(a) In General.--The Secretary may make awards of grants, 
     cooperative agreements, and contracts to health professions 
     schools, hospices, and other public and private entities for 
     the development and implementation of programs to provide 
     education and training to health care professionals in pain 
     care.
       ``(b) Certain Topics.--An award may be made under 
     subsection (a) only if the applicant for the award agrees 
     that the program carried out with the award will include 
     information and education on--
       ``(1) recognized means for assessing, diagnosing, treating, 
     and managing pain and related signs and symptoms, including 
     the medically appropriate use of controlled substances;
       ``(2) applicable laws, regulations, rules, and policies on 
     controlled substances, including the degree to which 
     misconceptions and concerns regarding such laws, regulations, 
     rules, and policies, or the enforcement thereof, may create 
     barriers to patient access to appropriate and effective pain 
     care;
       ``(3) interdisciplinary approaches to the delivery of pain 
     care, including delivery through specialized centers 
     providing comprehensive pain care treatment expertise;
       ``(4) cultural, linguistic, literacy, geographic, and other 
     barriers to care in underserved populations; and
       ``(5) recent findings, developments, and improvements in 
     the provision of pain care.
       ``(c) Evaluation of Programs.--The Secretary shall 
     (directly or through grants or contracts) provide for the 
     evaluation of programs implemented under subsection (a) in 
     order to determine the effect of such programs on knowledge 
     and practice of pain care.

[[Page 28514]]

       ``(d) Pain Care Defined.--For purposes of this section the 
     term `pain care' means the assessment, diagnosis, treatment, 
     or management of acute or chronic pain regardless of 
     causation or body location.
       ``(e) Authorization of Appropriations.--There is authorized 
     to be appropriated to carry out this section, such sums as 
     may be necessary for each of the fiscal years 2010 through 
     2012. Amounts appropriated under this subsection shall remain 
     available until expended.''.

     SEC. 4306. FUNDING FOR CHILDHOOD OBESITY DEMONSTRATION 
                   PROJECT.

       Section 1139A(e)(8) of the Social Security Act (42 U.S.C. 
     1320b-9a(e)(8)) is amended to read as follows:
       ``(8) Appropriation.--Out of any funds in the Treasury not 
     otherwise appropriated, there is appropriated to carry out 
     this subsection, $25,000,000 for the period of fiscal years 
     2010 through 2014.''.

                  Subtitle E--Miscellaneous Provisions

     SEC. 4401. SENSE OF THE SENATE CONCERNING CBO SCORING.

       (a) Finding.--The Senate finds that the costs of prevention 
     programs are difficult to estimate due in part because 
     prevention initiatives are hard to measure and results may 
     occur outside the 5 and 10 year budget windows.
       (b) Sense of Congress.--It is the sense of the Senate that 
     Congress should work with the Congressional Budget Office to 
     develop better methodologies for scoring progress to be made 
     in prevention and wellness programs.

     SEC. 4402. EFFECTIVENESS OF FEDERAL HEALTH AND WELLNESS 
                   INITIATIVES.

       To determine whether existing Federal health and wellness 
     initiatives are effective in achieving their stated goals, 
     the Secretary of Health and Human Services shall--
       (1) conduct an evaluation of such programs as they relate 
     to changes in health status of the American public and 
     specifically on the health status of the Federal workforce, 
     including absenteeism of employees, the productivity of 
     employees, the rate of workplace injury, and the medical 
     costs incurred by employees, and health conditions, including 
     workplace fitness, healthy food and beverages, and incentives 
     in the Federal Employee Health Benefits Program; and
       (2) submit to Congress a report concerning such evaluation, 
     which shall include conclusions concerning the reasons that 
     such existing programs have proven successful or not 
     successful and what factors contributed to such conclusions.

                     TITLE V--HEALTH CARE WORKFORCE

                  Subtitle A--Purpose and Definitions

     SEC. 5001. PURPOSE.

       The purpose of this title is to improve access to and the 
     delivery of health care services for all individuals, 
     particularly low income, underserved, uninsured, minority, 
     health disparity, and rural populations by--
       (1) gathering and assessing comprehensive data in order for 
     the health care workforce to meet the health care needs of 
     individuals, including research on the supply, demand, 
     distribution, diversity, and skills needs of the health care 
     workforce;
       (2) increasing the supply of a qualified health care 
     workforce to improve access to and the delivery of health 
     care services for all individuals;
       (3) enhancing health care workforce education and training 
     to improve access to and the delivery of health care services 
     for all individuals; and
       (4) providing support to the existing health care workforce 
     to improve access to and the delivery of health care services 
     for all individuals.

     SEC. 5002. DEFINITIONS.

       (a) This Title.--In this title:
       (1) Allied health professional.--The term ``allied health 
     professional'' means an allied health professional as defined 
     in section 799B(5) of the Public Heath Service Act (42 U.S.C. 
     295p(5)) who--
       (A) has graduated and received an allied health professions 
     degree or certificate from an institution of higher 
     education; and
       (B) is employed with a Federal, State, local or tribal 
     public health agency, or in a setting where patients might 
     require health care services, including acute care 
     facilities, ambulatory care facilities, personal residences, 
     and other settings located in health professional shortage 
     areas, medically underserved areas, or medically underserved 
     populations, as recognized by the Secretary of Health and 
     Human Services.
       (2) Health care career pathway.--The term ``healthcare 
     career pathway'' means a rigorous, engaging, and high quality 
     set of courses and services that--
       (A) includes an articulated sequence of academic and career 
     courses, including 21st century skills;
       (B) is aligned with the needs of healthcare industries in a 
     region or State;
       (C) prepares students for entry into the full range of 
     postsecondary education options, including registered 
     apprenticeships, and careers;
       (D) provides academic and career counseling in student-to-
     counselor ratios that allow students to make informed 
     decisions about academic and career options;
       (E) meets State academic standards, State requirements for 
     secondary school graduation and is aligned with requirements 
     for entry into postsecondary education, and applicable 
     industry standards; and
       (F) leads to 2 or more credentials, including--
       (i) a secondary school diploma; and
       (ii) a postsecondary degree, an apprenticeship or other 
     occupational certification, a certificate, or a license.
       (3) Institution of higher education.--The term 
     ``institution of higher education'' has the meaning given the 
     term in sections 101 and 102 of the Higher Education Act of 
     1965 (20 U.S.C. 1001 and 1002).
       (4) Low income individual, state workforce investment 
     board, and local workforce investment board.--
       (A) Low-income individual.--The term ``low-income 
     individual'' has the meaning given that term in section 101 
     of the Workforce investment Act of 1998 (29 U.S.C. 2801).
       (B) State workforce investment board; local workforce 
     investment board.--The terms ``State workforce investment 
     board'' and ``local workforce investment board'', refer to a 
     State workforce investment board established under section 
     111 of the Workforce Investment Act of 1998 (29 U.S.C. 2821) 
     and a local workforce investment board established under 
     section 117 of such Act (29 U.S.C. 2832), respectively.
       (5) Postsecondary education.--The term ``postsecondary 
     education'' means--
       (A) a 4-year program of instruction, or not less than a 1-
     year program of instruction that is acceptable for credit 
     toward an associate or a baccalaureate degree, offered by an 
     institution of higher education; or
       (B) a certificate or registered apprenticeship program at 
     the postsecondary level offered by an institution of higher 
     education or a non-profit educational institution.
       (6) Registered apprenticeship program.--The term 
     ``registered apprenticeship program'' means an industry 
     skills training program at the postsecondary level that 
     combines technical and theoretical training through structure 
     on the job learning with related instruction (in a classroom 
     or through distance learning) while an individual is 
     employed, working under the direction of qualified personnel 
     or a mentor, and earning incremental wage increases aligned 
     to enhance job proficiency, resulting in the acquisition of a 
     nationally recognized and portable certificate, under a plan 
     approved by the Office of Apprenticeship or a State agency 
     recognized by the Department of Labor.
       (b) Title VII of the Public Health Service Act.--Section 
     799B of the Public Health Service Act (42 U.S.C. 295p) is 
     amended--
       (1) by striking paragraph (3) and inserting the following:
       ``(3) Physician assistant education program.--The term 
     `physician assistant education program' means an educational 
     program in a public or private institution in a State that--
       ``(A) has as its objective the education of individuals 
     who, upon completion of their studies in the program, be 
     qualified to provide primary care medical services with the 
     supervision of a physician; and
       ``(B) is accredited by the Accreditation Review Commission 
     on Education for the Physician Assistant.''; and
       (2) by adding at the end the following:
       ``(12) Area health education center.--The term `area health 
     education center' means a public or nonprofit private 
     organization that has a cooperative agreement or contract in 
     effect with an entity that has received an award under 
     subsection (a)(1) or (a)(2) of section 751, satisfies the 
     requirements in section 751(d)(1), and has as one of its 
     principal functions the operation of an area health education 
     center. Appropriate organizations may include hospitals, 
     health organizations with accredited primary care training 
     programs, accredited physician assistant educational programs 
     associated with a college or university, and universities or 
     colleges not operating a school of medicine or osteopathic 
     medicine.
       ``(13) Area health education center program.--The term 
     `area health education center program' means cooperative 
     program consisting of an entity that has received an award 
     under subsection (a)(1) or (a)(2) of section 751 for the 
     purpose of planning, developing, operating, and evaluating an 
     area health education center program and one or more area 
     health education centers, which carries out the required 
     activities described in section 751(c), satisfies the program 
     requirements in such section, has as one of its principal 
     functions identifying and implementing strategies and 
     activities that address health care workforce needs in its 
     service area, in coordination with the local workforce 
     investment boards.
       ``(14) Clinical social worker.--The term `clinical social 
     worker' has the meaning given the term in section 1861(hh)(1) 
     of the Social Security Act (42 U.S.C. 1395x(hh)(1)).
       ``(15) Cultural competency.--The term `cultural competency' 
     shall be defined by the Secretary in a manner consistent with 
     section 1707(d)(3).
       ``(16) Direct care worker.--The term `direct care worker' 
     has the meaning given that term in the 2010 Standard 
     Occupational Classifications of the Department of Labor for 
     Home Health Aides [31-1011], Psychiatric Aides [31-1013], 
     Nursing Assistants [31-1014], and Personal Care Aides [39-
     9021].

[[Page 28515]]

       ``(17) Federally qualified health center.--The term 
     `Federally qualified health center' has the meaning given 
     that term in section 1861(aa) of the Social Security Act (42 
     U.S.C. 1395x(aa)).
       ``(18) Frontier health professional shortage area.--The 
     term `frontier health professional shortage area' means an 
     area--
       ``(A) with a population density less than 6 persons per 
     square mile within the service area; and
       ``(B) with respect to which the distance or time for the 
     population to access care is excessive.
       ``(19) Graduate psychology.--The term `graduate psychology' 
     means an accredited program in professional psychology.
       ``(20) Health disparity population.--The term `health 
     disparity population' has the meaning given such term in 
     section 903(d)(1).
       ``(21) Health literacy.--The term `health literacy' means 
     the degree to which an individual has the capacity to obtain, 
     communicate, process, and understand health information and 
     services in order to make appropriate health decisions.
       ``(22) Mental health service professional.--The term 
     `mental health service professional' means an individual with 
     a graduate or postgraduate degree from an accredited 
     institution of higher education in psychiatry, psychology, 
     school psychology, behavioral pediatrics, psychiatric 
     nursing, social work, school social work, substance abuse 
     disorder prevention and treatment, marriage and family 
     counseling, school counseling, or professional counseling.
       ``(23) One-stop delivery system center.--The term `one-stop 
     delivery system' means a one-stop delivery system described 
     in section 134(c) of the Workforce Investment Act of 1998 (29 
     U.S.C. 2864(c)).
       ``(24) Paraprofessional child and adolescent mental health 
     worker.--The term `paraprofessional child and adolescent 
     mental health worker' means an individual who is not a mental 
     or behavioral health service professional, but who works at 
     the first stage of contact with children and families who are 
     seeking mental or behavioral health services, including 
     substance abuse prevention and treatment services.
       ``(25) Racial and ethnic minority group; racial and ethnic 
     minority population.--The terms `racial and ethnic minority 
     group' and `racial and ethnic minority population' have the 
     meaning given the term `racial and ethnic minority group' in 
     section 1707.
       ``(26) Rural health clinic.--The term `rural health clinic' 
     has the meaning given that term in section 1861(aa) of the 
     Social Security Act (42 U.S.C. 1395x(aa)).''.
       (c) Title VIII of the Public Health Service Act.--Section 
     801 of the Public Health Service Act (42 U.S.C. 296) is 
     amended--
       (1) in paragraph (2)--
       (A) by striking ``means a'' and inserting ``means an 
     accredited (as defined in paragraph 6)''; and
       (B) by striking the period as inserting the following: 
     ``where graduates are--
       ``(A) authorized to sit for the National Council Licensure 
     EXamination-Registered Nurse (NCLEX-RN); or
       ``(B) licensed registered nurses who will receive a 
     graduate or equivalent degree or training to become an 
     advanced education nurse as defined by section 811(b).''; and
       (2) by adding at the end the following:
       ``(16) Accelerated nursing degree program.--The term 
     `accelerated nursing degree program' means a program of 
     education in professional nursing offered by an accredited 
     school of nursing in which an individual holding a bachelors 
     degree in another discipline receives a BSN or MSN degree in 
     an accelerated time frame as determined by the accredited 
     school of nursing.
       ``(17) Bridge or degree completion program.--The term 
     `bridge or degree completion program' means a program of 
     education in professional nursing offered by an accredited 
     school of nursing, as defined in paragraph (2), that leads to 
     a baccalaureate degree in nursing. Such programs may include, 
     Registered Nurse (RN) to Bachelor's of Science of Nursing 
     (BSN) programs, RN to MSN (Master of Science of Nursing) 
     programs, or BSN to Doctoral programs.''.

          Subtitle B--Innovations in the Health Care Workforce

     SEC. 5101. NATIONAL HEALTH CARE WORKFORCE COMMISSION.

       (a) Purpose.--It is the purpose of this section to 
     establish a National Health Care Workforce Commission that--
       (1) serves as a national resource for Congress, the 
     President, States, and localities;
       (2) communicates and coordinates with the Departments of 
     Health and Human Services, Labor, Veterans Affairs, Homeland 
     Security, and Education on related activities administered by 
     one or more of such Departments;
       (3) develops and commissions evaluations of education and 
     training activities to determine whether the demand for 
     health care workers is being met;
       (4) identifies barriers to improved coordination at the 
     Federal, State, and local levels and recommend ways to 
     address such barriers; and
       (5) encourages innovations to address population needs, 
     constant changes in technology, and other environmental 
     factors.
       (b) Establishment.--There is hereby established the 
     National Health Care Workforce Commission (in this section 
     referred to as the ``Commission'').
       (c) Membership.--
       (1) Number and appointment.--The Commission shall be 
     composed of 15 members to be appointed by the Comptroller 
     General, without regard to section 5 of the Federal Advisory 
     Committee Act (5 U.S.C. App.).
       (2) Qualifications.--
       (A) In general.--The membership of the Commission shall 
     include individuals--
       (i) with national recognition for their expertise in health 
     care labor market analysis, including health care workforce 
     analysis; health care finance and economics; health care 
     facility management; health care plans and integrated 
     delivery systems; health care workforce education and 
     training; health care philanthropy; providers of health care 
     services; and other related fields; and
       (ii) who will provide a combination of professional 
     perspectives, broad geographic representation, and a balance 
     between urban, suburban, rural, and frontier representatives.
       (B) Inclusion.--
       (i) In general.--The membership of the Commission shall 
     include no less than one representative of--

       (I) the health care workforce and health professionals;
       (II) employers;
       (III) third-party payers;
       (IV) individuals skilled in the conduct and interpretation 
     of health care services and health economics research;
       (V) representatives of consumers;
       (VI) labor unions;
       (VII) State or local workforce investment boards; and
       (VIII) educational institutions (which may include 
     elementary and secondary institutions, institutions of higher 
     education, including 2 and 4 year institutions, or registered 
     apprenticeship programs).

       (ii) Additional members.--The remaining membership may 
     include additional representatives from clause (i) and other 
     individuals as determined appropriate by the Comptroller 
     General of the United States.
       (C) Majority non-providers.--Individuals who are directly 
     involved in health professions education or practice shall 
     not constitute a majority of the membership of the 
     Commission.
       (D) Ethical disclosure.--The Comptroller General shall 
     establish a system for public disclosure by members of the 
     Commission of financial and other potential conflicts of 
     interest relating to such members. Members of the Commission 
     shall be treated as employees of Congress for purposes of 
     applying title I of the Ethics in Government Act of 1978. 
     Members of the Commission shall not be treated as special 
     government employees under title 18, United States Code.
       (3) Terms.--
       (A) In general.--The terms of members of the Commission 
     shall be for 3 years except that the Comptroller General 
     shall designate staggered terms for the members first 
     appointed.
       (B) Vacancies.--Any member appointed to fill a vacancy 
     occurring before the expiration of the term for which the 
     member's predecessor was appointed shall be appointed only 
     for the remainder of that term. A member may serve after the 
     expiration of that member's term until a successor has taken 
     office. A vacancy in the Commission shall be filled in the 
     manner in which the original appointment was made.
       (C) Initial appointments.--The Comptroller General shall 
     make initial appointments of members to the Commission not 
     later than September 30, 2010.
       (4) Compensation.--While serving on the business of the 
     Commission (including travel time), a member of the 
     Commission shall be entitled to compensation at the per diem 
     equivalent of the rate provided for level IV of the Executive 
     Schedule under section 5315 of tile 5, United States Code, 
     and while so serving away from home and the member's regular 
     place of business, a member may be allowed travel expenses, 
     as authorized by the Chairman of the Commission. Physicians 
     serving as personnel of the Commission may be provided a 
     physician comparability allowance by the Commission in the 
     same manner as Government physicians may be provided such an 
     allowance by an agency under section 5948 of title 5, United 
     States Code, and for such purpose subsection (i) of such 
     section shall apply to the Commission in the same manner as 
     it applies to the Tennessee Valley Authority. For purposes of 
     pay (other than pay of members of the Commission) and 
     employment benefits, rights, and privileges, all personnel of 
     the Commission shall be treated as if they were employees of 
     the United States Senate. Personnel of the Commission shall 
     not be treated as employees of the Government Accountability 
     Office for any purpose.
       (5) Chairman, vice chairman.--The Comptroller General shall 
     designate a member of the Commission, at the time of 
     appointment of the member, as Chairman and a member as Vice 
     Chairman for that term of appointment, except that in the 
     case of vacancy of the chairmanship or vice chairmanship, the 
     Comptroller General may designate another member for the 
     remainder of that member's term.

[[Page 28516]]

       (6) Meetings.--The Commission shall meet at the call of the 
     chairman, but no less frequently than on a quarterly basis.
       (d) Duties.--
       (1) Recognition, dissemination, and communication.--The 
     Commission shall--
       (A) recognize efforts of Federal, State, and local 
     partnerships to develop and offer health care career pathways 
     of proven effectiveness;
       (B) disseminate information on promising retention 
     practices for health care professionals; and
       (C) communicate information on important policies and 
     practices that affect the recruitment, education and 
     training, and retention of the health care workforce.
       (2) Review of health care workforce and annual reports.--In 
     order to develop a fiscally sustainable integrated workforce 
     that supports a high-quality, readily accessible health care 
     delivery system that meets the needs of patients and 
     populations, the Commission, in consultation with relevant 
     Federal, State, and local agencies, shall--
       (A) review current and projected health care workforce 
     supply and demand, including the topics described in 
     paragraph (3);
       (B) make recommendations to Congress and the Administration 
     concerning national health care workforce priorities, goals, 
     and policies;
       (C) by not later than October 1 of each year (beginning 
     with 2011), submit a report to Congress and the 
     Administration containing the results of such reviews and 
     recommendations concerning related policies; and
       (D) by not later than April 1 of each year (beginning with 
     2011), submit a report to Congress and the Administration 
     containing a review of, and recommendations on, at a minimum 
     one high priority area as described in paragraph (4).
       (3) Specific topics to be reviewed.--The topics described 
     in this paragraph include--
       (A) current health care workforce supply and distribution, 
     including demographics, skill sets, and demands, with 
     projected demands during the subsequent 10 and 25 year 
     periods;
       (B) health care workforce education and training capacity, 
     including the number of students who have completed education 
     and training, including registered apprenticeships; the 
     number of qualified faculty; the education and training 
     infrastructure; and the education and training demands, with 
     projected demands during the subsequent 10 and 25 year 
     periods;
       (C) the education loan and grant programs in titles VII and 
     VIII of the Public Health Service Act (42 U.S.C. 292 et seq. 
     and 296 et seq.), with recommendations on whether such 
     programs should become part of the Higher Education Act of 
     1965 (20 U.S.C. 1001 et seq);
       (D) the implications of new and existing Federal policies 
     which affect the health care workforce, including Medicare 
     and Medicaid graduate medical education policies, titles VII 
     and VIII of the Public Health Service Act (42 U.S.C. 292 et 
     seq. and 296 et seq.), the National Health Service Corps 
     (with recommendations for aligning such programs with 
     national health workforce priorities and goals), and other 
     health care workforce programs, including those supported 
     through the Workforce Investment Act of 1998 (29 U.S.C. 2801 
     et seq.), the Carl D. Perkins Career and Technical Education 
     Act of 2006 (20 U.S.C. 2301 et seq.), the Higher Education 
     Act of 1965 (20 U.S.C. 1001 et seq.), and any other Federal 
     health care workforce programs;
       (E) the health care workforce needs of special populations, 
     such as minorities, rural populations, medically underserved 
     populations, gender specific needs, individuals with 
     disabilities, and geriatric and pediatric populations with 
     recommendations for new and existing Federal policies to meet 
     the needs of these special populations; and
       (F) recommendations creating or revising national loan 
     repayment programs and scholarship programs to require low-
     income, minority medical students to serve in their home 
     communities, if designated as medical underserved community.
       (4) High priority areas.--
       (A) In general.--The initial high priority topics described 
     in this paragraph include each of the following:
       (i) Integrated health care workforce planning that 
     identifies health care professional skills needed and 
     maximizes the skill sets of health care professionals across 
     disciplines.
       (ii) An analysis of the nature, scopes of practice, and 
     demands for health care workers in the enhanced information 
     technology and management workplace.
       (iii) An analysis of how to align Medicare and Medicaid 
     graduate medical education policies with national workforce 
     goals.
       (iv) The education and training capacity, projected 
     demands, and integration with the health care delivery system 
     of each of the following:

       (I) Nursing workforce capacity at all levels.
       (II) Oral health care workforce capacity at all levels.
       (III) Mental and behavioral health care workforce capacity 
     at all levels.
       (IV) Allied health and public health care workforce 
     capacity at all levels.
       (V) Emergency medical service workforce capacity, including 
     the retention and recruitment of the volunteer workforce, at 
     all levels.
       (VI) The geographic distribution of health care providers 
     as compared to the identified health care workforce needs of 
     States and regions.

       (B) Future determinations.--The Commission may require that 
     additional topics be included under subparagraph (A). The 
     appropriate committees of Congress may recommend to the 
     Commission the inclusion of other topics for health care 
     workforce development areas that require special attention.
       (5) Grant program.--The Commission shall--
       (A) review implementation progress reports on, and report 
     to Congress about, the State Health Care Workforce 
     Development Grant program established in section 5102;
       (B) in collaboration with the Department of Labor and in 
     coordination with the Department of Education and other 
     relevant Federal agencies, make recommendations to the fiscal 
     and administrative agent under section 5102(b) for grant 
     recipients under section 5102;
       (C) assess the implementation of the grants under such 
     section; and
       (D) collect performance and report information, including 
     identified models and best practices, on grants from the 
     fiscal and administrative agent under such section and 
     distribute this information to Congress, relevant Federal 
     agencies, and to the public.
       (6) Study.--The Commission shall study effective mechanisms 
     for financing education and training for careers in health 
     care, including public health and allied health.
       (7) Recommendations.--The Commission shall submit 
     recommendations to Congress, the Department of Labor, and the 
     Department of Health and Human Services about improving 
     safety, health, and worker protections in the workplace for 
     the health care workforce.
       (8) Assessment.--The Commission shall assess and receive 
     reports from the National Center for Health Care Workforce 
     Analysis established under section 761(b) of the Public 
     Service Health Act (as amended by section 5103).
       (e) Consultation With Federal, State, and Local Agencies, 
     Congress, and Other Organizations.--
       (1) In general.--The Commission shall consult with Federal 
     agencies (including the Departments of Health and Human 
     Services, Labor, Education, Commerce, Agriculture, Defense, 
     and Veterans Affairs and the Environmental Protection 
     Agency), Congress, the Medicare Payment Advisory Commission, 
     the Medicaid and CHIP Payment and Access Commission, and, to 
     the extent practicable, with State and local agencies, Indian 
     tribes, voluntary health care organizations, professional 
     societies, and other relevant public-private health care 
     partnerships.
       (2) Obtaining official data.--The Commission, consistent 
     with established privacy rules, may secure directly from any 
     department or agency of the Executive Branch information 
     necessary to enable the Commission to carry out this section.
       (3) Detail of federal government employees.--An employee of 
     the Federal Government may be detailed to the Commission 
     without reimbursement. The detail of such an employee shall 
     be without interruption or loss of civil service status.
       (f) Director and Staff; Experts and Consultants.--Subject 
     to such review as the Comptroller General of the United 
     States determines to be necessary to ensure the efficient 
     administration of the Commission, the Commission may--
       (1) employ and fix the compensation of an executive 
     director that shall not exceed the rate of basic pay payable 
     for level V of the Executive Schedule and such other 
     personnel as may be necessary to carry out its duties 
     (without regard to the provisions of title 5, United States 
     Code, governing appointments in the competitive service);
       (2) seek such assistance and support as may be required in 
     the performance of its duties from appropriate Federal 
     departments and agencies;
       (3) enter into contracts or make other arrangements, as may 
     be necessary for the conduct of the work of the Commission 
     (without regard to section 3709 of the Revised Statutes (41 
     U.S.C. 5));
       (4) make advance, progress, and other payments which relate 
     to the work of the Commission;
       (5) provide transportation and subsistence for persons 
     serving without compensation; and
       (6) prescribe such rules and regulations as the Commission 
     determines to be necessary with respect to the internal 
     organization and operation of the Commission.
       (g) Powers.--
       (1) Data collection.--In order to carry out its functions 
     under this section, the Commission shall--
       (A) utilize existing information, both published and 
     unpublished, where possible, collected and assessed either by 
     its own staff or under other arrangements made in accordance 
     with this section, including coordination with the Bureau of 
     Labor Statistics;
       (B) carry out, or award grants or contracts for the 
     carrying out of, original research and development, where 
     existing information is inadequate, and

[[Page 28517]]

       (C) adopt procedures allowing interested parties to submit 
     information for the Commission's use in making reports and 
     recommendations.
       (2) Access of the government accountability office to 
     information.--The Comptroller General of the United States 
     shall have unrestricted access to all deliberations, records, 
     and data of the Commission, immediately upon request.
       (3) Periodic audit.--The Commission shall be subject to 
     periodic audit by an independent public accountant under 
     contract to the Commission.
       (h) Authorization of Appropriations.--
       (1) Request for appropriations.--The Commission shall 
     submit requests for appropriations in the same manner as the 
     Comptroller General of the United States submits requests for 
     appropriations. Amounts so appropriated for the Commission 
     shall be separate from amounts appropriated for the 
     Comptroller General.
       (2) Authorization.--There are authorized to be appropriated 
     such sums as may be necessary to carry out this section.
       (3) Gifts and services.--The Commission may not accept 
     gifts, bequeaths, or donations of property, but may accept 
     and use donations of services for purposes of carrying out 
     this section.
       (i) Definitions.--In this section:
       (1) Health care workforce.--The term ``health care 
     workforce'' includes all health care providers with direct 
     patient care and support responsibilities, such as 
     physicians, nurses, nurse practitioners, primary care 
     providers, preventive medicine physicians, optometrists, 
     ophthalmologists, physician assistants, pharmacists, 
     dentists, dental hygienists, and other oral healthcare 
     professionals, allied health professionals, doctors of 
     chiropractic, community health workers, health care 
     paraprofessionals, direct care workers, psychologists and 
     other behavioral and mental health professionals (including 
     substance abuse prevention and treatment providers), social 
     workers, physical and occupational therapists, certified 
     nurse midwives, podiatrists, the EMS workforce (including 
     professional and volunteer ambulance personnel and 
     firefighters who perform emergency medical services), 
     licensed complementary and alternative medicine providers, 
     integrative health practitioners, public health 
     professionals, and any other health professional that the 
     Comptroller General of the United States determines 
     appropriate.
       (2) Health professionals.--The term ``health 
     professionals'' includes--
       (A) dentists, dental hygienists, primary care providers, 
     specialty physicians, nurses, nurse practitioners, physician 
     assistants, psychologists and other behavioral and mental 
     health professionals (including substance abuse prevention 
     and treatment providers), social workers, physical and 
     occupational therapists, public health professionals, 
     clinical pharmacists, allied health professionals, doctors of 
     chiropractic, community health workers, school nurses, 
     certified nurse midwives, podiatrists, licensed complementary 
     and alternative medicine providers, the EMS workforce 
     (including professional and volunteer ambulance personnel and 
     firefighters who perform emergency medical services), and 
     integrative health practitioners;
       (B) national representatives of health professionals;
       (C) representatives of schools of medicine, osteopathy, 
     nursing, dentistry, optometry, pharmacy, chiropractic, allied 
     health, educational programs for public health professionals, 
     behavioral and mental health professionals (as so defined), 
     social workers, pharmacists, physical and occupational 
     therapists, oral health care industry dentistry and dental 
     hygiene, and physician assistants;
       (D) representatives of public and private teaching 
     hospitals, and ambulatory health facilities, including 
     Federal medical facilities; and
       (E) any other health professional the Comptroller General 
     of the United States determines appropriate.

     SEC. 5102. STATE HEALTH CARE WORKFORCE DEVELOPMENT GRANTS.

       (a) Establishment.--There is established a competitive 
     health care workforce development grant program (referred to 
     in this section as the ``program'') for the purpose of 
     enabling State partnerships to complete comprehensive 
     planning and to carry out activities leading to coherent and 
     comprehensive health care workforce development strategies at 
     the State and local levels.
       (b) Fiscal and Administrative Agent.--The Health Resources 
     and Services Administration of the Department of Health and 
     Human Services (referred to in this section as the 
     ``Administration'') shall be the fiscal and administrative 
     agent for the grants awarded under this section. The 
     Administration is authorized to carry out the program, in 
     consultation with the National Health Care Workforce 
     Commission (referred to in this section as the 
     ``Commission''), which shall review reports on the 
     development, implementation, and evaluation activities of the 
     grant program, including--
       (1) administering the grants;
       (2) providing technical assistance to grantees; and
       (3) reporting performance information to the Commission.
       (c) Planning Grants.--
       (1) Amount and duration.--A planning grant shall be awarded 
     under this subsection for a period of not more than one year 
     and the maximum award may not be more than $150,000.
       (2) Eligibility.--To be eligible to receive a planning 
     grant, an entity shall be an eligible partnership. An 
     eligible partnership shall be a State workforce investment 
     board, if it includes or modifies the members to include at 
     least one representative from each of the following: health 
     care employer, labor organization, a public 2-year 
     institution of higher education, a public 4-year institution 
     of higher education, the recognized State federation of 
     labor, the State public secondary education agency, the State 
     P-16 or P-20 Council if such a council exists, and a 
     philanthropic organization that is actively engaged in 
     providing learning, mentoring, and work opportunities to 
     recruit, educate, and train individuals for, and retain 
     individuals in, careers in health care and related 
     industries.
       (3) Fiscal and administrative agent.--The Governor of the 
     State receiving a planning grant has the authority to appoint 
     a fiscal and an administrative agency for the partnership.
       (4) Application.--Each State partnership desiring a 
     planning grant shall submit an application to the 
     Administrator of the Administration at such time and in such 
     manner, and accompanied by such information as the 
     Administrator may reasonable require. Each application 
     submitted for a planning grant shall describe the members of 
     the State partnership, the activities for which assistance is 
     sought, the proposed performance benchmarks to be used to 
     measure progress under the planning grant, a budget for use 
     of the funds to complete the required activities described in 
     paragraph (5), and such additional assurance and information 
     as the Administrator determines to be essential to ensure 
     compliance with the grant program requirements.
       (5) Required activities.--A State partnership receiving a 
     planning grant shall carry out the following:
       (A) Analyze State labor market information in order to 
     create health care career pathways for students and adults, 
     including dislocated workers.
       (B) Identify current and projected high demand State or 
     regional health care sectors for purposes of planning career 
     pathways.
       (C) Identify existing Federal, State, and private resources 
     to recruit, educate or train, and retain a skilled health 
     care workforce and strengthen partnerships.
       (D) Describe the academic and health care industry skill 
     standards for high school graduation, for entry into 
     postsecondary education, and for various credentials and 
     licensure.
       (E) Describe State secondary and postsecondary education 
     and training policies, models, or practices for the health 
     care sector, including career information and guidance 
     counseling.
       (F) Identify Federal or State policies or rules to 
     developing a coherent and comprehensive health care workforce 
     development strategy and barriers and a plan to resolve these 
     barriers.
       (G) Participate in the Administration's evaluation and 
     reporting activities.
       (6) Performance and evaluation.--Before the State 
     partnership receives a planning grant, such partnership and 
     the Administrator of the Administration shall jointly 
     determine the performance benchmarks that will be established 
     for the purposes of the planning grant.
       (7) Match.--Each State partnership receiving a planning 
     grant shall provide an amount, in cash or in kind, that is 
     not less that 15 percent of the amount of the grant, to carry 
     out the activities supported by the grant. The matching 
     requirement may be provided from funds available under other 
     Federal, State, local or private sources to carry out the 
     activities.
       (8) Report.--
       (A) Report to administration.--Not later than 1 year after 
     a State partnership receives a planning grant, the 
     partnership shall submit a report to the Administration on 
     the State's performance of the activities under the grant, 
     including the use of funds, including matching funds, to 
     carry out required activities, and a description of the 
     progress of the State workforce investment board in meeting 
     the performance benchmarks.
       (B) Report to congress.--The Administration shall submit a 
     report to Congress analyzing the planning activities, 
     performance, and fund utilization of each State grant 
     recipient, including an identification of promising practices 
     and a profile of the activities of each State grant 
     recipient.
       (d) Implementation Grants.--
       (1) In general.--The Administration shall--
       (A) competitively award implementation grants to State 
     partnerships to enable such partnerships to implement 
     activities that will result in a coherent and comprehensive 
     plan for health workforce development that will address 
     current and projected workforce demands within the State; and
       (B) inform the Commission and Congress about the awards 
     made.
       (2) Duration.--An implementation grant shall be awarded for 
     a period of no more than

[[Page 28518]]

     2 years, except in those cases where the Administration 
     determines that the grantee is high performing and the 
     activities supported by the grant warrant up to 1 additional 
     year of funding.
       (3) Eligibility.--To be eligible for an implementation 
     grant, a State partnership shall have--
       (A) received a planning grant under subsection (c) and 
     completed all requirements of such grant; or
       (B) completed a satisfactory application, including a plan 
     to coordinate with required partners and complete the 
     required activities during the 2 year period of the 
     implementation grant.
       (4) Fiscal and administrative agent.--A State partnership 
     receiving an implementation grant shall appoint a fiscal and 
     an administration agent for the implementation of such grant.
       (5) Application.--Each eligible State partnership desiring 
     an implementation grant shall submit an application to the 
     Administration at such time, in such manner, and accompanied 
     by such information as the Administration may reasonably 
     require. Each application submitted shall include--
       (A) a description of the members of the State partnership;
       (B) a description of how the State partnership completed 
     the required activities under the planning grant, if 
     applicable;
       (C) a description of the activities for which 
     implementation grant funds are sought, including grants to 
     regions by the State partnership to advance coherent and 
     comprehensive regional health care workforce planning 
     activities;
       (D) a description of how the State partnership will 
     coordinate with required partners and complete the required 
     partnership activities during the duration of an 
     implementation grant;
       (E) a budget proposal of the cost of the activities 
     supported by the implementation grant and a timeline for the 
     provision of matching funds required;
       (F) proposed performance benchmarks to be used to assess 
     and evaluate the progress of the partnership activities;
       (G) a description of how the State partnership will collect 
     data to report progress in grant activities; and
       (H) such additional assurances as the Administration 
     determines to be essential to ensure compliance with grant 
     requirements.
       (6) Required activities.--
       (A) In general.--A State partnership that receives an 
     implementation grant may reserve not less than 60 percent of 
     the grant funds to make grants to be competitively awarded by 
     the State partnership, consistent with State procurement 
     rules, to encourage regional partnerships to address health 
     care workforce development needs and to promote innovative 
     health care workforce career pathway activities, including 
     career counseling, learning, and employment.
       (B) Eligible partnership duties.--An eligible State 
     partnership receiving an implementation grant shall--
       (i) identify and convene regional leadership to discuss 
     opportunities to engage in statewide health care workforce 
     development planning, including the potential use of 
     competitive grants to improve the development, distribution, 
     and diversity of the regional health care workforce; the 
     alignment of curricula for health care careers; and the 
     access to quality career information and guidance and 
     education and training opportunities;
       (ii) in consultation with key stakeholders and regional 
     leaders, take appropriate steps to reduce Federal, State, or 
     local barriers to a comprehensive and coherent strategy, 
     including changes in State or local policies to foster 
     coherent and comprehensive health care workforce development 
     activities, including health care career pathways at the 
     regional and State levels, career planning information, 
     retraining for dislocated workers, and as appropriate, 
     requests for Federal program or administrative waivers;
       (iii) develop, disseminate, and review with key 
     stakeholders a preliminary statewide strategy that addresses 
     short- and long-term health care workforce development supply 
     versus demand;
       (iv) convene State partnership members on a regular basis, 
     and at least on a semiannual basis;
       (v) assist leaders at the regional level to form 
     partnerships, including technical assistance and capacity 
     building activities;
       (vi) collect and assess data on and report on the 
     performance benchmarks selected by the State partnership and 
     the Administration for implementation activities carried out 
     by regional and State partnerships; and
       (vii) participate in the Administration's evaluation and 
     reporting activities.
       (7) Performance and evaluation.--Before the State 
     partnership receives an implementation grant, it and the 
     Administrator shall jointly determine the performance 
     benchmarks that shall be established for the purposes of the 
     implementation grant.
       (8) Match.--Each State partnership receiving an 
     implementation grant shall provide an amount, in cash or in 
     kind that is not less than 25 percent of the amount of the 
     grant, to carry out the activities supported by the grant. 
     The matching funds may be provided from funds available from 
     other Federal, State, local, or private sources to carry out 
     such activities.
       (9) Reports.--
       (A) Report to administration.--For each year of the 
     implementation grant, the State partnership receiving the 
     implementation grant shall submit a report to the 
     Administration on the performance of the State of the grant 
     activities, including a description of the use of the funds, 
     including matched funds, to complete activities, and a 
     description of the performance of the State partnership in 
     meeting the performance benchmarks.
       (B) Report to congress.--The Administration shall submit a 
     report to Congress analyzing implementation activities, 
     performance, and fund utilization of the State grantees, 
     including an identification of promising practices and a 
     profile of the activities of each State grantee.
       (e) Authorization for Appropriations.--
       (1) Planning grants.--There are authorized to be 
     appropriated to award planning grants under subsection (c) 
     $8,000,000 for fiscal year 2010, and such sums as may be 
     necessary for each subsequent fiscal year.
       (2) Implementation grants.--There are authorized to be 
     appropriated to award implementation grants under subsection 
     (d), $150,000,000 for fiscal year 2010, and such sums as may 
     be necessary for each subsequent fiscal year.

     SEC. 5103. HEALTH CARE WORKFORCE ASSESSMENT.

       (a) In General.--Section 761 of the Public Health Service 
     Act (42 U.S.C. 294m) is amended--
       (1) by redesignating subsection (c) as subsection (e);
       (2) by striking subsection (b) and inserting the following:
       ``(b) National Center for Health Care Workforce Analysis.--
       ``(1) Establishment.--The Secretary shall establish the 
     National Center for Health Workforce Analysis (referred to in 
     this section as the `National Center').
       ``(2) Purposes.--The National Center, in coordination to 
     the extent practicable with the National Health Care 
     Workforce Commission (established in section 5101 of the 
     Patient Protection and Affordable Care Act), and relevant 
     regional and State centers and agencies, shall--
       ``(A) provide for the development of information describing 
     and analyzing the health care workforce and workforce related 
     issues;
       ``(B) carry out the activities under section 792(a);
       ``(C) annually evaluate programs under this title;
       ``(D) develop and publish performance measures and 
     benchmarks for programs under this title; and
       ``(E) establish, maintain, and publicize a national 
     Internet registry of each grant awarded under this title and 
     a database to collect data from longitudinal evaluations (as 
     described in subsection (d)(2)) on performance measures (as 
     developed under sections 749(d)(3), 757(d)(3), and 
     762(a)(3)).
       ``(3) Collaboration and data sharing.--
       ``(A) In general.--The National Center shall collaborate 
     with Federal agencies and relevant professional and 
     educational organizations or societies for the purpose of 
     linking data regarding grants awarded under this title.
       ``(B) Contracts for health workforce analysis.--For the 
     purpose of carrying out the activities described in 
     subparagraph (A), the National Center may enter into 
     contracts with relevant professional and educational 
     organizations or societies.
       ``(c) State and Regional Centers for Health Workforce 
     Analysis.--
       ``(1) In general.--The Secretary shall award grants to, or 
     enter into contracts with, eligible entities for purposes 
     of--
       ``(A) collecting, analyzing, and reporting data regarding 
     programs under this title to the National Center and to the 
     public; and
       ``(B) providing technical assistance to local and regional 
     entities on the collection, analysis, and reporting of data.
       ``(2) Eligible entities.--To be eligible for a grant or 
     contract under this subsection, an entity shall--
       ``(A) be a State, a State workforce investment board, a 
     public health or health professions school, an academic 
     health center, or an appropriate public or private nonprofit 
     entity; and
       ``(B) submit to the Secretary an application at such time, 
     in such manner, and containing such information as the 
     Secretary may require.
       ``(d) Increase in Grants for Longitudinal Evaluations.--
       ``(1) In general.--The Secretary shall increase the amount 
     awarded to an eligible entity under this title for a 
     longitudinal evaluation of individuals who have received 
     education, training, or financial assistance from programs 
     under this title.
       ``(2) Capability.--A longitudinal evaluation shall be 
     capable of--
       ``(A) studying practice patterns; and
       ``(B) collecting and reporting data on performance measures 
     developed under sections 749(d)(3), 757(d)(3), and 762(a)(3).
       ``(3) Guidelines.--A longitudinal evaluation shall comply 
     with guidelines issued under sections 749(d)(4), 757(d)(4), 
     and 762(a)(4).

[[Page 28519]]

       ``(4) Eligible entities.--To be eligible to obtain an 
     increase under this section, an entity shall be a recipient 
     of a grant or contract under this title.''; and
       (3) in subsection (e), as so redesignated--
       (A) by striking paragraph (1) and inserting the following:
       ``(1) In general.--
       ``(A) National center.--To carry out subsection (b), there 
     are authorized to be appropriated $7,500,000 for each of 
     fiscal years 2010 through 2014.
       ``(B) State and regional centers.--To carry out subsection 
     (c), there are authorized to be appropriated $4,500,000 for 
     each of fiscal years 2010 through 2014.
       ``(C) Grants for longitudinal evaluations.--To carry out 
     subsection (d), there are authorized to be appropriated such 
     sums as may be necessary for fiscal years 2010 through 
     2014.''; and
       (4) in paragraph (2), by striking ``subsection (a)'' and 
     inserting ``paragraph (1)''.
       (b) Transfers.--Not later than 180 days after the date of 
     enactment of this Act, the responsibilities and resources of 
     the National Center for Health Workforce Analysis, as in 
     effect on the date before the date of enactment of this Act, 
     shall be transferred to the National Center for Health Care 
     Workforce Analysis established under section 761 of the 
     Public Health Service Act, as amended by subsection (a).
       (c) Use of Longitudinal Evaluations.--Section 791(a)(1) of 
     the Public Health Service Act (42 U.S.C. 295j(a)(1)) is 
     amended--
       (1) in subparagraph (A), by striking ``or'' at the end;
       (2) in subparagraph (B), by striking the period and 
     inserting ``; or''; and
       (3) by adding at the end the following:
       ``(C) utilizes a longitudinal evaluation (as described in 
     section 761(d)(2)) and reports data from such system to the 
     national workforce database (as established under section 
     761(b)(2)(E)).''.
       (d) Performance Measures; Guidelines for Longitudinal 
     Evaluations.--
       (1) Advisory committee on training in primary care medicine 
     and dentistry.--Section 748(d) of the Public Health Service 
     Act is amended--
       (A) in paragraph (1), by striking ``and'' at the end;
       (B) in paragraph (2), by striking the period and inserting 
     a semicolon; and
       (C) by adding at the end the following:
       ``(3) develop, publish, and implement performance measures 
     for programs under this part;
       ``(4) develop and publish guidelines for longitudinal 
     evaluations (as described in section 761(d)(2)) for programs 
     under this part; and
       ``(5) recommend appropriation levels for programs under 
     this part.''.
       (2) Advisory committee on interdisciplinary, community-
     based linkages.--Section 756(d) of the Public Health Service 
     Act is amended--
       (A) in paragraph (1), by striking ``and'' at the end;
       (B) in paragraph (2), by striking the period and inserting 
     a semicolon; and
       (C) by adding at the end the following:
       ``(3) develop, publish, and implement performance measures 
     for programs under this part;
       ``(4) develop and publish guidelines for longitudinal 
     evaluations (as described in section 761(d)(2)) for programs 
     under this part; and
       ``(5) recommend appropriation levels for programs under 
     this part.''.
       (3) Advisory council on graduate medical education.--
     Section 762(a) of the Public Health Service Act (42 U.S.C. 
     294o(a)) is amended--
       (A) in paragraph (1), by striking ``and'' at the end;
       (B) in paragraph (2), by striking the period and inserting 
     a semicolon; and
       (C) by adding at the end the following:
       ``(3) develop, publish, and implement performance measures 
     for programs under this title, except for programs under part 
     C or D;
       ``(4) develop and publish guidelines for longitudinal 
     evaluations (as described in section 761(d)(2)) for programs 
     under this title, except for programs under part C or D; and
       ``(5) recommend appropriation levels for programs under 
     this title, except for programs under part C or D.''.

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

     SEC. 5201. FEDERALLY SUPPORTED STUDENT LOAN FUNDS.

       (a) Medical Schools and Primary Health Care.--Section 723 
     of the Public Health Service Act (42 U.S.C. 292s) is 
     amended--
       (1) in subsection (a)--
       (A) in paragraph (1), by striking subparagraph (B) and 
     inserting the following:
       ``(B) to practice in such care for 10 years (including 
     residency training in primary health care) or through the 
     date on which the loan is repaid in full, whichever occurs 
     first.''; and
       (B) by striking paragraph (3) and inserting the following:
       ``(3) Noncompliance by student.--Each agreement entered 
     into with a student pursuant to paragraph (1) shall provide 
     that, if the student fails to comply with such agreement, the 
     loan involved will begin to accrue interest at a rate of 2 
     percent per year greater than the rate at which the student 
     would pay if compliant in such year.''; and
       (2) by adding at the end the following:
       ``(d) Sense of Congress.--It is the sense of Congress that 
     funds repaid under the loan program under this section should 
     not be transferred to the Treasury of the United States or 
     otherwise used for any other purpose other than to carry out 
     this section.''.
       (b) Student Loan Guidelines.--The Secretary of Health and 
     Human Services shall not require parental financial 
     information for an independent student to determine financial 
     need under section 723 of the Public Health Service Act (42 
     U.S.C. 292s) and the determination of need for such 
     information shall be at the discretion of applicable school 
     loan officer. The Secretary shall amend guidelines issued by 
     the Health Resources and Services Administration in 
     accordance with the preceding sentence.

     SEC. 5202. NURSING STUDENT LOAN PROGRAM.

       (a) Loan Agreements.--Section 836(a) of the Public Health 
     Service Act (42 U.S.C. 297b(a)) is amended--
       (1) by striking ``$2,500'' and inserting ``$3,300'';
       (2) by striking ``$4,000'' and inserting ``$5,200''; and
       (3) by striking ``$13,000'' and all that follows through 
     the period and inserting ``$17,000 in the case of any student 
     during fiscal years 2010 and 2011. After fiscal year 2011, 
     such amounts shall be adjusted to provide for a cost-of-
     attendance increase for the yearly loan rate and the 
     aggregate of the loans.''.
       (b) Loan Provisions.--Section 836(b) of the Public Health 
     Service Act (42 U.S.C. 297b(b)) is amended--
       (1) in paragraph (1)(C), by striking ``1986'' and inserting 
     ``2000''; and
       (2) in paragraph (3), by striking ``the date of enactment 
     of the Nurse Training Amendments of 1979'' and inserting 
     ``September 29, 1995''.

     SEC. 5203. HEALTH CARE WORKFORCE LOAN REPAYMENT PROGRAMS.

       Part E of title VII of the Public Health Service Act (42 
     U.S.C. 294n et seq.) is amended by adding at the end the 
     following:

            ``Subpart 3--Recruitment and Retention Programs

     ``SEC. 775. INVESTMENT IN TOMORROW'S PEDIATRIC HEALTH CARE 
                   WORKFORCE.

       ``(a) Establishment.--The Secretary shall establish and 
     carry out a pediatric specialty loan repayment program under 
     which the eligible individual agrees to be employed full-time 
     for a specified period (which shall not be less than 2 years) 
     in providing pediatric medical subspecialty, pediatric 
     surgical specialty, or child and adolescent mental and 
     behavioral health care, including substance abuse prevention 
     and treatment services.
       ``(b) Program Administration.--Through the program 
     established under this section, the Secretary shall enter 
     into contracts with qualified health professionals under 
     which--
       ``(1) such qualified health professionals will agree to 
     provide pediatric medical subspecialty, pediatric surgical 
     specialty, or child and adolescent mental and behavioral 
     health care in an area with a shortage of the specified 
     pediatric subspecialty that has a sufficient pediatric 
     population to support such pediatric subspecialty, as 
     determined by the Secretary; and
       ``(2) the Secretary agrees to make payments on the 
     principal and interest of undergraduate, graduate, or 
     graduate medical education loans of professionals described 
     in paragraph (1) of not more than $35,000 a year for each 
     year of agreed upon service under such paragraph for a period 
     of not more than 3 years during the qualified health 
     professional's--
       ``(A) participation in an accredited pediatric medical 
     subspecialty, pediatric surgical specialty, or child and 
     adolescent mental health subspecialty residency or 
     fellowship; or
       ``(B) employment as a pediatric medical subspecialist, 
     pediatric surgical specialist, or child and adolescent mental 
     health professional serving an area or population described 
     in such paragraph.
       ``(c) In General.--
       ``(1) Eligible individuals.--
       ``(A) Pediatric medical specialists and pediatric surgical 
     specialists.--For purposes of contracts with respect to 
     pediatric medical specialists and pediatric surgical 
     specialists, the term `qualified health professional' means a 
     licensed physician who--
       ``(i) is entering or receiving training in an accredited 
     pediatric medical subspecialty or pediatric surgical 
     specialty residency or fellowship; or
       ``(ii) has completed (but not prior to the end of the 
     calendar year in which this section is enacted) the training 
     described in subparagraph (B).
       ``(B) Child and adolescent mental and behavioral health.--
     For purposes of contracts with respect to child and 
     adolescent mental and behavioral health care, the term 
     `qualified health professional' means a health care 
     professional who--
       ``(i) has received specialized training or clinical 
     experience in child and adolescent mental health in 
     psychiatry, psychology, school psychology, behavioral 
     pediatrics, psychiatric nursing, social work, school social 
     work, substance abuse disorder prevention and treatment, 
     marriage and family therapy, school counseling, or 
     professional counseling;

[[Page 28520]]

       ``(ii) has a license or certification in a State to 
     practice allopathic medicine, osteopathic medicine, 
     psychology, school psychology, psychiatric nursing, social 
     work, school social work, marriage and family therapy, school 
     counseling, or professional counseling; or
       ``(iii) is a mental health service professional who 
     completed (but not before the end of the calendar year in 
     which this section is enacted) specialized training or 
     clinical experience in child and adolescent mental health 
     described in clause (i).
       ``(2) Additional eligibility requirements.--The Secretary 
     may not enter into a contract under this subsection with an 
     eligible individual unless--
       ``(A) the individual agrees to work in, or for a provider 
     serving, a health professional shortage area or medically 
     underserved area, or to serve a medically underserved 
     population;
       ``(B) the individual is a United States citizen or a 
     permanent legal United States resident; and
       ``(C) if the individual is enrolled in a graduate program, 
     the program is accredited, and the individual has an 
     acceptable level of academic standing (as determined by the 
     Secretary).
       ``(d) Priority.--In entering into contracts under this 
     subsection, the Secretary shall give priority to applicants 
     who--
       ``(1) are or will be working in a school or other pre-
     kindergarten, elementary, or secondary education setting;
       ``(2) have familiarity with evidence-based methods and 
     cultural and linguistic competence health care services; and
       ``(3) demonstrate financial need.
       ``(e) Authorization of Appropriations.--There is authorized 
     to be appropriated $30,000,000 for each of fiscal years 2010 
     through 2014 to carry out subsection (c)(1)(A) and 
     $20,000,000 for each of fiscal years 2010 through 2013 to 
     carry out subsection (c)(1)(B).''.

     SEC. 5204. PUBLIC HEALTH WORKFORCE RECRUITMENT AND RETENTION 
                   PROGRAMS.

       Part E of title VII of the Public Health Service Act (42 
     U.S.C. 294n et seq.), as amended by section 5203, is further 
     amended by adding at the end the following:

     ``SEC. 776. PUBLIC HEALTH WORKFORCE LOAN REPAYMENT PROGRAM.

       ``(a) Establishment.--The Secretary shall establish the 
     Public Health Workforce Loan Repayment Program (referred to 
     in this section as the `Program') to assure an adequate 
     supply of public health professionals to eliminate critical 
     public health workforce shortages in Federal, State, local, 
     and tribal public health agencies.
       ``(b) Eligibility.--To be eligible to participate in the 
     Program, an individual shall--
       ``(1)(A) be accepted for enrollment, or be enrolled, as a 
     student in an accredited academic educational institution in 
     a State or territory in the final year of a course of study 
     or program leading to a public health or health professions 
     degree or certificate; and have accepted employment with a 
     Federal, State, local, or tribal public health agency, or a 
     related training fellowship, as recognized by the Secretary, 
     to commence upon graduation;
       ``(B)(i) have graduated, during the preceding 10-year 
     period, from an accredited educational institution in a State 
     or territory and received a public health or health 
     professions degree or certificate; and
       ``(ii) be employed by, or have accepted employment with, a 
     Federal, State, local, or tribal public health agency or a 
     related training fellowship, as recognized by the Secretary;
       ``(2) be a United States citizen; and
       ``(3)(A) submit an application to the Secretary to 
     participate in the Program;
       ``(B) execute a written contract as required in subsection 
     (c); and
       ``(4) not have received, for the same service, a reduction 
     of loan obligations under section 455(m), 428J, 428K, 428L, 
     or 460 of the Higher Education Act of 1965.
       ``(c) Contract.--The written contract (referred to in this 
     section as the `written contract') between the Secretary and 
     an individual shall contain--
       ``(1) an agreement on the part of the Secretary that the 
     Secretary will repay on behalf of the individual loans 
     incurred by the individual in the pursuit of the relevant 
     degree or certificate in accordance with the terms of the 
     contract;
       ``(2) an agreement on the part of the individual that the 
     individual will serve in the full-time employment of a 
     Federal, State, local, or tribal public health agency or a 
     related fellowship program in a position related to the 
     course of study or program for which the contract was awarded 
     for a period of time (referred to in this section as the 
     `period of obligated service') equal to the greater of--
       ``(A) 3 years; or
       ``(B) such longer period of time as determined appropriate 
     by the Secretary and the individual;
       ``(3) an agreement, as appropriate, on the part of the 
     individual to relocate to a priority service area (as 
     determined by the Secretary) in exchange for an additional 
     loan repayment incentive amount to be determined by the 
     Secretary;
       ``(4) a provision that any financial obligation of the 
     United States arising out of a contract entered into under 
     this section and any obligation of the individual that is 
     conditioned thereon, is contingent on funds being 
     appropriated for loan repayments under this section;
       ``(5) a statement of the damages to which the United States 
     is entitled, under this section for the individual's breach 
     of the contract; and
       ``(6) such other statements of the rights and liabilities 
     of the Secretary and of the individual, not inconsistent with 
     this section.
       ``(d) Payments.--
       ``(1) In general.--A loan repayment provided for an 
     individual under a written contract under the Program shall 
     consist of payment, in accordance with paragraph (2), on 
     behalf of the individual of the principal, interest, and 
     related expenses on government and commercial loans received 
     by the individual regarding the undergraduate or graduate 
     education of the individual (or both), which loans were made 
     for tuition expenses incurred by the individual.
       ``(2) Payments for years served.--For each year of 
     obligated service that an individual contracts to serve under 
     subsection (c) the Secretary may pay up to $35,000 on behalf 
     of the individual for loans described in paragraph (1). With 
     respect to participants under the Program whose total 
     eligible loans are less than $105,000, the Secretary shall 
     pay an amount that does not exceed \1/3\ of the eligible loan 
     balance for each year of obligated service of the individual.
       ``(3) Tax liability.--For the purpose of providing 
     reimbursements for tax liability resulting from payments 
     under paragraph (2) on behalf of an individual, the Secretary 
     shall, in addition to such payments, make payments to the 
     individual in an amount not to exceed 39 percent of the total 
     amount of loan repayments made for the taxable year involved.
       ``(e) Postponing Obligated Service.--With respect to an 
     individual receiving a degree or certificate from a health 
     professions or other related school, the date of the 
     initiation of the period of obligated service may be 
     postponed as approved by the Secretary.
       ``(f) Breach of Contract.--An individual who fails to 
     comply with the contract entered into under subsection (c) 
     shall be subject to the same financial penalties as provided 
     for under section 338E for breaches of loan repayment 
     contracts under section 338B.
       ``(g) Authorization of Appropriations.--There is authorized 
     to be appropriated to carry out this section $195,000,000 for 
     fiscal year 2010, and such sums as may be necessary for each 
     of fiscal years 2011 through 2015.''.

     SEC. 5205. ALLIED HEALTH WORKFORCE RECRUITMENT AND RETENTION 
                   PROGRAMS.

       (a) Purpose.--The purpose of this section is to assure an 
     adequate supply of allied health professionals to eliminate 
     critical allied health workforce shortages in Federal, State, 
     local, and tribal public health agencies or in settings where 
     patients might require health care services, including acute 
     care facilities, ambulatory care facilities, personal 
     residences and other settings, as recognized by the Secretary 
     of Health and Human Services by authorizing an Allied Health 
     Loan Forgiveness Program.
       (b) Allied Health Workforce Recruitment and Retention 
     Program.--Section 428K of the Higher Education Act of 1965 
     (20 U.S.C. 1078-11) is amended--
       (1) in subsection (b), by adding at the end the following:
       ``(18) Allied health professionals.--The individual is 
     employed full-time as an allied health professional--
       ``(A) in a Federal, State, local, or tribal public health 
     agency; or
       ``(B) in a setting where patients might require health care 
     services, including acute care facilities, ambulatory care 
     facilities, personal residences and other settings located in 
     health professional shortage areas, medically underserved 
     areas, or medically underserved populations, as recognized by 
     the Secretary of Health and Human Services.''; and
       (2) in subsection (g)--
       (A) by redesignating paragraphs (1) through (9) as 
     paragraphs (2) through (10), respectively; and
       (B) by inserting before paragraph (2) (as redesignated by 
     subparagraph (A)) the following:
       ``(1) Allied health professional.--The term `allied health 
     professional' means an allied health professional as defined 
     in section 799B(5) of the Public Heath Service Act (42 U.S.C. 
     295p(5)) who--
       ``(A) has graduated and received an allied health 
     professions degree or certificate from an institution of 
     higher education; and
       ``(B) is employed with a Federal, State, local or tribal 
     public health agency, or in a setting where patients might 
     require health care services, including acute care 
     facilities, ambulatory care facilities, personal residences 
     and other settings located in health professional shortage 
     areas, medically underserved areas, or medically underserved 
     populations, as recognized by the Secretary of Health and 
     Human Services.''.

[[Page 28521]]



     SEC. 5206. GRANTS FOR STATE AND LOCAL PROGRAMS.

       (a) In General.--Section 765(d) of the Public Health 
     Service Act (42 U.S.C. 295(d)) is amended--
       (1) in paragraph (7), by striking ``; or'' and inserting a 
     semicolon;
       (2) by redesignating paragraph (8) as paragraph (9); and
       (3) by inserting after paragraph (7) the following:
       ``(8) public health workforce loan repayment programs; 
     or''.
       (b) Training for Mid-career Public Health Professionals.--
     Part E of title VII of the Public Health Service Act (42 
     U.S.C. 294n et seq.), as amended by section 5204, is further 
     amended by adding at the end the following:

     ``SEC. 777. TRAINING FOR MID-CAREER PUBLIC AND ALLIED HEALTH 
                   PROFESSIONALS.

       ``(a) In General.--The Secretary may make grants to, or 
     enter into contracts with, any eligible entity to award 
     scholarships to eligible individuals to enroll in degree or 
     professional training programs for the purpose of enabling 
     mid-career professionals in the public health and allied 
     health workforce to receive additional training in the field 
     of public health and allied health.
       ``(b) Eligibility.--
       ``(1) Eligible entity.--The term `eligible entity' 
     indicates an accredited educational institution that offers a 
     course of study, certificate program, or professional 
     training program in public or allied health or a related 
     discipline, as determined by the Secretary
       ``(2) Eligible individuals.--The term `eligible 
     individuals' includes those individuals employed in public 
     and allied health positions at the Federal, State, tribal, or 
     local level who are interested in retaining or upgrading 
     their education.
       ``(c) Authorization of Appropriations.--There is authorized 
     to be appropriated to carry out this section, $60,000,000 for 
     fiscal year 2010 and such sums as may be necessary for each 
     of fiscal years 2011 through 2015. Fifty percent of 
     appropriated funds shall be allotted to public health mid-
     career professionals and 50 percent shall be allotted to 
     allied health mid-career professionals.''.

     SEC. 5207. FUNDING FOR NATIONAL HEALTH SERVICE CORPS.

       Section 338H(a) of the Public Health Service Act (42 U.S.C. 
     254q(a)) is amended to read as follows:
       ``(a) Authorization of Appropriations.--For the purpose of 
     carrying out this section, there is authorized to be 
     appropriated, out of any funds in the Treasury not otherwise 
     appropriated, the following:
       ``(1) For fiscal year 2010, $320,461,632.
       ``(2) For fiscal year 2011, $414,095,394.
       ``(3) For fiscal year 2012, $535,087,442.
       ``(4) For fiscal year 2013, $691,431,432.
       ``(5) For fiscal year 2014, $893,456,433.
       ``(6) For fiscal year 2015, $1,154,510,336.
       ``(7) For fiscal year 2016, and each subsequent fiscal 
     year, the amount appropriated for the preceding fiscal year 
     adjusted by the product of--
       ``(A) one plus the average percentage increase in the costs 
     of health professions education during the prior fiscal year; 
     and
       ``(B) one plus the average percentage change in the number 
     of individuals residing in health professions shortage areas 
     designated under section 333 during the prior fiscal year, 
     relative to the number of individuals residing in such areas 
     during the previous fiscal year.''.

     SEC. 5208. NURSE-MANAGED HEALTH CLINICS.

       (a) Purpose.--The purpose of this section is to fund the 
     development and operation of nurse-managed health clinics.
       (b) Grants.--Subpart 1 of part D of title III of the Public 
     Health Service Act (42 U.S.C. 254b et seq.) is amended by 
     inserting after section 330A the following:

     ``SEC. 330A-1. GRANTS TO NURSE-MANAGED HEALTH CLINICS.

       ``(a) Definitions.--
       ``(1) Comprehensive primary health care services.--In this 
     section, the term `comprehensive primary health care 
     services' means the primary health services described in 
     section 330(b)(1).
       ``(2) Nurse-managed health clinic.--The term `nurse-managed 
     health clinic' means a nurse-practice arrangement, managed by 
     advanced practice nurses, that provides primary care or 
     wellness services to underserved or vulnerable populations 
     and that is associated with a school, college, university or 
     department of nursing, federally qualified health center, or 
     independent nonprofit health or social services agency.
       ``(b) Authority to Award Grants.--The Secretary shall award 
     grants for the cost of the operation of nurse-managed health 
     clinics that meet the requirements of this section.
       ``(c) Applications.--To be eligible to receive a grant 
     under this section, an entity shall--
       ``(1) be an NMHC; and
       ``(2) submit to the Secretary an application at such time, 
     in such manner, and containing--
       ``(A) assurances that nurses are the major providers of 
     services at the NMHC and that at least 1 advanced practice 
     nurse holds an executive management position within the 
     organizational structure of the NMHC;
       ``(B) an assurance that the NMHC will continue providing 
     comprehensive primary health care services or wellness 
     services without regard to income or insurance status of the 
     patient for the duration of the grant period; and
       ``(C) an assurance that, not later than 90 days of 
     receiving a grant under this section, the NMHC will establish 
     a community advisory committee, for which a majority of the 
     members shall be individuals who are served by the NMHC.
       ``(d) Grant Amount.--The amount of any grant made under 
     this section for any fiscal year shall be determined by the 
     Secretary, taking into account--
       ``(1) the financial need of the NMHC, considering State, 
     local, and other operational funding provided to the NMHC; 
     and
       ``(2) other factors, as the Secretary determines 
     appropriate.
       ``(e) Authorization of Appropriations.--For the purposes of 
     carrying out this section, there are authorized to be 
     appropriated $50,000,000 for the fiscal year 2010 and such 
     sums as may be necessary for each of the fiscal years 2011 
     through 2014.''.

     SEC. 5209. ELIMINATION OF CAP ON COMMISSIONED CORPS.

       Section 202 of the Department of Health and Human Services 
     Appropriations Act, 1993 (Public Law 102-394) is amended by 
     striking ``not to exceed 2,800''.

     SEC. 5210. ESTABLISHING A READY RESERVE CORPS.

       Section 203 of the Public Health Service Act (42 U.S.C. 
     204) is amended to read as follows:

     ``SEC. 203. COMMISSIONED CORPS AND READY RESERVE CORPS.

       ``(a) Establishment.--
       ``(1) In general.--There shall be in the Service a 
     commissioned Regular Corps and a Ready Reserve Corps for 
     service in time of national emergency.
       ``(2) Requirement.--All commissioned officers shall be 
     citizens of the United States and shall be appointed without 
     regard to the civil-service laws and compensated without 
     regard to the Classification Act of 1923, as amended.
       ``(3) Appointment.--Commissioned officers of the Ready 
     Reserve Corps shall be appointed by the President and 
     commissioned officers of the Regular Corps shall be appointed 
     by the President with the advice and consent of the Senate.
       ``(4) Active duty.--Commissioned officers of the Ready 
     Reserve Corps shall at all times be subject to call to active 
     duty by the Surgeon General, including active duty for the 
     purpose of training.
       ``(5) Warrant officers.--Warrant officers may be appointed 
     to the Service for the purpose of providing support to the 
     health and delivery systems maintained by the Service and any 
     warrant officer appointed to the Service shall be considered 
     for purposes of this Act and title 37, United States Code, to 
     be a commissioned officer within the Commissioned Corps of 
     the Service.
       ``(b) Assimilating Reserve Corp Officers Into the Regular 
     Corps.--Effective on the date of enactment of the Patient 
     Protection and Affordable Care Act, all individuals 
     classified as officers in the Reserve Corps under this 
     section (as such section existed on the day before the date 
     of enactment of such Act) and serving on active duty shall be 
     deemed to be commissioned officers of the Regular Corps.
       ``(c) Purpose and Use of Ready Research.--
       ``(1) Purpose.--The purpose of the Ready Reserve Corps is 
     to fulfill the need to have additional Commissioned Corps 
     personnel available on short notice (similar to the uniformed 
     service's reserve program) to assist regular Commissioned 
     Corps personnel to meet both routine public health and 
     emergency response missions.
       ``(2) Uses.--The Ready Reserve Corps shall--
       ``(A) participate in routine training to meet the general 
     and specific needs of the Commissioned Corps;
       ``(B) be available and ready for involuntary calls to 
     active duty during national emergencies and public health 
     crises, similar to the uniformed service reserve personnel;
       ``(C) be available for backfilling critical positions left 
     vacant during deployment of active duty Commissioned Corps 
     members, as well as for deployment to respond to public 
     health emergencies, both foreign and domestic; and
       ``(D) be available for service assignment in isolated, 
     hardship, and medically underserved communities (as defined 
     in section 799B) to improve access to health services.
       ``(d) Funding.--For the purpose of carrying out the duties 
     and responsibilities of the Commissioned Corps under this 
     section, there are authorized to be appropriated $5,000,000 
     for each of fiscal years 2010 through 2014 for recruitment 
     and training and $12,500,000 for each of fiscal years 2010 
     through 2014 for the Ready Reserve Corps.''.

[[Page 28522]]



   Subtitle D--Enhancing Health Care Workforce Education and Training

     SEC. 5301. TRAINING IN FAMILY MEDICINE, GENERAL INTERNAL 
                   MEDICINE, GENERAL PEDIATRICS, AND PHYSICIAN 
                   ASSISTANTSHIP.

       Part C of title VII (42 U.S.C. 293k et seq.) is amended by 
     striking section 747 and inserting the following:

     ``SEC. 747. PRIMARY CARE TRAINING AND ENHANCEMENT.

       ``(a) Support and Development of Primary Care Training 
     Programs.--
       ``(1) In general.--The Secretary may make grants to, or 
     enter into contracts with, an accredited public or nonprofit 
     private hospital, school of medicine or osteopathic medicine, 
     academically affiliated physician assistant training program, 
     or a public or private nonprofit entity which the Secretary 
     has determined is capable of carrying out such grant or 
     contract--
       ``(A) to plan, develop, operate, or participate in an 
     accredited professional training program, including an 
     accredited residency or internship program in the field of 
     family medicine, general internal medicine, or general 
     pediatrics for medical students, interns, residents, or 
     practicing physicians as defined by the Secretary;
       ``(B) to provide need-based financial assistance in the 
     form of traineeships and fellowships to medical students, 
     interns, residents, practicing physicians, or other medical 
     personnel, who are participants in any such program, and who 
     plan to specialize or work in the practice of the fields 
     defined in subparagraph (A);
       ``(C) to plan, develop, and operate a program for the 
     training of physicians who plan to teach in family medicine, 
     general internal medicine, or general pediatrics training 
     programs;
       ``(D) to plan, develop, and operate a program for the 
     training of physicians teaching in community-based settings;
       ``(E) to provide financial assistance in the form of 
     traineeships and fellowships to physicians who are 
     participants in any such programs and who plan to teach or 
     conduct research in a family medicine, general internal 
     medicine, or general pediatrics training program;
       ``(F) to plan, develop, and operate a physician assistant 
     education program, and for the training of individuals who 
     will teach in programs to provide such training;
       ``(G) to plan, develop, and operate a demonstration program 
     that provides training in new competencies, as recommended by 
     the Advisory Committee on Training in Primary Care Medicine 
     and Dentistry and the National Health Care Workforce 
     Commission established in section 5101 of the Patient 
     Protection and Affordable Care Act, which may include--
       ``(i) providing training to primary care physicians 
     relevant to providing care through patient-centered medical 
     homes (as defined by the Secretary for purposes of this 
     section);
       ``(ii) developing tools and curricula relevant to patient-
     centered medical homes; and
       ``(iii) providing continuing education to primary care 
     physicians relevant to patient-centered medical homes; and
       ``(H) to plan, develop, and operate joint degree programs 
     to provide interdisciplinary and interprofessional graduate 
     training in public health and other health professions to 
     provide training in environmental health, infectious disease 
     control, disease prevention and health promotion, 
     epidemiological studies and injury control.
       ``(2) Duration of awards.--The period during which payments 
     are made to an entity from an award of a grant or contract 
     under this subsection shall be 5 years.
       ``(b) Capacity Building in Primary Care.--
       ``(1) In general.--The Secretary may make grants to or 
     enter into contracts with accredited schools of medicine or 
     osteopathic medicine to establish, maintain, or improve--
       ``(A) academic units or programs that improve clinical 
     teaching and research in fields defined in subsection 
     (a)(1)(A); or
       ``(B) programs that integrate academic administrative units 
     in fields defined in subsection (a)(1)(A) to enhance 
     interdisciplinary recruitment, training, and faculty 
     development.
       ``(2) Preference in making awards under this subsection.--
     In making awards of grants and contracts under paragraph (1), 
     the Secretary shall give preference to any qualified 
     applicant for such an award that agrees to expend the award 
     for the purpose of--
       ``(A) establishing academic units or programs in fields 
     defined in subsection (a)(1)(A); or
       ``(B) substantially expanding such units or programs.
       ``(3) Priorities in making awards.--In awarding grants or 
     contracts under paragraph (1), the Secretary shall give 
     priority to qualified applicants that--
       ``(A) proposes a collaborative project between academic 
     administrative units of primary care;
       ``(B) proposes innovative approaches to clinical teaching 
     using models of primary care, such as the patient centered 
     medical home, team management of chronic disease, and 
     interprofessional integrated models of health care that 
     incorporate transitions in health care settings and 
     integration physical and mental health provision;
       ``(C) have a record of training the greatest percentage of 
     providers, or that have demonstrated significant improvements 
     in the percentage of providers trained, who enter and remain 
     in primary care practice;
       ``(D) have a record of training individuals who are from 
     underrepresented minority groups or from a rural or 
     disadvantaged background;
       ``(E) provide training in the care of vulnerable 
     populations such as children, older adults, homeless 
     individuals, victims of abuse or trauma, individuals with 
     mental health or substance-related disorders, individuals 
     with HIV/AIDS, and individuals with disabilities;
       ``(F) establish formal relationships and submit joint 
     applications with federally qualified health centers, rural 
     health clinics, area health education centers, or clinics 
     located in underserved areas or that serve underserved 
     populations;
       ``(G) teach trainees the skills to provide 
     interprofessional, integrated care through collaboration 
     among health professionals;
       ``(H) provide training in enhanced communication with 
     patients, evidence-based practice, chronic disease 
     management, preventive care, health information technology, 
     or other competencies as recommended by the Advisory 
     Committee on Training in Primary Care Medicine and Dentistry 
     and the National Health Care Workforce Commission established 
     in section 5101 of the Patient Protection and Affordable Care 
     Act; or
       ``(I) provide training in cultural competency and health 
     literacy.
       ``(4) Duration of awards.--The period during which payments 
     are made to an entity from an award of a grant or contract 
     under this subsection shall be 5 years.
       ``(c) Authorization of Appropriations.--
       ``(1) In general.--For purposes of carrying out this 
     section (other than subsection (b)(1)(B)), there are 
     authorized to be appropriated $125,000,000 for fiscal year 
     2010, and such sums as may be necessary for each of fiscal 
     years 2011 through 2014.
       ``(2) Training programs.--Fifteen percent of the amount 
     appropriated pursuant to paragraph (1) in each such fiscal 
     year shall be allocated to the physician assistant training 
     programs described in subsection (a)(1)(F), which prepare 
     students for practice in primary care.
       ``(3) Integrating academic administrative units.--For 
     purposes of carrying out subsection (b)(1)(B), there are 
     authorized to be appropriated $750,000 for each of fiscal 
     years 2010 through 2014.''.

     SEC. 5302. TRAINING OPPORTUNITIES FOR DIRECT CARE WORKERS.

       Part C of title VII of the Public Health Service Act (42 
     U.S.C. 293k et seq.) is amended by inserting after section 
     747, as amended by section 5301, the following:

     ``SEC. 747A. TRAINING OPPORTUNITIES FOR DIRECT CARE WORKERS.

       ``(a) In General.--The Secretary shall award grants to 
     eligible entities to enable such entities to provide new 
     training opportunities for direct care workers who are 
     employed in long-term care settings such as nursing homes (as 
     defined in section 1908(e)(1) of the Social Security Act (42 
     U.S.C. 1396g(e)(1)), assisted living facilities and skilled 
     nursing facilities, intermediate care facilities for 
     individuals with mental retardation, home and community based 
     settings, and any other setting the Secretary determines to 
     be appropriate.
       ``(b) Eligibility.--To be eligible to receive a grant under 
     this section, an entity shall--
       ``(1) be an institution of higher education (as defined in 
     section 102 of the Higher Education Act of 1965 (20 U.S.C. 
     1002)) that--
       ``(A) is accredited by a nationally recognized accrediting 
     agency or association listed under section 101(c) of the 
     Higher Education Act of 1965 (20 U.S.C. 1001(c)); and
       ``(B) has established a public-private educational 
     partnership with a nursing home or skilled nursing facility, 
     agency or entity providing home and community based services 
     to individuals with disabilities, or other long-term care 
     provider; and
       ``(2) submit to the Secretary an application at such time, 
     in such manner, and containing such information as the 
     Secretary may require.
       ``(c) Use of Funds.--An eligible entity shall use amounts 
     awarded under a grant under this section to provide 
     assistance to eligible individuals to offset the cost of 
     tuition and required fees for enrollment in academic programs 
     provided by such entity.
       ``(d) Eligible Individual.--
       ``(1) Eligibility.--To be eligible for assistance under 
     this section, an individual shall be enrolled in courses 
     provided by a grantee under this subsection and maintain 
     satisfactory academic progress in such courses.
       ``(2) Condition of assistance.--As a condition of receiving 
     assistance under this section, an individual shall agree 
     that, following completion of the assistance period, the 
     individual will work in the field of geriatrics, disability 
     services, long term services and supports, or chronic care 
     management for a minimum of 2 years under guidelines set by 
     the Secretary.
       ``(e) Authorization of Appropriations.--There is authorized 
     to be appropriated to

[[Page 28523]]

     carry out this section, $10,000,000 for the period of fiscal 
     years 2011 through 2013.''.

     SEC. 5303. TRAINING IN GENERAL, PEDIATRIC, AND PUBLIC HEALTH 
                   DENTISTRY.

       Part C of Title VII of the Public Health Service Act (42 
     U.S.C. 293k et seq.) is amended by--
       (1) redesignating section 748, as amended by section 5103 
     of this Act, as section 749; and
       (2) inserting after section 747A, as added by section 5302, 
     the following:

     ``SEC. 748. TRAINING IN GENERAL, PEDIATRIC, AND PUBLIC HEALTH 
                   DENTISTRY.

       ``(a) Support and Development of Dental Training 
     Programs.--
       ``(1) In general.--The Secretary may make grants to, or 
     enter into contracts with, a school of dentistry, public or 
     nonprofit private hospital, or a public or private nonprofit 
     entity which the Secretary has determined is capable of 
     carrying out such grant or contract--
       ``(A) to plan, develop, and operate, or participate in, an 
     approved professional training program in the field of 
     general dentistry, pediatric dentistry, or public health 
     dentistry for dental students, residents, practicing 
     dentists, dental hygienists, or other approved primary care 
     dental trainees, that emphasizes training for general, 
     pediatric, or public health dentistry;
       ``(B) to provide financial assistance to dental students, 
     residents, practicing dentists, and dental hygiene students 
     who are in need thereof, who are participants in any such 
     program, and who plan to work in the practice of general, 
     pediatric, public heath dentistry, or dental hygiene;
       ``(C) to plan, develop, and operate a program for the 
     training of oral health care providers who plan to teach in 
     general, pediatric, public health dentistry, or dental 
     hygiene;
       ``(D) to provide financial assistance in the form of 
     traineeships and fellowships to dentists who plan to teach or 
     are teaching in general, pediatric, or public health 
     dentistry;
       ``(E) to meet the costs of projects to establish, maintain, 
     or improve dental faculty development programs in primary 
     care (which may be departments, divisions or other units);
       ``(F) to meet the costs of projects to establish, maintain, 
     or improve predoctoral and postdoctoral training in primary 
     care programs;
       ``(G) to create a loan repayment program for faculty in 
     dental programs; and
       ``(H) to provide technical assistance to pediatric training 
     programs in developing and implementing instruction regarding 
     the oral health status, dental care needs, and risk-based 
     clinical disease management of all pediatric populations with 
     an emphasis on underserved children.
       ``(2) Faculty loan repayment.--
       ``(A) In general.--A grant or contract under subsection 
     (a)(1)(G) may be awarded to a program of general, pediatric, 
     or public health dentistry described in such subsection to 
     plan, develop, and operate a loan repayment program under 
     which--
       ``(i) individuals agree to serve full-time as faculty 
     members; and
       ``(ii) the program of general, pediatric or public health 
     dentistry agrees to pay the principal and interest on the 
     outstanding student loans of the individuals.
       ``(B) Manner of payments.--With respect to the payments 
     described in subparagraph (A)(ii), upon completion by an 
     individual of each of the first, second, third, fourth, and 
     fifth years of service, the program shall pay an amount equal 
     to 10, 15, 20, 25, and 30 percent, respectively, of the 
     individual's student loan balance as calculated based on 
     principal and interest owed at the initiation of the 
     agreement.
       ``(b) Eligible Entity.--For purposes of this subsection, 
     entities eligible for such grants or contracts in general, 
     pediatric, or public health dentistry shall include entities 
     that have programs in dental or dental hygiene schools, or 
     approved residency or advanced education programs in the 
     practice of general, pediatric, or public health dentistry. 
     Eligible entities may partner with schools of public health 
     to permit the education of dental students, residents, and 
     dental hygiene students for a master's year in public health 
     at a school of public health.
       ``(c) Priorities in Making Awards.--With respect to 
     training provided for under this section, the Secretary shall 
     give priority in awarding grants or contracts to the 
     following:
       ``(1) Qualified applicants that propose collaborative 
     projects between departments of primary care medicine and 
     departments of general, pediatric, or public health 
     dentistry.
       ``(2) Qualified applicants that have a record of training 
     the greatest percentage of providers, or that have 
     demonstrated significant improvements in the percentage of 
     providers, who enter and remain in general, pediatric, or 
     public health dentistry.
       ``(3) Qualified applicants that have a record of training 
     individuals who are from a rural or disadvantaged background, 
     or from underrepresented minorities.
       ``(4) Qualified applicants that establish formal 
     relationships with Federally qualified health centers, rural 
     health centers, or accredited teaching facilities and that 
     conduct training of students, residents, fellows, or faculty 
     at the center or facility.
       ``(5) Qualified applicants that conduct teaching programs 
     targeting vulnerable populations such as older adults, 
     homeless individuals, victims of abuse or trauma, individuals 
     with mental health or substance-related disorders, 
     individuals with disabilities, and individuals with HIV/AIDS, 
     and in the risk-based clinical disease management of all 
     populations.
       ``(6) Qualified applicants that include educational 
     activities in cultural competency and health literacy.
       ``(7) Qualified applicants that have a high rate for 
     placing graduates in practice settings that serve underserved 
     areas or health disparity populations, or who achieve a 
     significant increase in the rate of placing graduates in such 
     settings.
       ``(8) Qualified applicants that intend to establish a 
     special populations oral health care education center or 
     training program for the didactic and clinical education of 
     dentists, dental health professionals, and dental hygienists 
     who plan to teach oral health care for people with 
     developmental disabilities, cognitive impairment, complex 
     medical problems, significant physical limitations, and 
     vulnerable elderly.
       ``(d) Application.--An eligible entity desiring a grant 
     under this section shall submit to the Secretary an 
     application at such time, in such manner, and containing such 
     information as the Secretary may require.
       ``(e) Duration of Award.--The period during which payments 
     are made to an entity from an award of a grant or contract 
     under subsection (a) shall be 5 years. The provision of such 
     payments shall be subject to annual approval by the Secretary 
     and subject to the availability of appropriations for the 
     fiscal year involved to make the payments.
       ``(f) Authorizations of Appropriations.--For the purpose of 
     carrying out subsections (a) and (b), there is authorized to 
     be appropriated $30,000,000 for fiscal year 2010 and such 
     sums as may be necessary for each of fiscal years 2011 
     through 2015.
       ``(g) Carryover Funds.--An entity that receives an award 
     under this section may carry over funds from 1 fiscal year to 
     another without obtaining approval from the Secretary. In no 
     case may any funds be carried over pursuant to the preceding 
     sentence for more than 3 years.''.

     SEC. 5304. ALTERNATIVE DENTAL HEALTH CARE PROVIDERS 
                   DEMONSTRATION PROJECT.

       Subpart X of part D of title III of the Public Health 
     Service Act (42 U.S.C. 256f et seq.) is amended by adding at 
     the end the following:

     ``SEC. 340G-1. DEMONSTRATION PROGRAM.

       ``(a) In General.--
       ``(1) Authorization.--The Secretary is authorized to award 
     grants to 15 eligible entities to enable such entities to 
     establish a demonstration program to establish training 
     programs to train, or to employ, alternative dental health 
     care providers in order to increase access to dental health 
     care services in rural and other underserved communities.
       ``(2) Definition.--The term `alternative dental health care 
     providers' includes community dental health coordinators, 
     advance practice dental hygienists, independent dental 
     hygienists, supervised dental hygienists, primary care 
     physicians, dental therapists, dental health aides, and any 
     other health professional that the Secretary determines 
     appropriate.
       ``(b) Timeframe.--The demonstration projects funded under 
     this section shall begin not later than 2 years after the 
     date of enactment of this section, and shall conclude not 
     later than 7 years after such date of enactment.
       ``(c) Eligible Entities.--To be eligible to receive a grant 
     under subsection (a), an entity shall--
       ``(1) be--
       ``(A) an institution of higher education, including a 
     community college;
       ``(B) a public-private partnership;
       ``(C) a federally qualified health center;
       ``(D) an Indian Health Service facility or a tribe or 
     tribal organization (as such terms are defined in section 4 
     of the Indian Self-Determination and Education Assistance 
     Act);
       ``(E) a State or county public health clinic, a health 
     facility operated by an Indian tribe or tribal organization, 
     or urban Indian organization providing dental services; or
       ``(F) a public hospital or health system;
       ``(2) be within a program accredited by the Commission on 
     Dental Accreditation or within a dental education program in 
     an accredited institution; and
       ``(3) shall submit an application to the Secretary at such 
     time, in such manner, and containing such information as the 
     Secretary may require.
       ``(d) Administrative Provisions.--
       ``(1) Amount of grant.--Each grant under this section shall 
     be in an amount that is not less than $4,000,000 for the 5-
     year period during which the demonstration project being 
     conducted.
       ``(2) Disbursement of funds.--
       ``(A) Preliminary disbursements.--Beginning 1 year after 
     the enactment of this section, the Secretary may disperse to 
     any entity receiving a grant under this section not more than 
     20 percent of the total funding awarded to such entity under 
     such grant, for the purpose of enabling the entity to plan 
     the demonstration project to be conducted under such grant.

[[Page 28524]]

       ``(B) Subsequent disbursements.--The remaining amount of 
     grant funds not dispersed under subparagraph (A) shall be 
     dispersed such that not less than 15 percent of such 
     remaining amount is dispersed each subsequent year.
       ``(e) Compliance With State Requirements.--Each entity 
     receiving a grant under this section shall certify that it is 
     in compliance with all applicable State licensing 
     requirements.
       ``(f) Evaluation.--The Secretary shall contract with the 
     Director of the Institute of Medicine to conduct a study of 
     the demonstration programs conducted under this section that 
     shall provide analysis, based upon quantitative and 
     qualitative data, regarding access to dental health care in 
     the United States.
       ``(g) Clarification Regarding Dental Health Aide Program.--
     Nothing in this section shall prohibit a dental health aide 
     training program approved by the Indian Health Service from 
     being eligible for a grant under this section.
       ``(h) Authorization of Appropriations.--There is authorized 
     to be appropriated such sums as may be necessary to carry out 
     this section.''.

     SEC. 5305. GERIATRIC EDUCATION AND TRAINING; CAREER AWARDS; 
                   COMPREHENSIVE GERIATRIC EDUCATION.

       (a) Workforce Development; Career Awards.--Section 753 of 
     the Public Health Service Act (42 U.S.C. 294c) is amended by 
     adding at the end the following:
       ``(d) Geriatric Workforce Development.--
       ``(1) In general.--The Secretary shall award grants or 
     contracts under this subsection to entities that operate a 
     geriatric education center pursuant to subsection (a)(1).
       ``(2) Application.--To be eligible for an award under 
     paragraph (1), an entity described in such paragraph shall 
     submit to the Secretary an application at such time, in such 
     manner, and containing such information as the Secretary may 
     require.
       ``(3) Use of funds.--Amounts awarded under a grant or 
     contract under paragraph (1) shall be used to--
       ``(A) carry out the fellowship program described in 
     paragraph (4); and
       ``(B) carry out 1 of the 2 activities described in 
     paragraph (5).
       ``(4) Fellowship program.--
       ``(A) In general.--Pursuant to paragraph (3), a geriatric 
     education center that receives an award under this subsection 
     shall use such funds to offer short-term intensive courses 
     (referred to in this subsection as a `fellowship') that focus 
     on geriatrics, chronic care management, and long-term care 
     that provide supplemental training for faculty members in 
     medical schools and other health professions schools with 
     programs in psychology, pharmacy, nursing, social work, 
     dentistry, public health, allied health, or other health 
     disciplines, as approved by the Secretary. Such a fellowship 
     shall be open to current faculty, and appropriately 
     credentialed volunteer faculty and practitioners, who do not 
     have formal training in geriatrics, to upgrade their 
     knowledge and clinical skills for the care of older adults 
     and adults with functional limitations and to enhance their 
     interdisciplinary teaching skills.
       ``(B) Location.--A fellowship shall be offered either at 
     the geriatric education center that is sponsoring the course, 
     in collaboration with other geriatric education centers, or 
     at medical schools, schools of dentistry, schools of nursing, 
     schools of pharmacy, schools of social work, graduate 
     programs in psychology, or allied health and other health 
     professions schools approved by the Secretary with which the 
     geriatric education centers are affiliated.
       ``(C) CME credit.--Participation in a fellowship under this 
     paragraph shall be accepted with respect to complying with 
     continuing health profession education requirements. As a 
     condition of such acceptance, the recipient shall agree to 
     subsequently provide a minimum of 18 hours of voluntary 
     instructional support through a geriatric education center 
     that is providing clinical training to students or trainees 
     in long-term care settings.
       ``(5) Additional required activities described.--Pursuant 
     to paragraph (3), a geriatric education center that receives 
     an award under this subsection shall use such funds to carry 
     out 1 of the following 2 activities.
       ``(A) Family caregiver and direct care provider training.--
     A geriatric education center that receives an award under 
     this subsection shall offer at least 2 courses each year, at 
     no charge or nominal cost, to family caregivers and direct 
     care providers that are designed to provide practical 
     training for supporting frail elders and individuals with 
     disabilities. The Secretary shall require such Centers to 
     work with appropriate community partners to develop training 
     program content and to publicize the availability of training 
     courses in their service areas. All family caregiver and 
     direct care provider training programs shall include 
     instruction on the management of psychological and behavioral 
     aspects of dementia, communication techniques for working 
     with individuals who have dementia, and the appropriate, 
     safe, and effective use of medications for older adults.
       ``(B) Incorporation of best practices.--A geriatric 
     education center that receives an award under this subsection 
     shall develop and include material on depression and other 
     mental disorders common among older adults, medication safety 
     issues for older adults, and management of the psychological 
     and behavioral aspects of dementia and communication 
     techniques with individuals who have dementia in all training 
     courses, where appropriate.
       ``(6) Targets.--A geriatric education center that receives 
     an award under this subsection shall meet targets approved by 
     the Secretary for providing geriatric training to a certain 
     number of faculty or practitioners during the term of the 
     award, as well as other parameters established by the 
     Secretary.
       ``(7) Amount of award.--An award under this subsection 
     shall be in an amount of $150,000. Not more than 24 geriatric 
     education centers may receive an award under this subsection.
       ``(8) Maintenance of effort.--A geriatric education center 
     that receives an award under this subsection shall provide 
     assurances to the Secretary that funds provided to the 
     geriatric education center under this subsection will be used 
     only to supplement, not to supplant, the amount of Federal, 
     State, and local funds otherwise expended by the geriatric 
     education center.
       ``(9) Authorization of appropriations.--In addition to any 
     other funding available to carry out this section, there is 
     authorized to be appropriated to carry out this subsection, 
     $10,800,000 for the period of fiscal year 2011 through 2014.
       ``(e) Geriatric Career Incentive Awards.--
       ``(1) In general.--The Secretary shall award grants or 
     contracts under this section to individuals described in 
     paragraph (2) to foster greater interest among a variety of 
     health professionals in entering the field of geriatrics, 
     long-term care, and chronic care management.
       ``(2) Eligible individuals.--To be eligible to received an 
     award under paragraph (1), an individual shall--
       ``(A) be an advanced practice nurse, a clinical social 
     worker, a pharmacist, or student of psychology who is 
     pursuing a doctorate or other advanced degree in geriatrics 
     or related fields in an accredited health professions school; 
     and
       ``(B) submit to the Secretary an application at such time, 
     in such manner, and containing such information as the 
     Secretary may require.
       ``(3) Condition of award.--As a condition of receiving an 
     award under this subsection, an individual shall agree that, 
     following completion of the award period, the individual will 
     teach or practice in the field of geriatrics, long-term care, 
     or chronic care management for a minimum of 5 years under 
     guidelines set by the Secretary.
       ``(4) Authorization of appropriations.--There is authorized 
     to be appropriated to carry out this subsection, $10,000,000 
     for the period of fiscal years 2011 through 2013.''.
       (b) Expansion of Eligibility for Geriatric Academic Career 
     Awards; Payment to Institution.--Section 753(c) of the Public 
     Health Service Act 294(c)) is amended--
       (1) by redesignating paragraphs (4) and (5) as paragraphs 
     (5) and (6), respectively;
       (2) by striking paragraph (2) through paragraph (3) and 
     inserting the following:
       ``(2) Eligible individuals.--To be eligible to receive an 
     Award under paragraph (1), an individual shall--
       ``(A) be board certified or board eligible in internal 
     medicine, family practice, psychiatry, or licensed dentistry, 
     or have completed any required training in a discipline and 
     employed in an accredited health professions school that is 
     approved by the Secretary;
       ``(B) have completed an approved fellowship program in 
     geriatrics or have completed specialty training in geriatrics 
     as required by the discipline and any addition geriatrics 
     training as required by the Secretary; and
       ``(C) have a junior (non-tenured) faculty appointment at an 
     accredited (as determined by the Secretary) school of 
     medicine, osteopathic medicine, nursing, social work, 
     psychology, dentistry, pharmacy, or other allied health 
     disciplines in an accredited health professions school that 
     is approved by the Secretary.
       ``(3) Limitations.--No Award under paragraph (1) may be 
     made to an eligible individual unless the individual--
       ``(A) has submitted to the Secretary an application, at 
     such time, in such manner, and containing such information as 
     the Secretary may require, and the Secretary has approved 
     such application;
       ``(B) provides, in such form and manner as the Secretary 
     may require, assurances that the individual will meet the 
     service requirement described in paragraph (6); and
       ``(C) provides, in such form and manner as the Secretary 
     may require, assurances that the individual has a full-time 
     faculty appointment in a health professions institution and 
     documented commitment from such institution to spend 75 
     percent of the total time of such individual on teaching and 
     developing skills in interdisciplinary education in 
     geriatrics.

[[Page 28525]]

       ``(4) Maintenance of effort.--An eligible individual that 
     receives an Award under paragraph (1) shall provide 
     assurances to the Secretary that funds provided to the 
     eligible individual under this subsection will be used only 
     to supplement, not to supplant, the amount of Federal, State, 
     and local funds otherwise expended by the eligible 
     individual.''; and
       (3) in paragraph (5), as so designated--
       (A) in subparagraph (A)--
       (i) by inserting ``for individuals who are physicians'' 
     after ``this section''; and
       (ii) by inserting after the period at the end the 
     following: ``The Secretary shall determine the amount of an 
     Award under this section for individuals who are not 
     physicians.''; and
       (B) by adding at the end the following:
       ``(C) Payment to institution.--The Secretary shall make 
     payments to institutions which include schools of medicine, 
     osteopathic medicine, nursing, social work, psychology, 
     dentistry, and pharmacy, or other allied health discipline in 
     an accredited health professions school that is approved by 
     the Secretary.''.
       (c) Comprehensive Geriatric Education.--Section 855 of the 
     Public Health Service Act (42 U.S.C. 298) is amended--
       (1) in subsection (b)--
       (A) in paragraph (3), by striking ``or'' at the end;
       (B) in paragraph (4), by striking the period and inserting 
     ``; or''; and
       (C) by adding at the end the following:
       ``(5) establish traineeships for individuals who are 
     preparing for advanced education nursing degrees in geriatric 
     nursing, long-term care, gero-psychiatric nursing or other 
     nursing areas that specialize in the care of the elderly 
     population.''; and
       (2) in subsection (e), by striking ``2003 through 2007'' 
     and inserting ``2010 through 2014''.

     SEC. 5306. MENTAL AND BEHAVIORAL HEALTH EDUCATION AND 
                   TRAINING GRANTS.

       (a) In General.--Part D of title VII (42 U.S.C. 294 et 
     seq.) is amended by--
       (1) striking section 757;
       (2) redesignating section 756 (as amended by section 5103) 
     as section 757; and
       (3) inserting after section 755 the following:

     ``SEC. 756. MENTAL AND BEHAVIORAL HEALTH EDUCATION AND 
                   TRAINING GRANTS.

       ``(a) Grants Authorized.--The Secretary may award grants to 
     eligible institutions of higher education to support the 
     recruitment of students for, and education and clinical 
     experience of the students in--
       ``(1) baccalaureate, master's, and doctoral degree programs 
     of social work, as well as the development of faculty in 
     social work;
       ``(2) accredited master's, doctoral, internship, and post-
     doctoral residency programs of psychology for the development 
     and implementation of interdisciplinary training of 
     psychology graduate students for providing behavioral and 
     mental health services, including substance abuse prevention 
     and treatment services;
       ``(3) accredited institutions of higher education or 
     accredited professional training programs that are 
     establishing or expanding internships or other field 
     placement programs in child and adolescent mental health in 
     psychiatry, psychology, school psychology, behavioral 
     pediatrics, psychiatric nursing, social work, school social 
     work, substance abuse prevention and treatment, marriage and 
     family therapy, school counseling, or professional 
     counseling; and
       ``(4) State-licensed mental health nonprofit and for-profit 
     organizations to enable such organizations to pay for 
     programs for preservice or in-service training of 
     paraprofessional child and adolescent mental health workers.
       ``(b) Eligibility Requirements.--To be eligible for a grant 
     under this section, an institution shall demonstrate--
       ``(1) participation in the institutions' programs of 
     individuals and groups from different racial, ethnic, 
     cultural, geographic, religious, linguistic, and class 
     backgrounds, and different genders and sexual orientations;
       ``(2) knowledge and understanding of the concerns of the 
     individuals and groups described in subsection (a);
       ``(3) any internship or other field placement program 
     assisted under the grant will prioritize cultural and 
     linguistic competency;
       ``(4) the institution will provide to the Secretary such 
     data, assurances, and information as the Secretary may 
     require; and
       ``(5) with respect to any violation of the agreement 
     between the Secretary and the institution, the institution 
     will pay such liquidated damages as prescribed by the 
     Secretary by regulation.
       ``(c) Institutional Requirement.--For grants authorized 
     under subsection (a)(1), at least 4 of the grant recipients 
     shall be historically black colleges or universities or other 
     minority-serving institutions.
       ``(d) Priority.--
       ``(1) In selecting the grant recipients in social work 
     under subsection (a)(1), the Secretary shall give priority to 
     applicants that--
       ``(A) are accredited by the Council on Social Work 
     Education;
       ``(B) have a graduation rate of not less than 80 percent 
     for social work students; and
       ``(C) exhibit an ability to recruit social workers from and 
     place social workers in areas with a high need and high 
     demand population.
       ``(2) In selecting the grant recipients in graduate 
     psychology under subsection (a)(2), the Secretary shall give 
     priority to institutions in which training focuses on the 
     needs of vulnerable groups such as older adults and children, 
     individuals with mental health or substance-related 
     disorders, victims of abuse or trauma and of combat stress 
     disorders such as posttraumatic stress disorder and traumatic 
     brain injuries, homeless individuals, chronically ill 
     persons, and their families.
       ``(3) In selecting the grant recipients in training 
     programs in child and adolescent mental health under 
     subsections (a)(3) and (a)(4), the Secretary shall give 
     priority to applicants that--
       ``(A) have demonstrated the ability to collect data on the 
     number of students trained in child and adolescent mental 
     health and the populations served by such students after 
     graduation or completion of preservice or in-service 
     training;
       ``(B) have demonstrated familiarity with evidence-based 
     methods in child and adolescent mental health services, 
     including substance abuse prevention and treatment services;
       ``(C) have programs designed to increase the number of 
     professionals and paraprofessionals serving high-priority 
     populations and to applicants who come from high-priority 
     communities and plan to serve medically underserved 
     populations, in health professional shortage areas, or in 
     medically underserved areas;
       ``(D) offer curriculum taught collaboratively with a family 
     on the consumer and family lived experience or the importance 
     of family-professional or family-paraprofessional 
     partnerships; and
       ``(E) provide services through a community mental health 
     program described in section 1913(b)(1).
       ``(e) Authorization of Appropriation.--For the fiscal years 
     2010 through 2013, there is authorized to be appropriated to 
     carry out this section--
       ``(1) $8,000,000 for training in social work in subsection 
     (a)(1);
       ``(2) $12,000,000 for training in graduate psychology in 
     subsection (a)(2), of which not less than $10,000,000 shall 
     be allocated for doctoral, postdoctoral, and internship level 
     training;
       ``(3) $10,000,000 for training in professional child and 
     adolescent mental health in subsection (a)(3); and
       ``(4) $5,000,000 for training in paraprofessional child and 
     adolescent work in subsection (a)(4).''.
       (b) Conforming Amendments.--Section 757(b)(2) of the Public 
     Health Service Act, as redesignated by subsection (a), is 
     amended by striking ``sections 751(a)(1)(A), 751(a)(1)(B), 
     753(b), 754(3)(A), and 755(b)'' and inserting ``sections 
     751(b)(1)(A), 753(b), and 755(b)''.

     SEC. 5307. CULTURAL COMPETENCY, PREVENTION, AND PUBLIC HEALTH 
                   AND INDIVIDUALS WITH DISABILITIES TRAINING.

       (a) Title VII.--Section 741 of the Public Health Service 
     Act (42 U.S.C. 293e) is amended--
       (1) in subsection (a)--
       (A) by striking the subsection heading and inserting 
     ``Cultural Competency, Prevention, and Public Health and 
     Individuals With Disability Grants''; and
       (B) in paragraph (1), by striking ``for the purpose of'' 
     and all that follows through the period at the end and 
     inserting ``for the development, evaluation, and 
     dissemination of research, demonstration projects, and model 
     curricula for cultural competency, prevention, public health 
     proficiency, reducing health disparities, and aptitude for 
     working with individuals with disabilities training for use 
     in health professions schools and continuing education 
     programs, and for other purposes determined as appropriate by 
     the Secretary.''; and
       (2) by striking subsection (b) and inserting the following:
       ``(b) Collaboration.--In carrying out subsection (a), the 
     Secretary shall collaborate with health professional 
     societies, licensing and accreditation entities, health 
     professions schools, and experts in minority health and 
     cultural competency, prevention, and public health and 
     disability groups, community-based organizations, and other 
     organizations as determined appropriate by the Secretary. The 
     Secretary shall coordinate with curricula and research and 
     demonstration projects developed under section 807.
       ``(c) Dissemination.--
       ``(1) In general.--Model curricula developed under this 
     section shall be disseminated through the Internet 
     Clearinghouse under section 270 and such other means as 
     determined appropriate by the Secretary.
       ``(2) Evaluation.--The Secretary shall evaluate the 
     adoption and the implementation of cultural competency, 
     prevention, and public health, and working with individuals 
     with a disability training curricula, and the facilitate 
     inclusion of these competency measures in quality measurement 
     systems as appropriate.
       ``(d) Authorization of Appropriations.--There is authorized 
     to be appropriated to

[[Page 28526]]

     carry out this section such sums as may be necessary for each 
     of fiscal years 2010 through 2015.''.
       (b) Title VIII.--Section 807 of the Public Health Service 
     Act (42 U.S.C. 296e-1) is amended--
       (1) in subsection (a)--
       (A) by striking the subsection heading and inserting 
     ``Cultural Competency, Prevention, and Public Health and 
     Individuals With Disability Grants''; and
       (B) by striking ``for the purpose of'' and all that follows 
     through ``health care.'' and inserting ``for the development, 
     evaluation, and dissemination of research, demonstration 
     projects, and model curricula for cultural competency, 
     prevention, public health proficiency, reducing health 
     disparities, and aptitude for working with individuals with 
     disabilities training for use in health professions schools 
     and continuing education programs, and for other purposes 
     determined as appropriate by the Secretary.''; and
       (2) by redesignating subsection (b) as subsection (d);
       (3) by inserting after subsection (a) the following:
       ``(b) Collaboration.--In carrying out subsection (a), the 
     Secretary shall collaborate with the entities described in 
     section 741(b). The Secretary shall coordinate with curricula 
     and research and demonstration projects developed under such 
     section 741.
       ``(c) Dissemination.--Model curricula developed under this 
     section shall be disseminated and evaluated in the same 
     manner as model curricula developed under section 741, as 
     described in subsection (c) of such section.''; and
       (4) in subsection (d), as so redesignated--
       (A) by striking ``subsection (a)'' and inserting ``this 
     section''; and
       (B) by striking ``2001 through 2004'' and inserting ``2010 
     through 2015''.

     SEC. 5308. ADVANCED NURSING EDUCATION GRANTS.

       Section 811 of the Public Health Service Act (42 U.S.C. 
     296j) is amended--
       (1) in subsection (c)--
       (A) in the subsection heading, by striking ``and Nurse 
     Midwifery Programs''; and
       (B) by striking ``and nurse midwifery'';
       (2) in subsection (f)--
       (A) by striking paragraph (2); and
       (B) by redesignating paragraph (3) as paragraph (2); and
       (3) by redesignating subsections (d), (e), and (f) as 
     subsections (e), (f), and (g), respectively; and
       (4) by inserting after subsection (c), the following:
       ``(d) Authorized Nurse-midwifery Programs.--Midwifery 
     programs that are eligible for support under this section are 
     educational programs that--
       ``(1) have as their objective the education of midwives; 
     and
       ``(2) are accredited by the American College of Nurse-
     Midwives Accreditation Commission for Midwifery Education.''.

     SEC. 5309. NURSE EDUCATION, PRACTICE, AND RETENTION GRANTS.

       (a) In General.--Section 831 of the Public Health Service 
     Act (42 U.S.C. 296p) is amended--
       (1) in the section heading, by striking ``RETENTION'' and 
     inserting ``QUALITY'';
       (2) in subsection (a)--
       (A) in paragraph (1), by adding ``or'' after the semicolon;
       (B) by striking paragraph (2); and
       (C) by redesignating paragraph (3) as paragraph (2);
       (3) in subsection (b)(3), by striking ``managed care, 
     quality improvement'' and inserting ``coordinated care'';
       (4) in subsection (g), by inserting ``, as defined in 
     section 801(2),'' after ``school of nursing''; and
       (5) in subsection (h), by striking ``2003 through 2007'' 
     and inserting ``2010 through 2014''.
       (b) Nurse Retention Grants.--Title VIII of the Public 
     Health Service Act is amended by inserting after section 831 
     (42 U.S.C. 296b) the following:

     ``SEC. 831A. NURSE RETENTION GRANTS.

       ``(a) Retention Priority Areas.--The Secretary may award 
     grants to, and enter into contracts with, eligible entities 
     to enhance the nursing workforce by initiating and 
     maintaining nurse retention programs pursuant to subsection 
     (b) or (c).
       ``(b) Grants for Career Ladder Program.--The Secretary may 
     award grants to, and enter into contracts with, eligible 
     entities for programs--
       ``(1) to promote career advancement for individuals 
     including licensed practical nurses, licensed vocational 
     nurses, certified nurse assistants, home health aides, 
     diploma degree or associate degree nurses, to become 
     baccalaureate prepared registered nurses or advanced 
     education nurses in order to meet the needs of the registered 
     nurse workforce;
       ``(2) developing and implementing internships and residency 
     programs in collaboration with an accredited school of 
     nursing, as defined by section 801(2), to encourage mentoring 
     and the development of specialties; or
       ``(3) to assist individuals in obtaining education and 
     training required to enter the nursing profession and advance 
     within such profession.
       ``(c) Enhancing Patient Care Delivery Systems.--
       ``(1) Grants.--The Secretary may award grants to eligible 
     entities to improve the retention of nurses and enhance 
     patient care that is directly related to nursing activities 
     by enhancing collaboration and communication among nurses and 
     other health care professionals, and by promoting nurse 
     involvement in the organizational and clinical decision-
     making processes of a health care facility.
       ``(2) Priority.--In making awards of grants under this 
     subsection, the Secretary shall give preference to applicants 
     that have not previously received an award under this 
     subsection (or section 831(c) as such section existed on the 
     day before the date of enactment of this section).
       ``(3) Continuation of an award.--The Secretary shall make 
     continuation of any award under this subsection beyond the 
     second year of such award contingent on the recipient of such 
     award having demonstrated to the Secretary measurable and 
     substantive improvement in nurse retention or patient care.
       ``(d) Other Priority Areas.--The Secretary may award grants 
     to, or enter into contracts with, eligible entities to 
     address other areas that are of high priority to nurse 
     retention, as determined by the Secretary.
       ``(e) Report.--The Secretary shall submit to the Congress 
     before the end of each fiscal year a report on the grants 
     awarded and the contracts entered into under this section. 
     Each such report shall identify the overall number of such 
     grants and contracts and provide an explanation of why each 
     such grant or contract will meet the priority need of the 
     nursing workforce.
       ``(f) Eligible Entity.--For purposes of this section, the 
     term `eligible entity' includes an accredited school of 
     nursing, as defined by section 801(2), a health care 
     facility, or a partnership of such a school and facility.
       ``(g) Authorization of Appropriations.--There are 
     authorized to be appropriated to carry out this section such 
     sums as may be necessary for each of fiscal years 2010 
     through 2012.''.

     SEC. 5310. LOAN REPAYMENT AND SCHOLARSHIP PROGRAM.

       (a) Loan Repayments and Scholarships.--Section 846(a)(3) of 
     the Public Health Service Act (42 U.S.C. 297n(a)(3)) is 
     amended by inserting before the semicolon the following: ``, 
     or in a accredited school of nursing, as defined by section 
     801(2), as nurse faculty''.
       (b) Technical and Conforming Amendments.--Title VIII (42 
     U.S.C. 296 et seq.) is amended--
       (1) by redesignating section 810 (relating to prohibition 
     against discrimination by schools on the basis of sex) as 
     section 809 and moving such section so that it follows 
     section 808;
       (2) in sections 835, 836, 838, 840, and 842, by striking 
     the term ``this subpart'' each place it appears and inserting 
     ``this part'';
       (3) in section 836(h), by striking the last sentence;
       (4) in section 836, by redesignating subsection (l) as 
     subsection (k);
       (5) in section 839, by striking ``839'' and all that 
     follows through ``(a)'' and inserting ``839. (a)'';
       (6) in section 835(b), by striking ``841'' each place it 
     appears and inserting ``871'';
       (7) by redesignating section 841 as section 871, moving 
     part F to the end of the title, and redesignating such part 
     as part I;
       (8) in part G--
       (A) by redesignating section 845 as section 851; and
       (B) by redesignating part G as part F;
       (9) in part H--
       (A) by redesignating sections 851 and 852 as sections 861 
     and 862, respectively; and
       (B) by redesignating part H as part G; and
       (10) in part I--
       (A) by redesignating section 855, as amended by section 
     5305, as section 865; and
       (B) by redesignating part I as part H.

     SEC. 5311. NURSE FACULTY LOAN PROGRAM.

       (a) In General.--Section 846A of the Public Health Service 
     Act (42 U.S.C. 297n-1) is amended--
       (1) in subsection (a)--
       (A) in the subsection heading, by striking 
     ``Establishment'' and inserting ``School of Nursing Student 
     Loan Fund''; and
       (B) by inserting ``accredited'' after ``agreement with 
     any'';
       (2) in subsection (c)--
       (A) in paragraph (2), by striking ``$30,000'' and all that 
     follows through the semicolon and inserting ``$35,500, during 
     fiscal years 2010 and 2011 fiscal years (after fiscal year 
     2011, such amounts shall be adjusted to provide for a cost-
     of-attendance increase for the yearly loan rate and the 
     aggregate loan;''; and
       (B) in paragraph (3)(A), by inserting ``an accredited'' 
     after ``faculty member in'';
       (3) in subsection (e), by striking ``a school'' and 
     inserting ``an accredited school''; and
       (4) in subsection (f), by striking ``2003 through 2007'' 
     and inserting ``2010 through 2014''.
       (b) Eligible Individual Student Loan Repayment.--Title VIII 
     of the Public Health Service Act is amended by inserting 
     after section 846A (42 U.S.C. 297n-1) the following:

     ``SEC. 847. ELIGIBLE INDIVIDUAL STUDENT LOAN REPAYMENT.

       ``(a) In General.--The Secretary, acting through the 
     Administrator of the Health Resources and Services 
     Administration, may

[[Page 28527]]

     enter into an agreement with eligible individuals for the 
     repayment of education loans, in accordance with this 
     section, to increase the number of qualified nursing faculty.
       ``(b) Agreements.--Each agreement entered into under this 
     subsection shall require that the eligible individual shall 
     serve as a full-time member of the faculty of an accredited 
     school of nursing, for a total period, in the aggregate, of 
     at least 4 years during the 6-year period beginning on the 
     later of--
       ``(1) the date on which the individual receives a master's 
     or doctorate nursing degree from an accredited school of 
     nursing; or
       ``(2) the date on which the individual enters into an 
     agreement under this subsection.
       ``(c) Agreement Provisions.--Agreements entered into 
     pursuant to subsection (b) shall be entered into on such 
     terms and conditions as the Secretary may determine, except 
     that--
       ``(1) not more than 10 months after the date on which the 
     6-year period described under subsection (b) begins, but in 
     no case before the individual starts as a full-time member of 
     the faculty of an accredited school of nursing the Secretary 
     shall begin making payments, for and on behalf of that 
     individual, on the outstanding principal of, and interest on, 
     any loan of that individual obtained to pay for such degree;
       ``(2) for an individual who has completed a master's in 
     nursing or equivalent degree in nursing--
       ``(A) payments may not exceed $10,000 per calendar year; 
     and
       ``(B) total payments may not exceed $40,000 during the 2010 
     and 2011 fiscal years (after fiscal year 2011, such amounts 
     shall be adjusted to provide for a cost-of-attendance 
     increase for the yearly loan rate and the aggregate loan); 
     and
       ``(3) for an individual who has completed a doctorate or 
     equivalent degree in nursing--
       ``(A) payments may not exceed $20,000 per calendar year; 
     and
       ``(B) total payments may not exceed $80,000 during the 2010 
     and 2011 fiscal years (adjusted for subsequent fiscal years 
     as provided for in the same manner as in paragraph (2)(B)).
       ``(d) Breach of Agreement.--
       ``(1) In general.--In the case of any agreement made under 
     subsection (b), the individual is liable to the Federal 
     Government for the total amount paid by the Secretary under 
     such agreement, and for interest on such amount at the 
     maximum legal prevailing rate, if the individual fails to 
     meet the agreement terms required under such subsection.
       ``(2) Waiver or suspension of liability.--In the case of an 
     individual making an agreement for purposes of paragraph (1), 
     the Secretary shall provide for the waiver or suspension of 
     liability under such paragraph if compliance by the 
     individual with the agreement involved is impossible or would 
     involve extreme hardship to the individual or if enforcement 
     of the agreement with respect to the individual would be 
     unconscionable.
       ``(3) Date certain for recovery.--Subject to paragraph (2), 
     any amount that the Federal Government is entitled to recover 
     under paragraph (1) shall be paid to the United States not 
     later than the expiration of the 3-year period beginning on 
     the date the United States becomes so entitled.
       ``(4) Availability.--Amounts recovered under paragraph (1) 
     shall be available to the Secretary for making loan 
     repayments under this section and shall remain available for 
     such purpose until expended.
       ``(e) Eligible Individual Defined.--For purposes of this 
     section, the term `eligible individual' means an individual 
     who--
       ``(1) is a United States citizen, national, or lawful 
     permanent resident;
       ``(2) holds an unencumbered license as a registered nurse; 
     and
       ``(3) has either already completed a master's or doctorate 
     nursing program at an accredited school of nursing or is 
     currently enrolled on a full-time or part-time basis in such 
     a program.
       ``(f) Priority.--For the purposes of this section and 
     section 846A, funding priority will be awarded to School of 
     Nursing Student Loans that support doctoral nursing students 
     or Individual Student Loan Repayment that support doctoral 
     nursing students.
       ``(g) Authorization of Appropriations.--There are 
     authorized to be appropriated to carry out this section such 
     sums as may be necessary for each of fiscal years 2010 
     through 2014.''.

     SEC. 5312. AUTHORIZATION OF APPROPRIATIONS FOR PARTS B 
                   THROUGH D OF TITLE VIII.

       Section 871 of the Public Health Service Act, as 
     redesignated and moved by section 5310, is amended to read as 
     follows:

     ``SEC. 871. AUTHORIZATION OF APPROPRIATIONS.

       ``For the purpose of carrying out parts B, C, and D 
     (subject to section 851(g)), there are authorized to be 
     appropriated $338,000,000 for fiscal year 2010, and such sums 
     as may be necessary for each of the fiscal years 2011 through 
     2016.''.

     SEC. 5313. GRANTS TO PROMOTE THE COMMUNITY HEALTH WORKFORCE.

       (a) In General.--Part P of title III of the Public Health 
     Service Act (42 U.S.C. 280g et seq.) is amended by adding at 
     the end the following:

     ``SEC. 399V. GRANTS TO PROMOTE POSITIVE HEALTH BEHAVIORS AND 
                   OUTCOMES.

       ``(a) Grants Authorized.--The Director of the Centers for 
     Disease Control and Prevention, in collaboration with the 
     Secretary, shall award grants to eligible entities to promote 
     positive health behaviors and outcomes for populations in 
     medically underserved communities through the use of 
     community health workers.
       ``(b) Use of Funds.--Grants awarded under subsection (a) 
     shall be used to support community health workers--
       ``(1) to educate, guide, and provide outreach in a 
     community setting regarding health problems prevalent in 
     medically underserved communities, particularly racial and 
     ethnic minority populations;
       ``(2) to educate and provide guidance regarding effective 
     strategies to promote positive health behaviors and 
     discourage risky health behaviors;
       ``(3) to educate and provide outreach regarding enrollment 
     in health insurance including the Children's Health Insurance 
     Program under title XXI of the Social Security Act, Medicare 
     under title XVIII of such Act and Medicaid under title XIX of 
     such Act;
       ``(4) to identify, educate, refer, and enroll underserved 
     populations to appropriate healthcare agencies and community-
     based programs and organizations in order to increase access 
     to quality healthcare services and to eliminate duplicative 
     care; or
       ``(5) to educate, guide, and provide home visitation 
     services regarding maternal health and prenatal care.
       ``(c) Application.--Each eligible entity that desires to 
     receive a grant under subsection (a) shall submit an 
     application to the Secretary, at such time, in such manner, 
     and accompanied by such information as the Secretary may 
     require.
       ``(d) Priority.--In awarding grants under subsection (a), 
     the Secretary shall give priority to applicants that--
       ``(1) propose to target geographic areas--
       ``(A) with a high percentage of residents who are eligible 
     for health insurance but are uninsured or underinsured;
       ``(B) with a high percentage of residents who suffer from 
     chronic diseases; or
       ``(C) with a high infant mortality rate;
       ``(2) have experience in providing health or health-related 
     social services to individuals who are underserved with 
     respect to such services; and
       ``(3) have documented community activity and experience 
     with community health workers.
       ``(e) Collaboration With Academic Institutions and the One-
     stop Delivery System.--The Secretary shall encourage 
     community health worker programs receiving funds under this 
     section to collaborate with academic institutions and one-
     stop delivery systems under section 134(c) of the Workforce 
     Investment Act of 1998. Nothing in this section shall be 
     construed to require such collaboration.
       ``(f) Evidence-based Interventions.--The Secretary shall 
     encourage community health worker programs receiving funding 
     under this section to implement a process or an outcome-based 
     payment system that rewards community health workers for 
     connecting underserved populations with the most appropriate 
     services at the most appropriate time. Nothing in this 
     section shall be construed to require such a payment.
       ``(g) Quality Assurance and Cost Effectiveness.--The 
     Secretary shall establish guidelines for assuring the quality 
     of the training and supervision of community health workers 
     under the programs funded under this section and for assuring 
     the cost-effectiveness of such programs.
       ``(h) Monitoring.--The Secretary shall monitor community 
     health worker programs identified in approved applications 
     under this section and shall determine whether such programs 
     are in compliance with the guidelines established under 
     subsection (g).
       ``(i) Technical Assistance.--The Secretary may provide 
     technical assistance to community health worker programs 
     identified in approved applications under this section with 
     respect to planning, developing, and operating programs under 
     the grant.
       ``(j) Authorization of Appropriations.--There are 
     authorized to be appropriated, such sums as may be necessary 
     to carry out this section for each of fiscal years 2010 
     through 2014.
       ``(k) Definitions.--In this section:
       ``(1) Community health worker.--The term `community health 
     worker', as defined by the Department of Labor as Standard 
     Occupational Classification [21-1094] means an individual who 
     promotes health or nutrition within the community in which 
     the individual resides--
       ``(A) by serving as a liaison between communities and 
     healthcare agencies;
       ``(B) by providing guidance and social assistance to 
     community residents;
       ``(C) by enhancing community residents' ability to 
     effectively communicate with healthcare providers;
       ``(D) by providing culturally and linguistically 
     appropriate health or nutrition education;
       ``(E) by advocating for individual and community health;
       ``(F) by providing referral and follow-up services or 
     otherwise coordinating care; and

[[Page 28528]]

       ``(G) by proactively identifying and enrolling eligible 
     individuals in Federal, State, local, private or nonprofit 
     health and human services programs.
       ``(2) Community setting.--The term `community setting' 
     means a home or a community organization located in the 
     neighborhood in which a participant in the program under this 
     section resides.
       ``(3) Eligible entity.--The term `eligible entity' means a 
     public or nonprofit private entity (including a State or 
     public subdivision of a State, a public health department, a 
     free health clinic, a hospital, or a Federally-qualified 
     health center (as defined in section 1861(aa) of the Social 
     Security Act)), or a consortium of any such entities.
       ``(4) Medically underserved community.--The term `medically 
     underserved community' means a community identified by a 
     State--
       ``(A) that has a substantial number of individuals who are 
     members of a medically underserved population, as defined by 
     section 330(b)(3); and
       ``(B) a significant portion of which is a health 
     professional shortage area as designated under section 
     332.''.

     SEC. 5314. FELLOWSHIP TRAINING IN PUBLIC HEALTH.

       Part E of title VII of the Public Health Service Act (42 
     U.S.C. 294n et seq.), as amended by section 5206, is further 
     amended by adding at the end the following:

     ``SEC. 778. FELLOWSHIP TRAINING IN APPLIED PUBLIC HEALTH 
                   EPIDEMIOLOGY, PUBLIC HEALTH LABORATORY SCIENCE, 
                   PUBLIC HEALTH INFORMATICS, AND EXPANSION OF THE 
                   EPIDEMIC INTELLIGENCE SERVICE.

       ``(a) In General.--The Secretary may carry out activities 
     to address documented workforce shortages in State and local 
     health departments in the critical areas of applied public 
     health epidemiology and public health laboratory science and 
     informatics and may expand the Epidemic Intelligence Service.
       ``(b) Specific Uses.--In carrying out subsection (a), the 
     Secretary shall provide for the expansion of existing 
     fellowship programs operated through the Centers for Disease 
     Control and Prevention in a manner that is designed to 
     alleviate shortages of the type described in subsection (a).
       ``(c) Other Programs.--The Secretary may provide for the 
     expansion of other applied epidemiology training programs 
     that meet objectives similar to the objectives of the 
     programs described in subsection (b).
       ``(d) Work Obligation.--Participation in fellowship 
     training programs under this section shall be deemed to be 
     service for purposes of satisfying work obligations 
     stipulated in contracts under section 338I(j).
       ``(e) General Support.--Amounts may be used from grants 
     awarded under this section to expand the Public Health 
     Informatics Fellowship Program at the Centers for Disease 
     Control and Prevention to better support all public health 
     systems at all levels of government.
       ``(f) Authorization of Appropriations.--There are 
     authorized to be appropriated to carry out this section 
     $39,500,000 for each of fiscal years 2010 through 2013, of 
     which--
       ``(1) $5,000,000 shall be made available in each such 
     fiscal year for epidemiology fellowship training program 
     activities under subsections (b) and (c);
       ``(2) $5,000,000 shall be made available in each such 
     fiscal year for laboratory fellowship training programs under 
     subsection (b);
       ``(3) $5,000,000 shall be made available in each such 
     fiscal year for the Public Health Informatics Fellowship 
     Program under subsection (e); and
       ``(4) $24,500,000 shall be made available for expanding the 
     Epidemic Intelligence Service under subsection (a).''.

     SEC. 5315. UNITED STATES PUBLIC HEALTH SCIENCES TRACK.

       Title II of the Public Health Service Act (42 U.S.C. 202 et 
     seq.) is amended by adding at the end the following:

          ``PART D--UNITED STATES PUBLIC HEALTH SCIENCES TRACK

     ``SEC. 271. ESTABLISHMENT.

       ``(a) United States Public Health Services Track.--
       ``(1) In general.--There is hereby authorized to be 
     established a United States Public Health Sciences Track 
     (referred to in this part as the `Track'), at sites to be 
     selected by the Secretary, with authority to grant 
     appropriate advanced degrees in a manner that uniquely 
     emphasizes team-based service, public health, epidemiology, 
     and emergency preparedness and response. It shall be so 
     organized as to graduate not less than--
       ``(A) 150 medical students annually, 10 of whom shall be 
     awarded studentships to the Uniformed Services University of 
     Health Sciences;
       ``(B) 100 dental students annually;
       ``(C) 250 nursing students annually;
       ``(D) 100 public health students annually;
       ``(E) 100 behavioral and mental health professional 
     students annually;
       ``(F) 100 physician assistant or nurse practitioner 
     students annually; and
       ``(G) 50 pharmacy students annually.
       ``(2) Locations.--The Track shall be located at existing 
     and accredited, affiliated health professions education 
     training programs at academic health centers located in 
     regions of the United States determined appropriate by the 
     Surgeon General, in consultation with the National Health 
     Care Workforce Commission established in section 5101 of the 
     Patient Protection and Affordable Care Act.
       ``(b) Number of Graduates.--Except as provided in 
     subsection (a), the number of persons to be graduated from 
     the Track shall be prescribed by the Secretary. In so 
     prescribing the number of persons to be graduated from the 
     Track, the Secretary shall institute actions necessary to 
     ensure the maximum number of first-year enrollments in the 
     Track consistent with the academic capacity of the affiliated 
     sites and the needs of the United States for medical, dental, 
     and nursing personnel.
       ``(c) Development.--The development of the Track may be by 
     such phases as the Secretary may prescribe subject to the 
     requirements of subsection (a).
       ``(d) Integrated Longitudinal Plan.--The Surgeon General 
     shall develop an integrated longitudinal plan for health 
     professions continuing education throughout the continuum of 
     health-related education, training, and practice. Training 
     under such plan shall emphasize patient-centered, 
     interdisciplinary, and care coordination skills. Experience 
     with deployment of emergency response teams shall be included 
     during the clinical experiences.
       ``(e) Faculty Development.--The Surgeon General shall 
     develop faculty development programs and curricula in 
     decentralized venues of health care, to balance urban, 
     tertiary, and inpatient venues.

     ``SEC. 272. ADMINISTRATION.

       ``(a) In General.--The business of the Track shall be 
     conducted by the Surgeon General with funds appropriated for 
     and provided by the Department of Health and Human Services. 
     The National Health Care Workforce Commission shall assist 
     the Surgeon General in an advisory capacity.
       ``(b) Faculty.--
       ``(1) In general.--The Surgeon General, after considering 
     the recommendations of the National Health Care Workforce 
     Commission, shall obtain the services of such professors, 
     instructors, and administrative and other employees as may be 
     necessary to operate the Track, but utilize when possible, 
     existing affiliated health professions training institutions. 
     Members of the faculty and staff shall be employed under 
     salary schedules and granted retirement and other related 
     benefits prescribed by the Secretary so as to place the 
     employees of the Track faculty on a comparable basis with the 
     employees of fully accredited schools of the health 
     professions within the United States.
       ``(2) Titles.--The Surgeon General may confer academic 
     titles, as appropriate, upon the members of the faculty.
       ``(3) Nonapplication of provisions.--The limitations in 
     section 5373 of title 5, United States Code, shall not apply 
     to the authority of the Surgeon General under paragraph (1) 
     to prescribe salary schedules and other related benefits.
       ``(c) Agreements.--The Surgeon General may negotiate 
     agreements with agencies of the Federal Government to utilize 
     on a reimbursable basis appropriate existing Federal medical 
     resources located in the United States (or locations selected 
     in accordance with section 271(a)(2)). Under such agreements 
     the facilities concerned will retain their identities and 
     basic missions. The Surgeon General may negotiate affiliation 
     agreements with accredited universities and health 
     professions training institutions in the United States. Such 
     agreements may include provisions for payments for 
     educational services provided students participating in 
     Department of Health and Human Services educational programs.
       ``(d) Programs.--The Surgeon General may establish the 
     following educational programs for Track students:
       ``(1) Postdoctoral, postgraduate, and technological 
     programs.
       ``(2) A cooperative program for medical, dental, physician 
     assistant, pharmacy, behavioral and mental health, public 
     health, and nursing students.
       ``(3) Other programs that the Surgeon General determines 
     necessary in order to operate the Track in a cost-effective 
     manner.
       ``(e) Continuing Medical Education.--The Surgeon General 
     shall establish programs in continuing medical education for 
     members of the health professions to the end that high 
     standards of health care may be maintained within the United 
     States.
       ``(f) Authority of the Surgeon General.--
       ``(1) In general.--The Surgeon General is authorized--
       ``(A) to enter into contracts with, accept grants from, and 
     make grants to any nonprofit entity for the purpose of 
     carrying out cooperative enterprises in medical, dental, 
     physician assistant, pharmacy, behavioral and mental health, 
     public health, and nursing research, consultation, and 
     education;
       ``(B) to enter into contracts with entities under which the 
     Surgeon General may furnish the services of such 
     professional, technical, or clerical personnel as may be 
     necessary to fulfill cooperative enterprises undertaken by 
     the Track;
       ``(C) to accept, hold, administer, invest, and spend any 
     gift, devise, or bequest of personal property made to the 
     Track, including

[[Page 28529]]

     any gift, devise, or bequest for the support of an academic 
     chair, teaching, research, or demonstration project;
       ``(D) to enter into agreements with entities that may be 
     utilized by the Track for the purpose of enhancing the 
     activities of the Track in education, research, and 
     technological applications of knowledge; and
       ``(E) to accept the voluntary services of guest scholars 
     and other persons.
       ``(2) Limitation.--The Surgeon General may not enter into 
     any contract with an entity if the contract would obligate 
     the Track to make outlays in advance of the enactment of 
     budget authority for such outlays.
       ``(3) Scientists.--Scientists or other medical, dental, or 
     nursing personnel utilized by the Track under an agreement 
     described in paragraph (1) may be appointed to any position 
     within the Track and may be permitted to perform such duties 
     within the Track as the Surgeon General may approve.
       ``(4) Volunteer services.--A person who provides voluntary 
     services under the authority of subparagraph (E) of paragraph 
     (1) shall be considered to be an employee of the Federal 
     Government for the purposes of chapter 81 of title 5, 
     relating to compensation for work-related injuries, and to be 
     an employee of the Federal Government for the purposes of 
     chapter 171 of title 28, relating to tort claims. Such a 
     person who is not otherwise employed by the Federal 
     Government shall not be considered to be a Federal employee 
     for any other purpose by reason of the provision of such 
     services.

     ``SEC. 273. STUDENTS; SELECTION; OBLIGATION.

       ``(a) Student Selection.--
       ``(1) In general.--Medical, dental, physician assistant, 
     pharmacy, behavioral and mental health, public health, and 
     nursing students at the Track shall be selected under 
     procedures prescribed by the Surgeon General. In so 
     prescribing, the Surgeon General shall consider the 
     recommendations of the National Health Care Workforce 
     Commission.
       ``(2) Priority.--In developing admissions procedures under 
     paragraph (1), the Surgeon General shall ensure that such 
     procedures give priority to applicant medical, dental, 
     physician assistant, pharmacy, behavioral and mental health, 
     public health, and nursing students from rural communities 
     and underrepresented minorities.
       ``(b) Contract and Service Obligation.--
       ``(1) Contract.--Upon being admitted to the Track, a 
     medical, dental, physician assistant, pharmacy, behavioral 
     and mental health, public health, or nursing student shall 
     enter into a written contract with the Surgeon General that 
     shall contain--
       ``(A) an agreement under which--
       ``(i) subject to subparagraph (B), the Surgeon General 
     agrees to provide the student with tuition (or tuition 
     remission) and a student stipend (described in paragraph (2)) 
     in each school year for a period of years (not to exceed 4 
     school years) determined by the student, during which period 
     the student is enrolled in the Track at an affiliated or 
     other participating health professions institution pursuant 
     to an agreement between the Track and such institution; and
       ``(ii) subject to subparagraph (B), the student agrees--

       ``(I) to accept the provision of such tuition and student 
     stipend to the student;
       ``(II) to maintain enrollment at the Track until the 
     student completes the course of study involved;
       ``(III) while enrolled in such course of study, to maintain 
     an acceptable level of academic standing (as determined by 
     the Surgeon General);
       ``(IV) if pursuing a degree from a school of medicine or 
     osteopathic medicine, dental, public health, or nursing 
     school or a physician assistant, pharmacy, or behavioral and 
     mental health professional program, to complete a residency 
     or internship in a specialty that the Surgeon General 
     determines is appropriate; and
       ``(V) to serve for a period of time (referred to in this 
     part as the `period of obligated service') within the 
     Commissioned Corps of the Public Health Service equal to 2 
     years for each school year during which such individual was 
     enrolled at the College, reduced as provided for in paragraph 
     (3);

       ``(B) a provision that any financial obligation of the 
     United States arising out of a contract entered into under 
     this part and any obligation of the student which is 
     conditioned thereon, is contingent upon funds being 
     appropriated to carry out this part;
       ``(C) a statement of the damages to which the United States 
     is entitled for the student's breach of the contract; and
       ``(D) such other statements of the rights and liabilities 
     of the Secretary and of the individual, not inconsistent with 
     the provisions of this part.
       ``(2) Tuition and student stipend.--
       ``(A) Tuition remission rates.--The Surgeon General, based 
     on the recommendations of the National Health Care Workforce 
     Commission, shall establish Federal tuition remission rates 
     to be used by the Track to provide reimbursement to 
     affiliated and other participating health professions 
     institutions for the cost of educational services provided by 
     such institutions to Track students. The agreement entered 
     into by such participating institutions under paragraph 
     (1)(A)(i) shall contain an agreement to accept as payment in 
     full the established remission rate under this subparagraph.
       ``(B) Stipend.--The Surgeon General, based on the 
     recommendations of the National Health Care Workforce 
     Commission, shall establish and update Federal stipend rates 
     for payment to students under this part.
       ``(3) Reductions in the period of obligated service.--The 
     period of obligated service under paragraph (1)(A)(ii)(V) 
     shall be reduced--
       ``(A) in the case of a student who elects to participate in 
     a high-needs speciality residency (as determined by the 
     National Health Care Workforce Commission), by 3 months for 
     each year of such participation (not to exceed a total of 12 
     months); and
       ``(B) in the case of a student who, upon completion of 
     their residency, elects to practice in a Federal medical 
     facility (as defined in section 781(e)) that is located in a 
     health professional shortage area (as defined in section 
     332), by 3 months for year of full-time practice in such a 
     facility (not to exceed a total of 12 months).
       ``(c) Second 2 Years of Service.--During the third and 
     fourth years in which a medical, dental, physician assistant, 
     pharmacy, behavioral and mental health, public health, or 
     nursing student is enrolled in the Track, training should be 
     designed to prioritize clinical rotations in Federal medical 
     facilities in health professional shortage areas, and 
     emphasize a balance of hospital and community-based 
     experiences, and training within interdisciplinary teams.
       ``(d) Dentist, Physician Assistant, Pharmacist, Behavioral 
     and Mental Health Professional, Public Health Professional, 
     and Nurse Training.--The Surgeon General shall establish 
     provisions applicable with respect to dental, physician 
     assistant, pharmacy, behavioral and mental health, public 
     health, and nursing students that are comparable to those for 
     medical students under this section, including service 
     obligations, tuition support, and stipend support. The 
     Surgeon General shall give priority to health professions 
     training institutions that train medical, dental, physician 
     assistant, pharmacy, behavioral and mental health, public 
     health, and nursing students for some significant period of 
     time together, but at a minimum have a discrete and shared 
     core curriculum.
       ``(e) Elite Federal Disaster Teams.--The Surgeon General, 
     in consultation with the Secretary, the Director of the 
     Centers for Disease Control and Prevention, and other 
     appropriate military and Federal government agencies, shall 
     develop criteria for the appointment of highly qualified 
     Track faculty, medical, dental, physician assistant, 
     pharmacy, behavioral and mental health, public health, and 
     nursing students, and graduates to elite Federal disaster 
     preparedness teams to train and to respond to public health 
     emergencies, natural disasters, bioterrorism events, and 
     other emergencies.
       ``(f) Student Dropped From Track in Affiliate School.--A 
     medical, dental, physician assistant, pharmacy, behavioral 
     and mental health, public health, or nursing student who, 
     under regulations prescribed by the Surgeon General, is 
     dropped from the Track in an affiliated school for deficiency 
     in conduct or studies, or for other reasons, shall be liable 
     to the United States for all tuition and stipend support 
     provided to the student.

     ``SEC. 274. FUNDING.

       ``Beginning with fiscal year 2010, the Secretary shall 
     transfer from the Public Health and Social Services Emergency 
     Fund such sums as may be necessary to carry out this part.''.

       Subtitle E--Supporting the Existing Health Care Workforce

     SEC. 5401. CENTERS OF EXCELLENCE.

       Section 736 of the Public Health Service Act (42 U.S.C. 
     293) is amended by striking subsection (h) and inserting the 
     following:
       ``(h) Formula for Allocations.--
       ``(1) Allocations.--Based on the amount appropriated under 
     subsection (i) for a fiscal year, the following subparagraphs 
     shall apply as appropriate:
       ``(A) In general.--If the amounts appropriated under 
     subsection (i) for a fiscal year are $24,000,000 or less--
       ``(i) the Secretary shall make available $12,000,000 for 
     grants under subsection (a) to health professions schools 
     that meet the conditions described in subsection (c)(2)(A); 
     and
       ``(ii) and available after grants are made with funds under 
     clause (i), the Secretary shall make available--

       ``(I) 60 percent of such amount for grants under subsection 
     (a) to health professions schools that meet the conditions 
     described in paragraph (3) or (4) of subsection (c) 
     (including meeting the conditions under subsection (e)); and
       ``(II) 40 percent of such amount for grants under 
     subsection (a) to health professions schools that meet the 
     conditions described in subsection (c)(5).

       ``(B) Funding in excess of $24,000,000.--If amounts 
     appropriated under subsection (i) for a fiscal year exceed 
     $24,000,000 but are less than $30,000,000--
       ``(i) 80 percent of such excess amounts shall be made 
     available for grants under subsection (a) to health 
     professions schools that meet the requirements described in 
     paragraph (3) or (4) of subsection (c) (including meeting 
     conditions pursuant to subsection (e)); and

[[Page 28530]]

       ``(ii) 20 percent of such excess amount shall be made 
     available for grants under subsection (a) to health 
     professions schools that meet the conditions described in 
     subsection (c)(5).
       ``(C) Funding in excess of $30,000,000.--If amounts 
     appropriated under subsection (i) for a fiscal year exceed 
     $30,000,000 but are less than $40,000,000, the Secretary 
     shall make available--
       ``(i) not less than $12,000,000 for grants under subsection 
     (a) to health professions schools that meet the conditions 
     described in subsection (c)(2)(A);
       ``(ii) not less than $12,000,000 for grants under 
     subsection (a) to health professions schools that meet the 
     conditions described in paragraph (3) or (4) of subsection 
     (c) (including meeting conditions pursuant to subsection 
     (e));
       ``(iii) not less than $6,000,000 for grants under 
     subsection (a) to health professions schools that meet the 
     conditions described in subsection (c)(5); and
       ``(iv) after grants are made with funds under clauses (i) 
     through (iii), any remaining excess amount for grants under 
     subsection (a) to health professions schools that meet the 
     conditions described in paragraph (2)(A), (3), (4), or (5) of 
     subsection (c).
       ``(D) Funding in excess of $40,000,000.--If amounts 
     appropriated under subsection (i) for a fiscal year are 
     $40,000,000 or more, the Secretary shall make available--
       ``(i) not less than $16,000,000 for grants under subsection 
     (a) to health professions schools that meet the conditions 
     described in subsection (c)(2)(A);
       ``(ii) not less than $16,000,000 for grants under 
     subsection (a) to health professions schools that meet the 
     conditions described in paragraph (3) or (4) of subsection 
     (c) (including meeting conditions pursuant to subsection 
     (e));
       ``(iii) not less than $8,000,000 for grants under 
     subsection (a) to health professions schools that meet the 
     conditions described in subsection (c)(5); and
       ``(iv) after grants are made with funds under clauses (i) 
     through (iii), any remaining funds for grants under 
     subsection (a) to health professions schools that meet the 
     conditions described in paragraph (2)(A), (3), (4), or (5) of 
     subsection (c).
       ``(2) No limitation.--Nothing in this subsection shall be 
     construed as limiting the centers of excellence referred to 
     in this section to the designated amount, or to preclude such 
     entities from competing for grants under this section.
       ``(3) Maintenance of effort.--
       ``(A) In general.--With respect to activities for which a 
     grant made under this part are authorized to be expended, the 
     Secretary may not make such a grant to a center of excellence 
     for any fiscal year unless the center agrees to maintain 
     expenditures of non-Federal amounts for such activities at a 
     level that is not less than the level of such expenditures 
     maintained by the center for the fiscal year preceding the 
     fiscal year for which the school receives such a grant.
       ``(B) Use of federal funds.--With respect to any Federal 
     amounts received by a center of excellence and available for 
     carrying out activities for which a grant under this part is 
     authorized to be expended, the center shall, before expending 
     the grant, expend the Federal amounts obtained from sources 
     other than the grant, unless given prior approval from the 
     Secretary.
       ``(i) Authorization of Appropriations.--There are 
     authorized to be appropriated to carry out this section--
       ``(1) $50,000,000 for each of the fiscal years 2010 through 
     2015; and
       ``(2) and such sums as are necessary for each subsequent 
     fiscal year.''.

     SEC. 5402. HEALTH CARE PROFESSIONALS TRAINING FOR DIVERSITY.

       (a) Loan Repayments and Fellowships Regarding Faculty 
     Positions.--Section 738(a)(1) of the Public Health Service 
     Act (42 U.S.C. 293b(a)(1)) is amended by striking ``$20,000 
     of the principal and interest of the educational loans of 
     such individuals.'' and inserting ``$30,000 of the principal 
     and interest of the educational loans of such individuals.''.
       (b) Scholarships for Disadvantaged Students.--Section 
     740(a) of such Act (42 U.S.C. 293d(a)) is amended by striking 
     ``$37,000,000'' and all that follows through ``2002'' and 
     inserting ``$51,000,000 for fiscal year 2010, and such sums 
     as may be necessary for each of the fiscal years 2011 through 
     2014''.
       (c) Reauthorization for Loan Repayments and Fellowships 
     Regarding Faculty Positions.--Section 740(b) of such Act (42 
     U.S.C. 293d(b)) is amended by striking ``appropriated'' and 
     all that follows through the period at the end and inserting 
     ``appropriated, $5,000,000 for each of the fiscal years 2010 
     through 2014.''.
       (d) Reauthorization for Educational Assistance in the 
     Health Professions Regarding Individuals From a Disadvantaged 
     Background.--Section 740(c) of such Act (42 U.S.C. 293d(c)) 
     is amended by striking the first sentence and inserting the 
     following: ``For the purpose of grants and contracts under 
     section 739(a)(1), there is authorized to be appropriated 
     $60,000,000 for fiscal year 2010 and such sums as may be 
     necessary for each of the fiscal years 2011 through 2014.''

     SEC. 5403. INTERDISCIPLINARY, COMMUNITY-BASED LINKAGES.

       (a) Area Health Education Centers.--Section 751 of the 
     Public Health Service Act (42 U.S.C. 294a) is amended to read 
     as follows:

     ``SEC. 751. AREA HEALTH EDUCATION CENTERS.

       ``(a) Establishment of Awards.--The Secretary shall make 
     the following 2 types of awards in accordance with this 
     section:
       ``(1) Infrastructure development award.--The Secretary 
     shall make awards to eligible entities to enable such 
     entities to initiate health care workforce educational 
     programs or to continue to carry out comparable programs that 
     are operating at the time the award is made by planning, 
     developing, operating, and evaluating an area health 
     education center program.
       ``(2) Point of service maintenance and enhancement award.--
     The Secretary shall make awards to eligible entities to 
     maintain and improve the effectiveness and capabilities of an 
     existing area health education center program, and make other 
     modifications to the program that are appropriate due to 
     changes in demographics, needs of the populations served, or 
     other similar issues affecting the area health education 
     center program. For the purposes of this section, the term 
     `Program' refers to the area health education center program.
       ``(b) Eligible Entities; Application.--
       ``(1) Eligible entities.--
       ``(A) Infrastructure development.--For purposes of 
     subsection (a)(1), the term `eligible entity' means a school 
     of medicine or osteopathic medicine, an incorporated 
     consortium of such schools, or the parent institutions of 
     such a school. With respect to a State in which no area 
     health education center program is in operation, the 
     Secretary may award a grant or contract under subsection 
     (a)(1) to a school of nursing.
       ``(B) Point of service maintenance and enhancement.--For 
     purposes of subsection (a)(2), the term `eligible entity' 
     means an entity that has received funds under this section, 
     is operating an area health education center program, 
     including an area health education center or centers, and has 
     a center or centers that are no longer eligible to receive 
     financial assistance under subsection (a)(1).
       ``(2) Application.--An eligible entity desiring to receive 
     an award under this section shall submit to the Secretary an 
     application at such time, in such manner, and containing such 
     information as the Secretary may require.
       ``(c) Use of Funds.--
       ``(1) Required activities.--An eligible entity shall use 
     amounts awarded under a grant under subsection (a)(1) or 
     (a)(2) to carry out the following activities:
       ``(A) Develop and implement strategies, in coordination 
     with the applicable one-stop delivery system under section 
     134(c) of the Workforce Investment Act of 1998, to recruit 
     individuals from underrepresented minority populations or 
     from disadvantaged or rural backgrounds into health 
     professions, and support such individuals in attaining such 
     careers.
       ``(B) Develop and implement strategies to foster and 
     provide community-based training and education to individuals 
     seeking careers in health professions within underserved 
     areas for the purpose of developing and maintaining a diverse 
     health care workforce that is prepared to deliver high-
     quality care, with an emphasis on primary care, in 
     underserved areas or for health disparity populations, in 
     collaboration with other Federal and State health care 
     workforce development programs, the State workforce agency, 
     and local workforce investment boards, and in health care 
     safety net sites.
       ``(C) Prepare individuals to more effectively provide 
     health services to underserved areas and health disparity 
     populations through field placements or preceptorships in 
     conjunction with community-based organizations, accredited 
     primary care residency training programs, Federally qualified 
     health centers, rural health clinics, public health 
     departments, or other appropriate facilities.
       ``(D) Conduct and participate in interdisciplinary training 
     that involves physicians, physician assistants, nurse 
     practitioners, nurse midwives, dentists, psychologists, 
     pharmacists, optometrists, community health workers, public 
     and allied health professionals, or other health 
     professionals, as practicable.
       ``(E) Deliver or facilitate continuing education and 
     information dissemination programs for health care 
     professionals, with an emphasis on individuals providing care 
     in underserved areas and for health disparity populations.
       ``(F) Propose and implement effective program and outcomes 
     measurement and evaluation strategies.
       ``(G) Establish a youth public health program to expose and 
     recruit high school students into health careers, with a 
     focus on careers in public health.
       ``(2) Innovative opportunities.--An eligible entity may use 
     amounts awarded under a grant under subsection (a)(1) or 
     subsection (a)(2) to carry out any of the following 
     activities:
       ``(A) Develop and implement innovative curricula in 
     collaboration with community-based accredited primary care 
     residency training programs, Federally qualified

[[Page 28531]]

     health centers, rural health clinics, behavioral and mental 
     health facilities, public health departments, or other 
     appropriate facilities, with the goal of increasing the 
     number of primary care physicians and other primary care 
     providers prepared to serve in underserved areas and health 
     disparity populations.
       ``(B) Coordinate community-based participatory research 
     with academic health centers, and facilitate rapid flow and 
     dissemination of evidence-based health care information, 
     research results, and best practices to improve quality, 
     efficiency, and effectiveness of health care and health care 
     systems within community settings.
       ``(C) Develop and implement other strategies to address 
     identified workforce needs and increase and enhance the 
     health care workforce in the area served by the area health 
     education center program.
       ``(d) Requirements.--
       ``(1) Area health education center program.--In carrying 
     out this section, the Secretary shall ensure the following:
       ``(A) An entity that receives an award under this section 
     shall conduct at least 10 percent of clinical education 
     required for medical students in community settings that are 
     removed from the primary teaching facility of the contracting 
     institution for grantees that operate a school of medicine or 
     osteopathic medicine. In States in which an entity that 
     receives an award under this section is a nursing school or 
     its parent institution, the Secretary shall alternatively 
     ensure that--
       ``(i) the nursing school conducts at least 10 percent of 
     clinical education required for nursing students in community 
     settings that are remote from the primary teaching facility 
     of the school; and
       ``(ii) the entity receiving the award maintains a written 
     agreement with a school of medicine or osteopathic medicine 
     to place students from that school in training sites in the 
     area health education center program area.
       ``(B) An entity receiving funds under subsection (a)(2) 
     does not distribute such funding to a center that is eligible 
     to receive funding under subsection (a)(1).
       ``(2) Area health education center.--The Secretary shall 
     ensure that each area health education center program 
     includes at least 1 area health education center, and that 
     each such center--
       ``(A) is a public or private organization whose structure, 
     governance, and operation is independent from the awardee and 
     the parent institution of the awardee;
       ``(B) is not a school of medicine or osteopathic medicine, 
     the parent institution of such a school, or a branch campus 
     or other subunit of a school of medicine or osteopathic 
     medicine or its parent institution, or a consortium of such 
     entities;
       ``(C) designates an underserved area or population to be 
     served by the center which is in a location removed from the 
     main location of the teaching facilities of the schools 
     participating in the program with such center and does not 
     duplicate, in whole or in part, the geographic area or 
     population served by any other center;
       ``(D) fosters networking and collaboration among 
     communities and between academic health centers and 
     community-based centers;
       ``(E) serves communities with a demonstrated need of health 
     professionals in partnership with academic medical centers;
       ``(F) addresses the health care workforce needs of the 
     communities served in coordination with the public workforce 
     investment system; and
       ``(G) has a community-based governing or advisory board 
     that reflects the diversity of the communities involved.
       ``(e) Matching Funds.--With respect to the costs of 
     operating a program through a grant under this section, to be 
     eligible for financial assistance under this section, an 
     entity shall make available (directly or through 
     contributions from State, county or municipal governments, or 
     the private sector) recurring non-Federal contributions in 
     cash or in kind, toward such costs in an amount that is equal 
     to not less than 50 percent of such costs. At least 25 
     percent of the total required non-Federal contributions shall 
     be in cash. An entity may apply to the Secretary for a waiver 
     of not more than 75 percent of the matching fund amount 
     required by the entity for each of the first 3 years the 
     entity is funded through a grant under subsection (a)(1).
       ``(f) Limitation.--Not less than 75 percent of the total 
     amount provided to an area health education center program 
     under subsection (a)(1) or (a)(2) shall be allocated to the 
     area health education centers participating in the program 
     under this section. To provide needed flexibility to newly 
     funded area health education center programs, the Secretary 
     may waive the requirement in the sentence for the first 2 
     years of a new area health education center program funded 
     under subsection (a)(1).
       ``(g) Award.--An award to an entity under this section 
     shall be not less than $250,000 annually per area health 
     education center included in the program involved. If amounts 
     appropriated to carry out this section are not sufficient to 
     comply with the preceding sentence, the Secretary may reduce 
     the per center amount provided for in such sentence as 
     necessary, provided the distribution established in 
     subsection (j)(2) is maintained.
       ``(h) Project Terms.--
       ``(1) In general.--Except as provided in paragraph (2), the 
     period during which payments may be made under an award under 
     subsection (a)(1) may not exceed--
       ``(A) in the case of a program, 12 years; or
       ``(B) in the case of a center within a program, 6 years.
       ``(2) Exception.--The periods described in paragraph (1) 
     shall not apply to programs receiving point of service 
     maintenance and enhancement awards under subsection (a)(2) to 
     maintain existing centers and activities.
       ``(i) Inapplicability of Provision.--Notwithstanding any 
     other provision of this title, section 791(a) shall not apply 
     to an area health education center funded under this section.
       ``(j) Authorization of Appropriations.--
       ``(1) In general.--There is authorized to be appropriated 
     to carry out this section $125,000,000 for each of the fiscal 
     years 2010 through 2014.
       ``(2) Requirements.--Of the amounts appropriated for a 
     fiscal year under paragraph (1)--
       ``(A) not more than 35 percent shall be used for awards 
     under subsection (a)(1);
       ``(B) not less than 60 percent shall be used for awards 
     under subsection (a)(2);
       ``(C) not more than 1 percent shall be used for grants and 
     contracts to implement outcomes evaluation for the area 
     health education centers; and
       ``(D) not more than 4 percent shall be used for grants and 
     contracts to provide technical assistance to entities 
     receiving awards under this section.
       ``(3) Carryover funds.--An entity that receives an award 
     under this section may carry over funds from 1 fiscal year to 
     another without obtaining approval from the Secretary. In no 
     case may any funds be carried over pursuant to the preceding 
     sentence for more than 3 years.
       ``(k) Sense of Congress.--It is the sense of the Congress 
     that every State have an area health education center program 
     in effect under this section.''.
       (b) Continuing Educational Support for Health Professionals 
     Serving in Underserved Communities.--Part D of title VII of 
     the Public Health Service Act (42 U.S.C. 294 et seq.) is 
     amended by striking section 752 and inserting the following:

     ``SEC. 752. CONTINUING EDUCATIONAL SUPPORT FOR HEALTH 
                   PROFESSIONALS SERVING IN UNDERSERVED 
                   COMMUNITIES.

       ``(a) In General.--The Secretary shall make grants to, and 
     enter into contracts with, eligible entities to improve 
     health care, increase retention, increase representation of 
     minority faculty members, enhance the practice environment, 
     and provide information dissemination and educational support 
     to reduce professional isolation through the timely 
     dissemination of research findings using relevant resources.
       ``(b) Eligible Entities.--For purposes of this section, the 
     term `eligible entity' means an entity described in section 
     799(b).
       ``(c) Application.--An eligible entity desiring to receive 
     an award under this section shall submit to the Secretary an 
     application at such time, in such manner, and containing such 
     information as the Secretary may require.
       ``(d) Use of Funds.--An eligible entity shall use amounts 
     awarded under a grant or contract under this section to 
     provide innovative supportive activities to enhance education 
     through distance learning, continuing educational activities, 
     collaborative conferences, and electronic and telelearning 
     activities, with priority for primary care.
       ``(e) Authorization.--There is authorized to be 
     appropriated to carry out this section $5,000,000 for each of 
     the fiscal years 2010 through 2014, and such sums as may be 
     necessary for each subsequent fiscal year.''.

     SEC. 5404. WORKFORCE DIVERSITY GRANTS.

       Section 821 of the Public Health Service Act (42 U.S.C. 
     296m) is amended--
       (1) in subsection (a)--
       (A) by striking ``The Secretary may'' and inserting the 
     following:
       ``(1) Authority.--The Secretary may'';
       (B) by striking ``pre-entry preparation, and retention 
     activities'' and inserting the following: ``stipends for 
     diploma or associate degree nurses to enter a bridge or 
     degree completion program, student scholarships or stipends 
     for accelerated nursing degree programs, pre-entry 
     preparation, advanced education preparation, and retention 
     activities''; and
       (2) in subsection (b)--
       (A) by striking ``First'' and all that follows through 
     ``including the'' and inserting ``National Advisory Council 
     on Nurse Education and Practice and consult with nursing 
     associations including the National Coalition of Ethnic 
     Minority Nurse Associations,''; and
       (B) by inserting before the period the following: ``, and 
     other organizations determined appropriate by the 
     Secretary''.

     SEC. 5405. PRIMARY CARE EXTENSION PROGRAM.

       Part P of title III of the Public Health Service Act (42 
     U.S.C. 280g et seq.), as amended by section 5313, is further 
     amended by adding at the end the following:

     ``SEC. 399W. PRIMARY CARE EXTENSION PROGRAM.

       ``(a) Establishment, Purpose and Definition.--

[[Page 28532]]

       ``(1) In general.--The Secretary, acting through the 
     Director of the Agency for Healthcare Research and Quality, 
     shall establish a Primary Care Extension Program.
       ``(2) Purpose.--The Primary Care Extension Program shall 
     provide support and assistance to primary care providers to 
     educate providers about preventive medicine, health 
     promotion, chronic disease management, mental and behavioral 
     health services (including substance abuse prevention and 
     treatment services), and evidence-based and evidence-informed 
     therapies and techniques, in order to enable providers to 
     incorporate such matters into their practice and to improve 
     community health by working with community-based health 
     connectors (referred to in this section as `Health Extension 
     Agents').
       ``(3) Definitions.--In this section:
       ``(A) Health extension agent.--The term `Health Extension 
     Agent' means any local, community-based health worker who 
     facilitates and provides assistance to primary care practices 
     by implementing quality improvement or system redesign, 
     incorporating the principles of the patient-centered medical 
     home to provide high-quality, effective, efficient, and safe 
     primary care and to provide guidance to patients in 
     culturally and linguistically appropriate ways, and linking 
     practices to diverse health system resources.
       ``(B) Primary care provider.--The term `primary care 
     provider' means a clinician who provides integrated, 
     accessible health care services and who is accountable for 
     addressing a large majority of personal health care needs, 
     including providing preventive and health promotion services 
     for men, women, and children of all ages, developing a 
     sustained partnership with patients, and practicing in the 
     context of family and community, as recognized by a State 
     licensing or regulatory authority, unless otherwise specified 
     in this section.
       ``(b) Grants to Establish State Hubs and Local Primary Care 
     Extension Agencies.--
       ``(1) Grants.--The Secretary shall award competitive grants 
     to States for the establishment of State- or multistate-level 
     primary care Primary Care Extension Program State Hubs 
     (referred to in this section as `Hubs').
       ``(2) Composition of hubs.--A Hub established by a State 
     pursuant to paragraph (1)--
       ``(A) shall consist of, at a minimum, the State health 
     department, the entity responsible for administering the 
     State Medicaid program (if other than the State health 
     department), the State-level entity administering the 
     Medicare program, and the departments of 1 or more health 
     professions schools in the State that train providers in 
     primary care; and
       ``(B) may include entities such as hospital associations, 
     primary care practice-based research networks, health 
     professional societies, State primary care associations, 
     State licensing boards, organizations with a contract with 
     the Secretary under section 1153 of the Social Security Act, 
     consumer groups, and other appropriate entities.
       ``(c) State and Local Activities.--
       ``(1) Hub activities.--Hubs established under a grant under 
     subsection (b) shall--
       ``(A) submit to the Secretary a plan to coordinate 
     functions with quality improvement organizations and area 
     health education centers if such entities are members of the 
     Hub not described in subsection (b)(2)(A);
       ``(B) contract with a county- or local-level entity that 
     shall serve as the Primary Care Extension Agency to 
     administer the services described in paragraph (2);
       ``(C) organize and administer grant funds to county- or 
     local-level Primary Care Extension Agencies that serve a 
     catchment area, as determined by the State; and
       ``(D) organize State-wide or multistate networks of local-
     level Primary Care Extension Agencies to share and 
     disseminate information and practices.
       ``(2) Local primary care extension agency activities.--
       ``(A) Required activities.--Primary Care Extension Agencies 
     established by a Hub under paragraph (1) shall--
       ``(i) assist primary care providers to implement a patient-
     centered medical home to improve the accessibility, quality, 
     and efficiency of primary care services, including health 
     homes;
       ``(ii) develop and support primary care learning 
     communities to enhance the dissemination of research findings 
     for evidence-based practice, assess implementation of 
     practice improvement, share best practices, and involve 
     community clinicians in the generation of new knowledge and 
     identification of important questions for research;
       ``(iii) participate in a national network of Primary Care 
     Extension Hubs and propose how the Primary Care Extension 
     Agency will share and disseminate lessons learned and best 
     practices; and
       ``(iv) develop a plan for financial sustainability 
     involving State, local, and private contributions, to provide 
     for the reduction in Federal funds that is expected after an 
     initial 6-year period of program establishment, 
     infrastructure development, and planning.
       ``(B) Discretionary activities.--Primary Care Extension 
     Agencies established by a Hub under paragraph (1) may--
       ``(i) provide technical assistance, training, and 
     organizational support for community health teams established 
     under section 3602 of the Patient Protection and Affordable 
     Care Act;
       ``(ii) collect data and provision of primary care provider 
     feedback from standardized measurements of processes and 
     outcomes to aid in continuous performance improvement;
       ``(iii) collaborate with local health departments, 
     community health centers, tribes and tribal entities, and 
     other community agencies to identify community health 
     priorities and local health workforce needs, and participate 
     in community-based efforts to address the social and primary 
     determinants of health, strengthen the local primary care 
     workforce, and eliminate health disparities;
       ``(iv) develop measures to monitor the impact of the 
     proposed program on the health of practice enrollees and of 
     the wider community served; and
       ``(v) participate in other activities, as determined 
     appropriate by the Secretary.
       ``(d) Federal Program Administration.--
       ``(1) Grants; types.--Grants awarded under subsection (b) 
     shall be--
       ``(A) program grants, that are awarded to State or 
     multistate entities that submit fully-developed plans for the 
     implementation of a Hub, for a period of 6 years; or
       ``(B) planning grants, that are awarded to State or 
     multistate entities with the goal of developing a plan for a 
     Hub, for a period of 2 years.
       ``(2) Applications.--To be eligible for a grant under 
     subsection (b), a State or multistate entity shall submit to 
     the Secretary an application, at such time, in such manner, 
     and containing such information as the Secretary may require.
       ``(3) Evaluation.--A State that receives a grant under 
     subsection (b) shall be evaluated at the end of the grant 
     period by an evaluation panel appointed by the Secretary.
       ``(4) Continuing support.--After the sixth year in which 
     assistance is provided to a State under a grant awarded under 
     subsection (b), the State may receive additional support 
     under this section if the State program has received 
     satisfactory evaluations with respect to program performance 
     and the merits of the State sustainability plan, as 
     determined by the Secretary.
       ``(5) Limitation.--A State shall not use in excess of 10 
     percent of the amount received under a grant to carry out 
     administrative activities under this section. Funds awarded 
     pursuant to this section shall not be used for funding direct 
     patient care.
       ``(e) Requirements on the Secretary.--In carrying out this 
     section, the Secretary shall consult with the heads of other 
     Federal agencies with demonstrated experience and expertise 
     in health care and preventive medicine, such as the Centers 
     for Disease Control and Prevention, the Substance Abuse and 
     Mental Health Administration, the Health Resources and 
     Services Administration, the National Institutes of Health, 
     the Office of the National Coordinator for Health Information 
     Technology, the Indian Health Service, the Agricultural 
     Cooperative Extension Service of the Department of 
     Agriculture, and other entities, as the Secretary determines 
     appropriate.
       ``(f) Authorization of Appropriations.--To awards grants as 
     provided in subsection (d), there are authorized to be 
     appropriated $120,000,000 for each of fiscal years 2011 and 
     2012, and such sums as may be necessary to carry out this 
     section for each of fiscal years 2013 through 2014.''.

Subtitle F--Strengthening Primary Care and Other Workforce Improvements

     SEC. 5501. EXPANDING ACCESS TO PRIMARY CARE SERVICES AND 
                   GENERAL SURGERY SERVICES.

       (a) Incentive Payment Program for Primary Care Services.--
       (1) In general.--Section 1833 of the Social Security Act 
     (42 U.S.C. 1395l) is amended by adding at the end the 
     following new subsection:
       ``(x) Incentive Payments for Primary Care Services.--
       ``(1) In general.--In the case of primary care services 
     furnished on or after January 1, 2011, and before January 1, 
     2016, by a primary care practitioner, in addition to the 
     amount of payment that would otherwise be made for such 
     services under this part, there also shall be paid (on a 
     monthly or quarterly basis) an amount equal to 10 percent of 
     the payment amount for the service under this part.
       ``(2) Definitions.--In this subsection:
       ``(A) Primary care practitioner.--The term `primary care 
     practitioner' means an individual--
       ``(i) who--

       ``(I) is a physician (as described in section 1861(r)(1)) 
     who has a primary specialty designation of family medicine, 
     internal medicine, geriatric medicine, or pediatric medicine; 
     or
       ``(II) is a nurse practitioner, clinical nurse specialist, 
     or physician assistant (as those terms are defined in section 
     1861(aa)(5)); and

       ``(ii) for whom primary care services accounted for at 
     least 60 percent of the allowed charges under this part for 
     such physician or practitioner in a prior period as 
     determined appropriate by the Secretary.
       ``(B) Primary care services.--The term `primary care 
     services' means services identified, as of January 1, 2009, 
     by the following HCPCS codes (and as subsequently modified by 
     the Secretary):

[[Page 28533]]

       ``(i) 99201 through 99215.
       ``(ii) 99304 through 99340.
       ``(iii) 99341 through 99350.
       ``(3) Coordination with other payments.--The amount of the 
     additional payment for a service under this subsection and 
     subsection (m) shall be determined without regard to any 
     additional payment for the service under subsection (m) and 
     this subsection, respectively.
       ``(4) Limitation on review.--There shall be no 
     administrative or judicial review under section 1869, 1878, 
     or otherwise, respecting the identification of primary care 
     practitioners under this subsection.''.
       (2) Conforming amendment.--Section 1834(g)(2)(B) of the 
     Social Security Act (42 U.S.C. 1395m(g)(2)(B)) is amended by 
     adding at the end the following sentence: ``Section 1833(x) 
     shall not be taken into account in determining the amounts 
     that would otherwise be paid pursuant to the preceding 
     sentence.''.
       (b) Incentive Payment Program for Major Surgical Procedures 
     Furnished in Health Professional Shortage Areas.--
       (1) In general.--Section 1833 of the Social Security Act 
     (42 U.S.C. 1395l), as amended by subsection (a)(1), is 
     amended by adding at the end the following new subsection:
       ``(y) Incentive Payments for Major Surgical Procedures 
     Furnished in Health Professional Shortage Areas.--
       ``(1) In general.--In the case of major surgical procedures 
     furnished on or after January 1, 2011, and before January 1, 
     2016, by a general surgeon in an area that is designated 
     (under section 332(a)(1)(A) of the Public Health Service Act) 
     as a health professional shortage area as identified by the 
     Secretary prior to the beginning of the year involved, in 
     addition to the amount of payment that would otherwise be 
     made for such services under this part, there also shall be 
     paid (on a monthly or quarterly basis) an amount equal to 10 
     percent of the payment amount for the service under this 
     part.
       ``(2) Definitions.--In this subsection:
       ``(A) General surgeon.--In this subsection, the term 
     `general surgeon' means a physician (as described in section 
     1861(r)(1)) who has designated CMS specialty code 02-General 
     Surgery as their primary specialty code in the physician's 
     enrollment under section 1866(j).
       ``(B) Major surgical procedures.--The term `major surgical 
     procedures' means physicians' services which are surgical 
     procedures for which a 10-day or 90-day global period is used 
     for payment under the fee schedule under section 1848(b).
       ``(3) Coordination with other payments.--The amount of the 
     additional payment for a service under this subsection and 
     subsection (m) shall be determined without regard to any 
     additional payment for the service under subsection (m) and 
     this subsection, respectively.
       ``(4) Application.--The provisions of paragraph (2) and (4) 
     of subsection (m) shall apply to the determination of 
     additional payments under this subsection in the same manner 
     as such provisions apply to the determination of additional 
     payments under subsection (m).''.
       (2) Conforming amendment.--Section 1834(g)(2)(B) of the 
     Social Security Act (42 U.S.C. 1395m(g)(2)(B)), as amended by 
     subsection (a)(2), is amended by striking ``Section 1833(x)'' 
     and inserting ``Subsections (x) and (y) of section 1833'' in 
     the last sentence.
       (c) Budget-neutrality Adjustment.--Section 1848(c)(2)(B) of 
     the Social Security Act (42 U.S.C. 1395w-4(c)(2)(B)) is 
     amended by adding at the end the following new clause:
       ``(vii) Adjustment for certain physician incentive 
     payments.--Fifty percent of the additional expenditures under 
     this part attributable to subsections (x) and (y) of section 
     1833 for a year (as estimated by the Secretary) shall be 
     taken into account in applying clause (ii)(II) for 2011 and 
     subsequent years. In lieu of applying the budget-neutrality 
     adjustments required under clause (ii)(II) to relative value 
     units to account for such costs for the year, the Secretary 
     shall apply such budget-neutrality adjustments to the 
     conversion factor otherwise determined for the year. For 2011 
     and subsequent years, the Secretary shall increase the 
     incentive payment otherwise applicable under section 1833(m) 
     by a percent estimated to be equal to the additional 
     expenditures estimated under the first sentence of this 
     clause for such year that is applicable to physicians who 
     primarily furnish services in areas designated (under section 
     332(a)(1)(A) of the Public Health Service Act) as health 
     professional shortage areas.''.

     SEC. 5502. MEDICARE FEDERALLY QUALIFIED HEALTH CENTER 
                   IMPROVEMENTS.

       (a)  Expansion of Medicare-Covered Preventive Services at 
     Federally Qualified Health Centers.--
       (1) In general.--Section 1861(aa)(3)(A) of the Social 
     Security Act (42 U.S.C. 1395w (aa)(3)(A)) is amended to read 
     as follows:
       ``(A) services of the type described subparagraphs (A) 
     through (C) of paragraph (1) and preventive services (as 
     defined in section 1861(ddd)(3)); and''.
       (2) Effective date.--The amendment made by paragraph (1) 
     shall apply to services furnished on or after January 1, 
     2011.
       (b) Prospective Payment System for Federally Qualified 
     Health Centers.--Section 1834 of the Social Security Act (42 
     U.S.C. 1395m) is amended by adding at the end the following 
     new subsection:
       ``(n) Development and Implementation of Prospective Payment 
     System.--
       ``(1) Development.--
       ``(A) In general.--The Secretary shall develop a 
     prospective payment system for payment for Federally 
     qualified health services furnished by Federally qualified 
     health centers under this title. Such system shall include a 
     process for appropriately describing the services furnished 
     by Federally qualified health centers.
       ``(B) Collection of data and evaluation.--The Secretary 
     shall require Federally qualified health centers to submit to 
     the Secretary such information as the Secretary may require 
     in order to develop and implement the prospective payment 
     system under this paragraph and paragraph (2), respectively, 
     including the reporting of services using HCPCS codes.
       ``(2) Implementation.--
       ``(A) In general.--Notwithstanding section 1833(a)(3)(B), 
     the Secretary shall provide, for cost reporting periods 
     beginning on or after October 1, 2014, for payments for 
     Federally qualified health services furnished by Federally 
     qualified health centers under this title in accordance with 
     the prospective payment system developed by the Secretary 
     under paragraph (1).
       ``(B) Payments.--
       ``(i) Initial payments.--The Secretary shall implement such 
     prospective payment system so that the estimated amount of 
     expenditures under this title for Federally qualified health 
     services in the first year that the prospective payment 
     system is implemented is equal to 103 percent of the 
     estimated amount of expenditures under this title that would 
     have occurred for such services in such year if the system 
     had not been implemented.
       ``(ii) Payments in subsequent years.--In the year after the 
     first year of implementation of such system, and in each 
     subsequent year, the payment rate for Federally qualified 
     health services furnished in the year shall be equal to the 
     payment rate established for such services furnished in the 
     preceding year under this subparagraph increased by the 
     percentage increase in the MEI (as defined in 1842(i)(3)) for 
     the year involved.''.

     SEC. 5503. DISTRIBUTION OF ADDITIONAL RESIDENCY POSITIONS.

       (a) In General.--Section 1886(h) of the Social Security Act 
     (42 U.S.C. 1395ww(h)) is amended--
       (1) in paragraph (4)(F)(i), by striking ``paragraph (7)'' 
     and inserting ``paragraphs (7) and (8)'';
       (2) in paragraph (4)(H)(i), by striking ``paragraph (7)'' 
     and inserting ``paragraphs (7) and (8)'';
       (3) in paragraph (7)(E), by inserting ``or paragraph (8)'' 
     before the period at the end; and
       (4) by adding at the end the following new paragraph:
       ``(8) Distribution of additional residency positions.--
       ``(A) Reductions in limit based on unused positions.--
       ``(i) In general.--Except as provided in clause (ii), if a 
     hospital's reference resident level (as defined in 
     subparagraph (H)(i)) is less than the otherwise applicable 
     resident limit (as defined in subparagraph (H)(iii)), 
     effective for portions of cost reporting periods occurring on 
     or after July 1, 2011, the otherwise applicable resident 
     limit shall be reduced by 65 percent of the difference 
     between such otherwise applicable resident limit and such 
     reference resident level.
       ``(ii) Exceptions.--This subparagraph shall not apply to--

       ``(I) a hospital located in a rural area (as defined in 
     subsection (d)(2)(D)(ii)) with fewer than 250 acute care 
     inpatient beds;
       ``(II) a hospital that was part of a qualifying entity 
     which had a voluntary residency reduction plan approved under 
     paragraph (6)(B) or under the authority of section 402 of 
     Public Law 90-248, if the hospital demonstrates to the 
     Secretary that it has a specified plan in place for filling 
     the unused positions by not later than 2 years after the date 
     of enactment of this paragraph; or
       ``(III) a hospital described in paragraph (4)(H)(v).

       ``(B) Distribution.--
       ``(i) In general.--The Secretary shall increase the 
     otherwise applicable resident limit for each qualifying 
     hospital that submits an application under this subparagraph 
     by such number as the Secretary may approve for portions of 
     cost reporting periods occurring on or after July 1, 2011. 
     The aggregate number of increases in the otherwise applicable 
     resident limit under this subparagraph shall be equal to the 
     aggregate reduction in such limits attributable to 
     subparagraph (A) (as estimated by the Secretary).
       ``(ii) Requirements.--Subject to clause (iii), a hospital 
     that receives an increase in the otherwise applicable 
     resident limit under this subparagraph shall ensure, during 
     the 5-year period beginning on the date of such increase, 
     that--

       ``(I) the number of full-time equivalent primary care 
     residents, as defined in paragraph

[[Page 28534]]

     (5)(H) (as determined by the Secretary), excluding any 
     additional positions under subclause (II), is not less than 
     the average number of full-time equivalent primary care 
     residents (as so determined) during the 3 most recent cost 
     reporting periods ending prior to the date of enactment of 
     this paragraph; and
       ``(II) not less than 75 percent of the positions 
     attributable to such increase are in a primary care or 
     general surgery residency (as determined by the Secretary).

     The Secretary may determine whether a hospital has met the 
     requirements under this clause during such 5-year period in 
     such manner and at such time as the Secretary determines 
     appropriate, including at the end of such 5-year period.
       ``(iii) Redistribution of positions if hospital no longer 
     meets certain requirements.--In the case where the Secretary 
     determines that a hospital described in clause (ii) does not 
     meet either of the requirements under subclause (I) or (II) 
     of such clause, the Secretary shall--

       ``(I) reduce the otherwise applicable resident limit of the 
     hospital by the amount by which such limit was increased 
     under this paragraph; and
       ``(II) provide for the distribution of positions 
     attributable to such reduction in accordance with the 
     requirements of this paragraph.

       ``(C) Considerations in redistribution.--In determining for 
     which hospitals the increase in the otherwise applicable 
     resident limit is provided under subparagraph (B), the 
     Secretary shall take into account--
       ``(i) the demonstration likelihood of the hospital filling 
     the positions made available under this paragraph within the 
     first 3 cost reporting periods beginning on or after July 1, 
     2011, as determined by the Secretary; and
       ``(ii) whether the hospital has an accredited rural 
     training track (as described in paragraph (4)(H)(iv)).
       ``(D) Priority for certain areas.--In determining for which 
     hospitals the increase in the otherwise applicable resident 
     limit is provided under subparagraph (B), subject to 
     subparagraph (E), the Secretary shall distribute the increase 
     to hospitals based on the following factors:
       ``(i) Whether the hospital is located in a State with a 
     resident-to-population ratio in the lowest quartile (as 
     determined by the Secretary).
       ``(ii) Whether the hospital is located in a State, a 
     territory of the United States, or the District of Columbia 
     that is among the top 10 States, territories, or Districts in 
     terms of the ratio of--

       ``(I) the total population of the State, territory, or 
     District living in an area designated (under such section 
     332(a)(1)(A)) as a health professional shortage area (as of 
     the date of enactment of this paragraph); to
       ``(II) the total population of the State, territory, or 
     District (as determined by the Secretary based on the most 
     recent available population data published by the Bureau of 
     the Census).

       ``(iii) Whether the hospital is located in a rural area (as 
     defined in subsection (d)(2)(D)(ii)).
       ``(E) Reservation of positions for certain hospitals.--
       ``(i) In general.--Subject to clause (ii), the Secretary 
     shall reserve the positions available for distribution under 
     this paragraph as follows:

       ``(I) 70 percent of such positions for distribution to 
     hospitals described in clause (i) of subparagraph (D).
       ``(II) 30 percent of such positions for distribution to 
     hospitals described in clause (ii) and (iii) of such 
     subparagraph.

       ``(ii) Exception if positions not redistributed by july 1, 
     2011.--In the case where the Secretary does not distribute 
     positions to hospitals in accordance with clause (i) by July 
     1, 2011, the Secretary shall distribute such positions to 
     other hospitals in accordance with the considerations 
     described in subparagraph (C) and the priority described in 
     subparagraph (D).
       ``(F) Limitation.--A hospital may not receive more than 75 
     full-time equivalent additional residency positions under 
     this paragraph.
       ``(G) Application of per resident amounts for primary care 
     and nonprimary care.--With respect to additional residency 
     positions in a hospital attributable to the increase provided 
     under this paragraph, the approved FTE per resident amounts 
     are deemed to be equal to the hospital per resident amounts 
     for primary care and nonprimary care computed under paragraph 
     (2)(D) for that hospital.
       ``(H) Definitions.--In this paragraph:
       ``(i) Reference resident level.--The term `reference 
     resident level' means, with respect to a hospital, the 
     highest resident level for any of the 3 most recent cost 
     reporting periods (ending before the date of the enactment of 
     this paragraph) of the hospital for which a cost report has 
     been settled (or, if not, submitted (subject to audit)), as 
     determined by the Secretary.
       ``(ii) Resident level.--The term `resident level' has the 
     meaning given such term in paragraph (7)(C)(i).
       ``(iii) Otherwise applicable resident limit.--The term 
     `otherwise applicable resident limit' means, with respect to 
     a hospital, the limit otherwise applicable under 
     subparagraphs (F)(i) and (H) of paragraph (4) on the resident 
     level for the hospital determined without regard to this 
     paragraph but taking into account paragraph (7)(A).''.
       (b) IME.--
       (1) In general.--Section 1886(d)(5)(B)(v) of the Social 
     Security Act (42 U.S.C. 1395ww(d)(5)(B)(v)), in the second 
     sentence, is amended--
       (A) by striking ``subsection (h)(7)'' and inserting 
     ``subsections (h)(7) and (h)(8)''; and
       (B) by striking ``it applies'' and inserting ``they 
     apply''.
       (2) Conforming amendment.--Section 1886(d)(5)(B) of the 
     Social Security Act (42 U.S.C. 1395ww(d)(5)(B)) is amended by 
     adding at the end the following clause:
       ``(x) For discharges occurring on or after July 1, 2011, 
     insofar as an additional payment amount under this 
     subparagraph is attributable to resident positions 
     distributed to a hospital under subsection (h)(8)(B), the 
     indirect teaching adjustment factor shall be computed in the 
     same manner as provided under clause (ii) with respect to 
     such resident positions.''.
       (c) Conforming Amendment.--Section 422(b)(2) of the 
     Medicare Prescription Drug, Improvement, and Modernization 
     Act of 2003 (Public Law 108-173) is amended by striking 
     ``section 1886(h)(7)'' and all that follows and inserting 
     ``paragraphs (7) and (8) of subsection (h) of section 1886 of 
     the Social Security Act''.

     SEC. 5504. COUNTING RESIDENT TIME IN NONPROVIDER SETTINGS.

       (a) GME.--Section 1886(h)(4)(E) of the Social Security Act 
     (42 U.S.C. 1395ww(h)(4)(E)) is amended--
       (1) by striking ``shall be counted and that all the time'' 
     and inserting ``shall be counted and that--
       ``(i) effective for cost reporting periods beginning before 
     July 1, 2010, all the time;'';
       (2) in clause (i), as inserted by paragraph (1), by 
     striking the period at the end and inserting ``; and'';
       (3) by inserting after clause (i), as so inserted, the 
     following new clause:
       ``(ii) effective for cost reporting periods beginning on or 
     after July 1, 2010, all the time so spent by a resident shall 
     be counted towards the determination of full-time 
     equivalency, without regard to the setting in which the 
     activities are performed, if a hospital incurs the costs of 
     the stipends and fringe benefits of the resident during the 
     time the resident spends in that setting. If more than one 
     hospital incurs these costs, either directly or through a 
     third party, such hospitals shall count a proportional share 
     of the time, as determined by written agreement between the 
     hospitals, that a resident spends training in that 
     setting.''; and
       (4) by adding at the end the following flush sentence:
     ``Any hospital claiming under this subparagraph for time 
     spent in a nonprovider setting shall maintain and make 
     available to the Secretary records regarding the amount of 
     such time and such amount in comparison with amounts of such 
     time in such base year as the Secretary shall specify.''.
       (b) IME.--Section 1886(d)(5)(B)(iv) of the Social Security 
     Act (42 U.S.C. 1395ww(d)(5)) is amended--
       (1) by striking ``(iv) Effective for discharges occurring 
     on or after October 1, 1997'' and inserting ``(iv)(I) 
     Effective for discharges occurring on or after October 1, 
     1997, and before July 1, 2010''; and
       (2) by inserting after clause (I), as inserted by paragraph 
     (1), the following new subparagraph:
       ``(II) Effective for discharges occurring on or after July 
     1, 2010, all the time spent by an intern or resident in 
     patient care activities in a nonprovider setting shall be 
     counted towards the determination of full-time equivalency if 
     a hospital incurs the costs of the stipends and fringe 
     benefits of the intern or resident during the time the intern 
     or resident spends in that setting. If more than one hospital 
     incurs these costs, either directly or through a third party, 
     such hospitals shall count a proportional share of the time, 
     as determined by written agreement between the hospitals, 
     that a resident spends training in that setting.''.
       (c) Application.--The amendments made by this section shall 
     not be applied in a manner that requires reopening of any 
     settled hospital cost reports as to which there is not a 
     jurisdictionally proper appeal pending as of the date of the 
     enactment of this Act on the issue of payment for indirect 
     costs of medical education under section 1886(d)(5)(B) of the 
     Social Security Act (42 U.S.C. 1395ww(d)(5)(B)) or for direct 
     graduate medical education costs under section 1886(h) of 
     such Act (42 U.S.C. 1395ww(h)).

     SEC. 5505. RULES FOR COUNTING RESIDENT TIME FOR DIDACTIC AND 
                   SCHOLARLY ACTIVITIES AND OTHER ACTIVITIES.

       (a) GME.--Section 1886(h) of the Social Security Act (42 
     U.S.C. 1395ww(h)), as amended by section 5504, is amended--
       (1) in paragraph (4)--
       (A) in subparagraph (E), by striking ``Such rules'' and 
     inserting ``Subject to subparagraphs (J) and (K), such 
     rules''; and
       (B) by adding at the end the following new subparagraphs:
       ``(J) Treatment of certain nonprovider and didactic 
     activities.--Such rules shall provide that all time spent by 
     an intern or

[[Page 28535]]

     resident in an approved medical residency training program in 
     a nonprovider setting that is primarily engaged in furnishing 
     patient care (as defined in paragraph (5)(K)) in non-patient 
     care activities, such as didactic conferences and seminars, 
     but not including research not associated with the treatment 
     or diagnosis of a particular patient, as such time and 
     activities are defined by the Secretary, shall be counted 
     toward the determination of full-time equivalency.
       ``(K) Treatment of certain other activities.--In 
     determining the hospital's number of full-time equivalent 
     residents for purposes of this subsection, all the time that 
     is spent by an intern or resident in an approved medical 
     residency training program on vacation, sick leave, or other 
     approved leave, as such time is defined by the Secretary, and 
     that does not prolong the total time the resident is 
     participating in the approved program beyond the normal 
     duration of the program shall be counted toward the 
     determination of full-time equivalency.''; and
       (2) in paragraph (5), by adding at the end the following 
     new subparagraph:
       ``(K) Nonprovider setting that is primarily engaged in 
     furnishing patient care.--The term `nonprovider setting that 
     is primarily engaged in furnishing patient care' means a 
     nonprovider setting in which the primary activity is the care 
     and treatment of patients, as defined by the Secretary.''.
       (b) IME Determinations.--Section 1886(d)(5)(B) of such Act 
     (42 U.S.C. 1395ww(d)(5)(B)) is amended by adding at the end 
     the following new clause:
       ``(x)(I) The provisions of subparagraph (K) of subsection 
     (h)(4) shall apply under this subparagraph in the same manner 
     as they apply under such subsection.
       ``(II) In determining the hospital's number of full-time 
     equivalent residents for purposes of this subparagraph, all 
     the time spent by an intern or resident in an approved 
     medical residency training program in non-patient care 
     activities, such as didactic conferences and seminars, as 
     such time and activities are defined by the Secretary, that 
     occurs in the hospital shall be counted toward the 
     determination of full-time equivalency if the hospital--

       ``(aa) is recognized as a subsection (d) hospital;
       ``(bb) is recognized as a subsection (d) Puerto Rico 
     hospital;
       ``(cc) is reimbursed under a reimbursement system 
     authorized under section 1814(b)(3); or
       ``(dd) is a provider-based hospital outpatient department.

       ``(III) In determining the hospital's number of full-time 
     equivalent residents for purposes of this subparagraph, all 
     the time spent by an intern or resident in an approved 
     medical residency training program in research activities 
     that are not associated with the treatment or diagnosis of a 
     particular patient, as such time and activities are defined 
     by the Secretary, shall not be counted toward the 
     determination of full-time equivalency.''.
       (c) Effective Dates.--
       (1) In general.--Except as otherwise provided, the 
     Secretary of Health and Human Services shall implement the 
     amendments made by this section in a manner so as to apply to 
     cost reporting periods beginning on or after January 1, 1983.
       (2) GME.--Section 1886(h)(4)(J) of the Social Security Act, 
     as added by subsection (a)(1)(B), shall apply to cost 
     reporting periods beginning on or after July 1, 2009.
       (3) IME.--Section 1886(d)(5)(B)(x)(III) of the Social 
     Security Act, as added by subsection (b), shall apply to cost 
     reporting periods beginning on or after October 1, 2001. Such 
     section, as so added, shall not give rise to any inference as 
     to how the law in effect prior to such date should be 
     interpreted.

     SEC. 5506. PRESERVATION OF RESIDENT CAP POSITIONS FROM CLOSED 
                   HOSPITALS.

       (a) GME.--Section 1886(h)(4)(H) of the Social Security Act 
     (42 U.S.C. Section 1395ww(h)(4)(H)) is amended by adding at 
     the end the following new clause:
       ``(vi) Redistribution of residency slots after a hospital 
     closes.--

       ``(I) In general.--Subject to the succeeding provisions of 
     this clause, the Secretary shall, by regulation, establish a 
     process under which, in the case where a hospital (other than 
     a hospital described in clause (v)) with an approved medical 
     residency program closes on or after a date that is 2 years 
     before the date of enactment of this clause, the Secretary 
     shall increase the otherwise applicable resident limit under 
     this paragraph for other hospitals in accordance with this 
     clause.
       ``(II) Priority for hospitals in certain areas.--Subject to 
     the succeeding provisions of this clause, in determining for 
     which hospitals the increase in the otherwise applicable 
     resident limit is provided under such process, the Secretary 
     shall distribute the increase to hospitals in the following 
     priority order (with preference given within each category to 
     hospitals that are members of the same affiliated group (as 
     defined by the Secretary under clause (ii)) as the closed 
     hospital):

       ``(aa) First, to hospitals located in the same core-based 
     statistical area as, or a core-based statistical area 
     contiguous to, the hospital that closed.
       ``(bb) Second, to hospitals located in the same State as 
     the hospital that closed.
       ``(cc) Third, to hospitals located in the same region of 
     the country as the hospital that closed.
       ``(dd) Fourth, only if the Secretary is not able to 
     distribute the increase to hospitals described in item (cc), 
     to qualifying hospitals in accordance with the provisions of 
     paragraph (8).

       ``(III) Requirement hospital likely to fill position within 
     certain time period.--The Secretary may only increase the 
     otherwise applicable resident limit of a hospital under such 
     process if the Secretary determines the hospital has 
     demonstrated a likelihood of filling the positions made 
     available under this clause within 3 years.
       ``(IV) Limitation.--The aggregate number of increases in 
     the otherwise applicable resident limits for hospitals under 
     this clause shall be equal to the number of resident 
     positions in the approved medical residency programs that 
     closed on or after the date described in subclause (I).
       ``(V) Administration.--Chapter 35 of title 44, United 
     States Code, shall not apply to the implementation of this 
     clause.''.

       (b) IME.--Section 1886(d)(5)(B)(v) of the Social Security 
     Act (42 U.S.C. 1395ww(d)(5)(B)(v)), in the second sentence, 
     as amended by section 5503, is amended by striking 
     ``subsections (h)(7) and (h)(8)'' and inserting ``subsections 
     (h)(4)(H)(vi), (h)(7), and (h)(8)''.
       (c) Application.--The amendments made by this section shall 
     not be applied in a manner that requires reopening of any 
     settled hospital cost reports as to which there is not a 
     jurisdictionally proper appeal pending as of the date of the 
     enactment of this Act on the issue of payment for indirect 
     costs of medical education under section 1886(d)(5)(B) of the 
     Social Security Act (42 U.S.C. 1395ww(d)(5)(B)) or for direct 
     graduate medical education costs under section 1886(h) of 
     such Act (42 U.S.C. Section 1395ww(h)).
       (d) Effect on Temporary FTE Cap Adjustments.--The Secretary 
     of Health and Human Services shall give consideration to the 
     effect of the amendments made by this section on any 
     temporary adjustment to a hospital's FTE cap under section 
     413.79(h) of title 42, Code of Federal Regulations (as in 
     effect on the date of enactment of this Act) in order to 
     ensure that there is no duplication of FTE slots. Such 
     amendments shall not affect the application of section 
     1886(h)(4)(H)(v) of the Social Security Act (42 U.S.C. 
     1395ww(h)(4)(H)(v)).
       (e) Conforming Amendment.--Section 1886(h)(7)(E) of the 
     Social Security Act (42 U.S.C. 1395ww(h)(7)(E)), as amended 
     by section 5503(a), is amended by striking ``paragraph or 
     paragraph (8)'' and inserting ``this paragraph, paragraph 
     (8), or paragraph (4)(H)(vi)''.

     SEC. 5507. DEMONSTRATION PROJECTS TO ADDRESS HEALTH 
                   PROFESSIONS WORKFORCE NEEDS; EXTENSION OF 
                   FAMILY-TO-FAMILY HEALTH INFORMATION CENTERS.

       (a) Authority to Conduct Demonstration Projects.--Title XX 
     of the Social Security Act (42 U.S.C. 1397 et seq.) is 
     amended by adding at the end the following:

     ``SEC. 2008. DEMONSTRATION PROJECTS TO ADDRESS HEALTH 
                   PROFESSIONS WORKFORCE NEEDS.

       ``(a) Demonstration Projects To Provide Low-Income 
     Individuals With Opportunities for Education, Training, and 
     Career Advancement To Address Health Professions Workforce 
     Needs.--
       ``(1) Authority to award grants.--The Secretary, in 
     consultation with the Secretary of Labor, shall award grants 
     to eligible entities to conduct demonstration projects that 
     are designed to provide eligible individuals with the 
     opportunity to obtain education and training for occupations 
     in the health care field that pay well and are expected to 
     either experience labor shortages or be in high demand.
       ``(2) Requirements.--
       ``(A) Aid and supportive services.--
       ``(i) In general.--A demonstration project conducted by an 
     eligible entity awarded a grant under this section shall, if 
     appropriate, provide eligible individuals participating in 
     the project with financial aid, child care, case management, 
     and other supportive services.
       ``(ii) Treatment.--Any aid, services, or incentives 
     provided to an eligible beneficiary participating in a 
     demonstration project under this section shall not be 
     considered income, and shall not be taken into account for 
     purposes of determining the individual's eligibility for, or 
     amount of, benefits under any means-tested program.
       ``(B) Consultation and coordination.--An eligible entity 
     applying for a grant to carry out a demonstration project 
     under this section shall demonstrate in the application that 
     the entity has consulted with the State agency responsible 
     for administering the State TANF program, the local workforce 
     investment board in the area in which the project is to be 
     conducted (unless the applicant is such board), the State 
     workforce investment board established under section 111 of 
     the Workforce Investment Act of 1998, and the State 
     Apprenticeship Agency recognized under the Act of August 16, 
     1937 (commonly known as the `National Apprenticeship Act') 
     (or if no agency has been recognized in the State, the Office 
     of Apprenticeship of the Department of Labor) and that the 
     project will

[[Page 28536]]

     be carried out in coordination with such entities.
       ``(C) Assurance of opportunities for indian populations.--
     The Secretary shall award at least 3 grants under this 
     subsection to an eligible entity that is an Indian tribe, 
     tribal organization, or Tribal College or University.
       ``(3) Reports and evaluation.--
       ``(A) Eligible entities.--An eligible entity awarded a 
     grant to conduct a demonstration project under this 
     subsection shall submit interim reports to the Secretary on 
     the activities carried out under the project and a final 
     report on such activities upon the conclusion of the 
     entities' participation in the project. Such reports shall 
     include assessments of the effectiveness of such activities 
     with respect to improving outcomes for the eligible 
     individuals participating in the project and with respect to 
     addressing health professions workforce needs in the areas in 
     which the project is conducted.
       ``(B) Evaluation.--The Secretary shall, by grant, contract, 
     or interagency agreement, evaluate the demonstration projects 
     conducted under this subsection. Such evaluation shall 
     include identification of successful activities for creating 
     opportunities for developing and sustaining, particularly 
     with respect to low-income individuals and other entry-level 
     workers, a health professions workforce that has accessible 
     entry points, that meets high standards for education, 
     training, certification, and professional development, and 
     that provides increased wages and affordable benefits, 
     including health care coverage, that are responsive to the 
     workforce's needs.
       ``(C) Report to congress.--The Secretary shall submit 
     interim reports and, based on the evaluation conducted under 
     subparagraph (B), a final report to Congress on the 
     demonstration projects conducted under this subsection.
       ``(4) Definitions.--In this subsection:
       ``(A) Eligible entity.--The term `eligible entity' means a 
     State, an Indian tribe or tribal organization, an institution 
     of higher education, a local workforce investment board 
     established under section 117 of the Workforce Investment Act 
     of 1998, a sponsor of an apprenticeship program registered 
     under the National Apprenticeship Act or a community-based 
     organization.
       ``(B) Eligible individual.--
       ``(i) In general.--The term `eligible individual' means a 
     individual receiving assistance under the State TANF program.
       ``(ii) Other low-income individuals.--Such term may include 
     other low-income individuals described by the eligible entity 
     in its application for a grant under this section.
       ``(C) Indian tribe; tribal organization.--The terms `Indian 
     tribe' and `tribal organization' have the meaning given such 
     terms in section 4 of the Indian Self-Determination and 
     Education Assistance Act (25 U.S.C. 450b).
       ``(D) Institution of higher education.--The term 
     `institution of higher education' has the meaning given that 
     term in section 101 of the Higher Education Act of 1965 (20 
     U.S.C. 1001).
       ``(E) State.--The term `State' means each of the 50 States, 
     the District of Columbia, the Commonwealth of Puerto Rico, 
     the United States Virgin Islands, Guam, and American Samoa.
       ``(F) State tanf program.--The term `State TANF program' 
     means the temporary assistance for needy families program 
     funded under part A of title IV.
       ``(G) Tribal college or university.--The term `Tribal 
     College or University' has the meaning given that term in 
     section 316(b) of the Higher Education Act of 1965 (20 U.S.C. 
     1059c(b)).
       ``(b) Demonstration Project To Develop Training and 
     Certification Programs for Personal or Home Care Aides.--
       ``(1) Authority to award grants.--Not later than 18 months 
     after the date of enactment of this section, the Secretary 
     shall award grants to eligible entities that are States to 
     conduct demonstration projects for purposes of developing 
     core training competencies and certification programs for 
     personal or home care aides. The Secretary shall--
       ``(A) evaluate the efficacy of the core training 
     competencies described in paragraph (3)(A) for newly hired 
     personal or home care aides and the methods used by States to 
     implement such core training competencies in accordance with 
     the issues specified in paragraph (3)(B); and
       ``(B) ensure that the number of hours of training provided 
     by States under the demonstration project with respect to 
     such core training competencies are not less than the number 
     of hours of training required under any applicable State or 
     Federal law or regulation.
       ``(2) Duration.--A demonstration project shall be conducted 
     under this subsection for not less than 3 years.
       ``(3) Core training competencies for personal or home care 
     aides.--
       ``(A) In general.--The core training competencies for 
     personal or home care aides described in this subparagraph 
     include competencies with respect to the following areas:
       ``(i) The role of the personal or home care aide (including 
     differences between a personal or home care aide employed by 
     an agency and a personal or home care aide employed directly 
     by the health care consumer or an independent provider).
       ``(ii) Consumer rights, ethics, and confidentiality 
     (including the role of proxy decision-makers in the case 
     where a health care consumer has impaired decision-making 
     capacity).
       ``(iii) Communication, cultural and linguistic competence 
     and sensitivity, problem solving, behavior management, and 
     relationship skills.
       ``(iv) Personal care skills.
       ``(v) Health care support.
       ``(vi) Nutritional support.
       ``(vii) Infection control.
       ``(viii) Safety and emergency training.
       ``(ix) Training specific to an individual consumer's needs 
     (including older individuals, younger individuals with 
     disabilities, individuals with developmental disabilities, 
     individuals with dementia, and individuals with mental and 
     behavioral health needs).
       ``(x) Self-Care.
       ``(B) Implementation.--The implementation issues specified 
     in this subparagraph include the following:
       ``(i) The length of the training.
       ``(ii) The appropriate trainer to student ratio.
       ``(iii) The amount of instruction time spent in the 
     classroom as compared to on-site in the home or a facility.
       ``(iv) Trainer qualifications.
       ``(v) Content for a `hands-on' and written certification 
     exam.
       ``(vi) Continuing education requirements.
       ``(4) Application and selection criteria.--
       ``(A) In general.--
       ``(i) Number of states.--The Secretary shall enter into 
     agreements with not more than 6 States to conduct 
     demonstration projects under this subsection.
       ``(ii) Requirements for states.--An agreement entered into 
     under clause (i) shall require that a participating State--

       ``(I) implement the core training competencies described in 
     paragraph (3)(A); and
       ``(II) develop written materials and protocols for such 
     core training competencies, including the development of a 
     certification test for personal or home care aides who have 
     completed such training competencies.

       ``(iii) Consultation and collaboration with community and 
     vocational colleges.--The Secretary shall encourage 
     participating States to consult with community and vocational 
     colleges regarding the development of curricula to implement 
     the project with respect to activities, as applicable, which 
     may include consideration of such colleges as partners in 
     such implementation.
       ``(B) Application and eligibility.--A State seeking to 
     participate in the project shall--
       ``(i) submit an application to the Secretary containing 
     such information and at such time as the Secretary may 
     specify;
       ``(ii) meet the selection criteria established under 
     subparagraph (C); and
       ``(iii) meet such additional criteria as the Secretary may 
     specify.
       ``(C) Selection criteria.--In selecting States to 
     participate in the program, the Secretary shall establish 
     criteria to ensure (if applicable with respect to the 
     activities involved)--
       ``(i) geographic and demographic diversity;
       ``(ii) that participating States offer medical assistance 
     for personal care services under the State Medicaid plan;
       ``(iii) that the existing training standards for personal 
     or home care aides in each participating State--

       ``(I) are different from such standards in the other 
     participating States; and
       ``(II) are different from the core training competencies 
     described in paragraph (3)(A);

       ``(iv) that participating States do not reduce the number 
     of hours of training required under applicable State law or 
     regulation after being selected to participate in the 
     project; and
       ``(v) that participating States recruit a minimum number of 
     eligible health and long-term care providers to participate 
     in the project.
       ``(D) Technical assistance.--The Secretary shall provide 
     technical assistance to States in developing written 
     materials and protocols for such core training competencies.
       ``(5) Evaluation and report.--
       ``(A) Evaluation.--The Secretary shall develop an 
     experimental or control group testing protocol in 
     consultation with an independent evaluation contractor 
     selected by the Secretary. Such contractor shall evaluate--
       ``(i) the impact of core training competencies described in 
     paragraph (3)(A), including curricula developed to implement 
     such core training competencies, for personal or home care 
     aides within each participating State on job satisfaction, 
     mastery of job skills, beneficiary and family caregiver 
     satisfaction with services, and additional measures 
     determined by the Secretary in consultation with the expert 
     panel;
       ``(ii) the impact of providing such core training 
     competencies on the existing training infrastructure and 
     resources of States; and
       ``(iii) whether a minimum number of hours of initial 
     training should be required for personal or home care aides 
     and, if so, what minimum number of hours should be required.

[[Page 28537]]

       ``(B) Reports.--
       ``(i) Report on initial implementation.--Not later than 2 
     years after the date of enactment of this section, the 
     Secretary shall submit to Congress a report on the initial 
     implementation of activities conducted under the 
     demonstration project, including any available results of the 
     evaluation conducted under subparagraph (A) with respect to 
     such activities, together with such recommendations for 
     legislation or administrative action as the Secretary 
     determines appropriate.
       ``(ii) Final report.--Not later than 1 year after the 
     completion of the demonstration project, the Secretary shall 
     submit to Congress a report containing the results of the 
     evaluation conducted under subparagraph (A), together with 
     such recommendations for legislation or administrative action 
     as the Secretary determines appropriate.
       ``(6) Definitions.--In this subsection:
       ``(A) Eligible health and long-term care provider.--The 
     term `eligible health and long-term care provider' means a 
     personal or home care agency (including personal or home care 
     public authorities), a nursing home, a home health agency (as 
     defined in section 1861(o)), or any other health care 
     provider the Secretary determines appropriate which--
       ``(i) is licensed or authorized to provide services in a 
     participating State; and
       ``(ii) receives payment for services under title XIX.
       ``(B) Personal care services.--The term `personal care 
     services' has the meaning given such term for purposes of 
     title XIX.
       ``(C) Personal or home care aide.--The term `personal or 
     home care aide' means an individual who helps individuals who 
     are elderly, disabled, ill, or mentally disabled (including 
     an individual with Alzheimer's disease or other dementia) to 
     live in their own home or a residential care facility (such 
     as a nursing home, assisted living facility, or any other 
     facility the Secretary determines appropriate) by providing 
     routine personal care services and other appropriate services 
     to the individual.
       ``(D) State.--The term `State' has the meaning given that 
     term for purposes of title XIX.
       ``(c) Funding.--
       ``(1) In general.--Subject to paragraph (2), out of any 
     funds in the Treasury not otherwise appropriated, there are 
     appropriated to the Secretary to carry out subsections (a) 
     and (b), $85,000,000 for each of fiscal years 2010 through 
     2014.
       ``(2) Training and certification programs for personal and 
     home care aides.--With respect to the demonstration projects 
     under subsection (b), the Secretary shall use $5,000,000 of 
     the amount appropriated under paragraph (1) for each of 
     fiscal years 2010 through 2012 to carry out such projects. No 
     funds appropriated under paragraph (1) shall be used to carry 
     out demonstration projects under subsection (b) after fiscal 
     year 2012.
       ``(d) Nonapplication.--
       ``(1) In general.--Except as provided in paragraph (2), the 
     preceding sections of this title shall not apply to grant 
     awarded under this section.
       ``(2) Limitations on use of grants.--Section 2005(a) (other 
     than paragraph (6)) shall apply to a grant awarded under this 
     section to the same extent and in the same manner as such 
     section applies to payments to States under this title.''.
       (b) Extension of Family-To-Family Health Information 
     Centers.--Section 501(c)(1)(A)(iii) of the Social Security 
     Act (42 U.S.C. 701(c)(1)(A)(iii)) is amended by striking 
     ``fiscal year 2009'' and inserting ``each of fiscal years 
     2009 through 2012''.

     SEC. 5508. INCREASING TEACHING CAPACITY.

       (a) Teaching Health Centers Training and Enhancement.--Part 
     C of title VII of the Public Health Service Act (42 U.S.C. 
     293k et. seq.), as amended by section 5303, is further 
     amended by inserting after section 749 the following:

     ``SEC. 749A. TEACHING HEALTH CENTERS DEVELOPMENT GRANTS.

       ``(a) Program Authorized.--The Secretary may award grants 
     under this section to teaching health centers for the purpose 
     of establishing new accredited or expanded primary care 
     residency programs.
       ``(b) Amount and Duration.--Grants awarded under this 
     section shall be for a term of not more than 3 years and the 
     maximum award may not be more than $500,000.
       ``(c) Use of Funds.--Amounts provided under a grant under 
     this section shall be used to cover the costs of--
       ``(1) establishing or expanding a primary care residency 
     training program described in subsection (a), including costs 
     associated with--
       ``(A) curriculum development;
       ``(B) recruitment, training and retention of residents and 
     faculty:
       ``(C) accreditation by the Accreditation Council for 
     Graduate Medical Education (ACGME), the American Dental 
     Association (ADA), or the American Osteopathic Association 
     (AOA); and
       ``(D) faculty salaries during the development phase; and
       ``(2) technical assistance provided by an eligible entity.
       ``(d) Application.--A teaching health center seeking a 
     grant under this section shall submit an application to the 
     Secretary at such time, in such manner, and containing such 
     information as the Secretary may require.
       ``(e) Preference for Certain Applications.--In selecting 
     recipients for grants under this section, the Secretary shall 
     give preference to any such application that documents an 
     existing affiliation agreement with an area health education 
     center program as defined in sections 751 and 799B.
       ``(f) Definitions.--In this section:
       ``(1) Eligible entity.--The term `eligible entity' means an 
     organization capable of providing technical assistance 
     including an area health education center program as defined 
     in sections 751 and 799B.
       ``(2) Primary care residency program.--The term `primary 
     care residency program' means an approved graduate medical 
     residency training program (as defined in section 340H) in 
     family medicine, internal medicine, pediatrics, internal 
     medicine-pediatrics, obstetrics and gynecology, psychiatry, 
     general dentistry, pediatric dentistry, and geriatrics.
       ``(3) Teaching health center.--
       ``(A) In general.--The term `teaching health center' means 
     an entity that--
       ``(i) is a community based, ambulatory patient care center; 
     and
       ``(ii) operates a primary care residency program.
       ``(B) Inclusion of certain entities.--Such term includes 
     the following:
       ``(i) A Federally qualified health center (as defined in 
     section 1905(l)(2)(B), of the Social Security Act).
       ``(ii) A community mental health center (as defined in 
     section 1861(ff)(3)(B) of the Social Security Act).
       ``(iii) A rural health clinic, as defined in section 
     1861(aa) of the Social Security Act.
       ``(iv) A health center operated by the Indian Health 
     Service, an Indian tribe or tribal organization, or an urban 
     Indian organization (as defined in section 4 of the Indian 
     Health Care Improvement Act).
       ``(v) An entity receiving funds under title X of the Public 
     Health Service Act.
       ``(g) Authorization of Appropriations.--There is authorized 
     to be appropriated, $25,000,000 for fiscal year 2010, 
     $50,000,000 for fiscal year 2011, $50,000,000 for fiscal year 
     2012, and such sums as may be necessary for each fiscal year 
     thereafter to carry out this section. Not to exceed 
     $5,000,000 annually may be used for technical assistance 
     program grants.''.
       (b) National Health Service Corps Teaching Capacity.--
     Section 338C(a) of the Public Health Service Act (42 U.S.C. 
     254m(a)) is amended to read as follows:
       ``(a) Service in Full-time Clinical Practice.--Except as 
     provided in section 338D, each individual who has entered 
     into a written contract with the Secretary under section 338A 
     or 338B shall provide service in the full-time clinical 
     practice of such individual's profession as a member of the 
     Corps for the period of obligated service provided in such 
     contract. For the purpose of calculating time spent in full-
     time clinical practice under this subsection, up to 50 
     percent of time spent teaching by a member of the Corps may 
     be counted toward his or her service obligation.''.
       (c) Payments to Qualified Teaching Health Centers.--Part D 
     of title III of the Public Health Service Act (42 U.S.C. 254b 
     et seq.) is amended by adding at the end the following:

   ``Subpart XI--Support of Graduate Medical Education in Qualified 
                        Teaching Health Centers

     ``SEC. 340H. PROGRAM OF PAYMENTS TO TEACHING HEALTH CENTERS 
                   THAT OPERATE GRADUATE MEDICAL EDUCATION 
                   PROGRAMS.

       ``(a) Payments.--Subject to subsection (h)(2), the 
     Secretary shall make payments under this section for direct 
     expenses and for indirect expenses to qualified teaching 
     health centers that are listed as sponsoring institutions by 
     the relevant accrediting body for expansion of existing or 
     establishment of new approved graduate medical residency 
     training programs.
       ``(b) Amount of Payments.--
       ``(1) In general.--Subject to paragraph (2), the amounts 
     payable under this section to qualified teaching health 
     centers for an approved graduate medical residency training 
     program for a fiscal year are each of the following amounts:
       ``(A) Direct expense amount.--The amount determined under 
     subsection (c) for direct expenses associated with sponsoring 
     approved graduate medical residency training programs.
       ``(B) Indirect expense amount.--The amount determined under 
     subsection (d) for indirect expenses associated with the 
     additional costs relating to teaching residents in such 
     programs.
       ``(2) Capped amount.--
       ``(A) In general.--The total of the payments made to 
     qualified teaching health centers under paragraph (1)(A) or 
     paragraph (1)(B) in a fiscal year shall not exceed the amount 
     of funds appropriated under subsection (g) for such payments 
     for that fiscal year.
       ``(B) Limitation.--The Secretary shall limit the funding of 
     full-time equivalent residents in order to ensure the direct 
     and indirect payments as determined under subsection (c) and 
     (d) do not exceed the total

[[Page 28538]]

     amount of funds appropriated in a fiscal year under 
     subsection (g).
       ``(c) Amount of Payment for Direct Graduate Medical 
     Education.--
       ``(1) In general.--The amount determined under this 
     subsection for payments to qualified teaching health centers 
     for direct graduate expenses relating to approved graduate 
     medical residency training programs for a fiscal year is 
     equal to the product of--
       ``(A) the updated national per resident amount for direct 
     graduate medical education, as determined under paragraph 
     (2); and
       ``(B) the average number of full-time equivalent residents 
     in the teaching health center's graduate approved medical 
     residency training programs as determined under section 
     1886(h)(4) of the Social Security Act (without regard to the 
     limitation under subparagraph (F) of such section) during the 
     fiscal year.
       ``(2) Updated national per resident amount for direct 
     graduate medical education.--The updated per resident amount 
     for direct graduate medical education for a qualified 
     teaching health center for a fiscal year is an amount 
     determined as follows:
       ``(A) Determination of qualified teaching health center per 
     resident amount.--The Secretary shall compute for each 
     individual qualified teaching health center a per resident 
     amount--
       ``(i) by dividing the national average per resident amount 
     computed under section 340E(c)(2)(D) into a wage-related 
     portion and a non-wage related portion by applying the 
     proportion determined under subparagraph (B);
       ``(ii) by multiplying the wage-related portion by the 
     factor applied under section 1886(d)(3)(E) of the Social 
     Security Act (but without application of section 4410 of the 
     Balanced Budget Act of 1997 (42 U.S.C. 1395ww note)) during 
     the preceding fiscal year for the teaching health center's 
     area; and
       ``(iii) by adding the non-wage-related portion to the 
     amount computed under clause (ii).
       ``(B) Updating rate.--The Secretary shall update such per 
     resident amount for each such qualified teaching health 
     center as determined appropriate by the Secretary.
       ``(d) Amount of Payment for Indirect Medical Education.--
       ``(1) In general.--The amount determined under this 
     subsection for payments to qualified teaching health centers 
     for indirect expenses associated with the additional costs of 
     teaching residents for a fiscal year is equal to an amount 
     determined appropriate by the Secretary.
       ``(2) Factors.--In determining the amount under paragraph 
     (1), the Secretary shall--
       ``(A) evaluate indirect training costs relative to 
     supporting a primary care residency program in qualified 
     teaching health centers; and
       ``(B) based on this evaluation, assure that the aggregate 
     of the payments for indirect expenses under this section and 
     the payments for direct graduate medical education as 
     determined under subsection (c) in a fiscal year do not 
     exceed the amount appropriated for such expenses as 
     determined in subsection (g).
       ``(3) Interim payment.--Before the Secretary makes a 
     payment under this subsection pursuant to a determination of 
     indirect expenses under paragraph (1), the Secretary may 
     provide to qualified teaching health centers a payment, in 
     addition to any payment made under subsection (c), for 
     expected indirect expenses associated with the additional 
     costs of teaching residents for a fiscal year, based on an 
     estimate by the Secretary.
       ``(e) Clarification Regarding Relationship to Other 
     Payments for Graduate Medical Education.--Payments under this 
     section--
       ``(1) shall be in addition to any payments--
       ``(A) for the indirect costs of medical education under 
     section 1886(d)(5)(B) of the Social Security Act;
       ``(B) for direct graduate medical education costs under 
     section 1886(h) of such Act; and
       ``(C) for direct costs of medical education under section 
     1886(k) of such Act;
       ``(2) shall not be taken into account in applying the 
     limitation on the number of total full-time equivalent 
     residents under subparagraphs (F) and (G) of section 
     1886(h)(4) of such Act and clauses (v), (vi)(I), and (vi)(II) 
     of section 1886(d)(5)(B) of such Act for the portion of time 
     that a resident rotates to a hospital; and
       ``(3) shall not include the time in which a resident is 
     counted toward full-time equivalency by a hospital under 
     paragraph (2) or under section 1886(d)(5)(B)(iv) of the 
     Social Security Act, section 1886(h)(4)(E) of such Act, or 
     section 340E of this Act.
       ``(f) Reconciliation.--The Secretary shall determine any 
     changes to the number of residents reported by a hospital in 
     the application of the hospital for the current fiscal year 
     to determine the final amount payable to the hospital for the 
     current fiscal year for both direct expense and indirect 
     expense amounts. Based on such determination, the Secretary 
     shall recoup any overpayments made to pay any balance due to 
     the extent possible. The final amount so determined shall be 
     considered a final intermediary determination for the 
     purposes of section 1878 of the Social Security Act and shall 
     be subject to administrative and judicial review under that 
     section in the same manner as the amount of payment under 
     section 1186(d) of such Act is subject to review under such 
     section.
       ``(g) Funding.--To carry out this section, there are 
     appropriated such sums as may be necessary, not to exceed 
     $230,000,000, for the period of fiscal years 2011 through 
     2015.
       ``(h) Annual Reporting Required.--
       ``(1) Annual report.--The report required under this 
     paragraph for a qualified teaching health center for a fiscal 
     year is a report that includes (in a form and manner 
     specified by the Secretary) the following information for the 
     residency academic year completed immediately prior to such 
     fiscal year:
       ``(A) The types of primary care resident approved training 
     programs that the qualified teaching health center provided 
     for residents.
       ``(B) The number of approved training positions for 
     residents described in paragraph (4).
       ``(C) The number of residents described in paragraph (4) 
     who completed their residency training at the end of such 
     residency academic year and care for vulnerable populations 
     living in underserved areas.
       ``(D) Other information as deemed appropriate by the 
     Secretary.
       ``(2) Audit authority; limitation on payment.--
       ``(A) Audit authority.--The Secretary may audit a qualified 
     teaching health center to ensure the accuracy and 
     completeness of the information submitted in a report under 
     paragraph (1).
       ``(B) Limitation on payment.--A teaching health center may 
     only receive payment in a cost reporting period for a number 
     of such resident positions that is greater than the base 
     level of primary care resident positions, as determined by 
     the Secretary. For purposes of this subparagraph, the `base 
     level of primary care residents' for a teaching health center 
     is the level of such residents as of a base period.
       ``(3) Reduction in payment for failure to report.--
       ``(A) In general.--The amount payable under this section to 
     a qualified teaching health center for a fiscal year shall be 
     reduced by at least 25 percent if the Secretary determines 
     that--
       ``(i) the qualified teaching health center has failed to 
     provide the Secretary, as an addendum to the qualified 
     teaching health center's application under this section for 
     such fiscal year, the report required under paragraph (1) for 
     the previous fiscal year; or
       ``(ii) such report fails to provide complete and accurate 
     information required under any subparagraph of such 
     paragraph.
       ``(B) Notice and opportunity to provide accurate and 
     missing information.--Before imposing a reduction under 
     subparagraph (A) on the basis of a qualified teaching health 
     center's failure to provide complete and accurate information 
     described in subparagraph (A)(ii), the Secretary shall 
     provide notice to the teaching health center of such failure 
     and the Secretary's intention to impose such reduction and 
     shall provide the teaching health center with the opportunity 
     to provide the required information within the period of 30 
     days beginning on the date of such notice. If the teaching 
     health center provides such information within such period, 
     no reduction shall be made under subparagraph (A) on the 
     basis of the previous failure to provide such information.
       ``(4) Residents.--The residents described in this paragraph 
     are those who are in part-time or full-time equivalent 
     resident training positions at a qualified teaching health 
     center in any approved graduate medical residency training 
     program.
       ``(i) Regulations.--The Secretary shall promulgate 
     regulations to carry out this section.
       ``(j) Definitions.--In this section:
       ``(1) Approved graduate medical residency training 
     program.--The term `approved graduate medical residency 
     training program' means a residency or other postgraduate 
     medical training program--
       ``(A) participation in which may be counted toward 
     certification in a specialty or subspecialty and includes 
     formal postgraduate training programs in geriatric medicine 
     approved by the Secretary; and
       ``(B) that meets criteria for accreditation (as established 
     by the Accreditation Council for Graduate Medical Education, 
     the American Osteopathic Association, or the American Dental 
     Association).
       ``(2) Primary care residency program.--The term `primary 
     care residency program' has the meaning given that term in 
     section 749A.
       ``(3) Qualified teaching health center.--The term 
     `qualified teaching health center' has the meaning given the 
     term `teaching health center' in section 749A.''.

     SEC. 5509. GRADUATE NURSE EDUCATION DEMONSTRATION.

       (a) In General.--
       (1) Establishment.--
       (A) In general.--The Secretary shall establish a graduate 
     nurse education demonstration under title XVIII of the Social 
     Security Act (42 U.S.C. 1395 et seq.) under which an eligible 
     hospital may receive payment for the hospital's reasonable 
     costs (described in paragraph (2)) for the provision of

[[Page 28539]]

     qualified clinical training to advance practice nurses.
       (B) Number.--The demonstration shall include up to 5 
     eligible hospitals.
       (C) Written agreements.--Eligible hospitals selected to 
     participate in the demonstration shall enter into written 
     agreements pursuant to subsection (b) in order to reimburse 
     the eligible partners of the hospital the share of the costs 
     attributable to each partner.
       (2) Costs described.--
       (A) In general.--Subject to subparagraph (B) and subsection 
     (d), the costs described in this paragraph are the reasonable 
     costs (as described in section 1861(v) of the Social Security 
     Act (42 U.S.C. 1395x(v))) of each eligible hospital for the 
     clinical training costs (as determined by the Secretary) that 
     are attributable to providing advanced practice registered 
     nurses with qualified training.
       (B) Limitation.--With respect to a year, the amount 
     reimbursed under subparagraph (A) may not exceed the amount 
     of costs described in subparagraph (A) that are attributable 
     to an increase in the number of advanced practice registered 
     nurses enrolled in a program that provides qualified training 
     during the year and for which the hospital is being 
     reimbursed under the demonstration, as compared to the 
     average number of advanced practice registered nurses who 
     graduated in each year during the period beginning on January 
     1, 2006, and ending on December 31, 2010 (as determined by 
     the Secretary) from the graduate nursing education program 
     operated by the applicable school of nursing that is an 
     eligible partner of the hospital for purposes of the 
     demonstration.
       (3) Waiver authority.--The Secretary may waive such 
     requirements of titles XI and XVIII of the Social Security 
     Act as may be necessary to carry out the demonstration.
       (4) Administration.--Chapter 35 of title 44, United States 
     Code, shall not apply to the implementation of this section.
       (b) Written Agreements With Eligible Partners.--No payment 
     shall be made under this section to an eligible hospital 
     unless such hospital has in effect a written agreement with 
     the eligible partners of the hospital. Such written agreement 
     shall describe, at a minimum--
       (1) the obligations of the eligible partners with respect 
     to the provision of qualified training; and
       (2) the obligation of the eligible hospital to reimburse 
     such eligible partners applicable (in a timely manner) for 
     the costs of such qualified training attributable to partner.
       (c) Evaluation.--Not later than October 17, 2017, the 
     Secretary shall submit to Congress a report on the 
     demonstration. Such report shall include an analysis of the 
     following:
       (1) The growth in the number of advanced practice 
     registered nurses with respect to a specific base year as a 
     result of the demonstration.
       (2) The growth for each of the specialties described in 
     subparagraphs (A) through (D) of subsection (e)(1).
       (3) The costs to the Medicare program under title XVIII of 
     the Social Security Act as a result of the demonstration.
       (4) Other items the Secretary determines appropriate and 
     relevant.
       (d) Funding.--
       (1) In general.--There is hereby appropriated to the 
     Secretary, out of any funds in the Treasury not otherwise 
     appropriated, $50,000,000 for each of fiscal years 2012 
     through 2015 to carry out this section, including the design, 
     implementation, monitoring, and evaluation of the 
     demonstration.
       (2) Proration.--If the aggregate payments to eligible 
     hospitals under the demonstration exceed $50,000,000 for a 
     fiscal year described in paragraph (1), the Secretary shall 
     prorate the payment amounts to each eligible hospital in 
     order to ensure that the aggregate payments do not exceed 
     such amount.
       (3) Without fiscal year limitation.--Amounts appropriated 
     under this subsection shall remain available without fiscal 
     year limitation.
       (e) Definitions.--In this section:
       (1) Advanced practice registered nurse.--The term 
     ``advanced practice registered nurse'' includes the 
     following:
       (A) A clinical nurse specialist (as defined in subsection 
     (aa)(5) of section 1861 of the Social Security Act (42 U.S.C. 
     1395x)).
       (B) A nurse practitioner (as defined in such subsection).
       (C) A certified registered nurse anesthetist (as defined in 
     subsection (bb)(2) of such section).
       (D) A certified nurse-midwife (as defined in subsection 
     (gg)(2) of such section).
       (2) Applicable non-hospital community-based care setting.--
     The term ``applicable non-hospital community-based care 
     setting'' means a non-hospital community-based care setting 
     which has entered into a written agreement (as described in 
     subsection (b)) with the eligible hospital participating in 
     the demonstration. Such settings include Federally qualified 
     health centers, rural health clinics, and other non-hospital 
     settings as determined appropriate by the Secretary.
       (3) Applicable school of nursing.--The term ``applicable 
     school of nursing'' means an accredited school of nursing (as 
     defined in section 801 of the Public Health Service Act) 
     which has entered into a written agreement (as described in 
     subsection (b)) with the eligible hospital participating in 
     the demonstration.
       (4) Demonstration.--The term ``demonstration'' means the 
     graduate nurse education demonstration established under 
     subsection (a).
       (5) Eligible hospital.--The term ``eligible hospital'' 
     means a hospital (as defined in subsection (e) of section 
     1861 of the Social Security Act (42 U.S.C. 1395x)) or a 
     critical access hospital (as defined in subsection (mm)(1) of 
     such section) that has a written agreement in place with--
       (A) 1 or more applicable schools of nursing; and
       (B) 2 or more applicable non-hospital community-based care 
     settings.
       (6) Eligible partners.--The term ``eligible partners'' 
     includes the following:
       (A) An applicable non-hospital community-based care 
     setting.
       (B) An applicable school of nursing.
       (7) Qualified training.--
       (A) In general.--The term ``qualified training'' means 
     training--
       (i) that provides an advanced practice registered nurse 
     with the clinical skills necessary to provide primary care, 
     preventive care, transitional care, chronic care management, 
     and other services appropriate for individuals entitled to, 
     or enrolled for, benefits under part A of title XVIII of the 
     Social Security Act, or enrolled under part B of such title; 
     and
       (ii) subject to subparagraph (B), at least half of which is 
     provided in a non-hospital community-based care setting.
       (B) Waiver of requirement half of training be provided in 
     non-hospital community-based care setting in certain areas.--
     The Secretary may waive the requirement under subparagraph 
     (A)(ii) with respect to eligible hospitals located in rural 
     or medically underserved areas.
       (8) Secretary.--The term ``Secretary'' means the Secretary 
     of Health and Human Services.

          Subtitle G--Improving Access to Health Care Services

     SEC. 5601. SPENDING FOR FEDERALLY QUALIFIED HEALTH CENTERS 
                   (FQHCS).

       (a) In General.--Section 330(r) of the Public Health 
     Service Act (42 U.S.C. 254b(r)) is amended by striking 
     paragraph (1) and inserting the following:
       ``(1) General amounts for grants.--For the purpose of 
     carrying out this section, in addition to the amounts 
     authorized to be appropriated under subsection (d), there is 
     authorized to be appropriated the following:
       ``(A) For fiscal year 2010, $2,988,821,592.
       ``(B) For fiscal year 2011, $3,862,107,440.
       ``(C) For fiscal year 2012, $4,990,553,440.
       ``(D) For fiscal year 2013, $6,448,713,307.
       ``(E) For fiscal year 2014, $7,332,924,155.
       ``(F) For fiscal year 2015, $8,332,924,155.
       ``(G) For fiscal year 2016, and each subsequent fiscal 
     year, the amount appropriated for the preceding fiscal year 
     adjusted by the product of--
       ``(i) one plus the average percentage increase in costs 
     incurred per patient served; and
       ``(ii) one plus the average percentage increase in the 
     total number of patients served.''.
       (b) Rule of Construction.--Section 330(r) of the Public 
     Health Service Act (42 U.S.C. 254b(r)) is amended by adding 
     at the end the following:
       ``(4) Rule of construction with respect to rural health 
     clinics.--
       ``(A) In general.--Nothing in this section shall be 
     construed to prevent a community health center from 
     contracting with a Federally certified rural health clinic 
     (as defined in section 1861(aa)(2) of the Social Security 
     Act), a low-volume hospital (as defined for purposes of 
     section 1886 of such Act), a critical access hospital, a sole 
     community hospital (as defined for purposes of section 
     1886(d)(5)(D)(iii) of such Act), or a medicare-dependent 
     share hospital (as defined for purposes of section 
     1886(d)(5)(G)(iv) of such Act) for the delivery of primary 
     health care services that are available at the clinic or 
     hospital to individuals who would otherwise be eligible for 
     free or reduced cost care if that individual were able to 
     obtain that care at the community health center. Such 
     services may be limited in scope to those primary health care 
     services available in that clinic or hospitals.
       ``(B) Assurances.--In order for a clinic or hospital to 
     receive funds under this section through a contract with a 
     community health center under subparagraph (A), such clinic 
     or hospital shall establish policies to ensure--
       ``(i) nondiscrimination based on the ability of a patient 
     to pay; and
       ``(ii) the establishment of a sliding fee scale for low-
     income patients.''.

     SEC. 5602. NEGOTIATED RULEMAKING FOR DEVELOPMENT OF 
                   METHODOLOGY AND CRITERIA FOR DESIGNATING 
                   MEDICALLY UNDERSERVED POPULATIONS AND HEALTH 
                   PROFESSIONS SHORTAGE AREAS.

       (a) Establishment.--
       (1) In general.--The Secretary of Health and Human Services 
     (in this section referred to as the ``Secretary'') shall 
     establish, through a negotiated rulemaking process under 
     subchapter 3 of chapter 5 of title 5,

[[Page 28540]]

     United States Code, a comprehensive methodology and criteria 
     for designation of--
       (A) medically underserved populations in accordance with 
     section 330(b)(3) of the Public Health Service Act (42 U.S.C. 
     254b(b)(3));
       (B) health professions shortage areas under section 332 of 
     the Public Health Service Act (42 U.S.C. 254e).
       (2) Factors to consider.--In establishing the methodology 
     and criteria under paragraph (1), the Secretary--
       (A) shall consult with relevant stakeholders who will be 
     significantly affected by a rule (such as national, State and 
     regional organizations representing affected entities), State 
     health offices, community organizations, health centers and 
     other affected entities, and other interested parties; and
       (B) shall take into account--
       (i) the timely availability and appropriateness of data 
     used to determine a designation to potential applicants for 
     such designations;
       (ii) the impact of the methodology and criteria on 
     communities of various types and on health centers and other 
     safety net providers;
       (iii) the degree of ease or difficulty that will face 
     potential applicants for such designations in securing the 
     necessary data; and
       (iv) the extent to which the methodology accurately 
     measures various barriers that confront individuals and 
     population groups in seeking health care services.
       (b) Publication of Notice.--In carrying out the rulemaking 
     process under this subsection, the Secretary shall publish 
     the notice provided for under section 564(a) of title 5, 
     United States Code, by not later than 45 days after the date 
     of the enactment of this Act.
       (c) Target Date for Publication of Rule.--As part of the 
     notice under subsection (b), and for purposes of this 
     subsection, the ``target date for publication'', as referred 
     to in section 564(a)(5) of title 5, United Sates Code, shall 
     be July 1, 2010.
       (d) Appointment of Negotiated Rulemaking Committee and 
     Facilitator.--The Secretary shall provide for--
       (1) the appointment of a negotiated rulemaking committee 
     under section 565(a) of title 5, United States Code, by not 
     later than 30 days after the end of the comment period 
     provided for under section 564(c) of such title; and
       (2) the nomination of a facilitator under section 566(c) of 
     such title 5 by not later than 10 days after the date of 
     appointment of the committee.
       (e) Preliminary Committee Report.--The negotiated 
     rulemaking committee appointed under subsection (d) shall 
     report to the Secretary, by not later than April 1, 2010, 
     regarding the committee's progress on achieving a consensus 
     with regard to the rulemaking proceeding and whether such 
     consensus is likely to occur before one month before the 
     target date for publication of the rule. If the committee 
     reports that the committee has failed to make significant 
     progress toward such consensus or is unlikely to reach such 
     consensus by the target date, the Secretary may terminate 
     such process and provide for the publication of a rule under 
     this section through such other methods as the Secretary may 
     provide.
       (f) Final Committee Report.--If the committee is not 
     terminated under subsection (e), the rulemaking committee 
     shall submit a report containing a proposed rule by not later 
     than one month before the target publication date.
       (g) Interim Final Effect.--The Secretary shall publish a 
     rule under this section in the Federal Register by not later 
     than the target publication date. Such rule shall be 
     effective and final immediately on an interim basis, but is 
     subject to change and revision after public notice and 
     opportunity for a period (of not less than 90 days) for 
     public comment. In connection with such rule, the Secretary 
     shall specify the process for the timely review and approval 
     of applications for such designations pursuant to such rules 
     and consistent with this section.
       (h) Publication of Rule After Public Comment.--The 
     Secretary shall provide for consideration of such comments 
     and republication of such rule by not later than 1 year after 
     the target publication date.

     SEC. 5603. REAUTHORIZATION OF THE WAKEFIELD EMERGENCY MEDICAL 
                   SERVICES FOR CHILDREN PROGRAM.

       Section 1910 of the Public Health Service Act (42 U.S.C. 
     300w-9) is amended--
       (1) in subsection (a), by striking ``3-year period (with an 
     optional 4th year'' and inserting ``4-year period (with an 
     optional 5th year''; and
       (2) in subsection (d)--
       (A) by striking ``and such sums'' and inserting ``such 
     sums''; and
       (B) by inserting before the period the following: ``, 
     $25,000,000 for fiscal year 2010, $26,250,000 for fiscal year 
     2011, $27,562,500 for fiscal year 2012, $28,940,625 for 
     fiscal year 2013, and $30,387,656 for fiscal year 2014''.

     SEC. 5604. CO-LOCATING PRIMARY AND SPECIALTY CARE IN 
                   COMMUNITY-BASED MENTAL HEALTH SETTINGS.

       Subpart 3 of part B of title V of the Public Health Service 
     Act (42 U.S.C. 290bb-31 et seq.) is amended by adding at the 
     end the following:

     ``SEC. 520K. AWARDS FOR CO-LOCATING PRIMARY AND SPECIALTY 
                   CARE IN COMMUNITY-BASED MENTAL HEALTH SETTINGS.

       ``(a) Definitions.--In this section:
       ``(1) Eligible entity.--The term `eligible entity' means a 
     qualified community mental health program defined under 
     section 1913(b)(1).
       ``(2) Special populations.--The term `special populations' 
     means adults with mental illnesses who have co-occurring 
     primary care conditions and chronic diseases.
       ``(b) Program Authorized.--The Secretary, acting through 
     the Administrator shall award grants and cooperative 
     agreements to eligible entities to establish demonstration 
     projects for the provision of coordinated and integrated 
     services to special populations through the co-location of 
     primary and specialty care services in community-based mental 
     and behavioral health settings.
       ``(c) Application.--To be eligible to receive a grant or 
     cooperative agreement under this section, an eligible entity 
     shall submit an application to the Administrator at such 
     time, in such manner, and accompanied by such information as 
     the Administrator may require, including a description of 
     partnerships, or other arrangements with local primary care 
     providers, including community health centers, to provide 
     services to special populations.
       ``(d) Use of Funds.--
       ``(1) In general.--For the benefit of special populations, 
     an eligible entity shall use funds awarded under this section 
     for--
       ``(A) the provision, by qualified primary care 
     professionals, of on site primary care services;
       ``(B) reasonable costs associated with medically necessary 
     referrals to qualified specialty care professionals, other 
     coordinators of care or, if permitted by the terms of the 
     grant or cooperative agreement, by qualified specialty care 
     professionals on a reasonable cost basis on site at the 
     eligible entity;
       ``(C) information technology required to accommodate the 
     clinical needs of primary and specialty care professionals; 
     or
       ``(D) facility modifications needed to bring primary and 
     specialty care professionals on site at the eligible entity.
       ``(2) Limitation.--Not to exceed 15 percent of grant or 
     cooperative agreement funds may be used for activities 
     described in subparagraphs (C) and (D) of paragraph (1).
       ``(e) Evaluation.--Not later than 90 days after a grant or 
     cooperative agreement awarded under this section expires, an 
     eligible entity shall submit to the Secretary the results of 
     an evaluation to be conducted by the entity concerning the 
     effectiveness of the activities carried out under the grant 
     or agreement.
       ``(f) Authorization of Appropriations.--There are 
     authorized to be appropriated to carry out this section, 
     $50,000,000 for fiscal year 2010 and such sums as may be 
     necessary for each of fiscal years 2011 through 2014.''.

     SEC. 5605. KEY NATIONAL INDICATORS.

       (a) Definitions.--In this section:
       (1) Academy.--The term ``Academy'' means the National 
     Academy of Sciences.
       (2) Commission.--The term ``Commission'' means the 
     Commission on Key National Indicators established under 
     subsection (b).
       (3) Institute.--The term ``Institute'' means a Key National 
     Indicators Institute as designated under subsection (c)(3).
       (b) Commission on Key National Indicators.--
       (1) Establishment.--There is established a ``Commission on 
     Key National Indicators''.
       (2) Membership.--
       (A) Number and appointment.--The Commission shall be 
     composed of 8 members, to be appointed equally by the 
     majority and minority leaders of the Senate and the Speaker 
     and minority leader of the House of Representatives.
       (B) Prohibited appointments.--Members of the Commission 
     shall not include Members of Congress or other elected 
     Federal, State, or local government officials.
       (C) Qualifications.--In making appointments under 
     subparagraph (A), the majority and minority leaders of the 
     Senate and the Speaker and minority leader of the House of 
     Representatives shall appoint individuals who have shown a 
     dedication to improving civic dialogue and decision-making 
     through the wide use of scientific evidence and factual 
     information.
       (D) Period of appointment.--Each member of the Commission 
     shall be appointed for a 2-year term, except that 1 initial 
     appointment shall be for 3 years. Any vacancies shall not 
     affect the power and duties of the Commission but shall be 
     filled in the same manner as the original appointment and 
     shall last only for the remainder of that term.
       (E) Date.--Members of the Commission shall be appointed by 
     not later than 30 days after the date of enactment of this 
     Act.
       (F) Initial organizing period.---Not later than 60 days 
     after the date of enactment of this Act, the Commission shall 
     develop and implement a schedule for completion of the review 
     and reports required under subsection (d).
       (G) Co-chairpersons.--The Commission shall select 2 Co-
     Chairpersons from among its members.
       (c) Duties of the Commission.--
       (1) In general.--The Commission shall--

[[Page 28541]]

       (A) conduct comprehensive oversight of a newly established 
     key national indicators system consistent with the purpose 
     described in this subsection;
       (B) make recommendations on how to improve the key national 
     indicators system;
       (C) coordinate with Federal Government users and 
     information providers to assure access to relevant and 
     quality data; and
       (D) enter into contracts with the Academy.
       (2) Reports.--
       (A) Annual report to congress.--Not later than 1 year after 
     the selection of the 2 Co-Chairpersons of the Commission, and 
     each subsequent year thereafter, the Commission shall prepare 
     and submit to the appropriate Committees of Congress and the 
     President a report that contains a detailed statement of the 
     recommendations, findings, and conclusions of the Commission 
     on the activities of the Academy and a designated Institute 
     related to the establishment of a Key National Indicator 
     System.
       (B) Annual report to the academy.--
       (i) In general.--Not later than 6 months after the 
     selection of the 2 Co-Chairpersons of the Commission, and 
     each subsequent year thereafter, the Commission shall prepare 
     and submit to the Academy and a designated Institute a report 
     making recommendations concerning potential issue areas and 
     key indicators to be included in the Key National Indicators.
       (ii) Limitation.--The Commission shall not have the 
     authority to direct the Academy or, if established, the 
     Institute, to adopt, modify, or delete any key indicators.
       (3) Contract with the national academy of sciences.--
       (A) In general.---As soon as practicable after the 
     selection of the 2 Co-Chairpersons of the Commission, the Co-
     Chairpersons shall enter into an arrangement with the 
     National Academy of Sciences under which the Academy shall--
       (i) review available public and private sector research on 
     the selection of a set of key national indicators;
       (ii) determine how best to establish a key national 
     indicator system for the United States, by either creating 
     its own institutional capability or designating an 
     independent private nonprofit organization as an Institute to 
     implement a key national indicator system;
       (iii) if the Academy designates an independent Institute 
     under clause (ii), provide scientific and technical advice to 
     the Institute and create an appropriate governance mechanism 
     that balances Academy involvement and the independence of the 
     Institute; and
       (iv) provide an annual report to the Commission addressing 
     scientific and technical issues related to the key national 
     indicator system and, if established, the Institute, and 
     governance of the Institute's budget and operations.
       (B) Participation.--In executing the arrangement under 
     subparagraph (A), the National Academy of Sciences shall 
     convene a multi-sector, multi-disciplinary process to define 
     major scientific and technical issues associated with 
     developing, maintaining, and evolving a Key National 
     Indicator System and, if an Institute is established, to 
     provide it with scientific and technical advice.
       (C) Establishment of a key national indicator system.--
       (i) In general.--In executing the arrangement under 
     subparagraph (A), the National Academy of Sciences shall 
     enable the establishment of a key national indicator system 
     by--

       (I) creating its own institutional capability; or
       (II) partnering with an independent private nonprofit 
     organization as an Institute to implement a key national 
     indicator system.

       (ii) Institute.--If the Academy designates an Institute 
     under clause (i)(II), such Institute shall be a non-profit 
     entity (as defined for purposes of section 501(c)(3) of the 
     Internal Revenue Code of 1986) with an educational mission, a 
     governance structure that emphasizes independence, and 
     characteristics that make such entity appropriate for 
     establishing a key national indicator system.
       (iii) Responsibilities.--Either the Academy or the 
     Institute designated under clause (i)(II) shall be 
     responsible for the following:

       (I) Identifying and selecting issue areas to be represented 
     by the key national indicators.
       (II) Identifying and selecting the measures used for key 
     national indicators within the issue areas under subclause 
     (I).
       (III) Identifying and selecting data to populate the key 
     national indicators described under subclause (II).
       (IV) Designing, publishing, and maintaining a public 
     website that contains a freely accessible database allowing 
     public access to the key national indicators.
       (V) Developing a quality assurance framework to ensure 
     rigorous and independent processes and the selection of 
     quality data.
       (VI) Developing a budget for the construction and 
     management of a sustainable, adaptable, and evolving key 
     national indicator system that reflects all Commission 
     funding of Academy and, if an Institute is established, 
     Institute activities.
       (VII) Reporting annually to the Commission regarding its 
     selection of issue areas, key indicators, data, and progress 
     toward establishing a web-accessible database.
       (VIII) Responding directly to the Commission in response to 
     any Commission recommendations and to the Academy regarding 
     any inquiries by the Academy.

       (iv) Governance.--Upon the establishment of a key national 
     indicator system, the Academy shall create an appropriate 
     governance mechanism that incorporates advisory and control 
     functions. If an Institute is designated under clause 
     (i)(II), the governance mechanism shall balance appropriate 
     Academy involvement and the independence of the Institute.
       (v) Modification and changes.--The Academy shall retain the 
     sole discretion, at any time, to alter its approach to the 
     establishment of a key national indicator system or, if an 
     Institute is designated under clause (i)(II), to alter any 
     aspect of its relationship with the Institute or to designate 
     a different non-profit entity to serve as the Institute.
       (vi) Construction.--Nothing in this section shall be 
     construed to limit the ability of the Academy or the 
     Institute designated under clause (i)(II) to receive private 
     funding for activities related to the establishment of a key 
     national indicator system.
       (D) Annual report.--As part of the arrangement under 
     subparagraph (A), the National Academy of Sciences shall, not 
     later than 270 days after the date of enactment of this Act, 
     and annually thereafter, submit to the Co-Chairpersons of the 
     Commission a report that contains the findings and 
     recommendations of the Academy.
       (d) Government Accountability Office Study and Report.--
       (1) GAO study.--The Comptroller General of the United 
     States shall conduct a study of previous work conducted by 
     all public agencies, private organizations, or foreign 
     countries with respect to best practices for a key national 
     indicator system. The study shall be submitted to the 
     appropriate authorizing committees of Congress.
       (2) GAO financial audit.--If an Institute is established 
     under this section, the Comptroller General shall conduct an 
     annual audit of the financial statements of the Institute, in 
     accordance with generally accepted government auditing 
     standards and submit a report on such audit to the Commission 
     and the appropriate authorizing committees of Congress.
       (3) GAO programmatic review.--The Comptroller General of 
     the United States shall conduct programmatic assessments of 
     the Institute established under this section as determined 
     necessary by the Comptroller General and report the findings 
     to the Commission and to the appropriate authorizing 
     committees of Congress.
       (e) Authorization of Appropriations.--
       (1) In general.---There are authorized to be appropriated 
     to carry out the purposes of this section, $10,000,000 for 
     fiscal year 2010, and $7,500,000 for each of fiscal year 2011 
     through 2018.
       (2) Availability.---Amounts appropriated under paragraph 
     (1) shall remain available until expended.

                     Subtitle H--General Provisions

     SEC. 5701. REPORTS.

       (a) Reports by Secretary of Health and Human Services.--On 
     an annual basis, the Secretary of Health and Human Services 
     shall submit to the appropriate Committees of Congress a 
     report on the activities carried out under the amendments 
     made by this title, and the effectiveness of such activities.
       (b) Reports by Recipients of Funds.--The Secretary of 
     Health and Human Services may require, as a condition of 
     receiving funds under the amendments made by this title, that 
     the entity receiving such award submit to such Secretary such 
     reports as the such Secretary may require on activities 
     carried out with such award, and the effectiveness of such 
     activities.

              TITLE VI--TRANSPARENCY AND PROGRAM INTEGRITY

         Subtitle A--Physician Ownership and Other Transparency

     SEC. 6001. LIMITATION ON MEDICARE EXCEPTION TO THE 
                   PROHIBITION ON CERTAIN PHYSICIAN REFERRALS FOR 
                   HOSPITALS.

       (a) In General.--Section 1877 of the Social Security Act 
     (42 U.S.C. 1395nn) is amended--
       (1) in subsection (d)(2)--
       (A) in subparagraph (A), by striking ``and'' at the end;
       (B) in subparagraph (B), by striking the period at the end 
     and inserting ``; and''; and
       (C) by adding at the end the following new subparagraph:
       ``(C) in the case where the entity is a hospital, the 
     hospital meets the requirements of paragraph (3)(D).'';
       (2) in subsection (d)(3)--
       (A) in subparagraph (B), by striking ``and'' at the end;
       (B) in subparagraph (C), by striking the period at the end 
     and inserting ``; and''; and
       (C) by adding at the end the following new subparagraph:
       ``(D) the hospital meets the requirements described in 
     subsection (i)(1) not later than 18 months after the date of 
     the enactment of this subparagraph.''; and
       (3) by adding at the end the following new subsection:
       ``(i) Requirements for Hospitals to Qualify for Rural 
     Provider and Hospital

[[Page 28542]]

     Exception to Ownership or Investment Prohibition.--
       ``(1) Requirements described.--For purposes of subsection 
     (d)(3)(D), the requirements described in this paragraph for a 
     hospital are as follows:
       ``(A) Provider agreement.--The hospital had--
       ``(i) physician ownership or investment on February 1, 
     2010; and
       ``(ii) a provider agreement under section 1866 in effect on 
     such date.
       ``(B) Limitation on expansion of facility capacity.--Except 
     as provided in paragraph (3), the number of operating rooms, 
     procedure rooms, and beds for which the hospital is licensed 
     at any time on or after the date of the enactment of this 
     subsection is no greater than the number of operating rooms, 
     procedure rooms, and beds for which the hospital is licensed 
     as of such date.
       ``(C) Preventing conflicts of interest.--
       ``(i) The hospital submits to the Secretary an annual 
     report containing a detailed description of--

       ``(I) the identity of each physician owner or investor and 
     any other owners or investors of the hospital; and
       ``(II) the nature and extent of all ownership and 
     investment interests in the hospital.

       ``(ii) The hospital has procedures in place to require that 
     any referring physician owner or investor discloses to the 
     patient being referred, by a time that permits the patient to 
     make a meaningful decision regarding the receipt of care, as 
     determined by the Secretary--

       ``(I) the ownership or investment interest, as applicable, 
     of such referring physician in the hospital; and
       ``(II) if applicable, any such ownership or investment 
     interest of the treating physician.

       ``(iii) The hospital does not condition any physician 
     ownership or investment interests either directly or 
     indirectly on the physician owner or investor making or 
     influencing referrals to the hospital or otherwise generating 
     business for the hospital.
       ``(iv) The hospital discloses the fact that the hospital is 
     partially owned or invested in by physicians--

       ``(I) on any public website for the hospital; and
       ``(II) in any public advertising for the hospital.

       ``(D) Ensuring bona fide investment.--
       ``(i) The percentage of the total value of the ownership or 
     investment interests held in the hospital, or in an entity 
     whose assets include the hospital, by physician owners or 
     investors in the aggregate does not exceed such percentage as 
     of the date of enactment of this subsection.
       ``(ii) Any ownership or investment interests that the 
     hospital offers to a physician owner or investor are not 
     offered on more favorable terms than the terms offered to a 
     person who is not a physician owner or investor.
       ``(iii) The hospital (or any owner or investor in the 
     hospital) does not directly or indirectly provide loans or 
     financing for any investment in the hospital by a physician 
     owner or investor.
       ``(iv) The hospital (or any owner or investor in the 
     hospital) does not directly or indirectly guarantee a loan, 
     make a payment toward a loan, or otherwise subsidize a loan, 
     for any individual physician owner or investor or group of 
     physician owners or investors that is related to acquiring 
     any ownership or investment interest in the hospital.
       ``(v) Ownership or investment returns are distributed to 
     each owner or investor in the hospital in an amount that is 
     directly proportional to the ownership or investment interest 
     of such owner or investor in the hospital.
       ``(vi) Physician owners and investors do not receive, 
     directly or indirectly, any guaranteed receipt of or right to 
     purchase other business interests related to the hospital, 
     including the purchase or lease of any property under the 
     control of other owners or investors in the hospital or 
     located near the premises of the hospital.
       ``(vii) The hospital does not offer a physician owner or 
     investor the opportunity to purchase or lease any property 
     under the control of the hospital or any other owner or 
     investor in the hospital on more favorable terms than the 
     terms offered to an individual who is not a physician owner 
     or investor.
       ``(E) Patient safety.--
       ``(i) Insofar as the hospital admits a patient and does not 
     have any physician available on the premises to provide 
     services during all hours in which the hospital is providing 
     services to such patient, before admitting the patient--

       ``(I) the hospital discloses such fact to a patient; and
       ``(II) following such disclosure, the hospital receives 
     from the patient a signed acknowledgment that the patient 
     understands such fact.

       ``(ii) The hospital has the capacity to--

       ``(I) provide assessment and initial treatment for 
     patients; and
       ``(II) refer and transfer patients to hospitals with the 
     capability to treat the needs of the patient involved.

       ``(F) Limitation on application to certain converted 
     facilities.--The hospital was not converted from an 
     ambulatory surgical center to a hospital on or after the date 
     of enactment of this subsection.
       ``(2) Publication of information reported.--The Secretary 
     shall publish, and update on an annual basis, the information 
     submitted by hospitals under paragraph (1)(C)(i) on the 
     public Internet website of the Centers for Medicare & 
     Medicaid Services.
       ``(3) Exception to prohibition on expansion of facility 
     capacity.--
       ``(A) Process.--
       ``(i) Establishment.--The Secretary shall establish and 
     implement a process under which an applicable hospital (as 
     defined in subparagraph (E)) may apply for an exception from 
     the requirement under paragraph (1)(B).
       ``(ii) Opportunity for community input.--The process under 
     clause (i) shall provide individuals and entities in the 
     community in which the applicable hospital applying for an 
     exception is located with the opportunity to provide input 
     with respect to the application.
       ``(iii) Timing for implementation.--The Secretary shall 
     implement the process under clause (i) on August 1, 2011.
       ``(iv) Regulations.--Not later than July 1, 2011, the 
     Secretary shall promulgate regulations to carry out the 
     process under clause (i).
       ``(B) Frequency.--The process described in subparagraph (A) 
     shall permit an applicable hospital to apply for an exception 
     up to once every 2 years.
       ``(C) Permitted increase.--
       ``(i) In general.--Subject to clause (ii) and subparagraph 
     (D), an applicable hospital granted an exception under the 
     process described in subparagraph (A) may increase the number 
     of operating rooms, procedure rooms, and beds for which the 
     applicable hospital is licensed above the baseline number of 
     operating rooms, procedure rooms, and beds of the applicable 
     hospital (or, if the applicable hospital has been granted a 
     previous exception under this paragraph, above the number of 
     operating rooms, procedure rooms, and beds for which the 
     hospital is licensed after the application of the most recent 
     increase under such an exception).
       ``(ii) 100 percent increase limitation.--The Secretary 
     shall not permit an increase in the number of operating 
     rooms, procedure rooms, and beds for which an applicable 
     hospital is licensed under clause (i) to the extent such 
     increase would result in the number of operating rooms, 
     procedure rooms, and beds for which the applicable hospital 
     is licensed exceeding 200 percent of the baseline number of 
     operating rooms, procedure rooms, and beds of the applicable 
     hospital.
       ``(iii) Baseline number of operating rooms, procedure 
     rooms, and beds.--In this paragraph, the term `baseline 
     number of operating rooms, procedure rooms, and beds' means 
     the number of operating rooms, procedure rooms, and beds for 
     which the applicable hospital is licensed as of the date of 
     enactment of this subsection.
       ``(D) Increase limited to facilities on the main campus of 
     the hospital.--Any increase in the number of operating rooms, 
     procedure rooms, and beds for which an applicable hospital is 
     licensed pursuant to this paragraph may only occur in 
     facilities on the main campus of the applicable hospital.
       ``(E) Applicable hospital.--In this paragraph, the term 
     `applicable hospital' means a hospital--
       ``(i) that is located in a county in which the percentage 
     increase in the population during the most recent 5-year 
     period (as of the date of the application under subparagraph 
     (A)) is at least 150 percent of the percentage increase in 
     the population growth of the State in which the hospital is 
     located during that period, as estimated by Bureau of the 
     Census;
       ``(ii) whose annual percent of total inpatient admissions 
     that represent inpatient admissions under the program under 
     title XIX is equal to or greater than the average percent 
     with respect to such admissions for all hospitals located in 
     the county in which the hospital is located;
       ``(iii) that does not discriminate against beneficiaries of 
     Federal health care programs and does not permit physicians 
     practicing at the hospital to discriminate against such 
     beneficiaries;
       ``(iv) that is located in a State in which the average bed 
     capacity in the State is less than the national average bed 
     capacity; and
       ``(v) that has an average bed occupancy rate that is 
     greater than the average bed occupancy rate in the State in 
     which the hospital is located.
       ``(F) Procedure rooms.--In this subsection, the term 
     `procedure rooms' includes rooms in which catheterizations, 
     angiographies, angiograms, and endoscopies are performed, 
     except such term shall not include emergency rooms or 
     departments (exclusive of rooms in which catheterizations, 
     angiographies, angiograms, and endoscopies are performed).
       ``(G) Publication of final decisions.--Not later than 60 
     days after receiving a complete application under this 
     paragraph, the Secretary shall publish in the Federal 
     Register the final decision with respect to such application.
       ``(H) Limitation on review.--There shall be no 
     administrative or judicial review under section 1869, section 
     1878, or otherwise of the

[[Page 28543]]

     process under this paragraph (including the establishment of 
     such process).
       ``(4) Collection of ownership and investment information.--
     For purposes of subparagraphs (A)(i) and (D)(i) of paragraph 
     (1), the Secretary shall collect physician ownership and 
     investment information for each hospital.
       ``(5) Physician owner or investor defined.--For purposes of 
     this subsection, the term `physician owner or investor' means 
     a physician (or an immediate family member of such physician) 
     with a direct or an indirect ownership or investment interest 
     in the hospital.
       ``(6) Clarification.--Nothing in this subsection shall be 
     construed as preventing the Secretary from revoking a 
     hospital's provider agreement if not in compliance with 
     regulations implementing section 1866.''.
       (b) Enforcement.--
       (1) Ensuring compliance.--The Secretary of Health and Human 
     Services shall establish policies and procedures to ensure 
     compliance with the requirements described in subsection 
     (i)(1) of section 1877 of the Social Security Act, as added 
     by subsection (a)(3), beginning on the date such requirements 
     first apply. Such policies and procedures may include 
     unannounced site reviews of hospitals.
       (2) Audits.--Beginning not later than November 1, 2011, the 
     Secretary of Health and Human Services shall conduct audits 
     to determine if hospitals violate the requirements referred 
     to in paragraph (1).

     SEC. 6002. TRANSPARENCY REPORTS AND REPORTING OF PHYSICIAN 
                   OWNERSHIP OR INVESTMENT INTERESTS.

       Part A of title XI of the Social Security Act (42 U.S.C. 
     1301 et seq.) is amended by inserting after section 1128F the 
     following new section:

     ``SEC. 1128G. TRANSPARENCY REPORTS AND REPORTING OF PHYSICIAN 
                   OWNERSHIP OR INVESTMENT INTERESTS.

       ``(a) Transparency Reports.--
       ``(1) Payments or other transfers of value.--
       ``(A) In general.--On March 31, 2013, and on the 90th day 
     of each calendar year beginning thereafter, any applicable 
     manufacturer that provides a payment or other transfer of 
     value to a covered recipient (or to an entity or individual 
     at the request of or designated on behalf of a covered 
     recipient), shall submit to the Secretary, in such electronic 
     form as the Secretary shall require, the following 
     information with respect to the preceding calendar year:
       ``(i) The name of the covered recipient.
       ``(ii) The business address of the covered recipient and, 
     in the case of a covered recipient who is a physician, the 
     specialty and National Provider Identifier of the covered 
     recipient.
       ``(iii) The amount of the payment or other transfer of 
     value.
       ``(iv) The dates on which the payment or other transfer of 
     value was provided to the covered recipient.
       ``(v) A description of the form of the payment or other 
     transfer of value, indicated (as appropriate for all that 
     apply) as--

       ``(I) cash or a cash equivalent;
       ``(II) in-kind items or services;
       ``(III) stock, a stock option, or any other ownership 
     interest, dividend, profit, or other return on investment; or
       ``(IV) any other form of payment or other transfer of value 
     (as defined by the Secretary).

       ``(vi) A description of the nature of the payment or other 
     transfer of value, indicated (as appropriate for all that 
     apply) as--

       ``(I) consulting fees;
       ``(II) compensation for services other than consulting;
       ``(III) honoraria;
       ``(IV) gift;
       ``(V) entertainment;
       ``(VI) food;
       ``(VII) travel (including the specified destinations);
       ``(VIII) education;
       ``(IX) research;
       ``(X) charitable contribution;
       ``(XI) royalty or license;
       ``(XII) current or prospective ownership or investment 
     interest;
       ``(XIII) direct compensation for serving as faculty or as a 
     speaker for a medical education program;
       ``(XIV) grant; or
       ``(XV) any other nature of the payment or other transfer of 
     value (as defined by the Secretary).

       ``(vii) If the payment or other transfer of value is 
     related to marketing, education, or research specific to a 
     covered drug, device, biological, or medical supply, the name 
     of that covered drug, device, biological, or medical supply.
       ``(viii) Any other categories of information regarding the 
     payment or other transfer of value the Secretary determines 
     appropriate.
       ``(B) Special rule for certain payments or other transfers 
     of value.--In the case where an applicable manufacturer 
     provides a payment or other transfer of value to an entity or 
     individual at the request of or designated on behalf of a 
     covered recipient, the applicable manufacturer shall disclose 
     that payment or other transfer of value under the name of the 
     covered recipient.
       ``(2) Physician ownership.--In addition to the requirement 
     under paragraph (1)(A), on March 31, 2013, and on the 90th 
     day of each calendar year beginning thereafter, any 
     applicable manufacturer or applicable group purchasing 
     organization shall submit to the Secretary, in such 
     electronic form as the Secretary shall require, the following 
     information regarding any ownership or investment interest 
     (other than an ownership or investment interest in a publicly 
     traded security and mutual fund, as described in section 
     1877(c)) held by a physician (or an immediate family member 
     of such physician (as defined for purposes of section 
     1877(a))) in the applicable manufacturer or applicable group 
     purchasing organization during the preceding year:
       ``(A) The dollar amount invested by each physician holding 
     such an ownership or investment interest.
       ``(B) The value and terms of each such ownership or 
     investment interest.
       ``(C) Any payment or other transfer of value provided to a 
     physician holding such an ownership or investment interest 
     (or to an entity or individual at the request of or 
     designated on behalf of a physician holding such an ownership 
     or investment interest), including the information described 
     in clauses (i) through (viii) of paragraph (1)(A), except 
     that in applying such clauses, `physician' shall be 
     substituted for `covered recipient' each place it appears.
       ``(D) Any other information regarding the ownership or 
     investment interest the Secretary determines appropriate.
       ``(b) Penalties for Noncompliance.--
       ``(1) Failure to report.--
       ``(A) In general.--Subject to subparagraph (B) except as 
     provided in paragraph (2), any applicable manufacturer or 
     applicable group purchasing organization that fails to submit 
     information required under subsection (a) in a timely manner 
     in accordance with rules or regulations promulgated to carry 
     out such subsection, shall be subject to a civil money 
     penalty of not less than $1,000, but not more than $10,000, 
     for each payment or other transfer of value or ownership or 
     investment interest not reported as required under such 
     subsection. Such penalty shall be imposed and collected in 
     the same manner as civil money penalties under subsection (a) 
     of section 1128A are imposed and collected under that 
     section.
       ``(B) Limitation.--The total amount of civil money 
     penalties imposed under subparagraph (A) with respect to each 
     annual submission of information under subsection (a) by an 
     applicable manufacturer or applicable group purchasing 
     organization shall not exceed $150,000.
       ``(2) Knowing failure to report.--
       ``(A) In general.--Subject to subparagraph (B), any 
     applicable manufacturer or applicable group purchasing 
     organization that knowingly fails to submit information 
     required under subsection (a) in a timely manner in 
     accordance with rules or regulations promulgated to carry out 
     such subsection, shall be subject to a civil money penalty of 
     not less than $10,000, but not more than $100,000, for each 
     payment or other transfer of value or ownership or investment 
     interest not reported as required under such subsection. Such 
     penalty shall be imposed and collected in the same manner as 
     civil money penalties under subsection (a) of section 1128A 
     are imposed and collected under that section.
       ``(B) Limitation.--The total amount of civil money 
     penalties imposed under subparagraph (A) with respect to each 
     annual submission of information under subsection (a) by an 
     applicable manufacturer or applicable group purchasing 
     organization shall not exceed $1,000,000.
       ``(3) Use of funds.--Funds collected by the Secretary as a 
     result of the imposition of a civil money penalty under this 
     subsection shall be used to carry out this section.
       ``(c) Procedures for Submission of Information and Public 
     Availability.--
       ``(1) In general.--
       ``(A) Establishment.--Not later than October 1, 2011, the 
     Secretary shall establish procedures--
       ``(i) for applicable manufacturers and applicable group 
     purchasing organizations to submit information to the 
     Secretary under subsection (a); and
       ``(ii) for the Secretary to make such information submitted 
     available to the public.
       ``(B) Definition of terms.--The procedures established 
     under subparagraph (A) shall provide for the definition of 
     terms (other than those terms defined in subsection (e)), as 
     appropriate, for purposes of this section.
       ``(C) Public availability.--Except as provided in 
     subparagraph (E), the procedures established under 
     subparagraph (A)(ii) shall ensure that, not later than 
     September 30, 2013, and on June 30 of each calendar year 
     beginning thereafter, the information submitted under 
     subsection (a) with respect to the preceding calendar year is 
     made available through an Internet website that--
       ``(i) is searchable and is in a format that is clear and 
     understandable;
       ``(ii) contains information that is presented by the name 
     of the applicable manufacturer or applicable group purchasing 
     organization, the name of the covered recipient, the business 
     address of the covered recipient, the specialty of the 
     covered recipient, the value of the payment or other transfer 
     of value, the date on which the payment

[[Page 28544]]

     or other transfer of value was provided to the covered 
     recipient, the form of the payment or other transfer of 
     value, indicated (as appropriate) under subsection 
     (a)(1)(A)(v), the nature of the payment or other transfer of 
     value, indicated (as appropriate) under subsection 
     (a)(1)(A)(vi), and the name of the covered drug, device, 
     biological, or medical supply, as applicable;
       ``(iii) contains information that is able to be easily 
     aggregated and downloaded;
       ``(iv) contains a description of any enforcement actions 
     taken to carry out this section, including any penalties 
     imposed under subsection (b), during the preceding year;
       ``(v) contains background information on industry-physician 
     relationships;
       ``(vi) in the case of information submitted with respect to 
     a payment or other transfer of value described in 
     subparagraph (E)(i), lists such information separately from 
     the other information submitted under subsection (a) and 
     designates such separately listed information as funding for 
     clinical research;
       ``(vii) contains any other information the Secretary 
     determines would be helpful to the average consumer;
       ``(viii) does not contain the National Provider Identifier 
     of the covered recipient, and
       ``(ix) subject to subparagraph (D), provides the applicable 
     manufacturer, applicable group purchasing organization, or 
     covered recipient an opportunity to review and submit 
     corrections to the information submitted with respect to the 
     applicable manufacturer, applicable group purchasing 
     organization, or covered recipient, respectively, for a 
     period of not less than 45 days prior to such information 
     being made available to the public.
       ``(D) Clarification of time period for review and 
     corrections.--In no case may the 45-day period for review and 
     submission of corrections to information under subparagraph 
     (C)(ix) prevent such information from being made available to 
     the public in accordance with the dates described in the 
     matter preceding clause (i) in subparagraph (C).
       ``(E) Delayed publication for payments made pursuant to 
     product research or development agreements and clinical 
     investigations.--
       ``(i) In general.--In the case of information submitted 
     under subsection (a) with respect to a payment or other 
     transfer of value made to a covered recipient by an 
     applicable manufacturer pursuant to a product research or 
     development agreement for services furnished in connection 
     with research on a potential new medical technology or a new 
     application of an existing medical technology or the 
     development of a new drug, device, biological, or medical 
     supply, or by an applicable manufacturer in connection with a 
     clinical investigation regarding a new drug, device, 
     biological, or medical supply, the procedures established 
     under subparagraph (A)(ii) shall provide that such 
     information is made available to the public on the first date 
     described in the matter preceding clause (i) in subparagraph 
     (C) after the earlier of the following:

       ``(I) The date of the approval or clearance of the covered 
     drug, device, biological, or medical supply by the Food and 
     Drug Administration.
       ``(II) Four calendar years after the date such payment or 
     other transfer of value was made.

       ``(ii) Confidentiality of information prior to 
     publication.--Information described in clause (i) shall be 
     considered confidential and shall not be subject to 
     disclosure under section 552 of title 5, United States Code, 
     or any other similar Federal, State, or local law, until on 
     or after the date on which the information is made available 
     to the public under such clause.
       ``(2) Consultation.--In establishing the procedures under 
     paragraph (1), the Secretary shall consult with the Inspector 
     General of the Department of Health and Human Services, 
     affected industry, consumers, consumer advocates, and other 
     interested parties in order to ensure that the information 
     made available to the public under such paragraph is 
     presented in the appropriate overall context.
       ``(d) Annual Reports and Relation to State Laws.--
       ``(1) Annual report to congress.--Not later than April 1 of 
     each year beginning with 2013, the Secretary shall submit to 
     Congress a report that includes the following:
       ``(A) The information submitted under subsection (a) during 
     the preceding year, aggregated for each applicable 
     manufacturer and applicable group purchasing organization 
     that submitted such information during such year (except, in 
     the case of information submitted with respect to a payment 
     or other transfer of value described in subsection 
     (c)(1)(E)(i), such information shall be included in the first 
     report submitted to Congress after the date on which such 
     information is made available to the public under such 
     subsection).
       ``(B) A description of any enforcement actions taken to 
     carry out this section, including any penalties imposed under 
     subsection (b), during the preceding year.
       ``(2) Annual reports to states.--Not later than September 
     30, 2013 and on June 30 of each calendar year thereafter, the 
     Secretary shall submit to States a report that includes a 
     summary of the information submitted under subsection (a) 
     during the preceding year with respect to covered recipients 
     in the State (except, in the case of information submitted 
     with respect to a payment or other transfer of value 
     described in subsection (c)(1)(E)(i), such information shall 
     be included in the first report submitted to States after the 
     date on which such information is made available to the 
     public under such subsection).
       ``(3) Relation to state laws.--
       ``(A) In general.--In the case of a payment or other 
     transfer of value provided by an applicable manufacturer that 
     is received by a covered recipient (as defined in subsection 
     (e)) on or after January 1, 2012, subject to subparagraph 
     (B), the provisions of this section shall preempt any statute 
     or regulation of a State or of a political subdivision of a 
     State that requires an applicable manufacturer (as so 
     defined) to disclose or report, in any format, the type of 
     information (as described in subsection (a)) regarding such 
     payment or other transfer of value.
       ``(B) No preemption of additional requirements.--
     Subparagraph (A) shall not preempt any statute or regulation 
     of a State or of a political subdivision of a State that 
     requires the disclosure or reporting of information--
       ``(i) not of the type required to be disclosed or reported 
     under this section;
       ``(ii) described in subsection (e)(10)(B), except in the 
     case of information described in clause (i) of such 
     subsection;
       ``(iii) by any person or entity other than an applicable 
     manufacturer (as so defined) or a covered recipient (as 
     defined in subsection (e)); or
       ``(iv) to a Federal, State, or local governmental agency 
     for public health surveillance, investigation, or other 
     public health purposes or health oversight purposes.
       ``(C) Nothing in subparagraph (A) shall be construed to 
     limit the discovery or admissibility of information described 
     in such subparagraph in a criminal, civil, or administrative 
     proceeding.
       ``(4) Consultation.--The Secretary shall consult with the 
     Inspector General of the Department of Health and Human 
     Services on the implementation of this section.
       ``(e) Definitions.--In this section:
       ``(1) Applicable group purchasing organization.--The term 
     `applicable group purchasing organization' means a group 
     purchasing organization (as defined by the Secretary) that 
     purchases, arranges for, or negotiates the purchase of a 
     covered drug, device, biological, or medical supply which is 
     operating in the United States, or in a territory, 
     possession, or commonwealth of the United States.
       ``(2) Applicable manufacturer.--The term `applicable 
     manufacturer' means a manufacturer of a covered drug, device, 
     biological, or medical supply which is operating in the 
     United States, or in a territory, possession, or commonwealth 
     of the United States.
       ``(3) Clinical investigation.--The term `clinical 
     investigation' means any experiment involving 1 or more human 
     subjects, or materials derived from human subjects, in which 
     a drug or device is administered, dispensed, or used.
       ``(4) Covered device.--The term `covered device' means any 
     device for which payment is available under title XVIII or a 
     State plan under title XIX or XXI (or a waiver of such a 
     plan).
       ``(5) Covered drug, device, biological, or medical 
     supply.--The term `covered drug, device, biological, or 
     medical supply' means any drug, biological product, device, 
     or medical supply for which payment is available under title 
     XVIII or a State plan under title XIX or XXI (or a waiver of 
     such a plan).
       ``(6) Covered recipient.--
       ``(A) In general.--Except as provided in subparagraph (B), 
     the term `covered recipient' means the following:
       ``(i) A physician.
       ``(ii) A teaching hospital.
       ``(B) Exclusion.--Such term does not include a physician 
     who is an employee of the applicable manufacturer that is 
     required to submit information under subsection (a).
       ``(7) Employee.--The term `employee' has the meaning given 
     such term in section 1877(h)(2).
       ``(8) Knowingly.--The term `knowingly' has the meaning 
     given such term in section 3729(b) of title 31, United States 
     Code.
       ``(9) Manufacturer of a covered drug, device, biological, 
     or medical supply.--The term `manufacturer of a covered drug, 
     device, biological, or medical supply' means any entity which 
     is engaged in the production, preparation, propagation, 
     compounding, or conversion of a covered drug, device, 
     biological, or medical supply (or any entity under common 
     ownership with such entity which provides assistance or 
     support to such entity with respect to the production, 
     preparation, propagation, compounding, conversion, marketing, 
     promotion, sale, or distribution of a covered drug, device, 
     biological, or medical supply).
       ``(10) Payment or other transfer of value.--
       ``(A) In general.--The term `payment or other transfer of 
     value' means a transfer of anything of value. Such term does 
     not include a transfer of anything of value that is made 
     indirectly to a covered recipient

[[Page 28545]]

     through a third party in connection with an activity or 
     service in the case where the applicable manufacturer is 
     unaware of the identity of the covered recipient.
       ``(B) Exclusions.--An applicable manufacturer shall not be 
     required to submit information under subsection (a) with 
     respect to the following:
       ``(i) A transfer of anything the value of which is less 
     than $10, unless the aggregate amount transferred to, 
     requested by, or designated on behalf of the covered 
     recipient by the applicable manufacturer during the calendar 
     year exceeds $100. For calendar years after 2012, the dollar 
     amounts specified in the preceding sentence shall be 
     increased by the same percentage as the percentage increase 
     in the consumer price index for all urban consumers (all 
     items; U.S. city average) for the 12-month period ending with 
     June of the previous year.
       ``(ii) Product samples that are not intended to be sold and 
     are intended for patient use.
       ``(iii) Educational materials that directly benefit 
     patients or are intended for patient use.
       ``(iv) The loan of a covered device for a short-term trial 
     period, not to exceed 90 days, to permit evaluation of the 
     covered device by the covered recipient.
       ``(v) Items or services provided under a contractual 
     warranty, including the replacement of a covered device, 
     where the terms of the warranty are set forth in the purchase 
     or lease agreement for the covered device.
       ``(vi) A transfer of anything of value to a covered 
     recipient when the covered recipient is a patient and not 
     acting in the professional capacity of a covered recipient.
       ``(vii) Discounts (including rebates).
       ``(viii) In-kind items used for the provision of charity 
     care.
       ``(ix) A dividend or other profit distribution from, or 
     ownership or investment interest in, a publicly traded 
     security and mutual fund (as described in section 1877(c)).
       ``(x) In the case of an applicable manufacturer who offers 
     a self-insured plan, payments for the provision of health 
     care to employees under the plan.
       ``(xi) In the case of a covered recipient who is a licensed 
     non-medical professional, a transfer of anything of value to 
     the covered recipient if the transfer is payment solely for 
     the non-medical professional services of such licensed non-
     medical professional.
       ``(xii) In the case of a covered recipient who is a 
     physician, a transfer of anything of value to the covered 
     recipient if the transfer is payment solely for the services 
     of the covered recipient with respect to a civil or criminal 
     action or an administrative proceeding.
       ``(11) Physician.--The term `physician' has the meaning 
     given that term in section 1861(r).''.

     SEC. 6003. DISCLOSURE REQUIREMENTS FOR IN-OFFICE ANCILLARY 
                   SERVICES EXCEPTION TO THE PROHIBITION ON 
                   PHYSICIAN SELF-REFERRAL FOR CERTAIN IMAGING 
                   SERVICES.

       (a) In General.--Section 1877(b)(2) of the Social Security 
     Act (42 U.S.C. 1395nn(b)(2)) is amended by adding at the end 
     the following new sentence: ``Such requirements shall, with 
     respect to magnetic resonance imaging, computed tomography, 
     positron emission tomography, and any other designated health 
     services specified under subsection (h)(6)(D) that the 
     Secretary determines appropriate, include a requirement that 
     the referring physician inform the individual in writing at 
     the time of the referral that the individual may obtain the 
     services for which the individual is being referred from a 
     person other than a person described in subparagraph (A)(i) 
     and provide such individual with a written list of suppliers 
     (as defined in section 1861(d)) who furnish such services in 
     the area in which such individual resides.''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to services furnished on or after January 1, 
     2010.

     SEC. 6004. PRESCRIPTION DRUG SAMPLE TRANSPARENCY.

       Part A of title XI of the Social Security Act (42 U.S.C. 
     1301 et seq.), as amended by section 6002, is amended by 
     inserting after section 1128G the following new section:

     ``SEC. 1128H. REPORTING OF INFORMATION RELATING TO DRUG 
                   SAMPLES.

       ``(a) In General.--Not later than April 1 of each year 
     (beginning with 2012), each manufacturer and authorized 
     distributor of record of an applicable drug shall submit to 
     the Secretary (in a form and manner specified by the 
     Secretary) the following information with respect to the 
     preceding year:
       ``(1) In the case of a manufacturer or authorized 
     distributor of record which makes distributions by mail or 
     common carrier under subsection (d)(2) of section 503 of the 
     Federal Food, Drug, and Cosmetic Act (21 U.S.C. 353), the 
     identity and quantity of drug samples requested and the 
     identity and quantity of drug samples distributed under such 
     subsection during that year, aggregated by--
       ``(A) the name, address, professional designation, and 
     signature of the practitioner making the request under 
     subparagraph (A)(i) of such subsection, or of any individual 
     who makes or signs for the request on behalf of the 
     practitioner; and
       ``(B) any other category of information determined 
     appropriate by the Secretary.
       ``(2) In the case of a manufacturer or authorized 
     distributor of record which makes distributions by means 
     other than mail or common carrier under subsection (d)(3) of 
     such section 503, the identity and quantity of drug samples 
     requested and the identity and quantity of drug samples 
     distributed under such subsection during that year, 
     aggregated by--
       ``(A) the name, address, professional designation, and 
     signature of the practitioner making the request under 
     subparagraph (A)(i) of such subsection, or of any individual 
     who makes or signs for the request on behalf of the 
     practitioner; and
       ``(B) any other category of information determined 
     appropriate by the Secretary.
       ``(b) Definitions.--In this section:
       ``(1) Applicable drug.--The term `applicable drug' means a 
     drug--
       ``(A) which is subject to subsection (b) of such section 
     503; and
       ``(B) for which payment is available under title XVIII or a 
     State plan under title XIX or XXI (or a waiver of such a 
     plan).
       ``(2) Authorized distributor of record.--The term 
     `authorized distributor of record' has the meaning given that 
     term in subsection (e)(3)(A) of such section.
       ``(3) Manufacturer.--The term `manufacturer' has the 
     meaning given that term for purposes of subsection (d) of 
     such section.''.

     SEC. 6005. PHARMACY BENEFIT MANAGERS TRANSPARENCY 
                   REQUIREMENTS.

       Part A of title XI of the Social Security Act (42 U.S.C. 
     1301 et seq.) is amended by inserting after section 1150 the 
     following new section:

     ``SEC. 1150A. PHARMACY BENEFIT MANAGERS TRANSPARENCY 
                   REQUIREMENTS.

       ``(a) Provision of Information.--A health benefits plan or 
     any entity that provides pharmacy benefits management 
     services on behalf of a health benefits plan (in this section 
     referred to as a `PBM') that manages prescription drug 
     coverage under a contract with--
       ``(1) a PDP sponsor of a prescription drug plan or an MA 
     organization offering an MA-PD plan under part D of title 
     XVIII; or
       ``(2) a qualified health benefits plan offered through an 
     exchange established by a State under section 1311 of the 
     Patient Protection and Affordable Care Act,
     shall provide the information described in subsection (b) to 
     the Secretary and, in the case of a PBM, to the plan with 
     which the PBM is under contract with, at such times, and in 
     such form and manner, as the Secretary shall specify.
       ``(b) Information Described.--The information described in 
     this subsection is the following with respect to services 
     provided by a health benefits plan or PBM for a contract 
     year:
       ``(1) The percentage of all prescriptions that were 
     provided through retail pharmacies compared to mail order 
     pharmacies, and the percentage of prescriptions for which a 
     generic drug was available and dispensed (generic dispensing 
     rate), by pharmacy type (which includes an independent 
     pharmacy, chain pharmacy, supermarket pharmacy, or mass 
     merchandiser pharmacy that is licensed as a pharmacy by the 
     State and that dispenses medication to the general public), 
     that is paid by the health benefits plan or PBM under the 
     contract.
       ``(2) The aggregate amount, and the type of rebates, 
     discounts, or price concessions (excluding bona fide service 
     fees, which include but are not limited to distribution 
     service fees, inventory management fees, product stocking 
     allowances, and fees associated with administrative services 
     agreements and patient care programs (such as medication 
     compliance programs and patient education programs))that the 
     PBM negotiates that are attributable to patient utilization 
     under the plan, and the aggregate amount of the rebates, 
     discounts, or price concessions that are passed through to 
     the plan sponsor, and the total number of prescriptions that 
     were dispensed.
       ``(3) The aggregate amount of the difference between the 
     amount the health benefits plan pays the PBM and the amount 
     that the PBM pays retail pharmacies, and mail order 
     pharmacies, and the total number of prescriptions that were 
     dispensed.
       ``(c) Confidentiality.--Information disclosed by a health 
     benefits plan or PBM under this section is confidential and 
     shall not be disclosed by the Secretary or by a plan 
     receiving the information, except that the Secretary may 
     disclose the information in a form which does not disclose 
     the identity of a specific PBM, plan, or prices charged for 
     drugs, for the following purposes:
       ``(1) As the Secretary determines to be necessary to carry 
     out this section or part D of title XVIII.
       ``(2) To permit the Comptroller General to review the 
     information provided.
       ``(3) To permit the Director of the Congressional Budget 
     Office to review the information provided.
       ``(4) To States to carry out section 1311 of the Patient 
     Protection and Affordable Care Act.
       ``(d) Penalties.--The provisions of subsection (b)(3)(C) of 
     section 1927 shall apply to a health benefits plan or PBM 
     that fails to provide information required under subsection 
     (a) on a timely basis or that knowingly provides false 
     information in the same

[[Page 28546]]

     manner as such provisions apply to a manufacturer with an 
     agreement under that section.''.

         Subtitle B--Nursing Home Transparency and Improvement

             PART I--IMPROVING TRANSPARENCY OF INFORMATION

     SEC. 6101. REQUIRED DISCLOSURE OF OWNERSHIP AND ADDITIONAL 
                   DISCLOSABLE PARTIES INFORMATION.

       (a) In General.--Section 1124 of the Social Security Act 
     (42 U.S.C. 1320a-3) is amended by adding at the end the 
     following new subsection:
       ``(c) Required Disclosure of Ownership and Additional 
     Disclosable Parties Information.--
       ``(1) Disclosure.--A facility shall have the information 
     described in paragraph (2) available--
       ``(A) during the period beginning on the date of the 
     enactment of this subsection and ending on the date such 
     information is made available to the public under section 
     6101(b) of the Patient Protection and Affordable Care Act for 
     submission to the Secretary, the Inspector General of the 
     Department of Health and Human Services, the State in which 
     the facility is located, and the State long-term care 
     ombudsman in the case where the Secretary, the Inspector 
     General, the State, or the State long-term care ombudsman 
     requests such information; and
       ``(B) beginning on the effective date of the final 
     regulations promulgated under paragraph (3)(A), for reporting 
     such information in accordance with such final regulations.
     Nothing in subparagraph (A) shall be construed as authorizing 
     a facility to dispose of or delete information described in 
     such subparagraph after the effective date of the final 
     regulations promulgated under paragraph (3)(A).
       ``(2) Information described.--
       ``(A) In general.--The following information is described 
     in this paragraph:
       ``(i) The information described in subsections (a) and (b), 
     subject to subparagraph (C).
       ``(ii) The identity of and information on--

       ``(I) each member of the governing body of the facility, 
     including the name, title, and period of service of each such 
     member;
       ``(II) each person or entity who is an officer, director, 
     member, partner, trustee, or managing employee of the 
     facility, including the name, title, and period of service of 
     each such person or entity; and
       ``(III) each person or entity who is an additional 
     disclosable party of the facility.

       ``(iii) The organizational structure of each additional 
     disclosable party of the facility and a description of the 
     relationship of each such additional disclosable party to the 
     facility and to one another.
       ``(B) Special rule where information is already reported or 
     submitted.--To the extent that information reported by a 
     facility to the Internal Revenue Service on Form 990, 
     information submitted by a facility to the Securities and 
     Exchange Commission, or information otherwise submitted to 
     the Secretary or any other Federal agency contains the 
     information described in clauses (i), (ii), or (iii) of 
     subparagraph (A), the facility may provide such Form or such 
     information submitted to meet the requirements of paragraph 
     (1).
       ``(C) Special rule.--In applying subparagraph (A)(i)--
       ``(i) with respect to subsections (a) and (b), `ownership 
     or control interest' shall include direct or indirect 
     interests, including such interests in intermediate entities; 
     and
       ``(ii) subsection (a)(3)(A)(ii) shall include the owner of 
     a whole or part interest in any mortgage, deed of trust, 
     note, or other obligation secured, in whole or in part, by 
     the entity or any of the property or assets thereof, if the 
     interest is equal to or exceeds 5 percent of the total 
     property or assets of the entirety.
       ``(3) Reporting.--
       ``(A) In general.--Not later than the date that is 2 years 
     after the date of the enactment of this subsection, the 
     Secretary shall promulgate final regulations requiring, 
     effective on the date that is 90 days after the date on which 
     such final regulations are published in the Federal Register, 
     a facility to report the information described in paragraph 
     (2) to the Secretary in a standardized format, and such other 
     regulations as are necessary to carry out this subsection. 
     Such final regulations shall ensure that the facility 
     certifies, as a condition of participation and payment under 
     the program under title XVIII or XIX, that the information 
     reported by the facility in accordance with such final 
     regulations is, to the best of the facility's knowledge, 
     accurate and current.
       ``(B) Guidance.--The Secretary shall provide guidance and 
     technical assistance to States on how to adopt the 
     standardized format under subparagraph (A).
       ``(4) No effect on existing reporting requirements.--
     Nothing in this subsection shall reduce, diminish, or alter 
     any reporting requirement for a facility that is in effect as 
     of the date of the enactment of this subsection.
       ``(5) Definitions.--In this subsection:
       ``(A) Additional disclosable party.--The term `additional 
     disclosable party' means, with respect to a facility, any 
     person or entity who--
       ``(i) exercises operational, financial, or managerial 
     control over the facility or a part thereof, or provides 
     policies or procedures for any of the operations of the 
     facility, or provides financial or cash management services 
     to the facility;
       ``(ii) leases or subleases real property to the facility, 
     or owns a whole or part interest equal to or exceeding 5 
     percent of the total value of such real property; or
       ``(iii) provides management or administrative services, 
     management or clinical consulting services, or accounting or 
     financial services to the facility.
       ``(B) Facility.--The term `facility' means a disclosing 
     entity which is--
       ``(i) a skilled nursing facility (as defined in section 
     1819(a)); or
       ``(ii) a nursing facility (as defined in section 1919(a)).
       ``(C) Managing employee.--The term `managing employee' 
     means, with respect to a facility, an individual (including a 
     general manager, business manager, administrator, director, 
     or consultant) who directly or indirectly manages, advises, 
     or supervises any element of the practices, finances, or 
     operations of the facility.
       ``(D) Organizational structure.--The term `organizational 
     structure' means, in the case of--
       ``(i) a corporation, the officers, directors, and 
     shareholders of the corporation who have an ownership 
     interest in the corporation which is equal to or exceeds 5 
     percent;
       ``(ii) a limited liability company, the members and 
     managers of the limited liability company (including, as 
     applicable, what percentage each member and manager has of 
     the ownership interest in the limited liability company);
       ``(iii) a general partnership, the partners of the general 
     partnership;
       ``(iv) a limited partnership, the general partners and any 
     limited partners of the limited partnership who have an 
     ownership interest in the limited partnership which is equal 
     to or exceeds 10 percent;
       ``(v) a trust, the trustees of the trust;
       ``(vi) an individual, contact information for the 
     individual; and
       ``(vii) any other person or entity, such information as the 
     Secretary determines appropriate.''.
       (b) Public Availability of Information.--Not later than the 
     date that is 1 year after the date on which the final 
     regulations promulgated under section 1124(c)(3)(A) of the 
     Social Security Act, as added by subsection (a), are 
     published in the Federal Register, the Secretary of Health 
     and Human Services shall make the information reported in 
     accordance with such final regulations available to the 
     public in accordance with procedures established by the 
     Secretary.
       (c) Conforming Amendments.--
       (1) In general.--
       (A) Skilled nursing facilities.--Section 1819(d)(1) of the 
     Social Security Act (42 U.S.C. 1395i-3(d)(1)) is amended by 
     striking subparagraph (B) and redesignating subparagraph (C) 
     as subparagraph (B).
       (B) Nursing facilities.--Section 1919(d)(1) of the Social 
     Security Act (42 U.S.C. 1396r(d)(1)) is amended by striking 
     subparagraph (B) and redesignating subparagraph (C) as 
     subparagraph (B).
       (2) Effective date.--The amendments made by paragraph (1) 
     shall take effect on the date on which the Secretary makes 
     the information described in subsection (b)(1) available to 
     the public under such subsection.

     SEC. 6102. ACCOUNTABILITY REQUIREMENTS FOR SKILLED NURSING 
                   FACILITIES AND NURSING FACILITIES.

       Part A of title XI of the Social Security Act (42 U.S.C. 
     1301 et seq.), as amended by sections 6002 and 6004, is 
     amended by inserting after section 1128H the following new 
     section:

     ``SEC. 1128I. ACCOUNTABILITY REQUIREMENTS FOR FACILITIES.

       ``(a) Definition of Facility.--In this section, the term 
     `facility' means--
       ``(1) a skilled nursing facility (as defined in section 
     1819(a)); or
       ``(2) a nursing facility (as defined in section 1919(a)).
       ``(b) Effective Compliance and Ethics Programs.--
       ``(1) Requirement.--On or after the date that is 36 months 
     after the date of the enactment of this section, a facility 
     shall, with respect to the entity that operates the facility 
     (in this subparagraph referred to as the `operating 
     organization' or `organization'), have in operation a 
     compliance and ethics program that is effective in preventing 
     and detecting criminal, civil, and administrative violations 
     under this Act and in promoting quality of care consistent 
     with regulations developed under paragraph (2).
       ``(2) Development of regulations.--
       ``(A) In general.--Not later than the date that is 2 years 
     after such date of the enactment, the Secretary, working 
     jointly with the Inspector General of the Department of 
     Health and Human Services, shall promulgate regulations for 
     an effective compliance and ethics program for operating 
     organizations, which may include a model compliance program.
       ``(B)  Design of regulations.--Such regulations with 
     respect to specific elements or formality of a program shall, 
     in the case of

[[Page 28547]]

     an organization that operates 5 or more facilities, vary with 
     the size of the organization, such that larger organizations 
     should have a more formal program and include established 
     written policies defining the standards and procedures to be 
     followed by its employees. Such requirements may specifically 
     apply to the corporate level management of multi unit nursing 
     home chains.
       ``(C) Evaluation.--Not later than 3 years after the date of 
     the promulgation of regulations under this paragraph, the 
     Secretary shall complete an evaluation of the compliance and 
     ethics programs required to be established under this 
     subsection. Such evaluation shall determine if such programs 
     led to changes in deficiency citations, changes in quality 
     performance, or changes in other metrics of patient quality 
     of care. The Secretary shall submit to Congress a report on 
     such evaluation and shall include in such report such 
     recommendations regarding changes in the requirements for 
     such programs as the Secretary determines appropriate.
       ``(3) Requirements for compliance and ethics programs.--In 
     this subsection, the term `compliance and ethics program' 
     means, with respect to a facility, a program of the operating 
     organization that--
       ``(A) has been reasonably designed, implemented, and 
     enforced so that it generally will be effective in preventing 
     and detecting criminal, civil, and administrative violations 
     under this Act and in promoting quality of care; and
       ``(B) includes at least the required components specified 
     in paragraph (4).
       ``(4) Required components of program.--The required 
     components of a compliance and ethics program of an operating 
     organization are the following:
       ``(A) The organization must have established compliance 
     standards and procedures to be followed by its employees and 
     other agents that are reasonably capable of reducing the 
     prospect of criminal, civil, and administrative violations 
     under this Act.
       ``(B) Specific individuals within high-level personnel of 
     the organization must have been assigned overall 
     responsibility to oversee compliance with such standards and 
     procedures and have sufficient resources and authority to 
     assure such compliance.
       ``(C) The organization must have used due care not to 
     delegate substantial discretionary authority to individuals 
     whom the organization knew, or should have known through the 
     exercise of due diligence, had a propensity to engage in 
     criminal, civil, and administrative violations under this 
     Act.
       ``(D) The organization must have taken steps to communicate 
     effectively its standards and procedures to all employees and 
     other agents, such as by requiring participation in training 
     programs or by disseminating publications that explain in a 
     practical manner what is required.
       ``(E) The organization must have taken reasonable steps to 
     achieve compliance with its standards, such as by utilizing 
     monitoring and auditing systems reasonably designed to detect 
     criminal, civil, and administrative violations under this Act 
     by its employees and other agents and by having in place and 
     publicizing a reporting system whereby employees and other 
     agents could report violations by others within the 
     organization without fear of retribution.
       ``(F) The standards must have been consistently enforced 
     through appropriate disciplinary mechanisms, including, as 
     appropriate, discipline of individuals responsible for the 
     failure to detect an offense.
       ``(G) After an offense has been detected, the organization 
     must have taken all reasonable steps to respond appropriately 
     to the offense and to prevent further similar offenses, 
     including any necessary modification to its program to 
     prevent and detect criminal, civil, and administrative 
     violations under this Act.
       ``(H) The organization must periodically undertake 
     reassessment of its compliance program to identify changes 
     necessary to reflect changes within the organization and its 
     facilities.
       ``(c) Quality Assurance and Performance Improvement 
     Program.--
       ``(1) In general.--Not later than December 31, 2011, the 
     Secretary shall establish and implement a quality assurance 
     and performance improvement program (in this subparagraph 
     referred to as the `QAPI program') for facilities, including 
     multi unit chains of facilities. Under the QAPI program, the 
     Secretary shall establish standards relating to quality 
     assurance and performance improvement with respect to 
     facilities and provide technical assistance to facilities on 
     the development of best practices in order to meet such 
     standards. Not later than 1 year after the date on which the 
     regulations are promulgated under paragraph (2), a facility 
     must submit to the Secretary a plan for the facility to meet 
     such standards and implement such best practices, including 
     how to coordinate the implementation of such plan with 
     quality assessment and assurance activities conducted under 
     sections 1819(b)(1)(B) and 1919(b)(1)(B), as applicable.
       ``(2) Regulations.--The Secretary shall promulgate 
     regulations to carry out this subsection.''.

     SEC. 6103. NURSING HOME COMPARE MEDICARE WEBSITE.

       (a) Skilled Nursing Facilities.--
       (1) In general.--Section 1819 of the Social Security Act 
     (42 U.S.C. 1395i-3) is amended--
       (A) by redesignating subsection (i) as subsection (j); and
       (B) by inserting after subsection (h) the following new 
     subsection:
       ``(i) Nursing Home Compare Website.--
       ``(1) Inclusion of additional information.--
       ``(A) In general.--The Secretary shall ensure that the 
     Department of Health and Human Services includes, as part of 
     the information provided for comparison of nursing homes on 
     the official Internet website of the Federal Government for 
     Medicare beneficiaries (commonly referred to as the `Nursing 
     Home Compare' Medicare website) (or a successor website), the 
     following information in a manner that is prominent, updated 
     on a timely basis, easily accessible, readily understandable 
     to consumers of long-term care services, and searchable:
       ``(i) Staffing data for each facility (including resident 
     census data and data on the hours of care provided per 
     resident per day) based on data submitted under section 
     1128I(g), including information on staffing turnover and 
     tenure, in a format that is clearly understandable to 
     consumers of long-term care services and allows such 
     consumers to compare differences in staffing between 
     facilities and State and national averages for the 
     facilities. Such format shall include--

       ``(I) concise explanations of how to interpret the data 
     (such as a plain English explanation of data reflecting 
     `nursing home staff hours per resident day');
       ``(II) differences in types of staff (such as training 
     associated with different categories of staff);
       ``(III) the relationship between nurse staffing levels and 
     quality of care; and
       ``(IV) an explanation that appropriate staffing levels vary 
     based on patient case mix.

       ``(ii) Links to State Internet websites with information 
     regarding State survey and certification programs, links to 
     Form 2567 State inspection reports (or a successor form) on 
     such websites, information to guide consumers in how to 
     interpret and understand such reports, and the facility plan 
     of correction or other response to such report. Any such 
     links shall be posted on a timely basis.
       ``(iii) The standardized complaint form developed under 
     section 1128I(f), including explanatory material on what 
     complaint forms are, how they are used, and how to file a 
     complaint with the State survey and certification program and 
     the State long-term care ombudsman program.
       ``(iv) Summary information on the number, type, severity, 
     and outcome of substantiated complaints.
       ``(v) The number of adjudicated instances of criminal 
     violations by a facility or the employees of a facility--

       ``(I) that were committed inside the facility;
       ``(II) with respect to such instances of violations or 
     crimes committed inside of the facility that were the 
     violations or crimes of abuse, neglect, and exploitation, 
     criminal sexual abuse, or other violations or crimes that 
     resulted in serious bodily injury; and
       ``(III) the number of civil monetary penalties levied 
     against the facility, employees, contractors, and other 
     agents.

       ``(B) Deadline for provision of information.--
       ``(i) In general.--Except as provided in clause (ii), the 
     Secretary shall ensure that the information described in 
     subparagraph (A) is included on such website (or a successor 
     website) not later than 1 year after the date of the 
     enactment of this subsection.
       ``(ii) Exception.--The Secretary shall ensure that the 
     information described in subparagraph (A)(i) is included on 
     such website (or a successor website) not later than the date 
     on which the requirements under section 1128I(g) are 
     implemented.
       ``(2) Review and modification of website.--
       ``(A) In general.--The Secretary shall establish a 
     process--
       ``(i) to review the accuracy, clarity of presentation, 
     timeliness, and comprehensiveness of information reported on 
     such website as of the day before the date of the enactment 
     of this subsection; and
       ``(ii) not later than 1 year after the date of the 
     enactment of this subsection, to modify or revamp such 
     website in accordance with the review conducted under clause 
     (i).
       ``(B) Consultation.--In conducting the review under 
     subparagraph (A)(i), the Secretary shall consult with--
       ``(i) State long-term care ombudsman programs;
       ``(ii) consumer advocacy groups;
       ``(iii) provider stakeholder groups; and
       ``(iv) any other representatives of programs or groups the 
     Secretary determines appropriate.''.
       (2) Timeliness of submission of survey and certification 
     information.--
       (A) In general.--Section 1819(g)(5) of the Social Security 
     Act (42 U.S.C. 1395i-3(g)(5)) is amended by adding at the end 
     the following new subparagraph:
       ``(E) Submission of survey and certification information to 
     the secretary.--In

[[Page 28548]]

     order to improve the timeliness of information made available 
     to the public under subparagraph (A) and provided on the 
     Nursing Home Compare Medicare website under subsection (i), 
     each State shall submit information respecting any survey or 
     certification made respecting a skilled nursing facility 
     (including any enforcement actions taken by the State) to the 
     Secretary not later than the date on which the State sends 
     such information to the facility. The Secretary shall use the 
     information submitted under the preceding sentence to update 
     the information provided on the Nursing Home Compare Medicare 
     website as expeditiously as practicable but not less 
     frequently than quarterly.''.
       (B) Effective date.--The amendment made by this paragraph 
     shall take effect 1 year after the date of the enactment of 
     this Act.
       (3) Special focus facility program.--Section 1819(f) of the 
     Social Security Act (42 U.S.C. 1395i-3(f)) is amended by 
     adding at the end the following new paragraph:
       ``(8) Special focus facility program.--
       ``(A) In general.--The Secretary shall conduct a special 
     focus facility program for enforcement of requirements for 
     skilled nursing facilities that the Secretary has identified 
     as having substantially failed to meet applicable requirement 
     of this Act.
       ``(B) Periodic surveys.--Under such program the Secretary 
     shall conduct surveys of each facility in the program not 
     less than once every 6 months.''.
       (b) Nursing Facilities.--
       (1) In general.--Section 1919 of the Social Security Act 
     (42 U.S.C. 1396r) is amended--
       (A) by redesignating subsection (i) as subsection (j); and
       (B) by inserting after subsection (h) the following new 
     subsection:
       ``(i) Nursing Home Compare Website.--
       ``(1) Inclusion of additional information.--
       ``(A) In general.--The Secretary shall ensure that the 
     Department of Health and Human Services includes, as part of 
     the information provided for comparison of nursing homes on 
     the official Internet website of the Federal Government for 
     Medicare beneficiaries (commonly referred to as the `Nursing 
     Home Compare' Medicare website) (or a successor website), the 
     following information in a manner that is prominent, updated 
     on a timely basis, easily accessible, readily understandable 
     to consumers of long-term care services, and searchable:
       ``(i) Staffing data for each facility (including resident 
     census data and data on the hours of care provided per 
     resident per day) based on data submitted under section 
     1128I(g), including information on staffing turnover and 
     tenure, in a format that is clearly understandable to 
     consumers of long-term care services and allows such 
     consumers to compare differences in staffing between 
     facilities and State and national averages for the 
     facilities. Such format shall include--

       ``(I) concise explanations of how to interpret the data 
     (such as plain English explanation of data reflecting 
     `nursing home staff hours per resident day');
       ``(II) differences in types of staff (such as training 
     associated with different categories of staff);
       ``(III) the relationship between nurse staffing levels and 
     quality of care; and
       ``(IV) an explanation that appropriate staffing levels vary 
     based on patient case mix.

       ``(ii) Links to State Internet websites with information 
     regarding State survey and certification programs, links to 
     Form 2567 State inspection reports (or a successor form) on 
     such websites, information to guide consumers in how to 
     interpret and understand such reports, and the facility plan 
     of correction or other response to such report. Any such 
     links shall be posted on a timely basis.
       ``(iii) The standardized complaint form developed under 
     section 1128I(f), including explanatory material on what 
     complaint forms are, how they are used, and how to file a 
     complaint with the State survey and certification program and 
     the State long-term care ombudsman program.
       ``(iv) Summary information on the number, type, severity, 
     and outcome of substantiated complaints.
       ``(v) The number of adjudicated instances of criminal 
     violations by a facility or the employees of a facility--

       ``(I) that were committed inside of the facility; and
       ``(II) with respect to such instances of violations or 
     crimes committed outside of the facility, that were 
     violations or crimes that resulted in the serious bodily 
     injury of an elder.

       ``(B) Deadline for provision of information.--
       ``(i) In general.--Except as provided in clause (ii), the 
     Secretary shall ensure that the information described in 
     subparagraph (A) is included on such website (or a successor 
     website) not later than 1 year after the date of the 
     enactment of this subsection.
       ``(ii) Exception.--The Secretary shall ensure that the 
     information described in subparagraph (A)(i) is included on 
     such website (or a successor website) not later than the date 
     on which the requirements under section 1128I(g) are 
     implemented.
       ``(2) Review and modification of website.--
       ``(A) In general.--The Secretary shall establish a 
     process--
       ``(i) to review the accuracy, clarity of presentation, 
     timeliness, and comprehensiveness of information reported on 
     such website as of the day before the date of the enactment 
     of this subsection; and
       ``(ii) not later than 1 year after the date of the 
     enactment of this subsection, to modify or revamp such 
     website in accordance with the review conducted under clause 
     (i).
       ``(B) Consultation.--In conducting the review under 
     subparagraph (A)(i), the Secretary shall consult with--
       ``(i) State long-term care ombudsman programs;
       ``(ii) consumer advocacy groups;
       ``(iii) provider stakeholder groups;
       ``(iv) skilled nursing facility employees and their 
     representatives; and
       ``(v) any other representatives of programs or groups the 
     Secretary determines appropriate.''.
       (2) Timeliness of submission of survey and certification 
     information.--
       (A) In general.--Section 1919(g)(5) of the Social Security 
     Act (42 U.S.C. 1396r(g)(5)) is amended by adding at the end 
     the following new subparagraph:
       ``(E) Submission of survey and certification information to 
     the secretary.--In order to improve the timeliness of 
     information made available to the public under subparagraph 
     (A) and provided on the Nursing Home Compare Medicare website 
     under subsection (i), each State shall submit information 
     respecting any survey or certification made respecting a 
     nursing facility (including any enforcement actions taken by 
     the State) to the Secretary not later than the date on which 
     the State sends such information to the facility. The 
     Secretary shall use the information submitted under the 
     preceding sentence to update the information provided on the 
     Nursing Home Compare Medicare website as expeditiously as 
     practicable but not less frequently than quarterly.''.
       (B) Effective date.--The amendment made by this paragraph 
     shall take effect 1 year after the date of the enactment of 
     this Act.
       (3) Special focus facility program.--Section 1919(f) of the 
     Social Security Act (42 U.S.C. 1396r(f)) is amended by adding 
     at the end of the following new paragraph:
       ``(10) Special focus facility program.--
       ``(A) In general.--The Secretary shall conduct a special 
     focus facility program for enforcement of requirements for 
     nursing facilities that the Secretary has identified as 
     having substantially failed to meet applicable requirements 
     of this Act.
       ``(B) Periodic surveys.--Under such program the Secretary 
     shall conduct surveys of each facility in the program not 
     less often than once every 6 months.''.
       (c) Availability of Reports on Surveys, Certifications, and 
     Complaint Investigations.--
       (1) Skilled nursing facilities.--Section 1819(d)(1) of the 
     Social Security Act (42 U.S.C. 1395i-3(d)(1)), as amended by 
     section 6101, is amended by adding at the end the following 
     new subparagraph:
       ``(C) Availability of survey, certification, and complaint 
     investigation reports.--A skilled nursing facility must--
       ``(i) have reports with respect to any surveys, 
     certifications, and complaint investigations made respecting 
     the facility during the 3 preceding years available for any 
     individual to review upon request; and
       ``(ii) post notice of the availability of such reports in 
     areas of the facility that are prominent and accessible to 
     the public.
     The facility shall not make available under clause (i) 
     identifying information about complainants or residents.''.
       (2) Nursing facilities.--Section 1919(d)(1) of the Social 
     Security Act (42 U.S.C. 1396r(d)(1)), as amended by section 
     6101, is amended by adding at the end the following new 
     subparagraph:
       ``(V) Availability of survey, certification, and complaint 
     investigation reports.--A nursing facility must--
       ``(i) have reports with respect to any surveys, 
     certifications, and complaint investigations made respecting 
     the facility during the 3 preceding years available for any 
     individual to review upon request; and
       ``(ii) post notice of the availability of such reports in 
     areas of the facility that are prominent and accessible to 
     the public.
     The facility shall not make available under clause (i) 
     identifying information about complainants or residents.''.
       (3) Effective date.--The amendments made by this subsection 
     shall take effect 1 year after the date of the enactment of 
     this Act.
       (d) Guidance to States on Form 2567 State Inspection 
     Reports and Complaint Investigation Reports.--
       (1) Guidance.--The Secretary of Health and Human Services 
     (in this subtitle referred to as the ``Secretary'') shall 
     provide guidance to States on how States can establish 
     electronic links to Form 2567 State inspection reports (or a 
     successor form), complaint investigation reports, and a 
     facility's plan of correction or other response to such Form 
     2567 State inspection reports (or a successor form) on the 
     Internet website of the State that provides information on 
     skilled nursing

[[Page 28549]]

     facilities and nursing facilities and the Secretary shall, if 
     possible, include such information on Nursing Home Compare.
       (2) Requirement.--Section 1902(a)(9) of the Social Security 
     Act (42 U.S.C. 1396a(a)(9)) is amended--
       (A) by striking ``and'' at the end of subparagraph (B);
       (B) by striking the semicolon at the end of subparagraph 
     (C) and inserting ``, and''; and
       (C) by adding at the end the following new subparagraph:
       ``(D) that the State maintain a consumer-oriented website 
     providing useful information to consumers regarding all 
     skilled nursing facilities and all nursing facilities in the 
     State, including for each facility, Form 2567 State 
     inspection reports (or a successor form), complaint 
     investigation reports, the facility's plan of correction, and 
     such other information that the State or the Secretary 
     considers useful in assisting the public to assess the 
     quality of long term care options and the quality of care 
     provided by individual facilities;''.
       (3) Definitions.--In this subsection:
       (A) Nursing facility.--The term ``nursing facility'' has 
     the meaning given such term in section 1919(a) of the Social 
     Security Act (42 U.S.C. 1396r(a)).
       (B) Secretary.--The term ``Secretary'' means the Secretary 
     of Health and Human Services.
       (C) Skilled nursing facility.--The term ``skilled nursing 
     facility'' has the meaning given such term in section 1819(a) 
     of the Social Security Act (42 U.S.C. 1395i-3(a)).
       (e) Development of Consumer Rights Information Page on 
     Nursing Home Compare Website.--Not later than 1 year after 
     the date of enactment of this Act, the Secretary shall ensure 
     that the Department of Health and Human Services, as part of 
     the information provided for comparison of nursing facilities 
     on the Nursing Home Compare Medicare website develops and 
     includes a consumer rights information page that contains 
     links to descriptions of, and information with respect to, 
     the following:
       (1) The documentation on nursing facilities that is 
     available to the public.
       (2) General information and tips on choosing a nursing 
     facility that meets the needs of the individual.
       (3) General information on consumer rights with respect to 
     nursing facilities.
       (4) The nursing facility survey process (on a national and 
     State-specific basis).
       (5) On a State-specific basis, the services available 
     through the State long-term care ombudsman for such State.

     SEC. 6104. REPORTING OF EXPENDITURES.

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

     SEC. 6105. STANDARDIZED COMPLAINT FORM.

       (a) In General.--Section 1128I of the Social Security Act, 
     as added and amended by this Act, is amended by adding at the 
     end the following new subsection:
       ``(f) Standardized Complaint Form.--
       ``(1) Development by the secretary.--The Secretary shall 
     develop a standardized complaint form for use by a resident 
     (or a person acting on the resident's behalf) in filing a 
     complaint with a State survey and certification agency and a 
     State long-term care ombudsman program with respect to a 
     facility.
       ``(2) Complaint forms and resolution processes.--
       ``(A) Complaint forms.--The State must make the 
     standardized complaint form developed under paragraph (1) 
     available upon request to--
       ``(i) a resident of a facility; and
       ``(ii) any person acting on the resident's behalf.
       ``(B) Complaint resolution process.--The State must 
     establish a complaint resolution process in order to ensure 
     that the legal representative of a resident of a facility or 
     other responsible party is not denied access to such resident 
     or otherwise retaliated against if they have complained about 
     the quality of care provided by the facility or other issues 
     relating to the facility. Such complaint resolution process 
     shall include--
       ``(i) procedures to assure accurate tracking of complaints 
     received, including notification to the complainant that a 
     complaint has been received;
       ``(ii) procedures to determine the likely severity of a 
     complaint and for the investigation of the complaint; and
       ``(iii) deadlines for responding to a complaint and for 
     notifying the complainant of the outcome of the 
     investigation.
       ``(3) Rule of construction.--Nothing in this subsection 
     shall be construed as preventing a resident of a facility (or 
     a person acting on the resident's behalf) from submitting a 
     complaint in a manner or format other than by using the 
     standardized complaint form developed under paragraph (1) 
     (including submitting a complaint orally).''.
       (b) Effective Date.--The amendment made by this section 
     shall take effect 1 year after the date of the enactment of 
     this Act.

     SEC. 6106. ENSURING STAFFING ACCOUNTABILITY.

       Section 1128I of the Social Security Act, as added and 
     amended by this Act, is amended by adding at the end the 
     following new subsection:
       ``(g) Submission of Staffing Information Based on Payroll 
     Data in a Uniform Format.--Beginning not later than 2 years 
     after the date of the enactment of this subsection, and after 
     consulting with State long-term care ombudsman programs, 
     consumer advocacy groups, provider stakeholder groups, 
     employees and their representatives, and other parties the 
     Secretary deems appropriate, the Secretary shall require a 
     facility to electronically submit to the Secretary direct 
     care staffing information (including information with respect 
     to agency and contract staff) based on payroll and other 
     verifiable and auditable data in a uniform format (according 
     to specifications established by the Secretary in 
     consultation with such programs, groups, and parties). Such 
     specifications shall require that the information submitted 
     under the preceding sentence--
       ``(1) specify the category of work a certified employee 
     performs (such as whether the employee is a registered nurse, 
     licensed practical nurse, licensed vocational nurse, 
     certified nursing assistant, therapist, or other medical 
     personnel);
       ``(2) include resident census data and information on 
     resident case mix;
       ``(3) include a regular reporting schedule; and
       ``(4) include information on employee turnover and tenure 
     and on the hours of care provided by each category of 
     certified employees referenced in paragraph (1) per resident 
     per day.

     Nothing in this subsection shall be construed as preventing 
     the Secretary from requiring submission of such information 
     with respect to specific categories, such as nursing staff, 
     before other categories of certified employees. Information 
     under this subsection with respect to agency and contract 
     staff shall be kept separate from information on employee 
     staffing.''.

     SEC. 6107. GAO STUDY AND REPORT ON FIVE-STAR QUALITY RATING 
                   SYSTEM.

       (a) Study.--The Comptroller General of the United States 
     (in this section referred to as the ``Comptroller General'') 
     shall conduct a study on the Five-Star Quality Rating System 
     for nursing homes of the Centers for Medicare & Medicaid 
     Services. Such study shall include an analysis of--
       (1) how such system is being implemented;
       (2) any problems associated with such system or its 
     implementation; and
       (3) how such system could be improved.
       (b) Report.--Not later than 2 years after the date of 
     enactment of this Act, the Comptroller General shall submit 
     to Congress a report containing the results of the study 
     conducted under subsection (a), together with recommendations 
     for such legislation and administrative action as the 
     Comptroller General determines appropriate.

                     PART II--TARGETING ENFORCEMENT

     SEC. 6111. CIVIL MONEY PENALTIES.

       (a) Skilled Nursing Facilities.--
       (1) In general.--Section 1819(h)(2)(B)(ii) of the Social 
     Security Act (42 U.S.C. 1395i-3(h)(2)(B)(ii)) is amended--
       (A) by striking ``Penalties.--The Secretary'' and inserting 
     ``penalties.--

[[Page 28550]]

       ``(I) In general.--Subject to subclause (II), the 
     Secretary''; and

       (B) by adding at the end the following new subclauses:

       ``(II) Reduction of civil money penalties in certain 
     circumstances.--Subject to subclause (III), in the case where 
     a facility self-reports and promptly corrects a deficiency 
     for which a penalty was imposed under this clause not later 
     than 10 calendar days after the date of such imposition, the 
     Secretary may reduce the amount of the penalty imposed by not 
     more than 50 percent.
       ``(III) Prohibitions on reduction for certain 
     deficiencies.--

       ``(aa) Repeat deficiencies.--The Secretary may not reduce 
     the amount of a penalty under subclause (II) if the Secretary 
     had reduced a penalty imposed on the facility in the 
     preceding year under such subclause with respect to a repeat 
     deficiency.
       ``(bb) Certain other deficiencies.--The Secretary may not 
     reduce the amount of a penalty under subclause (II) if the 
     penalty is imposed on the facility for a deficiency that is 
     found to result in a pattern of harm or widespread harm, 
     immediately jeopardizes the health or safety of a resident or 
     residents of the facility, or results in the death of a 
     resident of the facility.

       ``(IV) Collection of civil money penalties.--In the case of 
     a civil money penalty imposed under this clause, the 
     Secretary shall issue regulations that--

       ``(aa) subject to item (cc), not later than 30 days after 
     the imposition of the penalty, provide for the facility to 
     have the opportunity to participate in an independent 
     informal dispute resolution process which generates a written 
     record prior to the collection of such penalty;
       ``(bb) in the case where the penalty is imposed for each 
     day of noncompliance, provide that a penalty may not be 
     imposed for any day during the period beginning on the 
     initial day of the imposition of the penalty and ending on 
     the day on which the informal dispute resolution process 
     under item (aa) is completed;
       ``(cc) may provide for the collection of such civil money 
     penalty and the placement of such amounts collected in an 
     escrow account under the direction of the Secretary on the 
     earlier of the date on which the informal dispute resolution 
     process under item (aa) is completed or the date that is 90 
     days after the date of the imposition of the penalty;
       ``(dd) may provide that such amounts collected are kept in 
     such account pending the resolution of any subsequent 
     appeals;
       ``(ee) in the case where the facility successfully appeals 
     the penalty, may provide for the return of such amounts 
     collected (plus interest) to the facility; and
       ``(ff) in the case where all such appeals are unsuccessful, 
     may provide that some portion of such amounts collected may 
     be used to support activities that benefit residents, 
     including assistance to support and protect residents of a 
     facility that closes (voluntarily or involuntarily) or is 
     decertified (including offsetting costs of relocating 
     residents to home and community-based settings or another 
     facility), projects that support resident and family councils 
     and other consumer involvement in assuring quality care in 
     facilities, and facility improvement initiatives approved by 
     the Secretary (including joint training of facility staff and 
     surveyors, technical assistance for facilities implementing 
     quality assurance programs, the appointment of temporary 
     management firms, and other activities approved by the 
     Secretary).''.
       (2) Conforming amendment.--The second sentence of section 
     1819(h)(5) of the Social Security Act (42 U.S.C. 1395i-
     3(h)(5)) is amended by inserting ``(ii)(IV),'' after 
     ``(i),''.
       (b) Nursing Facilities.--
       (1) In general.--Section 1919(h)(3)(C)(ii) of the Social 
     Security Act (42 U.S.C. 1396r(h)(3)(C)) is amended--
       (A) by striking ``Penalties.--The Secretary'' and inserting 
     ``penalties.--

       ``(I) In general.--Subject to subclause (II), the 
     Secretary''; and

       (B) by adding at the end the following new subclauses:

       ``(II) Reduction of civil money penalties in certain 
     circumstances.--Subject to subclause (III), in the case where 
     a facility self-reports and promptly corrects a deficiency 
     for which a penalty was imposed under this clause not later 
     than 10 calendar days after the date of such imposition, the 
     Secretary may reduce the amount of the penalty imposed by not 
     more than 50 percent.
       ``(III) Prohibitions on reduction for certain 
     deficiencies.--

       ``(aa) Repeat deficiencies.--The Secretary may not reduce 
     the amount of a penalty under subclause (II) if the Secretary 
     had reduced a penalty imposed on the facility in the 
     preceding year under such subclause with respect to a repeat 
     deficiency.
       ``(bb) Certain other deficiencies.--The Secretary may not 
     reduce the amount of a penalty under subclause (II) if the 
     penalty is imposed on the facility for a deficiency that is 
     found to result in a pattern of harm or widespread harm, 
     immediately jeopardizes the health or safety of a resident or 
     residents of the facility, or results in the death of a 
     resident of the facility.

       ``(IV) Collection of civil money penalties.--In the case of 
     a civil money penalty imposed under this clause, the 
     Secretary shall issue regulations that--

       ``(aa) subject to item (cc), not later than 30 days after 
     the imposition of the penalty, provide for the facility to 
     have the opportunity to participate in an independent 
     informal dispute resolution process which generates a written 
     record prior to the collection of such penalty;
       ``(bb) in the case where the penalty is imposed for each 
     day of noncompliance, provide that a penalty may not be 
     imposed for any day during the period beginning on the 
     initial day of the imposition of the penalty and ending on 
     the day on which the informal dispute resolution process 
     under item (aa) is completed;
       ``(cc) may provide for the collection of such civil money 
     penalty and the placement of such amounts collected in an 
     escrow account under the direction of the Secretary on the 
     earlier of the date on which the informal dispute resolution 
     process under item (aa) is completed or the date that is 90 
     days after the date of the imposition of the penalty;
       ``(dd) may provide that such amounts collected are kept in 
     such account pending the resolution of any subsequent 
     appeals;
       ``(ee) in the case where the facility successfully appeals 
     the penalty, may provide for the return of such amounts 
     collected (plus interest) to the facility; and
       ``(ff) in the case where all such appeals are unsuccessful, 
     may provide that some portion of such amounts collected may 
     be used to support activities that benefit residents, 
     including assistance to support and protect residents of a 
     facility that closes (voluntarily or involuntarily) or is 
     decertified (including offsetting costs of relocating 
     residents to home and community-based settings or another 
     facility), projects that support resident and family councils 
     and other consumer involvement in assuring quality care in 
     facilities, and facility improvement initiatives approved by 
     the Secretary (including joint training of facility staff and 
     surveyors, technical assistance for facilities implementing 
     quality assurance programs, the appointment of temporary 
     management firms, and other activities approved by the 
     Secretary).''.
       (2) Conforming amendment.--Section 1919(h)(5)(8) of the 
     Social Security Act (42 U.S.C. 1396r(h)(5)(8)) is amended by 
     inserting ``(ii)(IV),'' after ``(i),''.
       (c) Effective Date.--The amendments made by this section 
     shall take effect 1 year after the date of the enactment of 
     this Act.

     SEC. 6112. NATIONAL INDEPENDENT MONITOR DEMONSTRATION 
                   PROJECT.

       (a) Establishment.--
       (1) In general.--The Secretary, in consultation with the 
     Inspector General of the Department of Health and Human 
     Services, shall conduct a demonstration project to develop, 
     test, and implement an independent monitor program to oversee 
     interstate and large intrastate chains of skilled nursing 
     facilities and nursing facilities.
       (2) Selection.--The Secretary shall select chains of 
     skilled nursing facilities and nursing facilities described 
     in paragraph (1) to participate in the demonstration project 
     under this section from among those chains that submit an 
     application to the Secretary at such time, in such manner, 
     and containing such information as the Secretary may require.
       (3) Duration.--The Secretary shall conduct the 
     demonstration project under this section for a 2-year period.
       (4) Implementation.--The Secretary shall implement the 
     demonstration project under this section not later than 1 
     year after the date of the enactment of this Act.
       (b) Requirements.--The Secretary shall evaluate chains 
     selected to participate in the demonstration project under 
     this section based on criteria selected by the Secretary, 
     including where evidence suggests that a number of the 
     facilities of the chain are experiencing serious safety and 
     quality of care problems. Such criteria may include the 
     evaluation of a chain that includes a number of facilities 
     participating in the ``Special Focus Facility'' program (or a 
     successor program) or multiple facilities with a record of 
     repeated serious safety and quality of care deficiencies.
       (c) Responsibilities.--An independent monitor that enters 
     into a contract with the Secretary to participate in the 
     conduct of the demonstration project under this section 
     shall--
       (1) conduct periodic reviews and prepare root-cause quality 
     and deficiency analyses of a chain to assess if facilities of 
     the chain are in compliance with State and Federal laws and 
     regulations applicable to the facilities;
       (2) conduct sustained oversight of the efforts of the 
     chain, whether publicly or privately held, to achieve 
     compliance by facilities of the chain with State and Federal 
     laws and regulations applicable to the facilities;
       (3) analyze the management structure, distribution of 
     expenditures, and nurse staffing levels of facilities of the 
     chain in relation to resident census, staff turnover rates, 
     and tenure;
       (4) report findings and recommendations with respect to 
     such reviews, analyses, and oversight to the chain and 
     facilities of the chain, to the Secretary, and to relevant 
     States; and

[[Page 28551]]

       (5) publish the results of such reviews, analyses, and 
     oversight.
       (d) Implementation of Recommendations.--
       (1) Receipt of finding by chain.--Not later than 10 days 
     after receipt of a finding of an independent monitor under 
     subsection (c)(4), a chain participating in the demonstration 
     project shall submit to the independent monitor a report--
       (A) outlining corrective actions the chain will take to 
     implement the recommendations in such report; or
       (B) indicating that the chain will not implement such 
     recommendations, and why it will not do so.
       (2) Receipt of report by independent monitor.--Not later 
     than 10 days after receipt of a report submitted by a chain 
     under paragraph (1), an independent monitor shall finalize 
     its recommendations and submit a report to the chain and 
     facilities of the chain, the Secretary, and the State or 
     States, as appropriate, containing such final 
     recommendations.
       (e) Cost of Appointment.--A chain shall be responsible for 
     a portion of the costs associated with the appointment of 
     independent monitors under the demonstration project under 
     this section. The chain shall pay such portion to the 
     Secretary (in an amount and in accordance with procedures 
     established by the Secretary).
       (f) Waiver Authority.--The Secretary may waive such 
     requirements of titles XVIII and XIX of the Social Security 
     Act (42 U.S.C. 1395 et seq.; 1396 et seq.) as may be 
     necessary for the purpose of carrying out the demonstration 
     project under this section.
       (g) Authorization of Appropriations.--There are authorized 
     to be appropriated such sums as may be necessary to carry out 
     this section.
       (h) Definitions.--In this section:
       (1) Additional disclosable party.--The term ``additional 
     disclosable party'' has the meaning given such term in 
     section 1124(c)(5)(A) of the Social Security Act, as added by 
     section 4201(a).
       (2) Facility.--The term ``facility'' means a skilled 
     nursing facility or a nursing facility.
       (3) Nursing facility.--The term ``nursing facility'' has 
     the meaning given such term in section 1919(a) of the Social 
     Security Act (42 U.S.C. 1396r(a)).
       (4) Secretary.--The term ``Secretary'' means the Secretary 
     of Health and Human Services, acting through the Assistant 
     Secretary for Planning and Evaluation.
       (5) Skilled nursing facility.--The term ``skilled nursing 
     facility'' has the meaning given such term in section 1819(a) 
     of the Social Security Act (42 U.S.C. 1395(a)).
       (i) Evaluation and Report.--
       (1) Evaluation.--The Secretary, in consultation with the 
     Inspector General of the Department of Health and Human 
     Services, shall evaluate the demonstration project conducted 
     under this section.
       (2) Report.--Not later than 180 days after the completion 
     of the demonstration project under this section, the 
     Secretary shall submit to Congress a report containing the 
     results of the evaluation conducted under paragraph (1), 
     together with recommendations--
       (A) as to whether the independent monitor program should be 
     established on a permanent basis;
       (B) if the Secretary recommends that such program be so 
     established, on appropriate procedures and mechanisms for 
     such establishment; and
       (C) for such legislation and administrative action as the 
     Secretary determines appropriate.

     SEC. 6113. NOTIFICATION OF FACILITY CLOSURE.

       (a) In General.--Section 1128I of the Social Security Act, 
     as added and amended by this Act, is amended by adding at the 
     end the following new subsection:
       ``(h) Notification of Facility Closure.--
       ``(1) In general.--Any individual who is the administrator 
     of a facility must--
       ``(A) submit to the Secretary, the State long-term care 
     ombudsman, residents of the facility, and the legal 
     representatives of such residents or other responsible 
     parties, written notification of an impending closure--
       ``(i) subject to clause (ii), not later than the date that 
     is 60 days prior to the date of such closure; and
       ``(ii) in the case of a facility where the Secretary 
     terminates the facility's participation under this title, not 
     later than the date that the Secretary determines 
     appropriate;
       ``(B) ensure that the facility does not admit any new 
     residents on or after the date on which such written 
     notification is submitted; and
       ``(C) include in the notice a plan for the transfer and 
     adequate relocation of the residents of the facility by a 
     specified date prior to closure that has been approved by the 
     State, including assurances that the residents will be 
     transferred to the most appropriate facility or other setting 
     in terms of quality, services, and location, taking into 
     consideration the needs, choice, and best interests of each 
     resident.
       ``(2) Relocation.--
       ``(A) In general.--The State shall ensure that, before a 
     facility closes, all residents of the facility have been 
     successfully relocated to another facility or an alternative 
     home and community-based setting.
       ``(B) Continuation of payments until residents relocated.--
     The Secretary may, as the Secretary determines appropriate, 
     continue to make payments under this title with respect to 
     residents of a facility that has submitted a notification 
     under paragraph (1) during the period beginning on the date 
     such notification is submitted and ending on the date on 
     which the resident is successfully relocated.
       ``(3) Sanctions.--Any individual who is the administrator 
     of a facility that fails to comply with the requirements of 
     paragraph (1)--
       ``(A) shall be subject to a civil monetary penalty of up to 
     $100,000;
       ``(B) may be subject to exclusion from participation in any 
     Federal health care program (as defined in section 1128B(f)); 
     and
       ``(C) shall be subject to any other penalties that may be 
     prescribed by law.
       ``(4) Procedure.--The provisions of section 1128A (other 
     than subsections (a) and (b) and the second sentence of 
     subsection (f)) shall apply to a civil money penalty or 
     exclusion under paragraph (3) in the same manner as such 
     provisions apply to a penalty or proceeding under section 
     1128A(a).''.
       (b) Conforming Amendments.--Section 1819(h)(4) of the 
     Social Security Act (42 U.S.C. 1395i-3(h)(4)) is amended--
       (1) in the first sentence, by striking ``the Secretary 
     shall terminate'' and inserting ``the Secretary, subject to 
     section 1128I(h), shall terminate''; and
       (2) in the second sentence, by striking ``subsection 
     (c)(2)'' and inserting ``subsection (c)(2) and section 
     1128I(h)''.
       (c) Effective Date.--The amendments made by this section 
     shall take effect 1 year after the date of the enactment of 
     this Act.

     SEC. 6114. NATIONAL DEMONSTRATION PROJECTS ON CULTURE CHANGE 
                   AND USE OF INFORMATION TECHNOLOGY IN NURSING 
                   HOMES.

       (a) In General.--The Secretary shall conduct 2 
     demonstration projects, 1 for the development of best 
     practices in skilled nursing facilities and nursing 
     facilities that are involved in the culture change movement 
     (including the development of resources for facilities to 
     find and access funding in order to undertake culture change) 
     and 1 for the development of best practices in skilled 
     nursing facilities and nursing facilities for the use of 
     information technology to improve resident care.
       (b) Conduct of Demonstration Projects.--
       (1) Grant award.--Under each demonstration project 
     conducted under this section, the Secretary shall award 1 or 
     more grants to facility-based settings for the development of 
     best practices described in subsection (a) with respect to 
     the demonstration project involved. Such award shall be made 
     on a competitive basis and may be allocated in 1 lump-sum 
     payment.
       (2) Consideration of special needs of residents.--Each 
     demonstration project conducted under this section shall take 
     into consideration the special needs of residents of skilled 
     nursing facilities and nursing facilities who have cognitive 
     impairment, including dementia.
       (c) Duration and Implementation.--
       (1) Duration.--The demonstration projects shall each be 
     conducted for a period not to exceed 3 years.
       (2) Implementation.--The demonstration projects shall each 
     be implemented not later than 1 year after the date of the 
     enactment of this Act.
       (d) Definitions.--In this section:
       (1) Nursing facility.--The term ``nursing facility'' has 
     the meaning given such term in section 1919(a) of the Social 
     Security Act (42 U.S.C. 1396r(a)).
       (2) Secretary.--The term ``Secretary'' means the Secretary 
     of Health and Human Services.
       (3) Skilled nursing facility.--The term ``skilled nursing 
     facility'' has the meaning given such term in section 1819(a) 
     of the Social Security Act (42 U.S.C. 1395(a)).
       (e) Authorization of Appropriations.--There are authorized 
     to be appropriated such sums as may be necessary to carry out 
     this section.
       (f) Report.--Not later than 9 months after the completion 
     of the demonstration project, the Secretary shall submit to 
     Congress a report on such project, together with 
     recommendations for such legislation and administrative 
     action as the Secretary determines appropriate.

                   PART III--IMPROVING STAFF TRAINING

     SEC. 6121. DEMENTIA AND ABUSE PREVENTION TRAINING.

       (a) Skilled Nursing Facilities.--
       (1) In general.--Section 1819(f)(2)(A)(i)(I) of the Social 
     Security Act (42 U.S.C. 1395i-3(f)(2)(A)(i)(I)) is amended by 
     inserting ``(including, in the case of initial training and, 
     if the Secretary determines appropriate, in the case of 
     ongoing training, dementia management training, and patient 
     abuse prevention training'' before ``, (II)''.
       (2) Clarification of definition of nurse aide.--Section 
     1819(b)(5)(F) of the Social Security Act (42 U.S.C. 1395i-
     3(b)(5)(F)) is amended by adding at the end the following 
     flush sentence:
     ``Such term includes an individual who provides such services 
     through an agency or under a contract with the facility.''.

[[Page 28552]]

       (b) Nursing Facilities.--
       (1) In general.--Section 1919(f)(2)(A)(i)(I) of the Social 
     Security Act (42 U.S.C. 1396r(f)(2)(A)(i)(I)) is amended by 
     inserting ``(including, in the case of initial training and, 
     if the Secretary determines appropriate, in the case of 
     ongoing training, dementia management training, and patient 
     abuse prevention training'' before ``, (II)''.
       (2) Clarification of definition of nurse aide.--Section 
     1919(b)(5)(F) of the Social Security Act (42 U.S.C. 
     1396r(b)(5)(F)) is amended by adding at the end the following 
     flush sentence:
     ``Such term includes an individual who provides such services 
     through an agency or under a contract with the facility.''.
       (c) Effective Date.--The amendments made by this section 
     shall take effect 1 year after the date of the enactment of 
     this Act.

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

     SEC. 6201. NATIONWIDE PROGRAM FOR NATIONAL AND STATE 
                   BACKGROUND CHECKS ON DIRECT PATIENT ACCESS 
                   EMPLOYEES OF LONG-TERM CARE FACILITIES AND 
                   PROVIDERS.

       (a) In General.--The Secretary of Health and Human Services 
     (in this section referred to as the ``Secretary''), shall 
     establish a program to identify efficient, effective, and 
     economical procedures for long term care facilities or 
     providers to conduct background checks on prospective direct 
     patient access employees on a nationwide basis (in this 
     subsection, such program shall be referred to as the 
     ``nationwide program''). Except for the following 
     modifications, the Secretary shall carry out the nationwide 
     program under similar terms and conditions as the pilot 
     program under section 307 of the Medicare Prescription Drug, 
     Improvement, and Modernization Act of 2003 (Public Law 108-
     173; 117 Stat. 2257), including the prohibition on hiring 
     abusive workers and the authorization of the imposition of 
     penalties by a participating State under subsection (b)(3)(A) 
     and (b)(6), respectively, of such section 307:
       (1) Agreements.--
       (A) Newly participating states.--The Secretary shall enter 
     into agreements with each State--
       (i) that the Secretary has not entered into an agreement 
     with under subsection (c)(1) of such section 307;
       (ii) that agrees to conduct background checks under the 
     nationwide program on a Statewide basis; and
       (iii) that submits an application to the Secretary 
     containing such information and at such time as the Secretary 
     may specify.
       (B) Certain previously participating states.--The Secretary 
     shall enter into agreements with each State--
       (i) that the Secretary has entered into an agreement with 
     under such subsection (c)(1), but only in the case where such 
     agreement did not require the State to conduct background 
     checks under the program established under subsection (a) of 
     such section 307 on a Statewide basis;
       (ii) that agrees to conduct background checks under the 
     nationwide program on a Statewide basis; and
       (iii) that submits an application to the Secretary 
     containing such information and at such time as the Secretary 
     may specify.
       (2) Nonapplication of selection criteria.--The selection 
     criteria required under subsection (c)(3)(B) of such section 
     307 shall not apply.
       (3) Required fingerprint check as part of criminal history 
     background check.--The procedures established under 
     subsection (b)(1) of such section 307 shall--
       (A) require that the long-term care facility or provider 
     (or the designated agent of the long-term care facility or 
     provider) obtain State and national criminal history 
     background checks on the prospective employee through such 
     means as the Secretary determines appropriate, efficient, and 
     effective that utilize a search of State-based abuse and 
     neglect registries and databases, including the abuse and 
     neglect registries of another State in the case where a 
     prospective employee previously resided in that State, State 
     criminal history records, the records of any proceedings in 
     the State that may contain disqualifying information about 
     prospective employees (such as proceedings conducted by State 
     professional licensing and disciplinary boards and State 
     Medicaid Fraud Control Units), and Federal criminal history 
     records, including a fingerprint check using the Integrated 
     Automated Fingerprint Identification System of the Federal 
     Bureau of Investigation;
       (B) require States to describe and test methods that reduce 
     duplicative fingerprinting, including providing for the 
     development of ``rap back'' capability by the State such 
     that, if a direct patient access employee of a long-term care 
     facility or provider is convicted of a crime following the 
     initial criminal history background check conducted with 
     respect to such employee, and the employee's fingerprints 
     match the prints on file with the State law enforcement 
     department, the department will immediately inform the State 
     and the State will immediately inform the long-term care 
     facility or provider which employs the direct patient access 
     employee of such conviction; and
       (C) require that criminal history background checks 
     conducted under the nationwide program remain valid for a 
     period of time specified by the Secretary.
       (4) State requirements.--An agreement entered into under 
     paragraph (1) shall require that a participating State--
       (A) be responsible for monitoring compliance with the 
     requirements of the nationwide program;
       (B) have procedures in place to--
       (i) conduct screening and criminal history background 
     checks under the nationwide program in accordance with the 
     requirements of this section;
       (ii) monitor compliance by long-term care facilities and 
     providers with the procedures and requirements of the 
     nationwide program;
       (iii) as appropriate, provide for a provisional period of 
     employment by a long-term care facility or provider of a 
     direct patient access employee, not to exceed 60 days, 
     pending completion of the required criminal history 
     background check and, in the case where the employee has 
     appealed the results of such background check, pending 
     completion of the appeals process, during which the employee 
     shall be subject to direct on-site supervision (in accordance 
     with procedures established by the State to ensure that a 
     long-term care facility or provider furnishes such direct on-
     site supervision);
       (iv) provide an independent process by which a provisional 
     employee or an employee may appeal or dispute the accuracy of 
     the information obtained in a background check performed 
     under the nationwide program, including the specification of 
     criteria for appeals for direct patient access employees 
     found to have disqualifying information which shall include 
     consideration of the passage of time, extenuating 
     circumstances, demonstration of rehabilitation, and relevancy 
     of the particular disqualifying information with respect to 
     the current employment of the individual;
       (v) provide for the designation of a single State agency as 
     responsible for--

       (I) overseeing the coordination of any State and national 
     criminal history background checks requested by a long-term 
     care facility or provider (or the designated agent of the 
     long-term care facility or provider) utilizing a search of 
     State and Federal criminal history records, including a 
     fingerprint check of such records;
       (II) overseeing the design of appropriate privacy and 
     security safeguards for use in the review of the results of 
     any State or national criminal history background checks 
     conducted regarding a prospective direct patient access 
     employee to determine whether the employee has any conviction 
     for a relevant crime;
       (III) immediately reporting to the long-term care facility 
     or provider that requested the criminal history background 
     check the results of such review; and
       (IV) in the case of an employee with a conviction for a 
     relevant crime that is subject to reporting under section 
     1128E of the Social Security Act (42 U.S.C. 1320a-7e), 
     reporting the existence of such conviction to the database 
     established under that section;

       (vi) determine which individuals are direct patient access 
     employees (as defined in paragraph (6)(B)) for purposes of 
     the nationwide program;
       (vii) as appropriate, specify offenses, including 
     convictions for violent crimes, for purposes of the 
     nationwide program; and
       (viii) describe and test methods that reduce duplicative 
     fingerprinting, including providing for the development of 
     ``rap back'' capability such that, if a direct patient access 
     employee of a long-term care facility or provider is 
     convicted of a crime following the initial criminal history 
     background check conducted with respect to such employee, and 
     the employee's fingerprints match the prints on file with the 
     State law enforcement department--

       (I) the department will immediately inform the State agency 
     designated under clause (v) and such agency will immediately 
     inform the facility or provider which employs the direct 
     patient access employee of such conviction; and
       (II) the State will provide, or will require the facility 
     to provide, to the employee a copy of the results of the 
     criminal history background check conducted with respect to 
     the employee at no charge in the case where the individual 
     requests such a copy.

       (5) Payments.--
       (A) Newly participating states.--
       (i) In general.--As part of the application submitted by a 
     State under paragraph (1)(A)(iii), the State shall guarantee, 
     with respect to the costs to be incurred by the State in 
     carrying out the nationwide program, that the State will make 
     available (directly or through donations from public or 
     private entities) a particular amount of non-Federal 
     contributions, as a condition of receiving the Federal match 
     under clause (ii).
       (ii) Federal match.--The payment amount to each State that 
     the Secretary enters into an agreement with under paragraph 
     (1)(A) shall be 3 times the amount that the State guarantees 
     to make available under clause (i), except that in no case 
     may the payment amount exceed $3,000,000.
       (B) Previously participating states.--
       (i) In general.--As part of the application submitted by a 
     State under paragraph

[[Page 28553]]

     (1)(B)(iii), the State shall guarantee, with respect to the 
     costs to be incurred by the State in carrying out the 
     nationwide program, that the State will make available 
     (directly or through donations from public or private 
     entities) a particular amount of non-Federal contributions, 
     as a condition of receiving the Federal match under clause 
     (ii).
       (ii) Federal match.--The payment amount to each State that 
     the Secretary enters into an agreement with under paragraph 
     (1)(B) shall be 3 times the amount that the State guarantees 
     to make available under clause (i), except that in no case 
     may the payment amount exceed $1,500,000.
       (6) Definitions.--Under the nationwide program:
       (A) Conviction for a relevant crime.--The term ``conviction 
     for a relevant crime'' means any Federal or State criminal 
     conviction for--
       (i) any offense described in section 1128(a) of the Social 
     Security Act (42 U.S.C. 1320a-7); or
       (ii) such other types of offenses as a participating State 
     may specify for purposes of conducting the program in such 
     State.
       (B) Disqualifying information.--The term ``disqualifying 
     information'' means a conviction for a relevant crime or a 
     finding of patient or resident abuse.
       (C) Finding of patient or resident abuse.--The term 
     ``finding of patient or resident abuse'' means any 
     substantiated finding by a State agency under section 
     1819(g)(1)(C) or 1919(g)(1)(C) of the Social Security Act (42 
     U.S.C. 1395i-3(g)(1)(C), 1396r(g)(1)(C)) or a Federal agency 
     that a direct patient access employee has committed--
       (i) an act of patient or resident abuse or neglect or a 
     misappropriation of patient or resident property; or
       (ii) such other types of acts as a participating State may 
     specify for purposes of conducting the program in such State.
       (D) Direct patient access employee.--The term ``direct 
     patient access employee'' means any individual who has access 
     to a patient or resident of a long-term care facility or 
     provider through employment or through a contract with such 
     facility or provider and has duties that involve (or may 
     involve) one-on-one contact with a patient or resident of the 
     facility or provider, as determined by the State for purposes 
     of the nationwide program. Such term does not include a 
     volunteer unless the volunteer has duties that are equivalent 
     to the duties of a direct patient access employee and those 
     duties involve (or may involve) one-on-one contact with a 
     patient or resident of the long-term care facility or 
     provider.
       (E) Long-term care facility or provider.--The term ``long-
     term care facility or provider'' means the following 
     facilities or providers which receive payment for services 
     under title XVIII or XIX of the Social Security Act:
       (i) A skilled nursing facility (as defined in section 
     1819(a) of the Social Security Act (42 U.S.C. 1395i-3(a))).
       (ii) A nursing facility (as defined in section 1919(a) of 
     such Act (42 U.S.C. 1396r(a))).
       (iii) A home health agency.
       (iv) A provider of hospice care (as defined in section 
     1861(dd)(1) of such Act (42 U.S.C. 1395x(dd)(1))).
       (v) A long-term care hospital (as described in section 
     1886(d)(1)(B)(iv) of such Act (42 U.S.C. 
     1395ww(d)(1)(B)(iv))).
       (vi) A provider of personal care services.
       (vii) A provider of adult day care.
       (viii) A residential care provider that arranges for, or 
     directly provides, long-term care services, including an 
     assisted living facility that provides a level of care 
     established by the Secretary.
       (ix) An intermediate care facility for the mentally 
     retarded (as defined in section 1905(d) of such Act (42 
     U.S.C. 1396d(d))).
       (x) Any other facility or provider of long-term care 
     services under such titles as the participating State 
     determines appropriate.
       (7) Evaluation and report.--
       (A) Evaluation.--
       (i) In general.--The Inspector General of the Department of 
     Health and Human Services shall conduct an evaluation of the 
     nationwide program.
       (ii) Inclusion of specific topics.--The evaluation 
     conducted under clause (i) shall include the following:

       (I) A review of the various procedures implemented by 
     participating States for long-term care facilities or 
     providers, including staffing agencies, to conduct background 
     checks of direct patient access employees under the 
     nationwide program and identification of the most 
     appropriate, efficient, and effective procedures for 
     conducting such background checks.
       (II) An assessment of the costs of conducting such 
     background checks (including start up and administrative 
     costs).
       (III) A determination of the extent to which conducting 
     such background checks leads to any unintended consequences, 
     including a reduction in the available workforce for long-
     term care facilities or providers.
       (IV) An assessment of the impact of the nationwide program 
     on reducing the number of incidents of neglect, abuse, and 
     misappropriation of resident property to the extent 
     practicable.
       (V) An evaluation of other aspects of the nationwide 
     program, as determined appropriate by the Secretary.

       (B) Report.--Not later than 180 days after the completion 
     of the nationwide program, the Inspector General of the 
     Department of Health and Human Services shall submit a report 
     to Congress containing the results of the evaluation 
     conducted under subparagraph (A).
       (b) Funding.--
       (1) Notification.--The Secretary of Health and Human 
     Services shall notify the Secretary of the Treasury of the 
     amount necessary to carry out the nationwide program under 
     this section for the period of fiscal years 2010 through 
     2012, except that in no case shall such amount exceed 
     $160,000,000.
       (2) Transfer of funds.--
       (A) In general.--Out of any funds in the Treasury not 
     otherwise appropriated, the Secretary of the Treasury shall 
     provide for the transfer to the Secretary of Health and Human 
     Services of the amount specified as necessary to carry out 
     the nationwide program under paragraph (1). Such amount shall 
     remain available until expended.
       (B) Reservation of funds for conduct of evaluation.--The 
     Secretary may reserve not more than $3,000,000 of the amount 
     transferred under subparagraph (A) to provide for the conduct 
     of the evaluation under subsection (a)(7)(A).

             Subtitle D--Patient-Centered Outcomes Research

     SEC. 6301. PATIENT-CENTERED OUTCOMES RESEARCH.

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

         ``Part D--Comparative Clinical Effectiveness Research


             ``comparative clinical effectiveness research

       ``Sec. 1181.  (a) Definitions.--In this section:
       ``(1) Board.--The term `Board' means the Board of Governors 
     established under subsection (f).
       ``(2) Comparative clinical effectiveness research; 
     research.--
       ``(A) In general.--The terms `comparative clinical 
     effectiveness research' and `research' mean research 
     evaluating and comparing health outcomes and the clinical 
     effectiveness, risks, and benefits of 2 or more medical 
     treatments, services, and items described in subparagraph 
     (B).
       ``(B) Medical treatments, services, and items described.--
     The medical treatments, services, and items described in this 
     subparagraph are health care interventions, protocols for 
     treatment, care management, and delivery, procedures, medical 
     devices, diagnostic tools, pharmaceuticals (including drugs 
     and biologicals), integrative health practices, and any other 
     strategies or items being used in the treatment, management, 
     and diagnosis of, or prevention of illness or injury in, 
     individuals.
       ``(3) Conflict of interest.--The term `conflict of 
     interest' means an association, including a financial or 
     personal association, that have the potential to bias or have 
     the appearance of biasing an individual's decisions in 
     matters related to the Institute or the conduct of activities 
     under this section.
       ``(4) Real conflict of interest.--The term `real conflict 
     of interest' means any instance where a member of the Board, 
     the methodology committee established under subsection 
     (d)(6), or an advisory panel appointed under subsection 
     (d)(4), or a close relative of such member, has received or 
     could receive either of the following:
       ``(A) A direct financial benefit of any amount deriving 
     from the result or findings of a study conducted under this 
     section.
       ``(B) A financial benefit from individuals or companies 
     that own or manufacture medical treatments, services, or 
     items to be studied under this section that in the aggregate 
     exceeds $10,000 per year. For purposes of the preceding 
     sentence, a financial benefit includes honoraria, fees, 
     stock, or other financial benefit and the current value of 
     the member or close relative's already existing stock 
     holdings, in addition to any direct financial benefit 
     deriving from the results or findings of a study conducted 
     under this section.
       ``(b) Patient-Centered Outcomes Research Institute.--
       ``(1) Establishment.--There is authorized to be established 
     a nonprofit corporation, to be known as the `Patient-Centered 
     Outcomes Research Institute' (referred to in this section as 
     the `Institute') which is neither an agency nor establishment 
     of the United States Government.
       ``(2) Application of provisions.--The Institute shall be 
     subject to the provisions of this section, and, to the extent 
     consistent with this section, to the District of Columbia 
     Nonprofit Corporation Act.
       ``(3) Funding of comparative clinical effectiveness 
     research.--For fiscal year 2010 and each subsequent fiscal 
     year, amounts in the Patient-Centered Outcomes Research Trust 
     Fund (referred to in this section as the `PCORTF') under 
     section 9511 of the Internal Revenue Code of 1986 shall be 
     available, without further appropriation, to the Institute to 
     carry out this section.

[[Page 28554]]

       ``(c) Purpose.--The purpose of the Institute is to assist 
     patients, clinicians, purchasers, and policy-makers in making 
     informed health decisions by advancing the quality and 
     relevance of evidence concerning the manner in which 
     diseases, disorders, and other health conditions can 
     effectively and appropriately be prevented, diagnosed, 
     treated, monitored, and managed through research and evidence 
     synthesis that considers variations in patient 
     subpopulations, and the dissemination of research findings 
     with respect to the relative health outcomes, clinical 
     effectiveness, and appropriateness of the medical treatments, 
     services, and items described in subsection (a)(2)(B).
       ``(d) Duties.--
       ``(1) Identifying research priorities and establishing 
     research project agenda.--
       ``(A) Identifying research priorities.--The Institute shall 
     identify national priorities for research, taking into 
     account factors of disease incidence, prevalence, and burden 
     in the United States (with emphasis on chronic conditions), 
     gaps in evidence in terms of clinical outcomes, practice 
     variations and health disparities in terms of delivery and 
     outcomes of care, the potential for new evidence to improve 
     patient health, well-being, and the quality of care, the 
     effect on national expenditures associated with a health care 
     treatment, strategy, or health conditions, as well as patient 
     needs, outcomes, and preferences, the relevance to patients 
     and clinicians in making informed health decisions, and 
     priorities in the National Strategy for quality care 
     established under section 399H of the Public Health Service 
     Act that are consistent with this section.
       ``(B) Establishing research project agenda.--The Institute 
     shall establish and update a research project agenda for 
     research to address the priorities identified under 
     subparagraph (A), taking into consideration the types of 
     research that might address each priority and the relative 
     value (determined based on the cost of conducting research 
     compared to the potential usefulness of the information 
     produced by research) associated with the different types of 
     research, and such other factors as the Institute determines 
     appropriate.
       ``(2) Carrying out research project agenda.--
       ``(A) Research.--The Institute shall carry out the research 
     project agenda established under paragraph (1)(B) in 
     accordance with the methodological standards adopted under 
     paragraph (9) using methods, including the following:
       ``(i) Systematic reviews and assessments of existing and 
     future research and evidence including original research 
     conducted subsequent to the date of the enactment of this 
     section.
       ``(ii) Primary research, such as randomized clinical 
     trials, molecularly informed trials, and observational 
     studies.
       ``(iii) Any other methodologies recommended by the 
     methodology committee established under paragraph (6) that 
     are adopted by the Board under paragraph (9).
       ``(B) Contracts for the management of funding and conduct 
     of research.--
       ``(i) Contracts.--

       ``(I) In general.--In accordance with the research project 
     agenda established under paragraph (1)(B), the Institute 
     shall enter into contracts for the management of funding and 
     conduct of research in accordance with the following:

       ``(aa) Appropriate agencies and instrumentalities of the 
     Federal Government.
       ``(bb) Appropriate academic research, private sector 
     research, or study-conducting entities.

       ``(II) Preference.--In entering into contracts under 
     subclause (I), the Institute shall give preference to the 
     Agency for Healthcare Research and Quality and the National 
     Institutes of Health, but only if the research to be 
     conducted or managed under such contract is authorized by the 
     governing statutes of such Agency or Institutes.

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

       ``(I) abide by the transparency and conflicts of interest 
     requirements under subsection (h) that apply to the Institute 
     with respect to the research managed or conducted under such 
     contract;
       ``(II) comply with the methodological standards adopted 
     under paragraph (9) with respect to such research;
       ``(III) consult with the expert advisory panels for 
     clinical trials and rare disease appointed under clauses (ii) 
     and (iii), respectively, of paragraph (4)(A);
       ``(IV) subject to clause (iv), permit a researcher who 
     conducts original research under the contract for the agency, 
     instrumentality, or other entity to have such research 
     published in a peer-reviewed journal or other publication;
       ``(V) have appropriate processes in place to manage data 
     privacy and meet ethical standards for the research;
       ``(VI) comply with the requirements of the Institute for 
     making the information available to the public under 
     paragraph (8); and
       ``(VII) comply with other terms and conditions determined 
     necessary by the Institute to carry out the research agenda 
     adopted under paragraph (2).

       ``(iii) Coverage of copayments or coinsurance.--A contract 
     entered into under this subparagraph may allow for the 
     coverage of copayments or coinsurance, or allow for other 
     appropriate measures, to the extent that such coverage or 
     other measures are necessary to preserve the validity of a 
     research project, such as in the case where the research 
     project must be blinded.
       ``(iv) Requirements for publication of research.--Any 
     research published under clause (ii)(IV) shall be within the 
     bounds of and entirely consistent with the evidence and 
     findings produced under the contract with the Institute under 
     this subparagraph. If the Institute determines that those 
     requirements are not met, the Institute shall not enter into 
     another contract with the agency, instrumentality, or entity 
     which managed or conducted such research for a period 
     determined appropriate by the Institute (but not less than 5 
     years).
       ``(C) Review and update of evidence.--The Institute shall 
     review and update evidence on a periodic basis as 
     appropriate.
       ``(D) Taking into account potential differences.--Research 
     shall be designed, as appropriate, to take into account the 
     potential for differences in the effectiveness of health care 
     treatments, services, and items as used with various 
     subpopulations, such as racial and ethnic minorities, women, 
     age, and groups of individuals with different comorbidities, 
     genetic and molecular sub-types, or quality of life 
     preferences and include members of such subpopulations as 
     subjects in the research as feasible and appropriate.
       ``(E) Differences in treatment modalities.--Research shall 
     be designed, as appropriate, to take into account different 
     characteristics of treatment modalities that may affect 
     research outcomes, such as the phase of the treatment 
     modality in the innovation cycle and the impact of the skill 
     of the operator of the treatment modality.
       ``(3) Data collection.--
       ``(A) In general.--The Secretary shall, with appropriate 
     safeguards for privacy, make available to the Institute such 
     data collected by the Centers for Medicare & Medicaid 
     Services under the programs under titles XVIII, XIX, and XXI, 
     as well as provide access to the data networks developed 
     under section 937(f) of the Public Health Service Act, as the 
     Institute and its contractors may require to carry out this 
     section. The Institute may also request and obtain data from 
     Federal, State, or private entities, including data from 
     clinical databases and registries.
       ``(B) Use of data.--The Institute shall only use data 
     provided to the Institute under subparagraph (A) in 
     accordance with laws and regulations governing the release 
     and use of such data, including applicable confidentiality 
     and privacy standards.
       ``(4) Appointing expert advisory panels.--
       ``(A) Appointment.--
       ``(i) In general.--The Institute may appoint permanent or 
     ad hoc expert advisory panels as determined appropriate to 
     assist in identifying research priorities and establishing 
     the research project agenda under paragraph (1) and for other 
     purposes.
       ``(ii) Expert advisory panels for clinical trials.--The 
     Institute shall appoint expert advisory panels in carrying 
     out randomized clinical trials under the research project 
     agenda under paragraph (2)(A)(ii). Such expert advisory 
     panels shall advise the Institute and the agency, 
     instrumentality, or entity conducting the research on the 
     research question involved and the research design or 
     protocol, including important patient subgroups and other 
     parameters of the research. Such panels shall be available as 
     a resource for technical questions that may arise during the 
     conduct of such research.
       ``(iii) Expert advisory panel for rare disease.--In the 
     case of a research study for rare disease, the Institute 
     shall appoint an expert advisory panel for purposes of 
     assisting in the design of the research study and determining 
     the relative value and feasibility of conducting the research 
     study.
       ``(B) Composition.--An expert advisory panel appointed 
     under subparagraph (A) shall include representatives of 
     practicing and research clinicians, patients, and experts in 
     scientific and health services research, health services 
     delivery, and evidence-based medicine who have experience in 
     the relevant topic, and as appropriate, experts in 
     integrative health and primary prevention strategies. The 
     Institute may include a technical expert of each manufacturer 
     or each medical technology that is included under the 
     relevant topic, project, or category for which the panel is 
     established.
       ``(5) Supporting patient and consumer representatives.--The 
     Institute shall provide support and resources to help patient 
     and consumer representatives effectively participate on the 
     Board and expert advisory panels appointed by the Institute 
     under paragraph (4).
       ``(6) Establishing methodology committee.--
       ``(A) In general.--The Institute shall establish a standing 
     methodology committee to carry out the functions described in 
     subparagraph (C).
       ``(B) Appointment and composition.--The methodology 
     committee established under

[[Page 28555]]

     subparagraph (A) shall be composed of not more than 15 
     members appointed by the Comptroller General of the United 
     States. Members appointed to the methodology committee shall 
     be experts in their scientific field, such as health services 
     research, clinical research, comparative clinical 
     effectiveness research, biostatistics, genomics, and research 
     methodologies. Stakeholders with such expertise may be 
     appointed to the methodology committee. In addition to the 
     members appointed under the first sentence, the Directors of 
     the National Institutes of Health and the Agency for 
     Healthcare Research and Quality (or their designees) shall 
     each be included as members of the methodology committee.
       ``(C) Functions.--Subject to subparagraph (D), the 
     methodology committee shall work to develop and improve the 
     science and methods of comparative clinical effectiveness 
     research by, not later than 18 months after the establishment 
     of the Institute, directly or through subcontract, developing 
     and periodically updating the following:
       ``(i) Methodological standards for research. Such 
     methodological standards shall provide specific criteria for 
     internal validity, generalizability, feasibility, and 
     timeliness of research and for health outcomes measures, risk 
     adjustment, and other relevant aspects of research and 
     assessment with respect to the design of research. Any 
     methodological standards developed and updated under this 
     subclause shall be scientifically based and include methods 
     by which new information, data, or advances in technology are 
     considered and incorporated into ongoing research projects by 
     the Institute, as appropriate. The process for developing and 
     updating such standards shall include input from relevant 
     experts, stakeholders, and decisionmakers, and shall provide 
     opportunities for public comment. Such standards shall also 
     include methods by which patient subpopulations can be 
     accounted for and evaluated in different types of research. 
     As appropriate, such standards shall build on existing work 
     on methodological standards for defined categories of health 
     interventions and for each of the major categories of 
     comparative clinical effectiveness research methods 
     (determined as of the date of enactment of the Patient 
     Protection and Affordable Care Act).
       ``(ii) A translation table that is designed to provide 
     guidance and act as a reference for the Board to determine 
     research methods that are most likely to address each 
     specific research question.
       ``(D) Consultation and conduct of examinations.--The 
     methodology committee may consult and contract with the 
     Institute of Medicine of the National Academies and academic, 
     nonprofit, or other private and governmental entities with 
     relevant expertise to carry out activities described in 
     subparagraph (C) and may consult with relevant stakeholders 
     to carry out such activities.
       ``(E) Reports.--The methodology committee shall submit 
     reports to the Board on the committee's performance of the 
     functions described in subparagraph (C). Reports shall 
     contain recommendations for the Institute to adopt 
     methodological standards developed and updated by the 
     methodology committee as well as other actions deemed 
     necessary to comply with such methodological standards.
       ``(7) Providing for a peer-review process for primary 
     research.--
       ``(A) In general.--The Institute shall ensure that there is 
     a process for peer review of primary research described in 
     subparagraph (A)(ii) of paragraph (2) that is conducted under 
     such paragraph. Under such process--
       ``(i) evidence from such primary research shall be reviewed 
     to assess scientific integrity and adherence to 
     methodological standards adopted under paragraph (9); and
       ``(ii) a list of the names of individuals contributing to 
     any peer-review process during the preceding year or years 
     shall be made public and included in annual reports in 
     accordance with paragraph (10)(D).
       ``(B) Composition.--Such peer-review process shall be 
     designed in a manner so as to avoid bias and conflicts of 
     interest on the part of the reviewers and shall be composed 
     of experts in the scientific field relevant to the research 
     under review.
       ``(C) Use of existing processes.--
       ``(i) Processes of another entity.--In the case where the 
     Institute enters into a contract or other agreement with 
     another entity for the conduct or management of research 
     under this section, the Institute may utilize the peer-review 
     process of such entity if such process meets the requirements 
     under subparagraphs (A) and (B).
       ``(ii) Processes of appropriate medical journals.--The 
     Institute may utilize the peer-review process of appropriate 
     medical journals if such process meets the requirements under 
     subparagraphs (A) and (B).
       ``(8) Release of research findings.--
       ``(A) In general.--The Institute shall, not later than 90 
     days after the conduct or receipt of research findings under 
     this part, make such research findings available to 
     clinicians, patients, and the general public. The Institute 
     shall ensure that the research findings--
       ``(i) convey the findings of research in a manner that is 
     comprehensible and useful to patients and providers in making 
     health care decisions;
       ``(ii) fully convey findings and discuss considerations 
     specific to certain subpopulations, risk factors, and 
     comorbidities, as appropriate;
       ``(iii) include limitations of the research and what 
     further research may be needed as appropriate;
       ``(iv) not be construed as mandates for practice 
     guidelines, coverage recommendations, payment, or policy 
     recommendations; and
       ``(v) not include any data which would violate the privacy 
     of research participants or any confidentiality agreements 
     made with respect to the use of data under this section.
       ``(B) Definition of research findings.--In this paragraph, 
     the term `research findings' means the results of a study or 
     assessment.
       ``(9) Adoption.--Subject to subsection (h)(1), the 
     Institute shall adopt the national priorities identified 
     under paragraph (1)(A), the research project agenda 
     established under paragraph (1)(B), the methodological 
     standards developed and updated by the methodology committee 
     under paragraph (6)(C)(i), and any peer-review process 
     provided under paragraph (7) by majority vote. In the case 
     where the Institute does not adopt such processes in 
     accordance with the preceding sentence, the processes shall 
     be referred to the appropriate staff or entity within the 
     Institute (or, in the case of the methodological standards, 
     the methodology committee) for further review.
       ``(10) Annual reports.--The Institute shall submit an 
     annual report to Congress and the President, and shall make 
     the annual report available to the public. Such report shall 
     contain--
       ``(A) a description of the activities conducted under this 
     section, research priorities identified under paragraph 
     (1)(A) and methodological standards developed and updated by 
     the methodology committee under paragraph (6)(C)(i) that are 
     adopted under paragraph (9) during the preceding year;
       ``(B) the research project agenda and budget of the 
     Institute for the following year;
       ``(C) any administrative activities conducted by the 
     Institute during the preceding year;
       ``(D) the names of individuals contributing to any peer-
     review process under paragraph (7), without identifying them 
     with a particular research project; and
       ``(E) any other relevant information (including information 
     on the membership of the Board, expert advisory panels, 
     methodology committee, and the executive staff of the 
     Institute, any conflicts of interest with respect to these 
     individuals, and any bylaws adopted by the Board during the 
     preceding year).
       ``(e) Administration.--
       ``(1) In general.--Subject to paragraph (2), the Board 
     shall carry out the duties of the Institute.
       ``(2) Nondelegable duties.--The activities described in 
     subsections (d)(1) and (d)(9) are nondelegable.
       ``(f) Board of Governors.--
       ``(1) In general.--The Institute shall have a Board of 
     Governors, which shall consist of the following members:
       ``(A) The Director of Agency for Healthcare Research and 
     Quality (or the Director's designee).
       ``(B) The Director of the National Institutes of Health (or 
     the Director's designee).
       ``(C) Seventeen members appointed, not later than 6 months 
     after the date of enactment of this section, by the 
     Comptroller General of the United States as follows:
       ``(i) 3 members representing patients and health care 
     consumers.
       ``(ii) 5 members representing physicians and providers, 
     including at least 1 surgeon, nurse, State-licensed 
     integrative health care practitioner, and representative of a 
     hospital.
       ``(iii) 3 members representing private payers, of whom at 
     least 1 member shall represent health insurance issuers and 
     at least 1 member shall represent employers who self-insure 
     employee benefits.
       ``(iv) 3 members representing pharmaceutical, device, and 
     diagnostic manufacturers or developers.
       ``(v) 1 member representing quality improvement or 
     independent health service researchers.
       ``(vi) 2 members representing the Federal Government or the 
     States, including at least 1 member representing a Federal 
     health program or agency.
       ``(2) Qualifications.--The Board shall represent a broad 
     range of perspectives and collectively have scientific 
     expertise in clinical health sciences research, including 
     epidemiology, decisions sciences, health economics, and 
     statistics. In appointing the Board, the Comptroller General 
     of the United States shall consider and disclose any 
     conflicts of interest in accordance with subsection 
     (h)(4)(B). Members of the Board shall be recused from 
     relevant Institute activities in the case where the member 
     (or an immediate family member of such member) has a real 
     conflict of interest directly related to the research project 
     or the matter that could affect or be affected by such 
     participation.
       ``(3) Terms; vacancies.--A member of the Board shall be 
     appointed for a term of 6 years, except with respect to the 
     members first appointed, whose terms of appointment shall be 
     staggered evenly over 2-year increments. No individual shall 
     be appointed to

[[Page 28556]]

     the Board for more than 2 terms. Vacancies shall be filled in 
     the same manner as the original appointment was made.
       ``(4) Chairperson and vice-chairperson.--The Comptroller 
     General of the United States shall designate a Chairperson 
     and Vice Chairperson of the Board from among the members of 
     the Board. Such members shall serve as Chairperson or Vice 
     Chairperson for a period of 3 years.
       ``(5) Compensation.--Each member of the Board who is not an 
     officer or employee of the Federal Government shall be 
     entitled to compensation (equivalent to the rate provided for 
     level IV of the Executive Schedule under section 5315 of 
     title 5, United States Code) and expenses incurred while 
     performing the duties of the Board. An officer or employee of 
     the Federal government who is a member of the Board shall be 
     exempt from compensation.
       ``(6) Director and staff; experts and consultants.--The 
     Board may employ and fix the compensation of an Executive 
     Director and such other personnel as may be necessary to 
     carry out the duties of the Institute and may seek such 
     assistance and support of, or contract with, experts and 
     consultants that may be necessary for the performance of the 
     duties of the Institute.
       ``(7) Meetings and hearings.--The Board shall meet and hold 
     hearings at the call of the Chairperson or a majority of its 
     members. Meetings not solely concerning matters of personnel 
     shall be advertised at least 7 days in advance and open to 
     the public. A majority of the Board members shall constitute 
     a quorum, but a lesser number of members may meet and hold 
     hearings.
       ``(g) Financial and Governmental Oversight.--
       ``(1) Contract for audit.--The Institute shall provide for 
     the conduct of financial audits of the Institute on an annual 
     basis by a private entity with expertise in conducting 
     financial audits.
       ``(2) Review and annual reports.--
       ``(A) Review.--The Comptroller General of the United States 
     shall review the following:
       ``(i) Not less frequently than on an annual basis, the 
     financial audits conducted under paragraph (1).
       ``(ii) Not less frequently than every 5 years, the 
     processes established by the Institute, including the 
     research priorities and the conduct of research projects, in 
     order to determine whether information produced by such 
     research projects is objective and credible, is produced in a 
     manner consistent with the requirements under this section, 
     and is developed through a transparent process.
       ``(iii) Not less frequently than every 5 years, the 
     dissemination and training activities and data networks 
     established under section 937 of the Public Health Service 
     Act, including the methods and products used to disseminate 
     research, the types of training conducted and supported, and 
     the types and functions of the data networks established, in 
     order to determine whether the activities and data are 
     produced in a manner consistent with the requirements under 
     such section.
       ``(iv) Not less frequently than every 5 years, the overall 
     effectiveness of activities conducted under this section and 
     the dissemination, training, and capacity building activities 
     conducted under section 937 of the Public Health Service Act. 
     Such review shall include an analysis of the extent to which 
     research findings are used by health care decision-makers, 
     the effect of the dissemination of such findings on reducing 
     practice variation and disparities in health care, and the 
     effect of the research conducted and disseminated on 
     innovation and the health care economy of the United States.
       ``(v) Not later than 8 years after the date of enactment of 
     this section, the adequacy and use of the funding for the 
     Institute and the activities conducted under section 937 of 
     the Public Health Service Act, including a determination as 
     to whether, based on the utilization of research findings by 
     public and private payers, funding sources for the Patient-
     Centered Outcomes Research Trust Fund under section 9511 of 
     the Internal Revenue Code of 1986 are appropriate and whether 
     such sources of funding should be continued or adjusted.
       ``(B) Annual reports.--Not later than April 1 of each year, 
     the Comptroller General of the United States shall submit to 
     Congress a report containing the results of the review 
     conducted under subparagraph (A) with respect to the 
     preceding year (or years, if applicable), together with 
     recommendations for such legislation and administrative 
     action as the Comptroller General determines appropriate.
       ``(h) Ensuring Transparency, Credibility, and Access.--The 
     Institute shall establish procedures to ensure that the 
     following requirements for ensuring transparency, 
     credibility, and access are met:
       ``(1) Public comment periods.--The Institute shall provide 
     for a public comment period of not less than 45 days and not 
     more than 60 days prior to the adoption under subsection 
     (d)(9) of the national priorities identified under subsection 
     (d)(1)(A), the research project agenda established under 
     subsection (d)(1)(B), the methodological standards developed 
     and updated by the methodology committee under subsection 
     (d)(6)(C)(i), and the peer-review process provided under 
     paragraph (7), and after the release of draft findings with 
     respect to systematic reviews of existing research and 
     evidence.
       ``(2) Additional forums.--The Institute shall support 
     forums to increase public awareness and obtain and 
     incorporate public input and feedback through media (such as 
     an Internet website) on research priorities, research 
     findings, and other duties, activities, or processes the 
     Institute determines appropriate.
       ``(3) Public availability.--The Institute shall make 
     available to the public and disclose through the official 
     public Internet website of the Institute the following:
       ``(A) Information contained in research findings as 
     specified in subsection (d)(9).
       ``(B) The process and methods for the conduct of research, 
     including the identity of the entity and the investigators 
     conducing such research and any conflicts of interests of 
     such parties, any direct or indirect links the entity has to 
     industry, and research protocols, including measures taken, 
     methods of research and analysis, research results, and such 
     other information the Institute determines appropriate) 
     concurrent with the release of research findings.
       ``(C) Notice of public comment periods under paragraph (1), 
     including deadlines for public comments.
       ``(D) Subsequent comments received during each of the 
     public comment periods.
       ``(E) In accordance with applicable laws and processes and 
     as the Institute determines appropriate, proceedings of the 
     Institute.
       ``(4) Disclosure of conflicts of interest.--
       ``(A) In general.--A conflict of interest shall be 
     disclosed in the following manner:
       ``(i) By the Institute in appointing members to an expert 
     advisory panel under subsection (d)(4), in selecting 
     individuals to contribute to any peer-review process under 
     subsection (d)(7), and for employment as executive staff of 
     the Institute.
       ``(ii) By the Comptroller General in appointing members of 
     the methodology committee under subsection (d)(6);
       ``(iii) By the Institute in the annual report under 
     subsection (d)(10), except that, in the case of individuals 
     contributing to any such peer review process, such 
     description shall be in a manner such that those individuals 
     cannot be identified with a particular research project.
       ``(B) Manner of disclosure.--Conflicts of interest shall be 
     disclosed as described in subparagraph (A) as soon as 
     practicable on the Internet web site of the Institute and of 
     the Government Accountability Office. The information 
     disclosed under the preceding sentence shall include the 
     type, nature, and magnitude of the interests of the 
     individual involved, except to the extent that the individual 
     recuses himself or herself from participating in the 
     consideration of or any other activity with respect to the 
     study as to which the potential conflict exists.
       ``(i) Rules.--The Institute, its Board or staff, shall be 
     prohibited from accepting gifts, bequeaths, or donations of 
     services or property. In addition, the Institute shall be 
     prohibited from establishing a corporation or generating 
     revenues from activities other than as provided under this 
     section.
       ``(j) Rules of Construction.--
       ``(1) Coverage.--Nothing in this section shall be 
     construed--
       ``(A) to permit the Institute to mandate coverage, 
     reimbursement, or other policies for any public or private 
     payer; or
       ``(B) as preventing the Secretary from covering the routine 
     costs of clinical care received by an individual entitled to, 
     or enrolled for, benefits under title XVIII, XIX, or XXI in 
     the case where such individual is participating in a clinical 
     trial and such costs would otherwise be covered under such 
     title with respect to the beneficiary.''.
       (b) Dissemination and Building Capacity for Research.--
     Title IX of the Public Health Service Act (42 U.S.C. 299 et 
     seq.), as amended by section 3606, is further amended by 
     inserting after section 936 the following:

     ``SEC. 937. DISSEMINATION AND BUILDING CAPACITY FOR RESEARCH.

       ``(a) In General.--
       ``(1) Dissemination.--The Office of Communication and 
     Knowledge Transfer (referred to in this section as the 
     `Office') at the Agency for Healthcare Research and Quality 
     (or any other relevant office designated by Agency for 
     Healthcare Research and Quality), in consultation with the 
     National Institutes of Health, shall broadly disseminate the 
     research findings that are published by the Patient Centered 
     Outcomes Research Institute established under section 1181(b) 
     of the Social Security Act (referred to in this section as 
     the `Institute') and other government-funded research 
     relevant to comparative clinical effectiveness research. The 
     Office shall create informational tools that organize and 
     disseminate research findings for physicians, health care 
     providers, patients, payers, and policy makers. The Office 
     shall also develop a publicly available resource database 
     that collects and contains government-funded evidence and 
     research from public, private, not-for profit, and academic 
     sources.
       ``(2) Requirements.--The Office shall provide for the 
     dissemination of the Institute's research findings and 
     government-funded research relevant to comparative clinical 
     effectiveness research to physicians, health

[[Page 28557]]

     care providers, patients, vendors of health information 
     technology focused on clinical decision support, appropriate 
     professional associations, and Federal and private health 
     plans. Materials, forums, and media used to disseminate the 
     findings, informational tools, and resource databases shall--
       ``(A) include a description of considerations for specific 
     subpopulations, the research methodology, and the limitations 
     of the research, and the names of the entities, agencies, 
     instrumentalities, and individuals who conducted any research 
     which was published by the Institute; and
       ``(B) not be construed as mandates, guidelines, or 
     recommendations for payment, coverage, or treatment.
       ``(b) Incorporation of Research Findings.--The Office, in 
     consultation with relevant medical and clinical associations, 
     shall assist users of health information technology focused 
     on clinical decision support to promote the timely 
     incorporation of research findings disseminated under 
     subsection (a) into clinical practices and to promote the 
     ease of use of such incorporation.
       ``(c) Feedback.--The Office shall establish a process to 
     receive feedback from physicians, health care providers, 
     patients, and vendors of health information technology 
     focused on clinical decision support, appropriate 
     professional associations, and Federal and private health 
     plans about the value of the information disseminated and the 
     assistance provided under this section.
       ``(d) Rule of Construction.--Nothing in this section shall 
     preclude the Institute from making its research findings 
     publicly available as required under section 1181(d)(8) of 
     the Social Security Act.
       ``(e) Training of Researchers.--The Agency for Health Care 
     Research and Quality, in consultation with the National 
     Institutes of Health, shall build capacity for comparative 
     clinical effectiveness research by establishing a grant 
     program that provides for the training of researchers in the 
     methods used to conduct such research, including systematic 
     reviews of existing research and primary research such as 
     clinical trials. At a minimum, such training shall be in 
     methods that meet the methodological standards adopted under 
     section 1181(d)(9) of the Social Security Act.
       ``(f) Building Data for Research.--The Secretary shall 
     provide for the coordination of relevant Federal health 
     programs to build data capacity for comparative clinical 
     effectiveness research, including the development and use of 
     clinical registries and health outcomes research data 
     networks, in order to develop and maintain a comprehensive, 
     interoperable data network to collect, link, and analyze data 
     on outcomes and effectiveness from multiple sources, 
     including electronic health records.
       ``(g) Authority to Contract With the Institute.--Agencies 
     and instrumentalities of the Federal Government may enter 
     into agreements with the Institute, and accept and retain 
     funds, for the conduct and support of research described in 
     this part, provided that the research to be conducted or 
     supported under such agreements is authorized under the 
     governing statutes of such agencies and instrumentalities.''.
       (c) In General.--Part D of title XI of the Social Security 
     Act, as added by subsection (a), is amended by adding at the 
     end the following new section:


  ``limitations on certain uses of comparative clinical effectiveness 
                                research

       ``Sec. 1182.  (a) The Secretary may only use evidence and 
     findings from research conducted under section 1181 to make a 
     determination regarding coverage under title XVIII if such 
     use is through an iterative and transparent process which 
     includes public comment and considers the effect on 
     subpopulations.
       ``(b) Nothing in section 1181 shall be construed as--
       ``(1) superceding or modifying the coverage of items or 
     services under title XVIII that the Secretary determines are 
     reasonable and necessary under section 1862(l)(1); or
       ``(2) authorizing the Secretary to deny coverage of items 
     or services under such title solely on the basis of 
     comparative clinical effectiveness research.
       ``(c)(1) The Secretary shall not use evidence or findings 
     from comparative clinical effectiveness research conducted 
     under section 1181 in determining coverage, reimbursement, or 
     incentive programs under title XVIII in a manner that treats 
     extending the life of an elderly, disabled, or terminally ill 
     individual as of lower value than extending the life of an 
     individual who is younger, nondisabled, or not terminally 
     ill.
       ``(2) Paragraph (1) shall not be construed as preventing 
     the Secretary from using evidence or findings from such 
     comparative clinical effectiveness research in determining 
     coverage, reimbursement, or incentive programs under title 
     XVIII based upon a comparison of the difference in the 
     effectiveness of alternative treatments in extending an 
     individual's life due to the individual's age, disability, or 
     terminal illness.
       ``(d)(1) The Secretary shall not use evidence or findings 
     from comparative clinical effectiveness research conducted 
     under section 1181 in determining coverage, reimbursement, or 
     incentive programs under title XVIII in a manner that 
     precludes, or with the intent to discourage, an individual 
     from choosing a health care treatment based on how the 
     individual values the tradeoff between extending the length 
     of their life and the risk of disability.
       ``(2)(A) Paragraph (1) shall not be construed to--
       ``(i) limit the application of differential copayments 
     under title XVIII based on factors such as cost or type of 
     service; or
       ``(ii) prevent the Secretary from using evidence or 
     findings from such comparative clinical effectiveness 
     research in determining coverage, reimbursement, or incentive 
     programs under such title based upon a comparison of the 
     difference in the effectiveness of alternative health care 
     treatments in extending an individual's life due to that 
     individual's age, disability, or terminal illness.
       ``(3) Nothing in the provisions of, or amendments made by 
     the Patient Protection and Affordable Care Act, shall be 
     construed to limit comparative clinical effectiveness 
     research or any other research, evaluation, or dissemination 
     of information concerning the likelihood that a health care 
     treatment will result in disability.
       ``(e) The Patient-Centered Outcomes Research Institute 
     established under section 1181(b)(1) shall not develop or 
     employ a dollars-per-quality adjusted life year (or similar 
     measure that discounts the value of a life because of an 
     individual's disability) as a threshold to establish what 
     type of health care is cost effective or recommended. The 
     Secretary shall not utilize such an adjusted life year (or 
     such a similar measure) as a threshold to determine coverage, 
     reimbursement, or incentive programs under title XVIII.''.
       (d) In General.--Part D of title XI of the Social Security 
     Act, as added by subsection (a) and amended by subsection 
     (c), is amended by adding at the end the following new 
     section:


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

       ``Sec. 1183.  (a) In General.--The Secretary shall provide 
     for the transfer, from the Federal Hospital Insurance Trust 
     Fund under section 1817 and the Federal Supplementary Medical 
     Insurance Trust Fund under section 1841, in proportion (as 
     estimated by the Secretary) to the total expenditures during 
     such fiscal year that are made under title XVIII from the 
     respective trust fund, to the Patient-Centered Outcomes 
     Research Trust Fund (referred to in this section as the 
     `PCORTF') under section 9511 of the Internal Revenue Code of 
     1986, of the following:
       ``(1) For fiscal year 2013, an amount equal to $1 
     multiplied by the average number of individuals entitled to 
     benefits under part A, or enrolled under part B, of title 
     XVIII during such fiscal year.
       ``(2) For each of fiscal years 2014, 2015, 2016, 2017, 
     2018, and 2019, an amount equal to $2 multiplied by the 
     average number of individuals entitled to benefits under part 
     A, or enrolled under part B, of title XVIII during such 
     fiscal year.
       ``(b) Adjustments for Increases in Health Care Spending.--
     In the case of any fiscal year beginning after September 30, 
     2014, the dollar amount in effect under subsection (a)(2) for 
     such fiscal year shall be equal to the sum of such dollar 
     amount for the previous fiscal year (determined after the 
     application of this subsection), plus an amount equal to the 
     product of--
       ``(1) such dollar amount for the previous fiscal year, 
     multiplied by
       ``(2) the percentage increase in the projected per capita 
     amount of National Health Expenditures, as most recently 
     published by the Secretary before the beginning of the fiscal 
     year.''.
       (e) Patient-Centered Outcomes Research Trust Fund; 
     Financing for Trust Fund.--
       (1) Establishment of trust fund.--
       (A) In general.--Subchapter A of chapter 98 of the Internal 
     Revenue Code of 1986 (relating to establishment of trust 
     funds) is amended by adding at the end the following new 
     section:

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

       ``(a) Creation of Trust Fund.--There is established in the 
     Treasury of the United States a trust fund to be known as the 
     `Patient-Centered Outcomes Research Trust Fund' (hereafter in 
     this section referred to as the `PCORTF'), consisting of such 
     amounts as may be appropriated or credited to such Trust Fund 
     as provided in this section and section 9602(b).
       ``(b) Transfers to Fund.--
       ``(1) Appropriation.--There are hereby appropriated to the 
     Trust Fund the following:
       ``(A) For fiscal year 2010, $10,000,000.
       ``(B) For fiscal year 2011, $50,000,000.
       ``(C) For fiscal year 2012, $150,000,000.
       ``(D) For fiscal year 2013--
       ``(i) an amount equivalent to the net revenues received in 
     the Treasury from the fees imposed under subchapter B of 
     chapter 34 (relating to fees on health insurance and self-
     insured plans) for such fiscal year; and
       ``(ii) $150,000,000.
       ``(E) For each of fiscal years 2014, 2015, 2016, 2017, 
     2018, and 2019--
       ``(i) an amount equivalent to the net revenues received in 
     the Treasury from the fees imposed under subchapter B of 
     chapter 34 (relating to fees on health insurance and self-
     insured plans) for such fiscal year; and

[[Page 28558]]

       ``(ii) $150,000,000.

     The amounts appropriated under subparagraphs (A), (B), (C), 
     (D)(ii), and (E)(ii) shall be transferred from the general 
     fund of the Treasury, from funds not otherwise appropriated.
       ``(2) Trust fund transfers.--In addition to the amounts 
     appropriated under paragraph (1), there shall be credited to 
     the PCORTF the amounts transferred under section 1183 of the 
     Social Security Act.
       ``(3) Limitation on transfers to pcortf.--No amount may be 
     appropriated or transferred to the PCORTF on and after the 
     date of any expenditure from the PCORTF which is not an 
     expenditure permitted under this section. The determination 
     of whether an expenditure is so permitted shall be made 
     without regard to--
       ``(A) any provision of law which is not contained or 
     referenced in this chapter or in a revenue Act, and
       ``(B) whether such provision of law is a subsequently 
     enacted provision or directly or indirectly seeks to waive 
     the application of this paragraph.
       ``(c) Trustee.--The Secretary of the Treasury shall be a 
     trustee of the PCORTF.
       ``(d) Expenditures From Fund.--
       ``(1) Amounts available to the patient-centered outcomes 
     research institute.--Subject to paragraph (2), amounts in the 
     PCORTF are available, without further appropriation, to the 
     Patient-Centered Outcomes Research Institute established 
     under section 1181(b) of the Social Security Act for carrying 
     out part D of title XI of the Social Security Act (as in 
     effect on the date of enactment of such Act).
       ``(2) Transfer of funds.--
       ``(A) In general.--The trustee of the PCORTF shall provide 
     for the transfer from the PCORTF of 20 percent of the amounts 
     appropriated or credited to the PCORTF for each of fiscal 
     years 2011 through 2019 to the Secretary of Health and Human 
     Services to carry out section 937 of the Public Health 
     Service Act.
       ``(B) Availability.--Amounts transferred under subparagraph 
     (A) shall remain available until expended.
       ``(C) Requirements.--Of the amounts transferred under 
     subparagraph (A) with respect to a fiscal year, the Secretary 
     of Health and Human Services shall distribute--
       ``(i) 80 percent to the Office of Communication and 
     Knowledge Transfer of the Agency for Healthcare Research and 
     Quality (or any other relevant office designated by Agency 
     for Healthcare Research and Quality) to carry out the 
     activities described in section 937 of the Public Health 
     Service Act; and
       ``(ii) 20 percent to the Secretary to carry out the 
     activities described in such section 937.
       ``(e) Net Revenues.--For purposes of this section, the term 
     `net revenues' means the amount estimated by the Secretary of 
     the Treasury based on the excess of--
       ``(1) the fees received in the Treasury under subchapter B 
     of chapter 34, over
       ``(2) the decrease in the tax imposed by chapter 1 
     resulting from the fees imposed by such subchapter.
       ``(f) Termination.--No amounts shall be available for 
     expenditure from the PCORTF after September 30, 2019, and any 
     amounts in such Trust Fund after such date shall be 
     transferred to the general fund of the Treasury.''.
       (B) Clerical amendment.--The table of sections for 
     subchapter A of chapter 98 of such Code is amended by adding 
     at the end the following new item:

``Sec. 9511. Patient-centered outcomes research trust fund.''.
       (2) Financing for fund from fees on insured and self-
     insured health plans.--
       (A) General rule.--Chapter 34 of the Internal Revenue Code 
     of 1986 is amended by adding at the end the following new 
     subchapter:

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

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

     ``SEC. 4375. HEALTH INSURANCE.

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

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

       ``(a) Imposition of Fee.--In the case of any applicable 
     self-insured health plan for each plan year ending after 
     September 30, 2012, there is hereby imposed a fee equal to $2 
     ($1 in the case of plan years ending during fiscal year 2013) 
     multiplied by the average number of lives covered under the 
     plan.
       ``(b) Liability for Fee.--
       ``(1) In general.--The fee imposed by subsection (a) shall 
     be paid by the plan sponsor.
       ``(2) Plan sponsor.--For purposes of paragraph (1) the term 
     `plan sponsor' means--
       ``(A) the employer in the case of a plan established or 
     maintained by a single employer,
       ``(B) the employee organization in the case of a plan 
     established or maintained by an employee organization,
       ``(C) in the case of--
       ``(i) a plan established or maintained by 2 or more 
     employers or jointly by 1 or more employers and 1 or more 
     employee organizations,
       ``(ii) a multiple employer welfare arrangement, or
       ``(iii) a voluntary employees' beneficiary association 
     described in section 501(c)(9),the association, committee, 
     joint board of trustees, or other similar group of 
     representatives of the parties who establish or maintain the 
     plan, or
       ``(D) the cooperative or association described in 
     subsection (c)(2)(F) in the case of a plan established or 
     maintained by such a cooperative or association.
       ``(c) Applicable Self-insured Health Plan.--For purposes of 
     this section, the term `applicable self-insured health plan' 
     means any plan for providing accident or health coverage if--
       ``(1) any portion of such coverage is provided other than 
     through an insurance policy, and
       ``(2) such plan is established or maintained--
       ``(A) by 1 or more employers for the benefit of their 
     employees or former employees,
       ``(B) by 1 or more employee organizations for the benefit 
     of their members or former members,
       ``(C) jointly by 1 or more employers and 1 or more employee 
     organizations for the benefit of employees or former 
     employees,
       ``(D) by a voluntary employees' beneficiary association 
     described in section 501(c)(9),
       ``(E) by any organization described in section 501(c)(6), 
     or
       ``(F) in the case of a plan not described in the preceding 
     subparagraphs, by a multiple employer welfare arrangement (as 
     defined in section 3(40) of Employee Retirement Income 
     Security Act of 1974), a rural electric cooperative (as 
     defined in section 3(40)(B)(iv) of such Act), or a rural 
     telephone cooperative association (as defined in section 
     3(40)(B)(v) of such Act).
       ``(d) Adjustments for Increases in Health Care Spending.--
     In the case of any plan year ending in any fiscal year 
     beginning after September 30, 2014, the dollar amount in 
     effect under subsection (a) for such plan year shall be equal 
     to the sum of such dollar amount for plan years ending in the 
     previous fiscal year (determined after the application of 
     this subsection), plus an amount equal to the product of--
       ``(1) such dollar amount for plan years ending in the 
     previous fiscal year, multiplied by
       ``(2) the percentage increase in the projected per capita 
     amount of National Health Expenditures, as most recently 
     published by the Secretary before the beginning of the fiscal 
     year.
       ``(e) Termination.--This section shall not apply to plan 
     years ending after September 30, 2019.

     ``SEC. 4377. DEFINITIONS AND SPECIAL RULES.

       ``(a) Definitions.--For purposes of this subchapter--
       ``(1) Accident and health coverage.--The term `accident and 
     health coverage' means

[[Page 28559]]

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

           ``CHAPTER 34--TAXES ON CERTAIN INSURANCE POLICIES

          ``subchapter a. policies issued by foreign insurers

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

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

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

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

       (f) Tax-exempt Status of the Patient-centered Outcomes 
     Research Institute.--Subsection 501(l) of the Internal 
     Revenue Code of 1986 is amended by adding at the end the 
     following new paragraph:
       ``(4) The Patient-Centered Outcomes Research Institute 
     established under section 1181(b) of the Social Security 
     Act.''.

     SEC. 6302. FEDERAL COORDINATING COUNCIL FOR COMPARATIVE 
                   EFFECTIVENESS RESEARCH.

       Notwithstanding any other provision of law, the Federal 
     Coordinating Council for Comparative Effectiveness Research 
     established under section 804 of Division A of the American 
     Recovery and Reinvestment Act of 2009 (42 U.S.C. 299b-8), 
     including the requirement under subsection (e)(2) of such 
     section, shall terminate on the date of enactment of this 
     Act.

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

     SEC. 6401. PROVIDER SCREENING AND OTHER ENROLLMENT 
                   REQUIREMENTS UNDER MEDICARE, MEDICAID, AND 
                   CHIP.

       (a) Medicare.--Section 1866(j) of the Social Security Act 
     (42 U.S.C. 1395cc(j)) is amended--
       (1) in paragraph (1)(A), by adding at the end the 
     following: ``Such process shall include screening of 
     providers and suppliers in accordance with paragraph (2), a 
     provisional period of enhanced oversight in accordance with 
     paragraph (3), disclosure requirements in accordance with 
     paragraph (4), the imposition of temporary enrollment 
     moratoria in accordance with paragraph (5), and the 
     establishment of compliance programs in accordance with 
     paragraph (6).'';
       (2) by redesignating paragraph (2) as paragraph (7); and
       (3) by inserting after paragraph (1) the following:
       ``(2) Provider screening.--
       ``(A) Procedures.--Not later than 180 days after the date 
     of enactment of this paragraph, the Secretary, in 
     consultation with the Inspector General of the Department of 
     Health and Human Services, shall establish procedures under 
     which screening is conducted with respect to providers of 
     medical or other items or services and suppliers under the 
     program under this title, the Medicaid program under title 
     XIX, and the CHIP program under title XXI.
       ``(B) Level of screening.--The Secretary shall determine 
     the level of screening conducted under this paragraph 
     according to the risk of fraud, waste, and abuse, as 
     determined by the Secretary, with respect to the category of 
     provider of medical or other items or services or supplier. 
     Such screening--
       ``(i) shall include a licensure check, which may include 
     such checks across States; and
       ``(ii) may, as the Secretary determines appropriate based 
     on the risk of fraud, waste, and abuse described in the 
     preceding sentence, include--

       ``(I) a criminal background check;
       ``(II) fingerprinting;
       ``(III) unscheduled and unannounced site visits, including 
     preenrollment site visits;
       ``(IV) database checks (including such checks across 
     States); and
       ``(V) such other screening as the Secretary determines 
     appropriate.

       ``(C) Application fees.--
       ``(i) Individual providers.--Except as provided in clause 
     (iii), the Secretary shall impose a fee on each individual 
     provider of medical or other items or services or supplier 
     (such as a physician, physician assistant, nurse 
     practitioner, or clinical nurse specialist) with respect to 
     which screening is conducted under this paragraph in an 
     amount equal to--

       ``(I) for 2010, $200; and
       ``(II) for 2011 and each subsequent year, the amount 
     determined under this clause for the preceding year, adjusted 
     by the percentage change in the consumer price index for all 
     urban consumers (all items; United States city average) for 
     the 12-month period ending with June of the previous year.

       ``(ii) Institutional providers.--Except as provided in 
     clause (iii), the Secretary shall impose a fee on each 
     institutional provider of medical or other items or services 
     or supplier (such as a hospital or skilled nursing facility) 
     with respect to which screening is conducted under this 
     paragraph in an amount equal to--

       ``(I) for 2010, $500; and
       ``(II) for 2011 and each subsequent year, the amount 
     determined under this clause for the preceding year, adjusted 
     by the percentage change in the consumer price index for all 
     urban consumers (all items; United States city average) for 
     the 12-month period ending with June of the previous year.

       ``(iii) Hardship exception; waiver for certain medicaid 
     providers.--The Secretary may, on a case-by-case basis, 
     exempt a provider of medical or other items or services or 
     supplier from the imposition of an application fee under this 
     subparagraph if the Secretary determines that the imposition 
     of the application fee would result in a hardship. The 
     Secretary may waive the application fee under this 
     subparagraph for providers enrolled in a State Medicaid 
     program for whom the State demonstrates that imposition of 
     the fee would impede beneficiary access to care.
       ``(iv) Use of funds.--Amounts collected as a result of the 
     imposition of a fee under this subparagraph shall be used by 
     the Secretary for program integrity efforts, including to 
     cover the costs of conducting screening under this paragraph 
     and to carry out this subsection and section 1128J.
       ``(D) Application and enforcement.--
       ``(i) New providers of services and suppliers.--The 
     screening under this paragraph shall apply, in the case of a 
     provider of medical or other items or services or supplier 
     who is not enrolled in the program under this title, title 
     XIX , or title XXI as of the date of enactment of this 
     paragraph, on or after the date that is 1 year after such 
     date of enactment.
       ``(ii) Current providers of services and suppliers.--The 
     screening under this paragraph shall apply, in the case of a 
     provider of medical or other items or services or supplier 
     who is enrolled in the program under this title, title XIX, 
     or title XXI as of such date of enactment, on or after the 
     date that is 2 years after such date of enactment.
       ``(iii) Revalidation of enrollment.--Effective beginning on 
     the date that is 180 days after such date of enactment, the 
     screening under this paragraph shall apply with respect to 
     the revalidation of enrollment of a provider of medical or 
     other items or services or supplier in the program under this 
     title, title XIX, or title XXI.
       ``(iv) Limitation on enrollment and revalidation of 
     enrollment.--In no case may a provider of medical or other 
     items or services or supplier who has not been screened under 
     this paragraph be initially enrolled or reenrolled in the 
     program under this title, title XIX, or title XXI on or after 
     the date that is 3 years after such date of enactment.
       ``(E) Expedited rulemaking.--The Secretary may promulgate 
     an interim final rule to carry out this paragraph.
       ``(3) Provisional period of enhanced oversight for new 
     providers of services and suppliers.--
       ``(A) In general.--The Secretary shall establish procedures 
     to provide for a provisional period of not less than 30 days 
     and not

[[Page 28560]]

     more than 1 year during which new providers of medical or 
     other items or services and suppliers, as the Secretary 
     determines appropriate, including categories of providers or 
     suppliers, would be subject to enhanced oversight, such as 
     prepayment review and payment caps, under the program under 
     this title, the Medicaid program under title XIX. and the 
     CHIP program under title XXI.
       ``(B) Implementation.--The Secretary may establish by 
     program instruction or otherwise the procedures under this 
     paragraph.
       ``(4) Increased disclosure requirements.--
       ``(A) Disclosure.--A provider of medical or other items or 
     services or supplier who submits an application for 
     enrollment or revalidation of enrollment in the program under 
     this title , title XIX, or title XXI on or after the date 
     that is 1 year after the date of enactment of this paragraph 
     shall disclose (in a form and manner and at such time as 
     determined by the Secretary) any current or previous 
     affiliation (directly or indirectly) with a provider of 
     medical or other items or services or supplier that has 
     uncollected debt, has been or is subject to a payment 
     suspension under a Federal health care program (as defined in 
     section 1128B(f)), has been excluded from participation under 
     the program under this title, the Medicaid program under 
     title XIX, or the CHIP program under title XXI, or has had 
     its billing privileges denied or revoked.
       ``(B) Authority to deny enrollment.--If the Secretary 
     determines that such previous affiliation poses an undue risk 
     of fraud, waste, or abuse, the Secretary may deny such 
     application. Such a denial shall be subject to appeal in 
     accordance with paragraph (7).
       ``(5) Authority to adjust payments of providers of services 
     and suppliers with the same tax identification number for 
     past-due obligations.--
       ``(A) In general.--Notwithstanding any other provision of 
     this title, in the case of an applicable provider of services 
     or supplier, the Secretary may make any necessary adjustments 
     to payments to the applicable provider of services or 
     supplier under the program under this title in order to 
     satisfy any past-due obligations described in subparagraph 
     (B)(ii) of an obligated provider of services or supplier.
       ``(B) Definitions.--In this paragraph:
       ``(i) In general.--The term `applicable provider of 
     services or supplier' means a provider of services or 
     supplier that has the same taxpayer identification number 
     assigned under section 6109 of the Internal Revenue Code of 
     1986 as is assigned to the obligated provider of services or 
     supplier under such section, regardless of whether the 
     applicable provider of services or supplier is assigned a 
     different billing number or national provider identification 
     number under the program under this title than is assigned to 
     the obligated provider of services or supplier.
       ``(ii) Obligated provider of services or supplier.--The 
     term `obligated provider of services or supplier' means a 
     provider of services or supplier that owes a past-due 
     obligation under the program under this title (as determined 
     by the Secretary).
       ``(6) Temporary moratorium on enrollment of new 
     providers.--
       ``(A) In general.--The Secretary may impose a temporary 
     moratorium on the enrollment of new providers of services and 
     suppliers, including categories of providers of services and 
     suppliers, in the program under this title, under the 
     Medicaid program under title XIX, or under the CHIP program 
     under title XXI if the Secretary determines such moratorium 
     is necessary to prevent or combat fraud, waste, or abuse 
     under either such program.
       ``(B) Limitation on review.--There shall be no judicial 
     review under section 1869, section 1878, or otherwise, of a 
     temporary moratorium imposed under subparagraph (A).
       ``(7) Compliance programs.--
       ``(A) In general.--On or after the date of implementation 
     determined by the Secretary under subparagraph (C), a 
     provider of medical or other items or services or supplier 
     within a particular industry sector or category shall, as a 
     condition of enrollment in the program under this title, 
     title XIX, or title XXI, establish a compliance program that 
     contains the core elements established under subparagraph (B) 
     with respect to that provider or supplier and industry or 
     category.
       ``(B) Establishment of core elements.--The Secretary, in 
     consultation with the Inspector General of the Department of 
     Health and Human Services, shall establish core elements for 
     a compliance program under subparagraph (A) for providers or 
     suppliers within a particular industry or category.
       ``(C) Timeline for implementation.--The Secretary shall 
     determine the timeline for the establishment of the core 
     elements under subparagraph (B) and the date of the 
     implementation of subparagraph (A) for providers or suppliers 
     within a particular industry or category. The Secretary 
     shall, in determining such date of implementation, consider 
     the extent to which the adoption of compliance programs by a 
     provider of medical or other items or services or supplier is 
     widespread in a particular industry sector or with respect to 
     a particular provider or supplier category.''.
       (b) Medicaid.--
       (1) State plan amendment.--Section 1902(a) of the Social 
     Security Act (42 U.S.C. 1396a(a)), as amended by section 
     4302(b), is amended--
       (A) in subsection (a)--
       (i) by striking ``and'' at the end of paragraph (75);
       (ii) by striking the period at the end of paragraph (76) 
     and inserting a semicolon; and
       (iii) by inserting after paragraph (76) the following:
       ``(77) provide that the State shall comply with provider 
     and supplier screening, oversight, and reporting requirements 
     in accordance with subsection (ii);''; and
       (B) by adding at the end the following:
       ``(ii) Provider and Supplier Screening, Oversight, and 
     Reporting Requirements.--For purposes of subsection (a)(77), 
     the requirements of this subsection are the following:
       ``(1) Screening.--The State complies with the process for 
     screening providers and suppliers under this title, as 
     established by the Secretary under section 1886(j)(2).
       ``(2) Provisional period of enhanced oversight for new 
     providers and suppliers.--The State complies with procedures 
     to provide for a provisional period of enhanced oversight for 
     new providers and suppliers under this title, as established 
     by the Secretary under section 1886(j)(3).
       ``(3) Disclosure requirements.--The State requires 
     providers and suppliers under the State plan or under a 
     waiver of the plan to comply with the disclosure requirements 
     established by the Secretary under section 1886(j)(4).
       ``(4) Temporary moratorium on enrollment of new providers 
     or suppliers.--
       ``(A) Temporary moratorium imposed by the secretary.--
       ``(i) In general.--Subject to clause (ii), the State 
     complies with any temporary moratorium on the enrollment of 
     new providers or suppliers imposed by the Secretary under 
     section 1886(j)(6).
       ``(ii) Exception.--A State shall not be required to comply 
     with a temporary moratorium described in clause (i) if the 
     State determines that the imposition of such temporary 
     moratorium would adversely impact beneficiaries' access to 
     medical assistance.
       ``(B) Moratorium on enrollment of providers and 
     suppliers.--At the option of the State, the State imposes, 
     for purposes of entering into participation agreements with 
     providers or suppliers under the State plan or under a waiver 
     of the plan, periods of enrollment moratoria, or numerical 
     caps or other limits, for providers or suppliers identified 
     by the Secretary as being at high-risk for fraud, waste, or 
     abuse as necessary to combat fraud, waste, or abuse, but only 
     if the State determines that the imposition of any such 
     period, cap, or other limits would not adversely impact 
     beneficiaries' access to medical assistance.
       ``(5) Compliance programs.--The State requires providers 
     and suppliers under the State plan or under a waiver of the 
     plan to establish, in accordance with the requirements of 
     section 1866(j)(7), a compliance program that contains the 
     core elements established under subparagraph (B) of that 
     section 1866(j)(7) for providers or suppliers within a 
     particular industry or category.
       ``(6) Reporting of adverse provider actions.--The State 
     complies with the national system for reporting criminal and 
     civil convictions, sanctions, negative licensure actions, and 
     other adverse provider actions to the Secretary, through the 
     Administrator of the Centers for Medicare & Medicaid 
     Services, in accordance with regulations of the Secretary.
       ``(7) Enrollment and npi of ordering or referring 
     providers.--The State requires--
       ``(A) all ordering or referring physicians or other 
     professionals to be enrolled under the State plan or under a 
     waiver of the plan as a participating provider; and
       ``(B) the national provider identifier of any ordering or 
     referring physician or other professional to be specified on 
     any claim for payment that is based on an order or referral 
     of the physician or other professional.
       ``(8) Other state oversight.--Nothing in this subsection 
     shall be interpreted to preclude or limit the ability of a 
     State to engage in provider and supplier screening or 
     enhanced provider and supplier oversight activities beyond 
     those required by the Secretary.''.
       (2) Disclosure of medicare terminated providers and 
     suppliers to states.--The Administrator of the Centers for 
     Medicare & Medicaid Services shall establish a process for 
     making available to the each State agency with responsibility 
     for administering a State Medicaid plan (or a waiver of such 
     plan) under title XIX of the Social Security Act or a child 
     health plan under title XXI the name, national provider 
     identifier, and other identifying information for any 
     provider of medical or other items or services or supplier 
     under the Medicare program under title XVIII or under the 
     CHIP program under title XXI that is terminated from 
     participation under that program within 30 days of the 
     termination (and, with respect to all such providers or 
     suppliers who are terminated from the Medicare program on the 
     date of enactment of this Act, within 90 days of such date).
       (3) Conforming amendment.--Section 1902(a)(23) of the 
     Social Security Act (42

[[Page 28561]]

     U.S.C. 1396a), is amended by inserting before the semicolon 
     at the end the following: ``or by a provider or supplier to 
     which a moratorium under subsection (ii)(4) is applied during 
     the period of such moratorium''.
       (c) CHIP.--Section 2107(e)(1) of the Social Security Act 
     (42 U.S.C. 1397gg(e)(1)), as amended by section 2101(d), is 
     amended--
       (1) by redesignating subparagraphs (D) through (M) as 
     subparagraphs (E) through (N), respectively; and
       (2) by inserting after subparagraph (C), the following:
       ``(D) Subsections (a)(77) and (ii) of section 1902 
     (relating to provider and supplier screening, oversight, and 
     reporting requirements).''.

     SEC. 6402. ENHANCED MEDICARE AND MEDICAID PROGRAM INTEGRITY 
                   PROVISIONS.

       (a) In General.--Part A of title XI of the Social Security 
     Act (42 U.S.C. 1301 et seq.), as amended by sections 6002, 
     6004, and 6102, is amended by inserting after section 1128I 
     the following new section:

     ``SEC. 1128J. MEDICARE AND MEDICAID PROGRAM INTEGRITY 
                   PROVISIONS.

       ``(a) Data Matching.--
       ``(1) Integrated data repository.--
       ``(A) Inclusion of certain data.--
       ``(i) In general.--The Integrated Data Repository of the 
     Centers for Medicare & Medicaid Services shall include, at a 
     minimum, claims and payment data from the following:

       ``(I) The programs under titles XVIII and XIX (including 
     parts A, B, C, and D of title XVIII).
       ``(II) The program under title XXI.
       ``(III) Health-related programs administered by the 
     Secretary of Veterans Affairs.
       ``(IV) Health-related programs administered by the 
     Secretary of Defense.
       ``(V) The program of old-age, survivors, and disability 
     insurance benefits established under title II.
       ``(VI) The Indian Health Service and the Contract Health 
     Service program.

       ``(ii) Priority for inclusion of certain data.--Inclusion 
     of the data described in subclause (I) of such clause in the 
     Integrated Data Repository shall be a priority. Data 
     described in subclauses (II) through (VI) of such clause 
     shall be included in the Integrated Data Repository as 
     appropriate.
       ``(B) Data sharing and matching.--
       ``(i) In general.--The Secretary shall enter into 
     agreements with the individuals described in clause (ii) 
     under which such individuals share and match data in the 
     system of records of the respective agencies of such 
     individuals with data in the system of records of the 
     Department of Health and Human Services for the purpose of 
     identifying potential fraud, waste, and abuse under the 
     programs under titles XVIII and XIX.
       ``(ii) Individuals described.--The following individuals 
     are described in this clause:

       ``(I) The Commissioner of Social Security.
       ``(II) The Secretary of Veterans Affairs.
       ``(III) The Secretary of Defense.
       ``(IV) The Director of the Indian Health Service.

       ``(iii) Definition of system of records.--For purposes of 
     this paragraph, the term `system of records' has the meaning 
     given such term in section 552a(a)(5) of title 5, United 
     States Code.
       ``(2) Access to claims and payment databases.--For purposes 
     of conducting law enforcement and oversight activities and to 
     the extent consistent with applicable information, privacy, 
     security, and disclosure laws, including the regulations 
     promulgated under the Health Insurance Portability and 
     Accountability Act of 1996 and section 552a of title 5, 
     United States Code, and subject to any information systems 
     security requirements under such laws or otherwise required 
     by the Secretary, the Inspector General of the Department of 
     Health and Human Services and the Attorney General shall have 
     access to claims and payment data of the Department of Health 
     and Human Services and its contractors related to titles 
     XVIII, XIX, and XXI.
       ``(b) OIG Authority To Obtain Information.--
       ``(1) In general.--Notwithstanding and in addition to any 
     other provision of law, the Inspector General of the 
     Department of Health and Human Services may, for purposes of 
     protecting the integrity of the programs under titles XVIII 
     and XIX, obtain information from any individual (including a 
     beneficiary provided all applicable privacy protections are 
     followed) or entity that--
       ``(A) is a provider of medical or other items or services, 
     supplier, grant recipient, contractor, or subcontractor; or
       ``(B) directly or indirectly provides, orders, 
     manufactures, distributes, arranges for, prescribes, 
     supplies, or receives medical or other items or services 
     payable by any Federal health care program (as defined in 
     section 1128B(f)) regardless of how the item or service is 
     paid for, or to whom such payment is made.
       ``(2) Inclusion of certain information.--Information which 
     the Inspector General may obtain under paragraph (1) includes 
     any supporting documentation necessary to validate claims for 
     payment or payments under title XVIII or XIX, including a 
     prescribing physician's medical records for an individual who 
     is prescribed an item or service which is covered under part 
     B of title XVIII, a covered part D drug (as defined in 
     section 1860D-2(e)) for which payment is made under an MA-PD 
     plan under part C of such title, or a prescription drug plan 
     under part D of such title, and any records necessary for 
     evaluation of the economy, efficiency, and effectiveness of 
     the programs under titles XVIII and XIX.
       ``(c) Administrative Remedy for Knowing Participation by 
     Beneficiary in Health Care Fraud Scheme.--
       ``(1) In general.--In addition to any other applicable 
     remedies, if an applicable individual has knowingly 
     participated in a Federal health care fraud offense or a 
     conspiracy to commit a Federal health care fraud offense, the 
     Secretary shall impose an appropriate administrative penalty 
     commensurate with the offense or conspiracy.
       ``(2) Applicable individual.--For purposes of paragraph 
     (1), the term `applicable individual' means an individual--
       ``(A) entitled to, or enrolled for, benefits under part A 
     of title XVIII or enrolled under part B of such title;
       ``(B) eligible for medical assistance under a State plan 
     under title XIX or under a waiver of such plan; or
       ``(C) eligible for child health assistance under a child 
     health plan under title XXI.
       ``(d) Reporting and Returning of Overpayments.--
       ``(1) In general.--If a person has received an overpayment, 
     the person shall--
       ``(A) report and return the overpayment to the Secretary, 
     the State, an intermediary, a carrier, or a contractor, as 
     appropriate, at the correct address; and
       ``(B) notify the Secretary, State, intermediary, carrier, 
     or contractor to whom the overpayment was returned in writing 
     of the reason for the overpayment.
       ``(2) Deadline for reporting and returning overpayments.--
     An overpayment must be reported and returned under paragraph 
     (1) by the later of--
       ``(A) the date which is 60 days after the date on which the 
     overpayment was identified; or
       ``(B) the date any corresponding cost report is due, if 
     applicable.
       ``(3) Enforcement.--Any overpayment retained by a person 
     after the deadline for reporting and returning the 
     overpayment under paragraph (2) is an obligation (as defined 
     in section 3729(b)(3) of title 31, United States Code) for 
     purposes of section 3729 of such title.
       ``(4) Definitions.--In this subsection:
       ``(A) Knowing and knowingly.--The terms `knowing' and 
     `knowingly' have the meaning given those terms in section 
     3729(b) of title 31, United States Code.
       ``(B) Overpayment.--The term ``overpayment'' means any 
     funds that a person receives or retains under title XVIII or 
     XIX to which the person, after applicable reconciliation, is 
     not entitled under such title.
       ``(C) Person.--
       ``(i) In general.--The term `person' means a provider of 
     services, supplier, medicaid managed care organization (as 
     defined in section 1903(m)(1)(A)), Medicare Advantage 
     organization (as defined in section 1859(a)(1)), or PDP 
     sponsor (as defined in section 1860D-41(a)(13)).
       ``(ii) Exclusion.--Such term does not include a 
     beneficiary.
       ``(e) Inclusion of National Provider Identifier on All 
     Applications and Claims.--The Secretary shall promulgate a 
     regulation that requires, not later than January 1, 2011, all 
     providers of medical or other items or services and suppliers 
     under the programs under titles XVIII and XIX that qualify 
     for a national provider identifier to include their national 
     provider identifier on all applications to enroll in such 
     programs and on all claims for payment submitted under such 
     programs.''.
       (b) Access to Data.--
       (1) Medicare part d.--Section 1860D-15(f)(2) of the Social 
     Security Act (42 U.S.C. 1395w-116(f)(2)) is amended by 
     striking ``may be used by'' and all that follows through the 
     period at the end and inserting ``may be used--
       ``(A) by officers, employees, and contractors of the 
     Department of Health and Human Services for the purposes of, 
     and to the extent necessary in--
       ``(i) carrying out this section; and
       ``(ii) conducting oversight, evaluation, and enforcement 
     under this title; and
       ``(B) by the Attorney General and the Comptroller General 
     of the United States for the purposes of, and to the extent 
     necessary in, carrying out health oversight activities.''.
       (2) Data matching.--Section 552a(a)(8)(B) of title 5, 
     United States Code, is amended--
       (A) in clause (vii), by striking ``or'' at the end;
       (B) in clause (viii), by inserting ``or'' after the 
     semicolon; and
       (C) by adding at the end the following new clause:
       ``(ix) matches performed by the Secretary of Health and 
     Human Services or the Inspector General of the Department of 
     Health and Human Services with respect to potential fraud, 
     waste, and abuse, including matches of a system of records 
     with non-Federal records;''.
       (3) Matching agreements with the commissioner of social 
     security.--Section

[[Page 28562]]

     205(r) of the Social Security Act (42 U.S.C. 405(r)) is 
     amended by adding at the end the following new paragraph:
       ``(9)(A) The Commissioner of Social Security shall, upon 
     the request of the Secretary or the Inspector General of the 
     Department of Health and Human Services--
       ``(i) enter into an agreement with the Secretary or such 
     Inspector General for the purpose of matching data in the 
     system of records of the Social Security Administration and 
     the system of records of the Department of Health and Human 
     Services; and
       ``(ii) include in such agreement safeguards to assure the 
     maintenance of the confidentiality of any information 
     disclosed.
       ``(B) For purposes of this paragraph, the term `system of 
     records' has the meaning given such term in section 
     552a(a)(5) of title 5, United States Code.''.
       (c) Withholding of Federal Matching Payments for States 
     That Fail to Report Enrollee Encounter Data in the Medicaid 
     Statistical Information System.--Section 1903(i) of the 
     Social Security Act (42 U.S.C. 1396b(i)) is amended--
       (1) in paragraph (23), by striking ``or'' at the end;
       (2) in paragraph (24), by striking the period at the end 
     and inserting ``; or''; and
       (3) by adding at the end the following new paragraph:.
       ``(25) with respect to any amounts expended for medical 
     assistance for individuals for whom the State does not report 
     enrollee encounter data (as defined by the Secretary) to the 
     Medicaid Statistical Information System (MSIS) in a timely 
     manner (as determined by the Secretary).''.
       (d) Permissive Exclusions and Civil Monetary Penalties.--
       (1) Permissive exclusions.--Section 1128(b) of the Social 
     Security Act (42 U.S.C. 1320a-7(b)) is amended by adding at 
     the end the following new paragraph:
       ``(16) Making false statements or misrepresentation of 
     material facts.--Any individual or entity that knowingly 
     makes or causes to be made any false statement, omission, or 
     misrepresentation of a material fact in any application, 
     agreement, bid, or contract to participate or enroll as a 
     provider of services or supplier under a Federal health care 
     program (as defined in section 1128B(f)), including Medicare 
     Advantage organizations under part C of title XVIII, 
     prescription drug plan sponsors under part D of title XVIII, 
     medicaid managed care organizations under title XIX, and 
     entities that apply to participate as providers of services 
     or suppliers in such managed care organizations and such 
     plans.''.
       (2) Civil monetary penalties.--
       (A) In general.--Section 1128A(a) of the Social Security 
     Act (42 U.S.C. 1320a-7a(a)) is amended--
       (i) in paragraph (1)(D), by striking ``was excluded'' and 
     all that follows through the period at the end and inserting 
     ``was excluded from the Federal health care program (as 
     defined in section 1128B(f)) under which the claim was made 
     pursuant to Federal law.'';
       (ii) in paragraph (6), by striking ``or'' at the end;
       (iii) by inserting after paragraph (7), the following new 
     paragraphs:
       ``(8) orders or prescribes a medical or other item or 
     service during a period in which the person was excluded from 
     a Federal health care program (as so defined), in the case 
     where the person knows or should know that a claim for such 
     medical or other item or service will be made under such a 
     program;
       ``(9) knowingly makes or causes to be made any false 
     statement, omission, or misrepresentation of a material fact 
     in any application, bid, or contract to participate or enroll 
     as a provider of services or a supplier under a Federal 
     health care program (as so defined), including Medicare 
     Advantage organizations under part C of title XVIII, 
     prescription drug plan sponsors under part D of title XVIII, 
     medicaid managed care organizations under title XIX, and 
     entities that apply to participate as providers of services 
     or suppliers in such managed care organizations and such 
     plans;
       ``(10) knows of an overpayment (as defined in paragraph (4) 
     of section 1128J(d)) and does not report and return the 
     overpayment in accordance with such section;'';
       (iv) in the first sentence--

       (I) by striking the ``or'' after ``prohibited relationship 
     occurs;''; and
       (II) by striking ``act)'' and inserting ``act; or in cases 
     under paragraph (9), $50,000 for each false statement or 
     misrepresentation of a material fact)''; and

       (v) in the second sentence, by striking ``purpose)'' and 
     inserting ``purpose; or in cases under paragraph (9), an 
     assessment of not more than 3 times the total amount claimed 
     for each item or service for which payment was made based 
     upon the application containing the false statement or 
     misrepresentation of a material fact)''.
       (B) Clarification of treatment of certain charitable and 
     other innocuous programs.--Section 1128A(i)(6) of the Social 
     Security Act (42 U.S.C. 1320a-7a(i)(6)) is amended--
       (i) in subparagraph (C), by striking ``or'' at the end;
       (ii) in subparagraph (D), as redesignated by section 
     4331(e) of the Balanced Budget Act of 1997 (Public Law 105-
     33), by striking the period at the end and inserting a 
     semicolon;
       (iii) by redesignating subparagraph (D), as added by 
     section 4523(c) of such Act, as subparagraph (E) and striking 
     the period at the end and inserting ``; or''; and
       (iv) by adding at the end the following new subparagraphs:
       ``(F) any other remuneration which promotes access to care 
     and poses a low risk of harm to patients and Federal health 
     care programs (as defined in section 1128B(f) and designated 
     by the Secretary under regulations);
       ``(G) the offer or transfer of items or services for free 
     or less than fair market value by a person, if--
       ``(i) the items or services consist of coupons, rebates, or 
     other rewards from a retailer;
       ``(ii) the items or services are offered or transferred on 
     equal terms available to the general public, regardless of 
     health insurance status; and
       ``(iii) the offer or transfer of the items or services is 
     not tied to the provision of other items or services 
     reimbursed in whole or in part by the program under title 
     XVIII or a State health care program (as defined in section 
     1128(h));
       ``(H) the offer or transfer of items or services for free 
     or less than fair market value by a person, if--
       ``(i) the items or services are not offered as part of any 
     advertisement or solicitation;
       ``(ii) the items or services are not tied to the provision 
     of other services reimbursed in whole or in part by the 
     program under title XVIII or a State health care program (as 
     so defined);
       ``(iii) there is a reasonable connection between the items 
     or services and the medical care of the individual; and
       ``(iv) the person provides the items or services after 
     determining in good faith that the individual is in financial 
     need; or
       ``(I) effective on a date specified by the Secretary (but 
     not earlier than January 1, 2011), the waiver by a PDP 
     sponsor of a prescription drug plan under part D of title 
     XVIII or an MA organization offering an MA-PD plan under part 
     C of such title of any copayment for the first fill of a 
     covered part D drug (as defined in section 1860D-2(e)) that 
     is a generic drug for individuals enrolled in the 
     prescription drug plan or MA-PD plan, respectively.''.
       (e) Testimonial Subpoena Authority in Exclusion-only 
     Cases.--Section 1128(f) of the Social Security Act (42 U.S.C. 
     1320a-7(f)) is amended by adding at the end the following new 
     paragraph:
       ``(4) The provisions of subsections (d) and (e) of section 
     205 shall apply with respect to this section to the same 
     extent as they are applicable with respect to title II. The 
     Secretary may delegate the authority granted by section 
     205(d) (as made applicable to this section) to the Inspector 
     General of the Department of Health and Human Services for 
     purposes of any investigation under this section.''.
       (f) Health Care Fraud.--
       (1) Kickbacks.--Section 1128B of the Social Security Act 
     (42 U.S.C. 1320a-7b) is amended by adding at the end the 
     following new subsection:
       ``(g) In addition to the penalties provided for in this 
     section or section 1128A, a claim that includes items or 
     services resulting from a violation of this section 
     constitutes a false or fraudulent claim for purposes of 
     subchapter III of chapter 37 of title 31, United States 
     Code.''.
       (2) Revising the intent requirement.--Section 1128B of the 
     Social Security Act (42 U.S.C. 1320a-7b), as amended by 
     paragraph (1), is amended by adding at the end the following 
     new subsection:
       ``(h) With respect to violations of this section, a person 
     need not have actual knowledge of this section or specific 
     intent to commit a violation of this section.''.
       (g) Surety Bond Requirements.--
       (1) Durable medical equipment.--Section 1834(a)(16)(B) of 
     the Social Security Act (42 U.S.C. 1395m(a)(16)(B)) is 
     amended by inserting ``that the Secretary determines is 
     commensurate with the volume of the billing of the supplier'' 
     before the period at the end.
       (2) Home health agencies.--Section 1861(o)(7)(C) of the 
     Social Security Act (42 U.S.C. 1395x(o)(7)(C)) is amended by 
     inserting ``that the Secretary determines is commensurate 
     with the volume of the billing of the home health agency'' 
     before the semicolon at the end.
       (3) Requirements for certain other providers of services 
     and suppliers.--Section 1862 of the Social Security Act (42 
     U.S.C. 1395y) is amended by adding at the end the following 
     new subsection:
       ``(n) Requirement of a Surety Bond for Certain Providers of 
     Services and Suppliers.--
       ``(1) In general.--The Secretary may require a provider of 
     services or supplier described in paragraph (2) to provide 
     the Secretary on a continuing basis with a surety bond in a 
     form specified by the Secretary in an amount (not less than 
     $50,000) that the Secretary determines is commensurate with 
     the volume of the billing of the provider of services or 
     supplier. The Secretary may waive the requirement of a bond 
     under the preceding sentence in the case of a provider of 
     services or supplier that provides a comparable surety bond 
     under State law.

[[Page 28563]]

       ``(2) Provider of services or supplier described.--A 
     provider of services or supplier described in this paragraph 
     is a provider of services or supplier the Secretary 
     determines appropriate based on the level of risk involved 
     with respect to the provider of services or supplier, and 
     consistent with the surety bond requirements under sections 
     1834(a)(16)(B) and 1861(o)(7)(C).''.
       (h) Suspension of Medicare and Medicaid Payments Pending 
     Investigation of Credible Allegations of Fraud.--
       (1) Medicare.--Section 1862 of the Social Security Act (42 
     U.S.C. 1395y), as amended by subsection (g)(3), is amended by 
     adding at the end the following new subsection:
       ``(o) Suspension of Payments Pending Investigation of 
     Credible Allegations of Fraud.--
       ``(1) In general.--The Secretary may suspend payments to a 
     provider of services or supplier under this title pending an 
     investigation of a credible allegation of fraud against the 
     provider of services or supplier, unless the Secretary 
     determines there is good cause not to suspend such payments.
       ``(2) Consultation.--The Secretary shall consult with the 
     Inspector General of the Department of Health and Human 
     Services in determining whether there is a credible 
     allegation of fraud against a provider of services or 
     supplier.
       ``(3) Promulgation of regulations.--The Secretary shall 
     promulgate regulations to carry out this subsection and 
     section 1903(i)(2)(C).''.
       (2) Medicaid.--Section 1903(i)(2) of such Act (42 U.S.C. 
     1396b(i)(2)) is amended--
       (A) in subparagraph (A), by striking ``or'' at the end; and
       (B) by inserting after subparagraph (B), the following:
       ``(C) by any individual or entity to whom the State has 
     failed to suspend payments under the plan during any period 
     when there is pending an investigation of a credible 
     allegation of fraud against the individual or entity, as 
     determined by the State in accordance with regulations 
     promulgated by the Secretary for purposes of section 1862(o) 
     and this subparagraph, unless the State determines in 
     accordance with such regulations there is good cause not to 
     suspend such payments; or''.
       (i) Increased Funding to Fight Fraud and Abuse.--
       (1) In general.--Section 1817(k) of the Social Security Act 
     (42 U.S.C. 1395i(k)) is amended--
       (A) by adding at the end the following new paragraph:
       ``(7) Additional funding.--In addition to the funds 
     otherwise appropriated to the Account from the Trust Fund 
     under paragraphs (3) and (4) and for purposes described in 
     paragraphs (3)(C) and (4)(A), there are hereby appropriated 
     an additional $10,000,000 to such Account from such Trust 
     Fund for each of fiscal years 2011 through 2020. The funds 
     appropriated under this paragraph shall be allocated in the 
     same proportion as the total funding appropriated with 
     respect to paragraphs (3)(A) and (4)(A) was allocated with 
     respect to fiscal year 2010, and shall be available without 
     further appropriation until expended.''; and
       (B) in paragraph (4)(A), by inserting ``until expended'' 
     after ``appropriation''.
       (2) Indexing of amounts appropriated.--
       (A) Departments of health and human services and justice.--
     Section 1817(k)(3)(A)(i) of the Social Security Act (42 
     U.S.C. 1395i(k)(3)(A)(i)) is amended--
       (i) in subclause (III), by inserting ``and'' at the end;
       (ii) in subclause (IV)--

       (I) by striking ``for each of fiscal years 2007, 2008, 
     2009, and 2010'' and inserting ``for each fiscal year after 
     fiscal year 2006''; and
       (II) by striking ``; and'' and inserting a period; and

       (iii) by striking subclause (V).
       (B) Office of the inspector general of the department of 
     health and human services.--Section 1817(k)(3)(A)(ii) of such 
     Act (42 U.S.C. 1395i(k)(3)(A)(ii)) is amended--
       (i) in subclause (VIII), by inserting ``and'' at the end;
       (ii) in subclause (IX)--

       (I) by striking ``for each of fiscal years 2008, 2009, and 
     2010'' and inserting ``for each fiscal year after fiscal year 
     2007''; and
       (II) by striking ``; and'' and inserting a period; and

       (iii) by striking subclause (X).
       (C) Federal bureau of investigation.--Section 1817(k)(3)(B) 
     of the Social Security Act (42 U.S.C. 1395i(k)(3)(B)) is 
     amended--
       (i) in clause (vii), by inserting ``and'' at the end;
       (ii) in clause (viii)--

       (I) by striking ``for each of fiscal years 2007, 2008, 
     2009, and 2010'' and inserting ``for each fiscal year after 
     fiscal year 2006''; and
       (II) by striking ``; and'' and inserting a period; and

       (iii) by striking clause (ix).
       (D) Medicare integrity program.--Section 1817(k)(4)(C) of 
     the Social Security Act (42 U.S.C. 1395i(k)(4)(C)) is amended 
     by adding at the end the following new clause:
       ``(ii) For each fiscal year after 2010, by the percentage 
     increase in the consumer price index for all urban consumers 
     (all items; United States city average) over the previous 
     year.''.
       (j) Medicare Integrity Program and Medicaid Integrity 
     Program.--
       (1) Medicare integrity program.--
       (A) Requirement to provide performance statistics.--Section 
     1893(c) of the Social Security Act (42 U.S.C. 1395ddd(c)) is 
     amended--
       (i) in paragraph (3), by striking ``and'' at the end;
       (ii) by redesignating paragraph (4) as paragraph (5); and
       (iii) by inserting after paragraph (3) the following new 
     paragraph:
       ``(4) the entity agrees to provide the Secretary and the 
     Inspector General of the Department of Health and Human 
     Services with such performance statistics (including the 
     number and amount of overpayments recovered, the number of 
     fraud referrals, and the return on investment of such 
     activities by the entity) as the Secretary or the Inspector 
     General may request; and''.
       (B) Evaluations and annual report.--Section 1893 of the 
     Social Security Act (42 U.S.C. 1395ddd) is amended by adding 
     at the end the following new subsection:
       ``(i) Evaluations and Annual Report.--
       ``(1) Evaluations.--The Secretary shall conduct evaluations 
     of eligible entities which the Secretary contracts with under 
     the Program not less frequently than every 3 years.
       ``(2) Annual report.--Not later than 180 days after the end 
     of each fiscal year (beginning with fiscal year 2011), the 
     Secretary shall submit a report to Congress which 
     identifies--
       ``(A) the use of funds, including funds transferred from 
     the Federal Hospital Insurance Trust Fund under section 1817 
     and the Federal Supplementary Insurance Trust Fund under 
     section 1841, to carry out this section; and
       ``(B) the effectiveness of the use of such funds.''.
       (C) Flexibility in pursuing fraud and abuse.--Section 
     1893(a) of the Social Security Act (42 U.S.C. 1395ddd(a)) is 
     amended by inserting ``, or otherwise,'' after ``entities''.
       (2) Medicaid integrity program.--
       (A) Requirement to provide performance statistics.--Section 
     1936(c)(2) of the Social Security Act (42 U.S.C. 1396u-
     6(c)(2)) is amended--
       (i) by redesignating subparagraph (D) as subparagraph (E); 
     and
       (ii) by inserting after subparagraph (C) the following new 
     subparagraph:
       ``(D) The entity agrees to provide the Secretary and the 
     Inspector General of the Department of Health and Human 
     Services with such performance statistics (including the 
     number and amount of overpayments recovered, the number of 
     fraud referrals, and the return on investment of such 
     activities by the entity) as the Secretary or the Inspector 
     General may request.''.
       (B) Evaluations and annual report.--Section 1936(e) of the 
     Social Security Act (42 U.S.C. 1396u-7(e)) is amended--
       (i) by redesignating paragraph (4) as paragraph (5); and
       (ii) by inserting after paragraph (3) the following new 
     paragraph:
       ``(4) Evaluations.--The Secretary shall conduct evaluations 
     of eligible entities which the Secretary contracts with under 
     the Program not less frequently than every 3 years.''.
       (k) Expanded Application of Hardship Waivers for 
     Exclusions.--Section 1128(c)(3)(B) of the Social Security Act 
     (42 U.S.C. 1320a-7(c)(3)(B)) is amended by striking 
     ``individuals entitled to benefits under part A of title 
     XVIII or enrolled under part B of such title, or both'' and 
     inserting ``beneficiaries (as defined in section 1128A(i)(5)) 
     of that program''.

     SEC. 6403. ELIMINATION OF DUPLICATION BETWEEN THE HEALTHCARE 
                   INTEGRITY AND PROTECTION DATA BANK AND THE 
                   NATIONAL PRACTITIONER DATA BANK.

       (a) Information Reported by Federal Agencies and Health 
     Plans.--Section 1128E of the Social Security Act (42 U.S.C. 
     1320a-7e) is amended--
       (1) by striking subsection (a) and inserting the following:
       ``(a) In General.--The Secretary shall maintain a national 
     health care fraud and abuse data collection program under 
     this section for the reporting of certain final adverse 
     actions (not including settlements in which no findings of 
     liability have been made) against health care providers, 
     suppliers, or practitioners as required by subsection (b), 
     with access as set forth in subsection (d), and shall furnish 
     the information collected under this section to the National 
     Practitioner Data Bank established pursuant to the Health 
     Care Quality Improvement Act of 1986 (42 U.S.C. 11101 et 
     seq.).'';
       (2) by striking subsection (d) and inserting the following:
       ``(d) Access to Reported Information.--
       ``(1) Availability.--The information collected under this 
     section shall be available from the National Practitioner 
     Data Bank to the agencies, authorities, and officials which 
     are provided under section 1921(b) information reported under 
     section 1921(a).
       ``(2) Fees for disclosure.--The Secretary may establish or 
     approve reasonable fees for the disclosure of information 
     under this section. The amount of such a fee may not exceed 
     the costs of processing the requests for disclosure and of 
     providing such information. Such fees shall be available to 
     the Secretary to cover such costs.'';

[[Page 28564]]

       (3) by striking subsection (f) and inserting the following:
       ``(f) Appropriate Coordination.--In implementing this 
     section, the Secretary shall provide for the maximum 
     appropriate coordination with part B of the Health Care 
     Quality Improvement Act of 1986 (42 U.S.C. 11131 et seq.) and 
     section 1921.''; and
       (4) in subsection (g)--
       (A) in paragraph (1)(A)--
       (i) in clause (iii)--

       (I) by striking ``or State'' each place it appears;
       (II) by redesignating subclauses (II) and (III) as 
     subclauses (III) and (IV), respectively; and
       (III) by inserting after subclause (I) the following new 
     subclause:
       ``(II) any dismissal or closure of the proceedings by 
     reason of the provider, supplier, or practitioner 
     surrendering their license or leaving the State or 
     jurisdiction''; and

       (ii) by striking clause (iv) and inserting the following:
       ``(iv) Exclusion from participation in a Federal health 
     care program (as defined in section 1128B(f)).'';
       (B) in paragraph (3)--
       (i) by striking subparagraphs (D) and (E); and
       (ii) by redesignating subparagraph (F) as subparagraph (D); 
     and
       (C) in subparagraph (D) (as so redesignated), by striking 
     ``or State''.
       (b) Information Reported by State Law or Fraud Enforcement 
     Agencies.--Section 1921 of the Social Security Act (42 U.S.C. 
     1396r-2) is amended--
       (1) in subsection (a)--
       (A) in paragraph (1)--
       (i) by striking ``system.--The State'' and all that follows 
     through the semicolon and inserting system.--
       ``(A) Licensing or certification actions.--The State must 
     have in effect a system of reporting the following 
     information with respect to formal proceedings (as defined by 
     the Secretary in regulations) concluded against a health care 
     practitioner or entity by a State licensing or certification 
     agency:'';
       (ii) by redesignating subparagraphs (A) through (D) as 
     clauses (i) through (iv), respectively, and indenting 
     appropriately;
       (iii) in subparagraph (A)(iii) (as so redesignated)--

       (I) by striking ``the license of'' and inserting ``license 
     or the right to apply for, or renew, a license by''; and
       (II) by inserting ``nonrenewability,'' after ``voluntary 
     surrender,''; and

       (iv) by adding at the end the following new subparagraph:
       ``(B) Other final adverse actions.--The State must have in 
     effect a system of reporting information with respect to any 
     final adverse action (not including settlements in which no 
     findings of liability have been made) taken against a health 
     care provider, supplier, or practitioner by a State law or 
     fraud enforcement agency.''; and
       (B) in paragraph (2), by striking ``the authority described 
     in paragraph (1)'' and inserting ``a State licensing or 
     certification agency or State law or fraud enforcement 
     agency'';
       (2) in subsection (b)--
       (A) by striking paragraph (2) and inserting the following:
       ``(2) to State licensing or certification agencies and 
     Federal agencies responsible for the licensing and 
     certification of health care providers, suppliers, and 
     licensed health care practitioners;'';
       (B) in each of paragraphs (4) and (6), by inserting ``, but 
     only with respect to information provided pursuant to 
     subsection (a)(1)(A)'' before the comma at the end;
       (C) by striking paragraph (5) and inserting the following:
       ``(5) to State law or fraud enforcement agencies,'';
       (D) by redesignating paragraphs (7) and (8) as paragraphs 
     (8) and (9), respectively; and
       (E) by inserting after paragraph (6) the following new 
     paragraph:
       ``(7) to health plans (as defined in section 1128C(c));'';
       (3) by redesignating subsection (d) as subsection (h), and 
     by inserting after subsection (c) the following new 
     subsections:
       ``(d) Disclosure and Correction of Information.--
       ``(1) Disclosure.--With respect to information reported 
     pursuant to subsection (a)(1), the Secretary shall--
       ``(A) provide for disclosure of the information, upon 
     request, to the health care practitioner who, or the entity 
     that, is the subject of the information reported; and
       ``(B) establish procedures for the case where the health 
     care practitioner or entity disputes the accuracy of the 
     information reported.
       ``(2) Corrections.--Each State licensing or certification 
     agency and State law or fraud enforcement agency shall report 
     corrections of information already reported about any formal 
     proceeding or final adverse action described in subsection 
     (a), in such form and manner as the Secretary prescribes by 
     regulation.
       ``(e) Fees for Disclosure.--The Secretary may establish or 
     approve reasonable fees for the disclosure of information 
     under this section. The amount of such a fee may not exceed 
     the costs of processing the requests for disclosure and of 
     providing such information. Such fees shall be available to 
     the Secretary to cover such costs.
       ``(f) Protection From Liability for Reporting.--No person 
     or entity, including any agency designated by the Secretary 
     in subsection (b), shall be held liable in any civil action 
     with respect to any reporting of information as required 
     under this section, without knowledge of the falsity of the 
     information contained in the report.
       ``(g) References.--For purposes of this section:
       ``(1) State licensing or certification agency.--The term 
     `State licensing or certification agency' includes any 
     authority of a State (or of a political subdivision thereof) 
     responsible for the licensing of health care practitioners 
     (or any peer review organization or private accreditation 
     entity reviewing the services provided by health care 
     practitioners) or entities.
       ``(2) State law or fraud enforcement agency.--The term 
     `State law or fraud enforcement agency' includes--
       ``(A) a State law enforcement agency; and
       ``(B) a State medicaid fraud control unit (as defined in 
     section 1903(q)).
       ``(3) Final adverse action.--
       ``(A) In general.--Subject to subparagraph (B), the term 
     `final adverse action' includes--
       ``(i) civil judgments against a health care provider, 
     supplier, or practitioner in State court related to the 
     delivery of a health care item or service;
       ``(ii) State criminal convictions related to the delivery 
     of a health care item or service;
       ``(iii) exclusion from participation in State health care 
     programs (as defined in section 1128(h));
       ``(iv) any licensing or certification action described in 
     subsection (a)(1)(A) taken against a supplier by a State 
     licensing or certification agency; and
       ``(v) any other adjudicated actions or decisions that the 
     Secretary shall establish by regulation.
       ``(B) Exception.--Such term does not include any action 
     with respect to a malpractice claim.''; and
       (4) in subsection (h), as so redesignated, by striking 
     ``The Secretary'' and all that follows through the period at 
     the end and inserting ``In implementing this section, the 
     Secretary shall provide for the maximum appropriate 
     coordination with part B of the Health Care Quality 
     Improvement Act of 1986 (42 U.S.C. 11131 et seq.) and section 
     1128E.''.
       (c) Conforming Amendment.--Section 1128C(a)(1) of the 
     Social Security Act (42 U.S.C. 1320a-7c(a)(1)) is amended--
       (1) in subparagraph (C), by adding ``and'' after the comma 
     at the end;
       (2) in subparagraph (D), by striking ``, and'' and 
     inserting a period; and
       (3) by striking subparagraph (E).
       (d) Transition Process; Effective Date.--
       (1) In general.--Effective on the date of enactment of this 
     Act, the Secretary of Health and Human Services (in this 
     section referred to as the ``Secretary'') shall implement a 
     transition process under which, by not later than the end of 
     the transition period described in paragraph (5), the 
     Secretary shall cease operating the Healthcare Integrity and 
     Protection Data Bank established under section 1128E of the 
     Social Security Act (as in effect before the effective date 
     specified in paragraph (6)) and shall transfer all data 
     collected in the Healthcare Integrity and Protection Data 
     Bank to the National Practitioner Data Bank established 
     pursuant to the Health Care Quality Improvement Act of 1986 
     (42 U.S.C. 11101 et seq.). During such transition process, 
     the Secretary shall have in effect appropriate procedures to 
     ensure that data collection and access to the Healthcare 
     Integrity and Protection Data Bank and the National 
     Practitioner Data Bank are not disrupted.
       (2) Regulations.--The Secretary shall promulgate 
     regulations to carry out the amendments made by subsections 
     (a) and (b).
       (3) Funding.--
       (A) Availability of fees.--Fees collected pursuant to 
     section 1128E(d)(2) of the Social Security Act prior to the 
     effective date specified in paragraph (6) for the disclosure 
     of information in the Healthcare Integrity and Protection 
     Data Bank shall be available to the Secretary, without fiscal 
     year limitation, for payment of costs related to the 
     transition process described in paragraph (1). Any such fees 
     remaining after the transition period is complete shall be 
     available to the Secretary, without fiscal year limitation, 
     for payment of the costs of operating the National 
     Practitioner Data Bank.
       (B) Availability of additional funds.--In addition to the 
     fees described in subparagraph (A), any funds available to 
     the Secretary or to the Inspector General of the Department 
     of Health and Human Services for a purpose related to 
     combating health care fraud, waste, or abuse shall be 
     available to the extent necessary for operating the 
     Healthcare Integrity and Protection Data Bank during the 
     transition period, including systems testing and other 
     activities necessary to ensure that information formerly 
     reported to the Healthcare Integrity and Protection Data Bank 
     will be accessible through the National Practitioner Data 
     Bank after the end of such transition period.

[[Page 28565]]

       (4) Special provision for access to the national 
     practitioner data bank by the department of veterans 
     affairs.--
       (A) In general.--Notwithstanding any other provision of 
     law, during the 1-year period that begins on the effective 
     date specified in paragraph (6), the information described in 
     subparagraph (B) shall be available from the National 
     Practitioner Data Bank to the Secretary of Veterans Affairs 
     without charge.
       (B) Information described.--For purposes of subparagraph 
     (A), the information described in this subparagraph is the 
     information that would, but for the amendments made by this 
     section, have been available to the Secretary of Veterans 
     Affairs from the Healthcare Integrity and Protection Data 
     Bank.
       (5) Transition period defined.--For purposes of this 
     subsection, the term ``transition period'' means the period 
     that begins on the date of enactment of this Act and ends on 
     the later of--
       (A) the date that is 1 year after such date of enactment; 
     or
       (B) the effective date of the regulations promulgated under 
     paragraph (2).
       (6) Effective date.--The amendments made by subsections 
     (a), (b), and (c) shall take effect on the first day after 
     the final day of the transition period.

     SEC. 6404. MAXIMUM PERIOD FOR SUBMISSION OF MEDICARE CLAIMS 
                   REDUCED TO NOT MORE THAN 12 MONTHS.

       (a) Reducing Maximum Period for Submission.--
       (1) Part a.--Section 1814(a) of the Social Security Act (42 
     U.S.C. 1395f(a)(1)) is amended--
       (A) in paragraph (1), by striking ``period of 3 calendar 
     years'' and all that follows through the semicolon and 
     inserting ``period ending 1 calendar year after the date of 
     service;''; and
       (B) by adding at the end the following new sentence: ``In 
     applying paragraph (1), the Secretary may specify exceptions 
     to the 1 calendar year period specified in such paragraph.''
       (2) Part b.--
       (A) Section 1842(b)(3) of such Act (42 U.S.C. 
     1395u(b)(3)(B)) is amended--
       (i) in subparagraph (B), in the flush language following 
     clause (ii), by striking ``close of the calendar year 
     following the year in which such service is furnished 
     (deeming any service furnished in the last 3 months of any 
     calendar year to have been furnished in the succeeding 
     calendar year)'' and inserting ``period ending 1 calendar 
     year after the date of service''; and
       (ii) by adding at the end the following new sentence: ``In 
     applying subparagraph (B), the Secretary may specify 
     exceptions to the 1 calendar year period specified in such 
     subparagraph.''
       (B) Section 1835(a) of such Act (42 U.S.C. 1395n(a)) is 
     amended--
       (i) in paragraph (1), by striking ``period of 3 calendar 
     years'' and all that follows through the semicolon and 
     inserting ``period ending 1 calendar year after the date of 
     service;''; and
       (ii) by adding at the end the following new sentence: ``In 
     applying paragraph (1), the Secretary may specify exceptions 
     to the 1 calendar year period specified in such paragraph.''
       (b) Effective Date.--
       (1) In general.--The amendments made by subsection (a) 
     shall apply to services furnished on or after January 1, 
     2010.
       (2) Services furnished before 2010.--In the case of 
     services furnished before January 1, 2010, a bill or request 
     for payment under section 1814(a)(1), 1842(b)(3)(B), or 
     1835(a) shall be filed not later that December 31, 2010.

     SEC. 6405. PHYSICIANS WHO ORDER ITEMS OR SERVICES REQUIRED TO 
                   BE MEDICARE ENROLLED PHYSICIANS OR ELIGIBLE 
                   PROFESSIONALS.

       (a) DME.--Section 1834(a)(11)(B) of the Social Security Act 
     (42 U.S.C. 1395m(a)(11)(B)) is amended by striking 
     ``physician'' and inserting ``physician enrolled under 
     section 1866(j) or an eligible professional under section 
     1848(k)(3)(B) that is enrolled under section 1866(j)''.
       (b) Home Health Services.--
       (1) Part a.--Section 1814(a)(2) of such Act (42 U.S.C. 
     1395(a)(2)) is amended in the matter preceding subparagraph 
     (A) by inserting ``in the case of services described in 
     subparagraph (C), a physician enrolled under section 1866(j) 
     or an eligible professional under section 1848(k)(3)(B),'' 
     before ``or, in the case of services''.
       (2) Part b.--Section 1835(a)(2) of such Act (42 U.S.C. 
     1395n(a)(2)) is amended in the matter preceding subparagraph 
     (A) by inserting ``, or in the case of services described in 
     subparagraph (A), a physician enrolled under section 1866(j) 
     or an eligible professional under section 1848(k)(3)(B),'' 
     after ``a physician''.
       (c) Application to Other Items or Services.--The Secretary 
     may extend the requirement applied by the amendments made by 
     subsections (a) and (b) to durable medical equipment and home 
     health services (relating to requiring certifications and 
     written orders to be made by enrolled physicians and health 
     professions) to all other categories of items or services 
     under title XVIII of the Social Security Act (42 U.S.C. 1395 
     et seq.), including covered part D drugs as defined in 
     section 1860D-2(e) of such Act (42 U.S.C. 1395w-102), that 
     are ordered, prescribed, or referred by a physician enrolled 
     under section 1866(j) of such Act (42 U.S.C. 1395cc(j)) or an 
     eligible professional under section 1848(k)(3)(B) of such Act 
     (42 U.S.C. 1395w-4(k)(3)(B)).
       (d) Effective Date.--The amendments made by this section 
     shall apply to written orders and certifications made on or 
     after July 1, 2010.

     SEC. 6406. REQUIREMENT FOR PHYSICIANS TO PROVIDE 
                   DOCUMENTATION ON REFERRALS TO PROGRAMS AT HIGH 
                   RISK OF WASTE AND ABUSE.

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

     SEC. 6407. FACE TO FACE ENCOUNTER WITH PATIENT REQUIRED 
                   BEFORE PHYSICIANS MAY CERTIFY ELIGIBILITY FOR 
                   HOME HEALTH SERVICES OR DURABLE MEDICAL 
                   EQUIPMENT UNDER MEDICARE.

       (a) Condition of Payment for Home Health Services.--
       (1) Part a.--Section 1814(a)(2)(C) of such Act is amended--
       (A) by striking ``and such services'' and inserting ``such 
     services''; and
       (B) by inserting after ``care of a physician'' the 
     following: ``, and, in the case of a certification made by a 
     physician after January 1, 2010, prior to making such 
     certification the physician must document that the physician 
     himself or herself has had a face-to-face encounter 
     (including through use of telehealth, subject to the 
     requirements in section 1834(m), and other than with respect 
     to encounters that are incident to services involved) with 
     the individual within a reasonable timeframe as determined by 
     the Secretary''.
       (2) Part b.--Section 1835(a)(2)(A) of the Social Security 
     Act is amended--
       (A) by striking ``and'' before ``(iii)''; and
       (B) by inserting after ``care of a physician'' the 
     following: ``, and (iv) in the case of a certification after 
     January 1, 2010, prior to making such certification the 
     physician must document that the physician has had a face-to-
     face encounter (including through use of telehealth and other 
     than with respect to encounters that are incident to services 
     involved) with the individual during the 6-month period 
     preceding such certification, or other reasonable timeframe 
     as determined by the Secretary''.
       (b) Condition of Payment for Durable Medical Equipment.--
     Section 1834(a)(11)(B) of the Social Security Act (42 U.S.C. 
     1395m(a)(11)(B)) is amended--
       (1) by striking ``Order.--The Secretary'' and inserting 
     ``Order.--
       ``(i) In general.--The Secretary''; and
       (2) by adding at the end the following new clause:
       ``(ii) Requirement for face to face encounter.--The 
     Secretary shall require that such an order be written 
     pursuant to the physician documenting that a physician, a 
     physician assistant, a nurse practitioner, or a clinical 
     nurse specialist (as those terms are defined in section 
     1861(aa)(5)) has had a face-to-face encounter (including 
     through use of telehealth under subsection (m) and other than 
     with respect to encounters that are incident to services 
     involved) with the individual involved during the 6-month 
     period preceding such written order, or other reasonable 
     timeframe as determined by the Secretary.''.
       (c) Application to Other Areas Under Medicare.--The 
     Secretary may apply the face-to-face encounter requirement 
     described in the amendments made by subsections (a) and (b) 
     to other items and services for which payment is provided 
     under title XVIII of the

[[Page 28566]]

     Social Security Act based upon a finding that such an 
     decision would reduce the risk of waste, fraud, or abuse.
       (d) Application to Medicaid.--The requirements pursuant to 
     the amendments made by subsections (a) and (b) shall apply in 
     the case of physicians making certifications for home health 
     services under title XIX of the Social Security Act in the 
     same manner and to the same extent as such requirements apply 
     in the case of physicians making such certifications under 
     title XVIII of such Act.

     SEC. 6408. ENHANCED PENALTIES.

       (a) Civil Monetary Penalties for False Statements or 
     Delaying Inspections.--Section 1128A(a) of the Social 
     Security Act (42 U.S.C. 1320a-7a(a)), as amended by section 
     5002(d)(2)(A), is amended--
       (1) in paragraph (6), by striking ``or'' at the end; and
       (2) by inserting after paragraph (7) the following new 
     paragraphs:
       ``(8) knowingly makes, uses, or causes to be made or used, 
     a false record or statement material to a false or fraudulent 
     claim for payment for items and services furnished under a 
     Federal health care program; or
       ``(9) fails to grant timely access, upon reasonable request 
     (as defined by the Secretary in regulations), to the 
     Inspector General of the Department of Health and Human 
     Services, for the purpose of audits, investigations, 
     evaluations, or other statutory functions of the Inspector 
     General of the Department of Health and Human Services;''; 
     and
       (3) in the first sentence--
       (A) by striking ``or in cases under paragraph (7)'' and 
     inserting ``in cases under paragraph (7)''; and
       (B) by striking ``act)'' and inserting ``act, in cases 
     under paragraph (8), $50,000 for each false record or 
     statement, or in cases under paragraph (9), $15,000 for each 
     day of the failure described in such paragraph)''.
       (b) Medicare Advantage and Part D Plans.--
       (1) Ensuring timely inspections relating to contracts with 
     ma organizations.--Section 1857(d)(2) of such Act (42 U.S.C. 
     1395w-27(d)(2)) is amended--
       (A) in subparagraph (A), by inserting ``timely'' before 
     ``inspect''; and
       (B) in subparagraph (B), by inserting ``timely'' before 
     ``audit and inspect''.
       (2) Marketing violations.--Section 1857(g)(1) of the Social 
     Security Act (42 U.S.C. 1395w--27(g)(1)) is amended--
       (A) in subparagraph (F), by striking ``or'' at the end;
       (B) by inserting after subparagraph (G) the following new 
     subparagraphs:
       ``(H) except as provided under subparagraph (C) or (D) of 
     section 1860D-1(b)(1), enrolls an individual in any plan 
     under this part without the prior consent of the individual 
     or the designee of the individual;
       ``(I) transfers an individual enrolled under this part from 
     one plan to another without the prior consent of the 
     individual or the designee of the individual or solely for 
     the purpose of earning a commission;
       ``(J) fails to comply with marketing restrictions described 
     in subsections (h) and (j) of section 1851 or applicable 
     implementing regulations or guidance; or
       ``(K) employs or contracts with any individual or entity 
     who engages in the conduct described in subparagraphs (A) 
     through (J) of this paragraph;''; and
       (C) by adding at the end the following new sentence: ``The 
     Secretary may provide, in addition to any other remedies 
     authorized by law, for any of the remedies described in 
     paragraph (2), if the Secretary determines that any employee 
     or agent of such organization, or any provider or supplier 
     who contracts with such organization, has engaged in any 
     conduct described in subparagraphs (A) through (K) of this 
     paragraph.''.
       (3) Provision of false information.--Section 1857(g)(2)(A) 
     of the Social Security Act (42 U.S.C. 1395w--27(g)(2)(A)) is 
     amended by inserting ``except with respect to a determination 
     under subparagraph (E), an assessment of not more than the 
     amount claimed by such plan or plan sponsor based upon the 
     misrepresentation or falsified information involved,'' after 
     ``for each such determination,''.
       (c) Obstruction of Program Audits.--Section 1128(b)(2) of 
     the Social Security Act (42 U.S.C. 1320a-7(b)(2)) is 
     amended--
       (1) in the heading, by inserting ``or audit'' after 
     ``investigation''; and
       (2) by striking ``investigation into'' and all that follows 
     through the period and inserting ``investigation or audit 
     related to--''
       ``(i) any offense described in paragraph (1) or in 
     subsection (a); or
       ``(ii) the use of funds received, directly or indirectly, 
     from any Federal health care program (as defined in section 
     1128B(f)).''.
       (d) Effective Date.--
       (1) In general.--Except as provided in paragraph (2), the 
     amendments made by this section shall apply to acts committed 
     on or after January 1, 2010.
       (2) Exception.--The amendments made by subsection (b)(1) 
     take effect on the date of enactment of this Act.

     SEC. 6409. MEDICARE SELF-REFERRAL DISCLOSURE PROTOCOL.

       (a) Development of Self-Referral Disclosure Protocol.--
       (1) In general.--The Secretary of Health and Human 
     Services, in cooperation with the Inspector General of the 
     Department of Health and Human Services, shall establish, not 
     later than 6 months after the date of the enactment of this 
     Act, a protocol to enable health care providers of services 
     and suppliers to disclose an actual or potential violation of 
     section 1877 of the Social Security Act (42 U.S.C. 1395nn) 
     pursuant to a self-referral disclosure protocol (in this 
     section referred to as an ``SRDP''). The SRDP shall include 
     direction to health care providers of services and suppliers 
     on--
       (A) a specific person, official, or office to whom such 
     disclosures shall be made; and
       (B) instruction on the implication of the SRDP on corporate 
     integrity agreements and corporate compliance agreements.
       (2) Publication on internet website of srdp information.--
     The Secretary of Health and Human Services shall post 
     information on the public Internet website of the Centers for 
     Medicare & Medicaid Services to inform relevant stakeholders 
     of how to disclose actual or potential violations pursuant to 
     an SRDP.
       (3) Relation to advisory opinions.--The SRDP shall be 
     separate from the advisory opinion process set forth in 
     regulations implementing section 1877(g) of the Social 
     Security Act.
       (b) Reduction in Amounts Owed.--The Secretary of Health and 
     Human Services is authorized to reduce the amount due and 
     owing for all violations under section 1877 of the Social 
     Security Act to an amount less than that specified in 
     subsection (g) of such section. In establishing such amount 
     for a violation, the Secretary may consider the following 
     factors:
       (1) The nature and extent of the improper or illegal 
     practice.
       (2) The timeliness of such self-disclosure.
       (3) The cooperation in providing additional information 
     related to the disclosure.
       (4) Such other factors as the Secretary considers 
     appropriate.
       (c) Report.--Not later than 18 months after the date on 
     which the SRDP protocol is established under subsection 
     (a)(1), the Secretary shall submit to Congress a report on 
     the implementation of this section. Such report shall 
     include--
       (1) the number of health care providers of services and 
     suppliers making disclosures pursuant to the SRDP;
       (2) the amounts collected pursuant to the SRDP;
       (3) the types of violations reported under the SRDP; and
       (4) such other information as may be necessary to evaluate 
     the impact of this section.

     SEC. 6410. ADJUSTMENTS TO THE MEDICARE DURABLE MEDICAL 
                   EQUIPMENT, PROSTHETICS, ORTHOTICS, AND SUPPLIES 
                   COMPETITIVE ACQUISITION PROGRAM.

       (a) Expansion of Round 2 of the DME Competitive Bidding 
     Program.--Section 1847(a)(1) of the Social Security Act (42 
     U.S.C. 1395w-3(a)(1)) is amended--
       (1) in subparagraph (B)(i)(II), by striking ``70'' and 
     inserting ``91''; and
       (2) in subparagraph (D)(ii)--
       (A) in subclause (I), by striking ``and'' at the end;
       (B) by redesignating subclause (II) as subclause (III); and
       (C) by inserting after subclause (I) the following new 
     subclause:

       ``(II) the Secretary shall include the next 21 largest 
     metropolitan statistical areas by total population (after 
     those selected under subclause (I)) for such round; and''.

       (b) Requirement to Either Competitively Bid Areas or Use 
     Competitive Bid Prices by 2016.--Section 1834(a)(1)(F) of the 
     Social Security Act (42 U.S.C. 1395m(a)(1)(F)) is amended--
       (1) in clause (i), by striking ``and'' at the end;
       (2) in clause (ii)--
       (A) by inserting ``(and, in the case of covered items 
     furnished on or after January 1, 2016, subject to clause 
     (iii), shall)'' after ``may''; and
       (B) by striking the period at the end and inserting ``; 
     and''; and
       (3) by adding at the end the following new clause:
       ``(iii) in the case of covered items furnished on or after 
     January 1, 2016, the Secretary shall continue to make such 
     adjustments described in clause (ii) as, under such 
     competitive acquisition programs, additional covered items 
     are phased in or information is updated as contracts under 
     section 1847 are recompeted in accordance with section 
     1847(b)(3)(B).''.

     SEC. 6411. EXPANSION OF THE RECOVERY AUDIT CONTRACTOR (RAC) 
                   PROGRAM.

       (a) Expansion to Medicaid.--
       (1) State plan amendment.--Section 1902(a)(42) of the 
     Social Security Act (42 U.S.C. 1396a(a)(42)) is amended--
       (A) by striking ``that the records'' and inserting ``that--
       ``(A) the records'';
       (B) by inserting ``and'' after the semicolon; and
       (C) by adding at the end the following:
       ``(B) not later than December 31, 2010, the State shall--
       ``(i) establish a program under which the State contracts 
     (consistent with State law

[[Page 28567]]

     and in the same manner as the Secretary enters into contracts 
     with recovery audit contractors under section 1893(h), 
     subject to such exceptions or requirements as the Secretary 
     may require for purposes of this title or a particular State) 
     with 1 or more recovery audit contractors for the purpose of 
     identifying underpayments and overpayments and recouping 
     overpayments under the State plan and under any waiver of the 
     State plan with respect to all services for which payment is 
     made to any entity under such plan or waiver; and
       ``(ii) provide assurances satisfactory to the Secretary 
     that--

       ``(I) under such contracts, payment shall be made to such a 
     contractor only from amounts recovered;
       ``(II) from such amounts recovered, payment--

       ``(aa) shall be made on a contingent basis for collecting 
     overpayments; and
       ``(bb) may be made in such amounts as the State may specify 
     for identifying underpayments;

       ``(III) the State has an adequate process for entities to 
     appeal any adverse determination made by such contractors; 
     and
       ``(IV) such program is carried out in accordance with such 
     requirements as the Secretary shall specify, including--

       ``(aa) for purposes of section 1903(a)(7), that amounts 
     expended by the State to carry out the program shall be 
     considered amounts expended as necessary for the proper and 
     efficient administration of the State plan or a waiver of the 
     plan;
       ``(bb) that section 1903(d) shall apply to amounts 
     recovered under the program; and
       ``(cc) that the State and any such contractors under 
     contract with the State shall coordinate such recovery audit 
     efforts with other contractors or entities performing audits 
     of entities receiving payments under the State plan or waiver 
     in the State, including efforts with Federal and State law 
     enforcement with respect to the Department of Justice, 
     including the Federal Bureau of Investigations, the Inspector 
     General of the Department of Health and Human Services, and 
     the State medicaid fraud control unit; and''.
       (2) Coordination; regulations.--
       (A) In general.--The Secretary of Health and Human 
     Services, acting through the Administrator of the Centers for 
     Medicare & Medicaid Services, shall coordinate the expansion 
     of the Recovery Audit Contractor program to Medicaid with 
     States, particularly with respect to each State that enters 
     into a contract with a recovery audit contractor for purposes 
     of the State's Medicaid program prior to December 31, 2010.
       (B) Regulations.--The Secretary of Health and Human 
     Services shall promulgate regulations to carry out this 
     subsection and the amendments made by this subsection, 
     including with respect to conditions of Federal financial 
     participation, as specified by the Secretary.
       (b) Expansion to Medicare Parts C and D.--Section 1893(h) 
     of the Social Security Act (42 U.S.C. 1395ddd(h)) is 
     amended--
       (1) in paragraph (1), in the matter preceding subparagraph 
     (A), by striking ``part A or B'' and inserting ``this 
     title'';
       (2) in paragraph (2), by striking ``parts A and B'' and 
     inserting ``this title'';
       (3) in paragraph (3), by inserting ``(not later than 
     December 31, 2010, in the case of contracts relating to 
     payments made under part C or D)'' after ``2010'';
       (4) in paragraph (4), in the matter preceding subparagraph 
     (A), by striking ``part A or B'' and inserting ``this 
     title''; and
       (5) by adding at the end the following:
       ``(9) Special rules relating to parts c and d.--The 
     Secretary shall enter into contracts under paragraph (1) to 
     require recovery audit contractors to--
       ``(A) ensure that each MA plan under part C has an anti- 
     fraud plan in effect and to review the effectiveness of each 
     such anti-fraud plan;
       ``(B) ensure that each prescription drug plan under part D 
     has an anti- fraud plan in effect and to review the 
     effectiveness of each such anti-fraud plan;
       ``(C) examine claims for reinsurance payments under section 
     1860D-15(b) to determine whether prescription drug plans 
     submitting such claims incurred costs in excess of the 
     allowable reinsurance costs permitted under paragraph (2) of 
     that section; and
       ``(D) review estimates submitted by prescription drug plans 
     by private plans with respect to the enrollment of high cost 
     beneficiaries (as defined by the Secretary) and to compare 
     such estimates with the numbers of such beneficiaries 
     actually enrolled by such plans.''.
       (c) Annual Report.--The Secretary of Health and Human 
     Services, acting through the Administrator of the Centers for 
     Medicare & Medicaid Services, shall submit an annual report 
     to Congress concerning the effectiveness of the Recovery 
     Audit Contractor program under Medicaid and Medicare and 
     shall include such reports recommendations for expanding or 
     improving the program.

      Subtitle F--Additional Medicaid Program Integrity Provisions

     SEC. 6501. TERMINATION OF PROVIDER PARTICIPATION UNDER 
                   MEDICAID IF TERMINATED UNDER MEDICARE OR OTHER 
                   STATE PLAN.

       Section 1902(a)(39) of the Social Security Act (42 U.S.C. 
     42 U.S.C. 1396a(a)) is amended by inserting after ``1128A,'' 
     the following: ``terminate the participation of any 
     individual or entity in such program if (subject to such 
     exceptions as are permitted with respect to exclusion under 
     sections 1128(c)(3)(B) and 1128(d)(3)(B)) participation of 
     such individual or entity is terminated under title XVIII or 
     any other State plan under this title,''.

     SEC. 6502. MEDICAID EXCLUSION FROM PARTICIPATION RELATING TO 
                   CERTAIN OWNERSHIP, CONTROL, AND MANAGEMENT 
                   AFFILIATIONS.

       Section 1902(a) of the Social Security Act (42 U.S.C. 
     1396a(a)), as amended by section 6401(b), is amended by 
     inserting after paragraph (77) the following:
       ``(78) provide that the State agency described in paragraph 
     (9) exclude, with respect to a period, any individual or 
     entity from participation in the program under the State plan 
     if such individual or entity owns, controls, or manages an 
     entity that (or if such entity is owned, controlled, or 
     managed by an individual or entity that)--
       ``(A) has unpaid overpayments (as defined by the Secretary) 
     under this title during such period determined by the 
     Secretary or the State agency to be delinquent;
       ``(B) is suspended or excluded from participation under or 
     whose participation is terminated under this title during 
     such period; or
       ``(C) is affiliated with an individual or entity that has 
     been suspended or excluded from participation under this 
     title or whose participation is terminated under this title 
     during such period;''.

     SEC. 6503. BILLING AGENTS, CLEARINGHOUSES, OR OTHER ALTERNATE 
                   PAYEES REQUIRED TO REGISTER UNDER MEDICAID.

       (a) In General.--Section 1902(a) of the Social Security Act 
     (42 U.S.C. 42 U.S.C. 1396a(a)), as amended by section 
     6502(a), is amended by inserting after paragraph (78), the 
     following:
       ``(79) provide that any agent, clearinghouse, or other 
     alternate payee (as defined by the Secretary) that submits 
     claims on behalf of a health care provider must register with 
     the State and the Secretary in a form and manner specified by 
     the Secretary;''.

     SEC. 6504. REQUIREMENT TO REPORT EXPANDED SET OF DATA 
                   ELEMENTS UNDER MMIS TO DETECT FRAUD AND ABUSE.

       (a) In General.--Section 1903(r)(1)(F) of the Social 
     Security Act (42 U.S.C. 1396b(r)(1)(F)) is amended by 
     inserting after ``necessary'' the following: ``and including, 
     for data submitted to the Secretary on or after January 1, 
     2010, data elements from the automated data system that the 
     Secretary determines to be necessary for program integrity, 
     program oversight, and administration, at such frequency as 
     the Secretary shall determine''.
       (b) Managed Care Organizations.--
       (1) In general.--Section 1903(m)(2)(A)(xi) of the Social 
     Security Act (42 U.S.C. 1396b(m)(2)(A)(xi)) is amended by 
     inserting ``and for the provision of such data to the State 
     at a frequency and level of detail to be specified by the 
     Secretary'' after ``patients''.
       (2) Effective date.--The amendment made by paragraph (1) 
     shall apply with respect to contract years beginning on or 
     after January 1, 2010.

     SEC. 6505. PROHIBITION ON PAYMENTS TO INSTITUTIONS OR 
                   ENTITIES LOCATED OUTSIDE OF THE UNITED STATES.

       Section 1902(a) of the Social Security Act (42 U.S.C. 
     1396b(a)), as amended by section 6503, is amended by 
     inserting after paragraph (79) the following new paragraph:
       ``(80) provide that the State shall not provide any 
     payments for items or services provided under the State plan 
     or under a waiver to any financial institution or entity 
     located outside of the United States;''.

     SEC. 6506. OVERPAYMENTS.

       (a) Extension of Period for Collection of Overpayments Due 
     to Fraud.--
       (1) In general.--Section 1903(d)(2) of the Social Security 
     Act (42 U.S.C. 1396b(d)(2)) is amended--
       (A) in subparagraph (C)--
       (i) in the first sentence, by striking ``60 days'' and 
     inserting ``1 year''; and
       (ii) in the second sentence, by striking ``60 days'' and 
     inserting ``1-year period''; and
       (B) in subparagraph (D)--
       (i) in inserting ``(i)'' after ``(D)''; and
       (ii) by adding at the end the following:
       ``(ii) In any case where the State is unable to recover a 
     debt which represents an overpayment (or any portion thereof) 
     made to a person or other entity due to fraud within 1 year 
     of discovery because there is not a final determination of 
     the amount of the overpayment under an administrative or 
     judicial process (as applicable), including as a result of a 
     judgment being under appeal, no adjustment shall be made in 
     the Federal payment to such State on account of such 
     overpayment (or portion thereof) before the date that is 30 
     days after the date on which a final judgment (including, if 
     applicable, a final determination on an appeal) is made.''.
       (2) Effective date.--The amendments made by this subsection 
     take effect on the date of enactment of this Act and apply to 
     overpayments discovered on or after that date.
       (b) Corrective Action.--The Secretary shall promulgate 
     regulations that require States to correct Federally 
     identified claims

[[Page 28568]]

     overpayments, of an ongoing or recurring nature, with new 
     Medicaid Management Information System (MMIS) edits, audits, 
     or other appropriate corrective action.

     SEC. 6507. MANDATORY STATE USE OF NATIONAL CORRECT CODING 
                   INITIATIVE.

       Section 1903(r) of the Social Security Act (42 U.S.C. 
     1396b(r)) is amended--
       (1) in paragraph (1)(B)--
       (A) in clause (ii), by striking ``and'' at the end;
       (B) in clause (iii), by adding ``and'' after the semi-
     colon; and
       (C) by adding at the end the following new clause:
       ``(iv) effective for claims filed on or after October 1, 
     2010, incorporate compatible methodologies of the National 
     Correct Coding Initiative administered by the Secretary (or 
     any successor initiative to promote correct coding and to 
     control improper coding leading to inappropriate payment) and 
     such other methodologies of that Initiative (or such other 
     national correct coding methodologies) as the Secretary 
     identifies in accordance with paragraph (4);''; and
       (2) by adding at the end the following new paragraph:
       ``(4) For purposes of paragraph (1)(B)(iv), the Secretary 
     shall do the following:
       ``(A) Not later than September 1, 2010:
       ``(i) Identify those methodologies of the National Correct 
     Coding Initiative administered by the Secretary (or any 
     successor initiative to promote correct coding and to control 
     improper coding leading to inappropriate payment) which are 
     compatible to claims filed under this title.
       ``(ii) Identify those methodologies of such Initiative (or 
     such other national correct coding methodologies) that should 
     be incorporated into claims filed under this title with 
     respect to items or services for which States provide medical 
     assistance under this title and no national correct coding 
     methodologies have been established under such Initiative 
     with respect to title XVIII.
       ``(iii) Notify States of--
       ``(I) the methodologies identified under subparagraphs (A) 
     and (B) (and of any other national correct coding 
     methodologies identified under subparagraph (B)); and
       ``(II) how States are to incorporate such methodologies 
     into claims filed under this title.
       ``(B) Not later than March 1, 2011, submit a report to 
     Congress that includes the notice to States under clause 
     (iii) of subparagraph (A) and an analysis supporting the 
     identification of the methodologies made under clauses (i) 
     and (ii) of subparagraph (A).''.

     SEC. 6508. GENERAL EFFECTIVE DATE.

       (a) In General.--Except as otherwise provided in this 
     subtitle, this subtitle and the amendments made by this 
     subtitle take effect on January 1, 2011, without regard to 
     whether final regulations to carry out such amendments and 
     subtitle have been promulgated by that date.
       (b) Delay if State Legislation Required.--In the case of a 
     State plan for medical assistance under title XIX of the 
     Social Security Act or a child health plan under title XXI of 
     such Act which the Secretary of Health and Human Services 
     determines requires State legislation (other than legislation 
     appropriating funds) in order for the plan to meet the 
     additional requirement imposed by the amendments made by this 
     subtitle, the State plan or child health plan shall not be 
     regarded as failing to comply with the requirements of such 
     title solely on the basis of its failure to meet this 
     additional requirement before the first day of the first 
     calendar quarter beginning after the close of the first 
     regular session of the State legislature that begins after 
     the date of the enactment of this Act. For purposes of the 
     previous sentence, in the case of a State that has a 2-year 
     legislative session, each year of such session shall be 
     deemed to be a separate regular session of the State 
     legislature.

          Subtitle G--Additional Program Integrity Provisions

     SEC. 6601. PROHIBITION ON FALSE STATEMENTS AND 
                   REPRESENTATIONS.

       (a) Prohibition.--Part 5 of subtitle B of title I of the 
     Employee Retirement Income Security Act of 1974 (29 U.S.C. 
     1131 et seq.) is amended by adding at the end the following:

     ``SEC. 519. PROHIBITION ON FALSE STATEMENTS AND 
                   REPRESENTATIONS.

       ``No person, in connection with a plan or other arrangement 
     that is multiple employer welfare arrangement described in 
     section 3(40), shall make a false statement or false 
     representation of fact, knowing it to be false, in connection 
     with the marketing or sale of such plan or arrangement, to 
     any employee, any member of an employee organization, any 
     beneficiary, any employer, any employee organization, the 
     Secretary, or any State, or the representative or agent of 
     any such person, State, or the Secretary, concerning--
       ``(1) the financial condition or solvency of such plan or 
     arrangement;
       ``(2) the benefits provided by such plan or arrangement;
       ``(3) the regulatory status of such plan or other 
     arrangement under any Federal or State law governing 
     collective bargaining, labor management relations, or intern 
     union affairs; or
       ``(4) the regulatory status of such plan or other 
     arrangement regarding exemption from state regulatory 
     authority under this Act.
     This section shall not apply to any plan or arrangement that 
     does not fall within the meaning of the term `multiple 
     employer welfare arrangement' under section 3(40)(A).''.
       (b) Criminal Penalties.--Section 501 of the Employee 
     Retirement Income Security Act of 1974 (29 U.S.C. 1131) is 
     amended--
       (1) by inserting ``(a)'' before ``Any person''; and
       (2) by adding at the end the following:
       ``(b) Any person that violates section 519 shall upon 
     conviction be imprisoned not more than 10 years or fined 
     under title 18, United States Code, or both.''.
       (c) Conforming Amendment.--The table of sections for part 5 
     of subtitle B of title I of the Employee Retirement Income 
     Security Act of 1974 is amended by adding at the end the 
     following:

``Sec. 519. Prohibition on false statement and representations.''.

     SEC. 6602. CLARIFYING DEFINITION.

       Section 24(a)(2) of title 18, United States Code, is 
     amended by inserting ``or section 411, 518, or 511 of the 
     Employee Retirement Income Security Act of 1974,'' after 
     ``1954 of this title''.

     SEC. 6603. DEVELOPMENT OF MODEL UNIFORM REPORT FORM.

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

     ``SEC. 2794. UNIFORM FRAUD AND ABUSE REFERRAL FORMAT.

       ``The Secretary shall request the National Association of 
     Insurance Commissioners to develop a model uniform report 
     form for private health insurance issuer seeking to refer 
     suspected fraud and abuse to State insurance departments or 
     other responsible State agencies for investigation. The 
     Secretary shall request that the National Association of 
     Insurance Commissioners develop recommendations for uniform 
     reporting standards for such referrals.''.

     SEC. 6604. APPLICABILITY OF STATE LAW TO COMBAT FRAUD AND 
                   ABUSE.

       (a) In General.--Part 5 of subtitle B of title I of the 
     Employee Retirement Income Security Act of 1974 (29 U.S.C. 
     1131 et seq.), as amended by section 6601, is further amended 
     by adding at the end the following:

     ``SEC. 520. APPLICABILITY OF STATE LAW TO COMBAT FRAUD AND 
                   ABUSE.

       ``The Secretary may, for the purpose of identifying, 
     preventing, or prosecuting fraud and abuse, adopt regulatory 
     standards establishing, or issue an order relating to a 
     specific person establishing, that a person engaged in the 
     business of providing insurance through a multiple employer 
     welfare arrangement described in section 3(40) is subject to 
     the laws of the States in which such person operates which 
     regulate insurance in such State, notwithstanding section 
     514(b)(6) of this Act or the Liability Risk Retention Act of 
     1986, and regardless of whether the law of the State is 
     otherwise preempted under any of such provisions. This 
     section shall not apply to any plan or arrangement that does 
     not fall within the meaning of the term `multiple employer 
     welfare arrangement' under section 3(40(A).''.
       (b) Conforming Amendment.--The table of sections for part 5 
     of subtitle B of title I of the Employee Retirement Income 
     Security Act of 1974, as amended by section 6601, is further 
     amended by adding at the end the following:

``Sec. 520. Applicability of State law to combat fraud and abuse.''.

     SEC. 6605. ENABLING THE DEPARTMENT OF LABOR TO ISSUE 
                   ADMINISTRATIVE SUMMARY CEASE AND DESIST ORDERS 
                   AND SUMMARY SEIZURES ORDERS AGAINST PLANS THAT 
                   ARE IN FINANCIALLY HAZARDOUS CONDITION.

       (a) In General.--Part 5 of subtitle B of title I of the 
     Employee Retirement Income Security Act of 1974 (29 U.S.C. 
     1131 et seq.), as amended by section 6604, is further amended 
     by adding at the end the following:

     ``SEC. 521. ADMINISTRATIVE SUMMARY CEASE AND DESIST ORDERS 
                   AND SUMMARY SEIZURE ORDERS AGAINST MULTIPLE 
                   EMPLOYER WELFARE ARRANGEMENTS IN FINANCIALLY 
                   HAZARDOUS CONDITION.

       ``(a) In General.--The Secretary may issue a cease and 
     desist (ex parte) order under this title if it appears to the 
     Secretary that the alleged conduct of a multiple employer 
     welfare arrangement described in section 3(40), other than a 
     plan or arrangement described in subsection (g), is 
     fraudulent, or creates an immediate danger to the public 
     safety or welfare, or is causing or can be reasonably 
     expected to cause significant, imminent, and irreparable 
     public injury.
       ``(b) Hearing.--A person that is adversely affected by the 
     issuance of a cease and desist order under subsection (a) may 
     request a hearing by the Secretary regarding such order. The 
     Secretary may require that a proceeding under this section, 
     including all related information and evidence, be conducted 
     in a confidential manner.
       ``(c) Burden of Proof.--The burden of proof in any hearing 
     conducted under subsection (b) shall be on the party 
     requesting the hearing to show cause why the cease and desist 
     order should be set aside.

[[Page 28569]]

       ``(d) Determination.--Based upon the evidence presented at 
     a hearing under subsection (b), the cease and desist order 
     involved may be affirmed, modified, or set aside by the 
     Secretary in whole or in part.
       ``(e) Seizure.--The Secretary may issue a summary seizure 
     order under this title if it appears that a multiple employer 
     welfare arrangement is in a financially hazardous condition.
       ``(f) Regulations.--The Secretary may promulgate such 
     regulations or other guidance as may be necessary or 
     appropriate to carry out this section.
       ``(g) Exception.--This section shall not apply to any plan 
     or arrangement that does not fall within the meaning of the 
     term `multiple employer welfare arrangement' under section 
     3(40(A).''.
       (b) Conforming Amendment.--The table of sections for part 5 
     of subtitle B of title I of the Employee Retirement Income 
     Security Act of 1974, as amended by section 6604, is further 
     amended by adding at the end the following:

``Sec. 521. Administrative summary cease and desist orders and summary 
              seizure orders against health plans in financially 
              hazardous condition.''.

     SEC. 6606. MEWA PLAN REGISTRATION WITH DEPARTMENT OF LABOR.

       Section 101(g) of the Employee Retirement Income Security 
     Act of 1974 (29 U.S.C. 1021(g)) is amended--
       (1) by striking ``Secretary may'' and inserting ``Secretary 
     shall''; and
       (2) by inserting ``to register with the Secretary prior to 
     operating in a State and may, by regulation, require such 
     multiple employer welfare arrangements'' after ``not group 
     health plans''.

     SEC. 6607. PERMITTING EVIDENTIARY PRIVILEGE AND CONFIDENTIAL 
                   COMMUNICATIONS.

       Section 504 of the Employee Retirement Income Security Act 
     of 1974 (29 U.S.C. 1134) is amended by adding at the end the 
     following:
       ``(d) The Secretary may promulgate a regulation that 
     provides an evidentiary privilege for, and provides for the 
     confidentiality of communications between or among, any of 
     the following entities or their agents, consultants, or 
     employees:
       ``(1) A State insurance department.
       ``(2) A State attorney general.
       ``(3) The National Association of Insurance Commissioners.
       ``(4) The Department of Labor.
       ``(5) The Department of the Treasury.
       ``(6) The Department of Justice.
       ``(7) The Department of Health and Human Services.
       ``(8) Any other Federal or State authority that the 
     Secretary determines is appropriate for the purposes of 
     enforcing the provisions of this title.
       ``(e) The privilege established under subsection (d) shall 
     apply to communications related to any investigation, audit, 
     examination, or inquiry conducted or coordinated by any of 
     the agencies. A communication that is privileged under 
     subsection (d) shall not waive any privilege otherwise 
     available to the communicating agency or to any person who 
     provided the information that is communicated.''.

                     Subtitle H--Elder Justice Act

     SEC. 6701. SHORT TITLE OF SUBTITLE.

       This subtitle may be cited as the ``Elder Justice Act of 
     2009''.

     SEC. 6702. DEFINITIONS.

       Except as otherwise specifically provided, any term that is 
     defined in section 2011 of the Social Security Act (as added 
     by section 6703(a)) and is used in this subtitle has the 
     meaning given such term by such section.

     SEC. 6703. ELDER JUSTICE.

       (a) Elder Justice.--
       (1) In general.--Title XX of the Social Security Act (42 
     U.S.C. 1397 et seq.) is amended--
       (A) in the heading, by inserting ``AND ELDER JUSTICE'' 
     after ``SOCIAL SERVICES'';
       (B) by inserting before section 2001 the following:

      ``Subtitle A--Block Grants to States for Social Services'';

     and
       (C) by adding at the end the following:

                      ``Subtitle B--Elder Justice

     ``SEC. 2011. DEFINITIONS.

       ``In this subtitle:
       ``(1) Abuse.--The term `abuse' means the knowing infliction 
     of physical or psychological harm or the knowing deprivation 
     of goods or services that are necessary to meet essential 
     needs or to avoid physical or psychological harm.
       ``(2) Adult protective services.--The term `adult 
     protective services' means such services provided to adults 
     as the Secretary may specify and includes services such as--
       ``(A) receiving reports of adult abuse, neglect, or 
     exploitation;
       ``(B) investigating the reports described in subparagraph 
     (A);
       ``(C) case planning, monitoring, evaluation, and other case 
     work and services; and
       ``(D) providing, arranging for, or facilitating the 
     provision of medical, social service, economic, legal, 
     housing, law enforcement, or other protective, emergency, or 
     support services.
       ``(3) Caregiver.--The term `caregiver' means an individual 
     who has the responsibility for the care of an elder, either 
     voluntarily, by contract, by receipt of payment for care, or 
     as a result of the operation of law, and means a family 
     member or other individual who provides (on behalf of such 
     individual or of a public or private agency, organization, or 
     institution) compensated or uncompensated care to an elder 
     who needs supportive services in any setting.
       ``(4) Direct care.--The term `direct care' means care by an 
     employee or contractor who provides assistance or long-term 
     care services to a recipient.
       ``(5) Elder.--The term `elder' means an individual age 60 
     or older.
       ``(6) Elder justice.--The term `elder justice' means--
       ``(A) from a societal perspective, efforts to--
       ``(i) prevent, detect, treat, intervene in, and prosecute 
     elder abuse, neglect, and exploitation; and
       ``(ii) protect elders with diminished capacity while 
     maximizing their autonomy; and
       ``(B) from an individual perspective, the recognition of an 
     elder's rights, including the right to be free of abuse, 
     neglect, and exploitation.
       ``(7) Eligible entity.--The term `eligible entity' means a 
     State or local government agency, Indian tribe or tribal 
     organization, or any other public or private entity that is 
     engaged in and has expertise in issues relating to elder 
     justice or in a field necessary to promote elder justice 
     efforts.
       ``(8) Exploitation.--The term `exploitation' means the 
     fraudulent or otherwise illegal, unauthorized, or improper 
     act or process of an individual, including a caregiver or 
     fiduciary, that uses the resources of an elder for monetary 
     or personal benefit, profit, or gain, or that results in 
     depriving an elder of rightful access to, or use of, 
     benefits, resources, belongings, or assets.
       ``(9) Fiduciary.--The term `fiduciary'--
       ``(A) means a person or entity with the legal 
     responsibility--
       ``(i) to make decisions on behalf of and for the benefit of 
     another person; and
       ``(ii) to act in good faith and with fairness; and
       ``(B) includes a trustee, a guardian, a conservator, an 
     executor, an agent under a financial power of attorney or 
     health care power of attorney, or a representative payee.
       ``(10) Grant.--The term `grant' includes a contract, 
     cooperative agreement, or other mechanism for providing 
     financial assistance.
       ``(11) Guardianship.--The term `guardianship' means--
       ``(A) the process by which a State court determines that an 
     adult individual lacks capacity to make decisions about self-
     care or property, and appoints another individual or entity 
     known as a guardian, as a conservator, or by a similar term, 
     as a surrogate decisionmaker;
       ``(B) the manner in which the court-appointed surrogate 
     decisionmaker carries out duties to the individual and the 
     court; or
       ``(C) the manner in which the court exercises oversight of 
     the surrogate decisionmaker.
       ``(12) Indian tribe.--
       ``(A) In general.--The term `Indian tribe' has the meaning 
     given such term in section 4 of the Indian Self-Determination 
     and Education Assistance Act (25 U.S.C. 450b).
       ``(B) Inclusion of pueblo and rancheria.--The term `Indian 
     tribe' includes any Pueblo or Rancheria.
       ``(13) Law enforcement.--The term `law enforcement' means 
     the full range of potential responders to elder abuse, 
     neglect, and exploitation including--
       ``(A) police, sheriffs, detectives, public safety officers, 
     and corrections personnel;
       ``(B) prosecutors;
       ``(C) medical examiners;
       ``(D) investigators; and
       ``(E) coroners.
       ``(14) Long-term care.--
       ``(A) In general.--The term `long-term care' means 
     supportive and health services specified by the Secretary for 
     individuals who need assistance because the individuals have 
     a loss of capacity for self-care due to illness, disability, 
     or vulnerability.
       ``(B) Loss of capacity for self-care.--For purposes of 
     subparagraph (A), the term `loss of capacity for self-care' 
     means an inability to engage in 1 or more activities of daily 
     living, including eating, dressing, bathing, management of 
     one's financial affairs, and other activities the Secretary 
     determines appropriate.
       ``(15) Long-term care facility.--The term `long-term care 
     facility' means a residential care provider that arranges 
     for, or directly provides, long-term care.
       ``(16) Neglect.--The term `neglect' means--
       ``(A) the failure of a caregiver or fiduciary to provide 
     the goods or services that are necessary to maintain the 
     health or safety of an elder; or
       ``(B) self-neglect.
       ``(17) Nursing facility.--
       ``(A) In general.--The term `nursing facility' has the 
     meaning given such term under section 1919(a).
       ``(B) Inclusion of skilled nursing facility.--The term 
     `nursing facility' includes a

[[Page 28570]]

     skilled nursing facility (as defined in section 1819(a)).
       ``(18) Self-neglect.--The term `self-neglect' means an 
     adult's inability, due to physical or mental impairment or 
     diminished capacity, to perform essential self-care tasks 
     including--
       ``(A) obtaining essential food, clothing, shelter, and 
     medical care;
       ``(B) obtaining goods and services necessary to maintain 
     physical health, mental health, or general safety; or
       ``(C) managing one's own financial affairs.
       ``(19) Serious bodily injury.--
       ``(A) In general.--The term `serious bodily injury' means 
     an injury--
       ``(i) involving extreme physical pain;
       ``(ii) involving substantial risk of death;
       ``(iii) involving protracted loss or impairment of the 
     function of a bodily member, organ, or mental faculty; or
       ``(iv) requiring medical intervention such as surgery, 
     hospitalization, or physical rehabilitation.
       ``(B) Criminal sexual abuse.--Serious bodily injury shall 
     be considered to have occurred if the conduct causing the 
     injury is conduct described in section 2241 (relating to 
     aggravated sexual abuse) or 2242 (relating to sexual abuse) 
     of title 18, United States Code, or any similar offense under 
     State law.
       ``(20) Social.--The term `social', when used with respect 
     to a service, includes adult protective services.
       ``(21) State legal assistance developer.--The term `State 
     legal assistance developer' means an individual described in 
     section 731 of the Older Americans Act of 1965.
       ``(22) State long-term care ombudsman.--The term `State 
     Long-Term Care Ombudsman' means the State Long-Term Care 
     Ombudsman described in section 712(a)(2) of the Older 
     Americans Act of 1965.

     ``SEC. 2012. GENERAL PROVISIONS.

       ``(a) Protection of Privacy.--In pursuing activities under 
     this subtitle, the Secretary shall ensure the protection of 
     individual health privacy consistent with the regulations 
     promulgated under section 264(c) of the Health Insurance 
     Portability and Accountability Act of 1996 and applicable 
     State and local privacy regulations.
       ``(b) Rule of Construction.--Nothing in this subtitle shall 
     be construed to interfere with or abridge an elder's right to 
     practice his or her religion through reliance on prayer alone 
     for healing when this choice--
       ``(1) is contemporaneously expressed, either orally or in 
     writing, with respect to a specific illness or injury which 
     the elder has at the time of the decision by an elder who is 
     competent at the time of the decision;
       ``(2) is previously set forth in a living will, health care 
     proxy, or other advance directive document that is validly 
     executed and applied under State law; or
       ``(3) may be unambiguously deduced from the elder's life 
     history.

    ``PART I--NATIONAL COORDINATION OF ELDER JUSTICE ACTIVITIES AND 
                                RESEARCH

 ``Subpart A--Elder Justice Coordinating Council and Advisory Board on 
                 Elder Abuse, Neglect, and Exploitation

     ``SEC. 2021. ELDER JUSTICE COORDINATING COUNCIL.

       ``(a) Establishment.--There is established within the 
     Office of the Secretary an Elder Justice Coordinating Council 
     (in this section referred to as the `Council').
       ``(b) Membership.--
       ``(1) In general.--The Council shall be composed of the 
     following members:
       ``(A) The Secretary (or the Secretary's designee).
       ``(B) The Attorney General (or the Attorney General's 
     designee).
       ``(C) The head of each Federal department or agency or 
     other governmental entity identified by the Chair referred to 
     in subsection (d) as having responsibilities, or 
     administering programs, relating to elder abuse, neglect, and 
     exploitation.
       ``(2) Requirement.--Each member of the Council shall be an 
     officer or employee of the Federal Government.
       ``(c) Vacancies.--Any vacancy in the Council shall not 
     affect its powers, but shall be filled in the same manner as 
     the original appointment was made.
       ``(d) Chair.--The member described in subsection (b)(1)(A) 
     shall be Chair of the Council.
       ``(e) Meetings.--The Council shall meet at least 2 times 
     per year, as determined by the Chair.
       ``(f) Duties.--
       ``(1) In general.--The Council shall make recommendations 
     to the Secretary for the coordination of activities of the 
     Department of Health and Human Services, the Department of 
     Justice, and other relevant Federal, State, local, and 
     private agencies and entities, relating to elder abuse, 
     neglect, and exploitation and other crimes against elders.
       ``(2) Report.--Not later than the date that is 2 years 
     after the date of enactment of the Elder Justice Act of 2009 
     and every 2 years thereafter, the Council shall submit to the 
     Committee on Finance of the Senate and the Committee on Ways 
     and Means and the Committee on Energy and Commerce of the 
     House of Representatives a report that--
       ``(A) describes the activities and accomplishments of, and 
     challenges faced by--
       ``(i) the Council; and
       ``(ii) the entities represented on the Council; and
       ``(B) makes such recommendations for legislation, model 
     laws, or other action as the Council determines to be 
     appropriate.
       ``(g) Powers of the Council.--
       ``(1) Information from federal agencies.--Subject to the 
     requirements of section 2012(a), the Council may secure 
     directly from any Federal department or agency such 
     information as the Council considers necessary to carry out 
     this section. Upon request of the Chair of the Council, the 
     head of such department or agency shall furnish such 
     information to the Council.
       ``(2) Postal services.--The Council may use the United 
     States mails in the same manner and under the same conditions 
     as other departments and agencies of the Federal Government.
       ``(h) Travel Expenses.--The members of the Council shall 
     not receive compensation for the performance of services for 
     the Council. The members shall be allowed travel expenses, 
     including per diem in lieu of subsistence, at rates 
     authorized for employees of agencies under subchapter I of 
     chapter 57 of title 5, United States Code, while away from 
     their homes or regular places of business in the performance 
     of services for the Council. Notwithstanding section 1342 of 
     title 31, United States Code, the Secretary may accept the 
     voluntary and uncompensated services of the members of the 
     Council.
       ``(i) Detail of Government Employees.--Any Federal 
     Government employee may be detailed to the Council without 
     reimbursement, and such detail shall be without interruption 
     or loss of civil service status or privilege.
       ``(j) Status as Permanent Council.--Section 14 of the 
     Federal Advisory Committee Act (5 U.S.C. App.) shall not 
     apply to the Council.
       ``(k) Authorization of Appropriations.--There are 
     authorized to be appropriated such sums as are necessary to 
     carry out this section.

     ``SEC. 2022. ADVISORY BOARD ON ELDER ABUSE, NEGLECT, AND 
                   EXPLOITATION.

       ``(a) Establishment.--There is established a board to be 
     known as the `Advisory Board on Elder Abuse, Neglect, and 
     Exploitation' (in this section referred to as the `Advisory 
     Board') to create short- and long-term multidisciplinary 
     strategic plans for the development of the field of elder 
     justice and to make recommendations to the Elder Justice 
     Coordinating Council established under section 2021.
       ``(b) Composition.--The Advisory Board shall be composed of 
     27 members appointed by the Secretary from among members of 
     the general public who are individuals with experience and 
     expertise in elder abuse, neglect, and exploitation 
     prevention, detection, treatment, intervention, or 
     prosecution.
       ``(c) Solicitation of Nominations.--The Secretary shall 
     publish a notice in the Federal Register soliciting 
     nominations for the appointment of members of the Advisory 
     Board under subsection (b).
       ``(d) Terms.--
       ``(1) In general.--Each member of the Advisory Board shall 
     be appointed for a term of 3 years, except that, of the 
     members first appointed--
       ``(A) 9 shall be appointed for a term of 3 years;
       ``(B) 9 shall be appointed for a term of 2 years; and
       ``(C) 9 shall be appointed for a term of 1 year.
       ``(2) Vacancies.--
       ``(A) In general.--Any vacancy on the Advisory Board shall 
     not affect its powers, but shall be filled in the same manner 
     as the original appointment was made.
       ``(B) Filling unexpired term.--An individual chosen to fill 
     a vacancy shall be appointed for the unexpired term of the 
     member replaced.
       ``(3) Expiration of terms.--The term of any member shall 
     not expire before the date on which the member's successor 
     takes office.
       ``(e) Election of Officers.--The Advisory Board shall elect 
     a Chair and Vice Chair from among its members. The Advisory 
     Board shall elect its initial Chair and Vice Chair at its 
     initial meeting.
       ``(f) Duties.--
       ``(1) Enhance communication on promoting quality of, and 
     preventing abuse, neglect, and exploitation in, long-term 
     care.--The Advisory Board shall develop collaborative and 
     innovative approaches to improve the quality of, including 
     preventing abuse, neglect, and exploitation in, long-term 
     care.
       ``(2) Collaborative efforts to develop consensus around the 
     management of certain quality-related factors.--
       ``(A) In general.--The Advisory Board shall establish 
     multidisciplinary panels to address, and develop consensus 
     on, subjects relating to improving the quality of long-term 
     care. At least 1 such panel shall address, and develop 
     consensus on, methods for managing resident-to-resident abuse 
     in long-term care.
       ``(B) Activities conducted.--The multidisciplinary panels 
     established under subparagraph (A) shall examine relevant 
     research and data, identify best practices with respect to 
     the subject of the panel, determine the best way to carry out 
     those best

[[Page 28571]]

     practices in a practical and feasible manner, and determine 
     an effective manner of distributing information on such 
     subject.
       ``(3) Report.--Not later than the date that is 18 months 
     after the date of enactment of the Elder Justice Act of 2009, 
     and annually thereafter, the Advisory Board shall prepare and 
     submit to the Elder Justice Coordinating Council, the 
     Committee on Finance of the Senate, and the Committee on Ways 
     and Means and the Committee on Energy and Commerce of the 
     House of Representatives a report containing--
       ``(A) information on the status of Federal, State, and 
     local public and private elder justice activities;
       ``(B) recommendations (including recommended priorities) 
     regarding--
       ``(i) elder justice programs, research, training, services, 
     practice, enforcement, and coordination;
       ``(ii) coordination between entities pursuing elder justice 
     efforts and those involved in related areas that may inform 
     or overlap with elder justice efforts, such as activities to 
     combat violence against women and child abuse and neglect; 
     and
       ``(iii) activities relating to adult fiduciary systems, 
     including guardianship and other fiduciary arrangements;
       ``(C) recommendations for specific modifications needed in 
     Federal and State laws (including regulations) or for 
     programs, research, and training to enhance prevention, 
     detection, and treatment (including diagnosis) of, 
     intervention in (including investigation of), and prosecution 
     of elder abuse, neglect, and exploitation;
       ``(D) recommendations on methods for the most effective 
     coordinated national data collection with respect to elder 
     justice, and elder abuse, neglect, and exploitation; and
       ``(E) recommendations for a multidisciplinary strategic 
     plan to guide the effective and efficient development of the 
     field of elder justice.
       ``(g) Powers of the Advisory Board.--
       ``(1) Information from federal agencies.--Subject to the 
     requirements of section 2012(a), the Advisory Board may 
     secure directly from any Federal department or agency such 
     information as the Advisory Board considers necessary to 
     carry out this section. Upon request of the Chair of the 
     Advisory Board, the head of such department or agency shall 
     furnish such information to the Advisory Board.
       ``(2) Sharing of data and reports.--The Advisory Board may 
     request from any entity pursuing elder justice activities 
     under the Elder Justice Act of 2009 or an amendment made by 
     that Act, any data, reports, or recommendations generated in 
     connection with such activities.
       ``(3) Postal services.--The Advisory Board may use the 
     United States mails in the same manner and under the same 
     conditions as other departments and agencies of the Federal 
     Government.
       ``(h) Travel Expenses.--The members of the Advisory Board 
     shall not receive compensation for the performance of 
     services for the Advisory Board. The members shall be allowed 
     travel expenses for up to 4 meetings per year, including per 
     diem in lieu of subsistence, at rates authorized for 
     employees of agencies under subchapter I of chapter 57 of 
     title 5, United States Code, while away from their homes or 
     regular places of business in the performance of services for 
     the Advisory Board. Notwithstanding section 1342 of title 31, 
     United States Code, the Secretary may accept the voluntary 
     and uncompensated services of the members of the Advisory 
     Board.
       ``(i) Detail of Government Employees.--Any Federal 
     Government employee may be detailed to the Advisory Board 
     without reimbursement, and such detail shall be without 
     interruption or loss of civil service status or privilege.
       ``(j) Status as Permanent Advisory Committee.--Section 14 
     of the Federal Advisory Committee Act (5 U.S.C. App.) shall 
     not apply to the advisory board.
       ``(k) Authorization of Appropriations.--There are 
     authorized to be appropriated such sums as are necessary to 
     carry out this section.

     ``SEC. 2023. RESEARCH PROTECTIONS.

       ``(a) Guidelines.--The Secretary shall promulgate 
     guidelines to assist researchers working in the area of elder 
     abuse, neglect, and exploitation, with issues relating to 
     human subject protections.
       ``(b) Definition of Legally Authorized Representative for 
     Application of Regulations.--For purposes of the application 
     of subpart A of part 46 of title 45, Code of Federal 
     Regulations, to research conducted under this subpart, the 
     term `legally authorized representative' means, unless 
     otherwise provided by law, the individual or judicial or 
     other body authorized under the applicable law to consent to 
     medical treatment on behalf of another person.

     ``SEC. 2024. AUTHORIZATION OF APPROPRIATIONS.

       ``There are authorized to be appropriated to carry out this 
     subpart--
       ``(1) for fiscal year 2011, $6,500,000; and
       ``(2) for each of fiscal years 2012 through 2014, 
     $7,000,000.

  ``Subpart B--Elder Abuse, Neglect, and Exploitation Forensic Centers

     ``SEC. 2031. ESTABLISHMENT AND SUPPORT OF ELDER ABUSE, 
                   NEGLECT, AND EXPLOITATION FORENSIC CENTERS.

       ``(a) In General.--The Secretary, in consultation with the 
     Attorney General, shall make grants to eligible entities to 
     establish and operate stationary and mobile forensic centers, 
     to develop forensic expertise regarding, and provide services 
     relating to, elder abuse, neglect, and exploitation.
       ``(b) Stationary Forensic Centers.--The Secretary shall 
     make 4 of the grants described in subsection (a) to 
     institutions of higher education with demonstrated expertise 
     in forensics or commitment to preventing or treating elder 
     abuse, neglect, or exploitation, to establish and operate 
     stationary forensic centers.
       ``(c) Mobile Centers.--The Secretary shall make 6 of the 
     grants described in subsection (a) to appropriate entities to 
     establish and operate mobile forensic centers.
       ``(d) Authorized Activities.--
       ``(1) Development of forensic markers and methodologies.--
     An eligible entity that receives a grant under this section 
     shall use funds made available through the grant to assist in 
     determining whether abuse, neglect, or exploitation occurred 
     and whether a crime was committed and to conduct research to 
     describe and disseminate information on--
       ``(A) forensic markers that indicate a case in which elder 
     abuse, neglect, or exploitation may have occurred; and
       ``(B) methodologies for determining, in such a case, when 
     and how health care, emergency service, social and protective 
     services, and legal service providers should intervene and 
     when the providers should report the case to law enforcement 
     authorities.
       ``(2) Development of forensic expertise.--An eligible 
     entity that receives a grant under this section shall use 
     funds made available through the grant to develop forensic 
     expertise regarding elder abuse, neglect, and exploitation in 
     order to provide medical and forensic evaluation, therapeutic 
     intervention, victim support and advocacy, case review, and 
     case tracking.
       ``(3) Collection of evidence.--The Secretary, in 
     coordination with the Attorney General, shall use data made 
     available by grant recipients under this section to develop 
     the capacity of geriatric health care professionals and law 
     enforcement to collect forensic evidence, including 
     collecting forensic evidence relating to a potential 
     determination of elder abuse, neglect, or exploitation.
       ``(e) Application.--To be eligible to receive a grant under 
     this section, an entity shall submit an application to the 
     Secretary at such time, in such manner, and containing such 
     information as the Secretary may require.
       ``(f) Authorization of Appropriations.--There are 
     authorized to be appropriated to carry out this section--
       ``(1) for fiscal year 2011, $4,000,000;
       ``(2) for fiscal year 2012, $6,000,000; and
       ``(3) for each of fiscal years 2013 and 2014, $8,000,000.

              ``PART II--PROGRAMS TO PROMOTE ELDER JUSTICE

     ``SEC. 2041. ENHANCEMENT OF LONG-TERM CARE.

       ``(a) Grants and Incentives for Long-Term Care Staffing.--
       ``(1) In general.--The Secretary shall carry out 
     activities, including activities described in paragraphs (2) 
     and (3), to provide incentives for individuals to train for, 
     seek, and maintain employment providing direct care in long-
     term care.
       ``(2) Specific programs to enhance training, recruitment, 
     and retention of staff.--
       ``(A) Coordination with secretary of labor to recruit and 
     train long-term care staff.--The Secretary shall coordinate 
     activities under this subsection with the Secretary of Labor 
     in order to provide incentives for individuals to train for 
     and seek employment providing direct care in long-term care.
       ``(B) Career ladders and wage or benefit increases to 
     increase staffing in long-term care.--
       ``(i) In general.--The Secretary shall make grants to 
     eligible entities to carry out programs through which the 
     entities--

       ``(I) offer, to employees who provide direct care to 
     residents of an eligible entity or individuals receiving 
     community-based long-term care from an eligible entity, 
     continuing training and varying levels of certification, 
     based on observed clinical care practices and the amount of 
     time the employees spend providing direct care; and
       ``(II) provide, or make arrangements to provide, bonuses or 
     other increased compensation or benefits to employees who 
     achieve certification under such a program.

       ``(ii) Application.--To be eligible to receive a grant 
     under this subparagraph, an eligible entity shall submit an 
     application to the Secretary at such time, in such manner, 
     and containing such information as the Secretary may require 
     (which may include evidence of consultation with the State in 
     which the eligible entity is located with respect to carrying 
     out activities funded under the grant).
       ``(iii) Authority to limit number of applicants.--Nothing 
     in this subparagraph shall be construed as prohibiting the 
     Secretary from limiting the number of applicants for a grant 
     under this subparagraph.

[[Page 28572]]

       ``(3) Specific programs to improve management practices.--
       ``(A) In general.--The Secretary shall make grants to 
     eligible entities to enable the entities to provide training 
     and technical assistance.
       ``(B) Authorized activities.--An eligible entity that 
     receives a grant under subparagraph (A) shall use funds made 
     available through the grant to provide training and technical 
     assistance regarding management practices using methods that 
     are demonstrated to promote retention of individuals who 
     provide direct care, such as--
       ``(i) the establishment of standard human resource policies 
     that reward high performance, including policies that provide 
     for improved wages and benefits on the basis of job reviews;
       ``(ii) the establishment of motivational and thoughtful 
     work organization practices;
       ``(iii) the creation of a workplace culture that respects 
     and values caregivers and their needs;
       ``(iv) the promotion of a workplace culture that respects 
     the rights of residents of an eligible entity or individuals 
     receiving community-based long-term care from an eligible 
     entity and results in improved care for the residents or the 
     individuals; and
       ``(v) the establishment of other programs that promote the 
     provision of high quality care, such as a continuing 
     education program that provides additional hours of training, 
     including on-the-job training, for employees who are 
     certified nurse aides.
       ``(C) Application.--To be eligible to receive a grant under 
     this paragraph, an eligible entity shall submit an 
     application to the Secretary at such time, in such manner, 
     and containing such information as the Secretary may require 
     (which may include evidence of consultation with the State in 
     which the eligible entity is located with respect to carrying 
     out activities funded under the grant).
       ``(D) Authority to limit number of applicants.--Nothing in 
     this paragraph shall be construed as prohibiting the 
     Secretary from limiting the number of applicants for a grant 
     under this paragraph.
       ``(4) Accountability measures.--The Secretary shall develop 
     accountability measures to ensure that the activities 
     conducted using funds made available under this subsection 
     benefit individuals who provide direct care and increase the 
     stability of the long-term care workforce.
       ``(5) Definitions.--In this subsection:
       ``(A) Community-based long-term care.--The term `community-
     based long-term care' has the meaning given such term by the 
     Secretary.
       ``(B) Eligible entity.--The term `eligible entity' means 
     the following:
       ``(i) A long-term care facility.
       ``(ii) A community-based long-term care entity (as defined 
     by the Secretary).
       ``(b) Certified EHR Technology Grant Program.--
       ``(1) Grants authorized.--The Secretary is authorized to 
     make grants to long-term care facilities for the purpose of 
     assisting such entities in offsetting the costs related to 
     purchasing, leasing, developing, and implementing certified 
     EHR technology (as defined in section 1848(o)(4)) designed to 
     improve patient safety and reduce adverse events and health 
     care complications resulting from medication errors.
       ``(2) Use of grant funds.--Funds provided under grants 
     under this subsection may be used for any of the following:
       ``(A) Purchasing, leasing, and installing computer software 
     and hardware, including handheld computer technologies.
       ``(B) Making improvements to existing computer software and 
     hardware.
       ``(C) Making upgrades and other improvements to existing 
     computer software and hardware to enable e-prescribing.
       ``(D) Providing education and training to eligible long-
     term care facility staff on the use of such technology to 
     implement the electronic transmission of prescription and 
     patient information.
       ``(3) Application.--
       ``(A) In general.--To be eligible to receive a grant under 
     this subsection, a long-term care facility shall submit an 
     application to the Secretary at such time, in such manner, 
     and containing such information as the Secretary may require 
     (which may include evidence of consultation with the State in 
     which the long-term care facility is located with respect to 
     carrying out activities funded under the grant).
       ``(B) Authority to limit number of applicants.--Nothing in 
     this subsection shall be construed as prohibiting the 
     Secretary from limiting the number of applicants for a grant 
     under this subsection.
       ``(4) Participation in state health exchanges.--A long-term 
     care facility that receives a grant under this subsection 
     shall, where available, participate in activities conducted 
     by a State or a qualified State-designated entity (as defined 
     in section 3013(f) of the Public Health Service Act) under a 
     grant under section 3013 of the Public Health Service Act to 
     coordinate care and for other purposes determined appropriate 
     by the Secretary.
       ``(5) Accountability measures.--The Secretary shall develop 
     accountability measures to ensure that the activities 
     conducted using funds made available under this subsection 
     help improve patient safety and reduce adverse events and 
     health care complications resulting from medication errors.
       ``(c) Adoption of Standards for Transactions Involving 
     Clinical Data by Long-Term Care Facilities.--
       ``(1) Standards and compatibility.--The Secretary shall 
     adopt electronic standards for the exchange of clinical data 
     by long-term care facilities, including, where available, 
     standards for messaging and nomenclature. Standards adopted 
     by the Secretary under the preceding sentence shall be 
     compatible with standards established under part C of title 
     XI, standards established under subsections (b)(2)(B)(i) and 
     (e)(4) of section 1860D-4, standards adopted under section 
     3004 of the Public Health Service Act, and general health 
     information technology standards.
       ``(2) Electronic submission of data to the secretary.--
       ``(A) In general.--Not later than 10 years after the date 
     of enactment of the Elder Justice Act of 2009, the Secretary 
     shall have procedures in place to accept the optional 
     electronic submission of clinical data by long-term care 
     facilities pursuant to the standards adopted under paragraph 
     (1).
       ``(B) Rule of construction.--Nothing in this subsection 
     shall be construed to require a long-term care facility to 
     submit clinical data electronically to the Secretary.
       ``(3) Regulations.--The Secretary shall promulgate 
     regulations to carry out this subsection. Such regulations 
     shall require a State, as a condition of the receipt of funds 
     under this part, to conduct such data collection and 
     reporting as the Secretary determines are necessary to 
     satisfy the requirements of this subsection.
       ``(d) Authorization of Appropriations.--There are 
     authorized to be appropriated to carry out this section--
       ``(1) for fiscal year 2011, $20,000,000;
       ``(2) for fiscal year 2012, $17,500,000; and
       ``(3) for each of fiscal years 2013 and 2014, $15,000,000.

     ``SEC. 2042. ADULT PROTECTIVE SERVICES FUNCTIONS AND GRANT 
                   PROGRAMS.

       ``(a) Secretarial Responsibilities.--
       ``(1) In general.--The Secretary shall ensure that the 
     Department of Health and Human Services--
       ``(A) provides funding authorized by this part to State and 
     local adult protective services offices that investigate 
     reports of the abuse, neglect, and exploitation of elders;
       ``(B) collects and disseminates data annually relating to 
     the abuse, exploitation, and neglect of elders in 
     coordination with the Department of Justice;
       ``(C) develops and disseminates information on best 
     practices regarding, and provides training on, carrying out 
     adult protective services;
       ``(D) conducts research related to the provision of adult 
     protective services; and
       ``(E) provides technical assistance to States and other 
     entities that provide or fund the provision of adult 
     protective services, including through grants made under 
     subsections (b) and (c).
       ``(2) Authorization of appropriations.--There are 
     authorized to be appropriated to carry out this subsection, 
     $3,000,000 for fiscal year 2011 and $4,000,000 for each of 
     fiscal years 2012 through 2014.
       ``(b) Grants To Enhance the Provision of Adult Protective 
     Services.--
       ``(1) Establishment.--There is established an adult 
     protective services grant program under which the Secretary 
     shall annually award grants to States in the amounts 
     calculated under paragraph (2) for the purposes of enhancing 
     adult protective services provided by States and local units 
     of government.
       ``(2) Amount of payment.--
       ``(A) In general.--Subject to the availability of 
     appropriations and subparagraphs (B) and (C), the amount paid 
     to a State for a fiscal year under the program under this 
     subsection shall equal the amount appropriated for that year 
     to carry out this subsection multiplied by the percentage of 
     the total number of elders who reside in the United States 
     who reside in that State.
       ``(B) Guaranteed minimum payment amount.--
       ``(i) 50 states.--Subject to clause (ii), if the amount 
     determined under subparagraph (A) for a State for a fiscal 
     year is less than 0.75 percent of the amount appropriated for 
     such year, the Secretary shall increase such determined 
     amount so that the total amount paid under this subsection to 
     the State for the year is equal to 0.75 percent of the amount 
     so appropriated.
       ``(ii) Territories.--In the case of a State other than 1 of 
     the 50 States, clause (i) shall be applied as if each 
     reference to `0.75' were a reference to `0.1'.
       ``(C) Pro rata reductions.--The Secretary shall make such 
     pro rata reductions to the amounts described in subparagraph 
     (A) as are necessary to comply with the requirements of 
     subparagraph (B).
       ``(3) Authorized activities.--
       ``(A) Adult protective services.--Funds made available 
     pursuant to this subsection may only be used by States and 
     local units of government to provide adult protective 
     services and may not be used for any other purpose.

[[Page 28573]]

       ``(B) Use by agency.--Each State receiving funds pursuant 
     to this subsection shall provide such funds to the agency or 
     unit of State government having legal responsibility for 
     providing adult protective services within the State.
       ``(C) Supplement not supplant.--Each State or local unit of 
     government shall use funds made available pursuant to this 
     subsection to supplement and not supplant other Federal, 
     State, and local public funds expended to provide adult 
     protective services in the State.
       ``(4) State reports.--Each State receiving funds under this 
     subsection shall submit to the Secretary, at such time and in 
     such manner as the Secretary may require, a report on the 
     number of elders served by the grants awarded under this 
     subsection.
       ``(5) Authorization of appropriations.--There are 
     authorized to be appropriated to carry out this subsection, 
     $100,000,000 for each of fiscal years 2011 through 2014.
       ``(c) State Demonstration Programs.--
       ``(1) Establishment.--The Secretary shall award grants to 
     States for the purposes of conducting demonstration programs 
     in accordance with paragraph (2).
       ``(2) Demonstration programs.--Funds made available 
     pursuant to this subsection may be used by States and local 
     units of government to conduct demonstration programs that 
     test--
       ``(A) training modules developed for the purpose of 
     detecting or preventing elder abuse;
       ``(B) methods to detect or prevent financial exploitation 
     of elders;
       ``(C) methods to detect elder abuse;
       ``(D) whether training on elder abuse forensics enhances 
     the detection of elder abuse by employees of the State or 
     local unit of government; or
       ``(E) other matters relating to the detection or prevention 
     of elder abuse.
       ``(3) Application.--To be eligible to receive a grant under 
     this subsection, a State shall submit an application to the 
     Secretary at such time, in such manner, and containing such 
     information as the Secretary may require.
       ``(4) State reports.--Each State that receives funds under 
     this subsection shall submit to the Secretary a report at 
     such time, in such manner, and containing such information as 
     the Secretary may require on the results of the demonstration 
     program conducted by the State using funds made available 
     under this subsection.
       ``(5) Authorization of appropriations.--There are 
     authorized to be appropriated to carry out this subsection, 
     $25,000,000 for each of fiscal years 2011 through 2014.

     ``SEC. 2043. LONG-TERM CARE OMBUDSMAN PROGRAM GRANTS AND 
                   TRAINING.

       ``(a) Grants To Support the Long-term Care Ombudsman 
     Program.--
       ``(1) In general.--The Secretary shall make grants to 
     eligible entities with relevant expertise and experience in 
     abuse and neglect in long-term care facilities or long-term 
     care ombudsman programs and responsibilities, for the purpose 
     of--
       ``(A) improving the capacity of State long-term care 
     ombudsman programs to respond to and resolve complaints about 
     abuse and neglect;
       ``(B) conducting pilot programs with State long-term care 
     ombudsman offices or local ombudsman entities; and
       ``(C) providing support for such State long-term care 
     ombudsman programs and such pilot programs (such as through 
     the establishment of a national long-term care ombudsman 
     resource center).
       ``(2) Authorization of appropriations.--There are 
     authorized to be appropriated to carry out this subsection--
       ``(A) for fiscal year 2011, $5,000,000;
       ``(B) for fiscal year 2012, $7,500,000; and
       ``(C) for each of fiscal years 2013 and 2014, $10,000,000.
       ``(b) Ombudsman Training Programs.--
       ``(1) In general.--The Secretary shall establish programs 
     to provide and improve ombudsman training with respect to 
     elder abuse, neglect, and exploitation for national 
     organizations and State long-term care ombudsman programs.
       ``(2) Authorization of appropriations.--There are 
     authorized to be appropriated to carry out this subsection, 
     for each of fiscal years 2011 through 2014, $10,000,000.

     ``SEC. 2044. PROVISION OF INFORMATION REGARDING, AND 
                   EVALUATIONS OF, ELDER JUSTICE PROGRAMS.

       ``(a) Provision of Information.--To be eligible to receive 
     a grant under this part, an applicant shall agree--
       ``(1) except as provided in paragraph (2), to provide the 
     eligible entity conducting an evaluation under subsection (b) 
     of the activities funded through the grant with such 
     information as the eligible entity may require in order to 
     conduct such evaluation; or
       ``(2) in the case of an applicant for a grant under section 
     2041(b), to provide the Secretary with such information as 
     the Secretary may require to conduct an evaluation or audit 
     under subsection (c).
       ``(b) Use of Eligible Entities To Conduct Evaluations.--
       ``(1) Evaluations required.--Except as provided in 
     paragraph (2), the Secretary shall--
       ``(A) reserve a portion (not less than 2 percent) of the 
     funds appropriated with respect to each program carried out 
     under this part; and
       ``(B) use the funds reserved under subparagraph (A) to 
     provide assistance to eligible entities to conduct 
     evaluations of the activities funded under each program 
     carried out under this part.
       ``(2) Certified ehr technology grant program not 
     included.--The provisions of this subsection shall not apply 
     to the certified EHR technology grant program under section 
     2041(b).
       ``(3) Authorized activities.--A recipient of assistance 
     described in paragraph (1)(B) shall use the funds made 
     available through the assistance to conduct a validated 
     evaluation of the effectiveness of the activities funded 
     under a program carried out under this part.
       ``(4) Applications.--To be eligible to receive assistance 
     under paragraph (1)(B), an entity shall submit an application 
     to the Secretary at such time, in such manner, and containing 
     such information as the Secretary may require, including a 
     proposal for the evaluation.
       ``(5) Reports.--Not later than a date specified by the 
     Secretary, an eligible entity receiving assistance under 
     paragraph (1)(B) shall submit to the Secretary, the Committee 
     on Ways and Means and the Committee on Energy and Commerce of 
     the House of Representatives, and the Committee on Finance of 
     the Senate a report containing the results of the evaluation 
     conducted using such assistance together with such 
     recommendations as the entity determines to be appropriate.
       ``(c) Evaluations and Audits of Certified EHR Technology 
     Grant Program by the Secretary.--
       ``(1) Evaluations.--The Secretary shall conduct an 
     evaluation of the activities funded under the certified EHR 
     technology grant program under section 2041(b). Such 
     evaluation shall include an evaluation of whether the funding 
     provided under the grant is expended only for the purposes 
     for which it is made.
       ``(2) Audits.--The Secretary shall conduct appropriate 
     audits of grants made under section 2041(b).

     ``SEC. 2045. REPORT.

       ``Not later than October 1, 2014, the Secretary shall 
     submit to the Elder Justice Coordinating Council established 
     under section 2021, the Committee on Ways and Means and the 
     Committee on Energy and Commerce of the House of 
     Representatives, and the Committee on Finance of the Senate a 
     report--
       ``(1) compiling, summarizing, and analyzing the information 
     contained in the State reports submitted under subsections 
     (b)(4) and (c)(4) of section 2042; and
       ``(2) containing such recommendations for legislative or 
     administrative action as the Secretary determines to be 
     appropriate.

     ``SEC. 2046. RULE OF CONSTRUCTION.

       ``Nothing in this subtitle shall be construed as--
       ``(1) limiting any cause of action or other relief related 
     to obligations under this subtitle that is available under 
     the law of any State, or political subdivision thereof; or
       ``(2) creating a private cause of action for a violation of 
     this subtitle.''.
       (2) Option for state plan under program for temporary 
     assistance for needy families.--
       (A) In general.--Section 402(a)(1)(B) of the Social 
     Security Act (42 U.S.C. 602(a)(1)(B)) is amended by adding at 
     the end the following new clause:
       ``(v) The document shall indicate whether the State intends 
     to assist individuals to train for, seek, and maintain 
     employment--

       ``(I) providing direct care in a long-term care facility 
     (as such terms are defined under section 2011); or
       ``(II) in other occupations related to elder care 
     determined appropriate by the State for which the State 
     identifies an unmet need for service personnel,

     and, if so, shall include an overview of such assistance.''.
       (B) Effective date.--The amendment made by subparagraph (A) 
     shall take effect on January 1, 2011.
       (b) Protecting Residents of Long-term Care Facilities.--
       (1) National training institute for surveyors.--
       (A) In general.--The Secretary of Health and Human Services 
     shall enter into a contract with an entity for the purpose of 
     establishing and operating a National Training Institute for 
     Federal and State surveyors. Such Institute shall provide and 
     improve the training of surveyors with respect to 
     investigating allegations of abuse, neglect, and 
     misappropriation of property in programs and long-term care 
     facilities that receive payments under title XVIII or XIX of 
     the Social Security Act.
       (B) Activities carried out by the institute.--The contract 
     entered into under subparagraph (A) shall require the 
     Institute established and operated under such contract to 
     carry out the following activities:
       (i) Assess the extent to which State agencies use 
     specialized surveyors for the investigation of reported 
     allegations of abuse, neglect, and misappropriation of 
     property in such programs and long-term care facilities.
       (ii) Evaluate how the competencies of surveyors may be 
     improved to more effectively investigate reported allegations 
     of such

[[Page 28574]]

     abuse, neglect, and misappropriation of property, and provide 
     feedback to Federal and State agencies on the evaluations 
     conducted.
       (iii) Provide a national program of training, tools, and 
     technical assistance to Federal and State surveyors on 
     investigating reports of such abuse, neglect, and 
     misappropriation of property.
       (iv) Develop and disseminate information on best practices 
     for the investigation of such abuse, neglect, and 
     misappropriation of property.
       (v) Assess the performance of State complaint intake 
     systems, in order to ensure that the intake of complaints 
     occurs 24 hours per day, 7 days a week (including holidays).
       (vi) To the extent approved by the Secretary of Health and 
     Human Services, provide a national 24 hours per day, 7 days a 
     week (including holidays), back-up system to State complaint 
     intake systems in order to ensure optimum national 
     responsiveness to complaints of such abuse, neglect, and 
     misappropriation of property.
       (vii) Analyze and report annually on the following:

       (I) The total number and sources of complaints of such 
     abuse, neglect, and misappropriation of property.
       (II) The extent to which such complaints are referred to 
     law enforcement agencies.
       (III) General results of Federal and State investigations 
     of such complaints.

       (viii) Conduct a national study of the cost to State 
     agencies of conducting complaint investigations of skilled 
     nursing facilities and nursing facilities under sections 1819 
     and 1919, respectively, of the Social Security Act (42 U.S.C. 
     1395i-3; 1396r), and making recommendations to the Secretary 
     of Health and Human Services with respect to options to 
     increase the efficiency and cost-effectiveness of such 
     investigations.
       (C) Authorization.--There are authorized to be appropriated 
     to carry out this paragraph, for the period of fiscal years 
     2011 through 2014, $12,000,000.
       (2) Grants to state survey agencies.--
       (A) In general.--The Secretary of Health and Human Services 
     shall make grants to State agencies that perform surveys of 
     skilled nursing facilities or nursing facilities under 
     sections 1819 or 1919, respectively, of the Social Security 
     Act (42 U.S.C. 1395i-3; 1395r).
       (B) Use of funds.--A grant awarded under subparagraph (A) 
     shall be used for the purpose of designing and implementing 
     complaint investigations systems that--
       (i) promptly prioritize complaints in order to ensure a 
     rapid response to the most serious and urgent complaints;
       (ii) respond to complaints with optimum effectiveness and 
     timeliness; and
       (iii) optimize the collaboration between local authorities, 
     consumers, and providers, including--

       (I) such State agency;
       (II) the State Long-Term Care Ombudsman;
       (III) local law enforcement agencies;
       (IV) advocacy and consumer organizations;
       (V) State aging units;
       (VI) Area Agencies on Aging; and
       (VII) other appropriate entities.

       (C) Authorization.--There are authorized to be appropriated 
     to carry out this paragraph, for each of fiscal years 2011 
     through 2014, $5,000,000.
       (3) Reporting of crimes in federally funded long-term care 
     facilities.--Part A of title XI of the Social Security Act 
     (42 U.S.C. 1301 et seq.), as amended by section 6005, is 
     amended by inserting after section 1150A the following new 
     section:


``reporting to law enforcement of crimes occurring in federally funded 
                       long-term care facilities

       ``Sec. 1150B.  (a) Determination and Notification.--
       ``(1) Determination.--The owner or operator of each long-
     term care facility that receives Federal funds under this Act 
     shall annually determine whether the facility received at 
     least $10,000 in such Federal funds during the preceding 
     year.
       ``(2) Notification.--If the owner or operator determines 
     under paragraph (1) that the facility received at least 
     $10,000 in such Federal funds during the preceding year, such 
     owner or operator shall annually notify each covered 
     individual (as defined in paragraph (3)) of that individual's 
     obligation to comply with the reporting requirements 
     described in subsection (b).
       ``(3) Covered individual defined.--In this section, the 
     term `covered individual' means each individual who is an 
     owner, operator, employee, manager, agent, or contractor of a 
     long-term care facility that is the subject of a 
     determination described in paragraph (1).
       ``(b) Reporting Requirements.--
       ``(1) In general.--Each covered individual shall report to 
     the Secretary and 1 or more law enforcement entities for the 
     political subdivision in which the facility is located any 
     reasonable suspicion of a crime (as defined by the law of the 
     applicable political subdivision) against any individual who 
     is a resident of, or is receiving care from, the facility.
       ``(2) Timing.--If the events that cause the suspicion--
       ``(A) result in serious bodily injury, the individual shall 
     report the suspicion immediately, but not later than 2 hours 
     after forming the suspicion; and
       ``(B) do not result in serious bodily injury, the 
     individual shall report the suspicion not later than 24 hours 
     after forming the suspicion.
       ``(c) Penalties.--
       ``(1) In general.--If a covered individual violates 
     subsection (b)--
       ``(A) the covered individual shall be subject to a civil 
     money penalty of not more than $200,000; and
       ``(B) the Secretary may make a determination in the same 
     proceeding to exclude the covered individual from 
     participation in any Federal health care program (as defined 
     in section 1128B(f)).
       ``(2) Increased harm.--If a covered individual violates 
     subsection (b) and the violation exacerbates the harm to the 
     victim of the crime or results in harm to another 
     individual--
       ``(A) the covered individual shall be subject to a civil 
     money penalty of not more than $300,000; and
       ``(B) the Secretary may make a determination in the same 
     proceeding to exclude the covered individual from 
     participation in any Federal health care program (as defined 
     in section 1128B(f)).
       ``(3) Excluded individual.--During any period for which a 
     covered individual is classified as an excluded individual 
     under paragraph (1)(B) or (2)(B), a long-term care facility 
     that employs such individual shall be ineligible to receive 
     Federal funds under this Act.
       ``(4) Extenuating circumstances.--
       ``(A) In general.--The Secretary may take into account the 
     financial burden on providers with underserved populations in 
     determining any penalty to be imposed under this subsection.
       ``(B) Underserved population defined.--In this paragraph, 
     the term `underserved population' means the population of an 
     area designated by the Secretary as an area with a shortage 
     of elder justice programs or a population group designated by 
     the Secretary as having a shortage of such programs. Such 
     areas or groups designated by the Secretary may include--
       ``(i) areas or groups that are geographically isolated 
     (such as isolated in a rural area);
       ``(ii) racial and ethnic minority populations; and
       ``(iii) populations underserved because of special needs 
     (such as language barriers, disabilities, alien status, or 
     age).
       ``(d) Additional Penalties for Retaliation.--
       ``(1) In general.--A long-term care facility may not--
       ``(A) discharge, demote, suspend, threaten, harass, or deny 
     a promotion or other employment-related benefit to an 
     employee, or in any other manner discriminate against an 
     employee in the terms and conditions of employment because of 
     lawful acts done by the employee; or
       ``(B) file a complaint or a report against a nurse or other 
     employee with the appropriate State professional disciplinary 
     agency because of lawful acts done by the nurse or employee,

     for making a report, causing a report to be made, or for 
     taking steps in furtherance of making a report pursuant to 
     subsection (b)(1).
       ``(2) Penalties for retaliation.--If a long-term care 
     facility violates subparagraph (A) or (B) of paragraph (1) 
     the facility shall be subject to a civil money penalty of not 
     more than $200,000 or the Secretary may classify the entity 
     as an excluded entity for a period of 2 years pursuant to 
     section 1128(b), or both.
       ``(3) Requirement to post notice.--Each long-term care 
     facility shall post conspicuously in an appropriate location 
     a sign (in a form specified by the Secretary) specifying the 
     rights of employees under this section. Such sign shall 
     include a statement that an employee may file a complaint 
     with the Secretary against a long-term care facility that 
     violates the provisions of this subsection and information 
     with respect to the manner of filing such a complaint.
       ``(e) Procedure.--The provisions of section 1128A (other 
     than subsections (a) and (b) and the second sentence of 
     subsection (f)) shall apply to a civil money penalty or 
     exclusion under this section in the same manner as such 
     provisions apply to a penalty or proceeding under section 
     1128A(a).
       ``(f) Definitions.--In this section, the terms `elder 
     justice', `long-term care facility', and `law enforcement' 
     have the meanings given those terms in section 2011.''.
       (c) National Nurse Aide Registry.--
       (1) Definition of nurse aide.--In this subsection, the term 
     ``nurse aide'' has the meaning given that term in sections 
     1819(b)(5)(F) and 1919(b)(5)(F) of the Social Security Act 
     (42 U.S.C. 1395i-3(b)(5)(F); 1396r(b)(5)(F)).
       (2) Study and report.--
       (A) In general.--The Secretary, in consultation with 
     appropriate government agencies and private sector 
     organizations, shall conduct a study on establishing a 
     national nurse aide registry.
       (B) Areas evaluated.--The study conducted under this 
     subsection shall include an evaluation of--

[[Page 28575]]

       (i) who should be included in the registry;
       (ii) how such a registry would comply with Federal and 
     State privacy laws and regulations;
       (iii) how data would be collected for the registry;
       (iv) what entities and individuals would have access to the 
     data collected;
       (v) how the registry would provide appropriate information 
     regarding violations of Federal and State law by individuals 
     included in the registry;
       (vi) how the functions of a national nurse aide registry 
     would be coordinated with the nationwide program for national 
     and State background checks on direct patient access 
     employees of long-term care facilities and providers under 
     section 4301; and
       (vii) how the information included in State nurse aide 
     registries developed and maintained under sections 1819(e)(2) 
     and 1919(e)(2) of the Social Security Act (42 U.S.C. 1395i-
     3(e)(2); 1396r(e)(2)(2)) would be provided as part of a 
     national nurse aide registry.
       (C) Considerations.--In conducting the study and preparing 
     the report required under this subsection, the Secretary 
     shall take into consideration the findings and conclusions of 
     relevant reports and other relevant resources, including the 
     following:
       (i) The Department of Health and Human Services Office of 
     Inspector General Report, Nurse Aide Registries: State 
     Compliance and Practices (February 2005).
       (ii) The General Accounting Office (now known as the 
     Government Accountability Office) Report, Nursing Homes: More 
     Can Be Done to Protect Residents from Abuse (March 2002).
       (iii) The Department of Health and Human Services Office of 
     the Inspector General Report, Nurse Aide Registries: Long-
     Term Care Facility Compliance and Practices (July 2005).
       (iv) The Department of Health and Human Services Health 
     Resources and Services Administration Report, Nursing Aides, 
     Home Health Aides, and Related Health Care Occupations--
     National and Local Workforce Shortages and Associated Data 
     Needs (2004) (in particular with respect to chapter 7 and 
     appendix F).
       (v) The 2001 Report to CMS from the School of Rural Public 
     Health, Texas A&M University, Preventing Abuse and Neglect in 
     Nursing Homes: The Role of Nurse Aide Registries.
       (vi) Information included in State nurse aide registries 
     developed and maintained under sections 1819(e)(2) and 
     1919(e)(2) of the Social Security Act (42 U.S.C. 1395i-
     3(e)(2); 1396r(e)(2)(2)).
       (D) Report.--Not later than 18 months after the date of 
     enactment of this Act, the Secretary shall submit to the 
     Elder Justice Coordinating Council established under section 
     2021 of the Social Security Act, as added by section 1805(a), 
     the Committee on Finance of the Senate, and the Committee on 
     Ways and Means and the Committee on Energy and Commerce of 
     the House of Representatives a report containing the findings 
     and recommendations of the study conducted under this 
     paragraph.
       (E) Funding limitation.--Funding for the study conducted 
     under this subsection shall not exceed $500,000.
       (3) Congressional action.--After receiving the report 
     submitted by the Secretary under paragraph (2)(D), the 
     Committee on Finance of the Senate and the Committee on Ways 
     and Means and the Committee on Energy and Commerce of the 
     House of Representatives shall, as they deem appropriate, 
     take action based on the recommendations contained in the 
     report.
       (4) Authorization of appropriations.--There are authorized 
     to be appropriated such sums as are necessary for the purpose 
     of carrying out this subsection.
       (d) Conforming Amendments.--
       (1) Title xx.--Title XX of the Social Security Act (42 
     U.S.C. 1397 et seq.), as amended by section 6703(a), is 
     amended--
       (A) in the heading of section 2001, by striking ``title'' 
     and inserting ``subtitle''; and
       (B) in subtitle 1, by striking ``this title'' each place it 
     appears and inserting ``this subtitle''.
       (2) Title iv.--Title IV of the Social Security Act (42 
     U.S.C. 601 et seq.) is amended--
       (A) in section 404(d)--
       (i) in paragraphs (1)(A), (2)(A), and (3)(B), by inserting 
     ``subtitle 1 of'' before ``title XX'' each place it appears;
       (ii) in the heading of paragraph (2), by inserting 
     ``subtitle 1 of'' before ``title xx''; and
       (iii) in the heading of paragraph (3)(B), by inserting 
     ``subtitle 1 of'' before ``title xx''; and
       (B) in sections 422(b), 471(a)(4), 472(h)(1), and 
     473(b)(2), by inserting ``subtitle 1 of'' before ``title XX'' 
     each place it appears.
       (3) Title xi.--Title XI of the Social Security Act (42 
     U.S.C. 1301 et seq.) is amended--
       (A) in section 1128(h)(3)--
       (i) by inserting ``subtitle 1 of'' before ``title XX''; and
       (ii) by striking ``such title'' and inserting ``such 
     subtitle''; and
       (B) in section 1128A(i)(1), by inserting ``subtitle 1 of'' 
     before ``title XX''.

     Subtitle I--Sense of the Senate Regarding Medical Malpractice

     SEC. 6801. SENSE OF THE SENATE REGARDING MEDICAL MALPRACTICE.

       It is the sense of the Senate that--
       (1) health care reform presents an opportunity to address 
     issues related to medical malpractice and medical liability 
     insurance;
       (2) States should be encouraged to develop and test 
     alternatives to the existing civil litigation system as a way 
     of improving patient safety, reducing medical errors, 
     encouraging the efficient resolution of disputes, increasing 
     the availability of prompt and fair resolution of disputes, 
     and improving access to liability insurance, while preserving 
     an individual's right to seek redress in court; and
       (3) Congress should consider establishing a State 
     demonstration program to evaluate alternatives to the 
     existing civil litigation system with respect to the 
     resolution of medical malpractice claims.

      TITLE VII--IMPROVING ACCESS TO INNOVATIVE MEDICAL THERAPIES

         Subtitle A--Biologics Price Competition and Innovation

     SEC. 7001. SHORT TITLE.

       (a) In General.--This subtitle may be cited as the 
     ``Biologics Price Competition and Innovation Act of 2009''.
       (b) Sense of the Senate.--It is the sense of the Senate 
     that a biosimilars pathway balancing innovation and consumer 
     interests should be established.

     SEC. 7002. APPROVAL PATHWAY FOR BIOSIMILAR BIOLOGICAL 
                   PRODUCTS.

       (a) Licensure of Biological Products as Biosimilar or 
     Interchangeable.--Section 351 of the Public Health Service 
     Act (42 U.S.C. 262) is amended--
       (1) in subsection (a)(1)(A), by inserting ``under this 
     subsection or subsection (k)'' after ``biologics license''; 
     and
       (2) by adding at the end the following:
       ``(k) Licensure of Biological Products as Biosimilar or 
     Interchangeable.--
       ``(1) In general.--Any person may submit an application for 
     licensure of a biological product under this subsection.
       ``(2) Content.--
       ``(A) In general.--
       ``(i) Required information.--An application submitted under 
     this subsection shall include information demonstrating 
     that--

       ``(I) the biological product is biosimilar to a reference 
     product based upon data derived from--

       ``(aa) analytical studies that demonstrate that the 
     biological product is highly similar to the reference product 
     notwithstanding minor differences in clinically inactive 
     components;
       ``(bb) animal studies (including the assessment of 
     toxicity); and
       ``(cc) a clinical study or studies (including the 
     assessment of immunogenicity and pharmacokinetics or 
     pharmacodynamics) that are sufficient to demonstrate safety, 
     purity, and potency in 1 or more appropriate conditions of 
     use for which the reference product is licensed and intended 
     to be used and for which licensure is sought for the 
     biological product;

       ``(II) the biological product and reference product utilize 
     the same mechanism or mechanisms of action for the condition 
     or conditions of use prescribed, recommended, or suggested in 
     the proposed labeling, but only to the extent the mechanism 
     or mechanisms of action are known for the reference product;
       ``(III) the condition or conditions of use prescribed, 
     recommended, or suggested in the labeling proposed for the 
     biological product have been previously approved for the 
     reference product;
       ``(IV) the route of administration, the dosage form, and 
     the strength of the biological product are the same as those 
     of the reference product; and
       ``(V) the facility in which the biological product is 
     manufactured, processed, packed, or held meets standards 
     designed to assure that the biological product continues to 
     be safe, pure, and potent.

       ``(ii) Determination by secretary.--The Secretary may 
     determine, in the Secretary's discretion, that an element 
     described in clause (i)(I) is unnecessary in an application 
     submitted under this subsection.
       ``(iii) Additional information.--An application submitted 
     under this subsection--

       ``(I) shall include publicly-available information 
     regarding the Secretary's previous determination that the 
     reference product is safe, pure, and potent; and
       ``(II) may include any additional information in support of 
     the application, including publicly-available information 
     with respect to the reference product or another biological 
     product.

       ``(B) Interchangeability.--An application (or a supplement 
     to an application) submitted under this subsection may 
     include information demonstrating that the biological product 
     meets the standards described in paragraph (4).
       ``(3) Evaluation by secretary.--Upon review of an 
     application (or a supplement to an application) submitted 
     under this subsection, the Secretary shall license the 
     biological product under this subsection if--
       ``(A) the Secretary determines that the information 
     submitted in the application (or the supplement) is 
     sufficient to show that the biological product--
       ``(i) is biosimilar to the reference product; or

[[Page 28576]]

       ``(ii) meets the standards described in paragraph (4), and 
     therefore is interchangeable with the reference product; and
       ``(B) the applicant (or other appropriate person) consents 
     to the inspection of the facility that is the subject of the 
     application, in accordance with subsection (c).
       ``(4) Safety standards for determining 
     interchangeability.--Upon review of an application submitted 
     under this subsection or any supplement to such application, 
     the Secretary shall determine the biological product to be 
     interchangeable with the reference product if the Secretary 
     determines that the information submitted in the application 
     (or a supplement to such application) is sufficient to show 
     that--
       ``(A) the biological product--
       ``(i) is biosimilar to the reference product; and
       ``(ii) can be expected to produce the same clinical result 
     as the reference product in any given patient; and
       ``(B) for a biological product that is administered more 
     than once to an individual, the risk in terms of safety or 
     diminished efficacy of alternating or switching between use 
     of the biological product and the reference product is not 
     greater than the risk of using the reference product without 
     such alternation or switch.
       ``(5) General rules.--
       ``(A) One reference product per application.--A biological 
     product, in an application submitted under this subsection, 
     may not be evaluated against more than 1 reference product.
       ``(B) Review.--An application submitted under this 
     subsection shall be reviewed by the division within the Food 
     and Drug Administration that is responsible for the review 
     and approval of the application under which the reference 
     product is licensed.
       ``(C) Risk evaluation and mitigation strategies.--The 
     authority of the Secretary with respect to risk evaluation 
     and mitigation strategies under the Federal Food, Drug, and 
     Cosmetic Act shall apply to biological products licensed 
     under this subsection in the same manner as such authority 
     applies to biological products licensed under subsection (a).
       ``(6) Exclusivity for first interchangeable biological 
     product.--Upon review of an application submitted under this 
     subsection relying on the same reference product for which a 
     prior biological product has received a determination of 
     interchangeability for any condition of use, the Secretary 
     shall not make a determination under paragraph (4) that the 
     second or subsequent biological product is interchangeable 
     for any condition of use until the earlier of--
       ``(A) 1 year after the first commercial marketing of the 
     first interchangeable biosimilar biological product to be 
     approved as interchangeable for that reference product;
       ``(B) 18 months after--
       ``(i) a final court decision on all patents in suit in an 
     action instituted under subsection (l)(6) against the 
     applicant that submitted the application for the first 
     approved interchangeable biosimilar biological product; or
       ``(ii) the dismissal with or without prejudice of an action 
     instituted under subsection (l)(6) against the applicant that 
     submitted the application for the first approved 
     interchangeable biosimilar biological product; or
       ``(C)(i) 42 months after approval of the first 
     interchangeable biosimilar biological product if the 
     applicant that submitted such application has been sued under 
     subsection (l)(6) and such litigation is still ongoing within 
     such 42-month period; or
       ``(ii) 18 months after approval of the first 
     interchangeable biosimilar biological product if the 
     applicant that submitted such application has not been sued 
     under subsection (l)(6).

     For purposes of this paragraph, the term `final court 
     decision' means a final decision of a court from which no 
     appeal (other than a petition to the United States Supreme 
     Court for a writ of certiorari) has been or can be taken.
       ``(7) Exclusivity for reference product.--
       ``(A) Effective date of biosimilar application approval.--
     Approval of an application under this subsection may not be 
     made effective by the Secretary until the date that is 12 
     years after the date on which the reference product was first 
     licensed under subsection (a).
       ``(B) Filing period.--An application under this subsection 
     may not be submitted to the Secretary until the date that is 
     4 years after the date on which the reference product was 
     first licensed under subsection (a).
       ``(C) First licensure.--Subparagraphs (A) and (B) shall not 
     apply to a license for or approval of--
       ``(i) a supplement for the biological product that is the 
     reference product; or
       ``(ii) a subsequent application filed by the same sponsor 
     or manufacturer of the biological product that is the 
     reference product (or a licensor, predecessor in interest, or 
     other related entity) for--

       ``(I) a change (not including a modification to the 
     structure of the biological product) that results in a new 
     indication, route of administration, dosing schedule, dosage 
     form, delivery system, delivery device, or strength; or
       ``(II) a modification to the structure of the biological 
     product that does not result in a change in safety, purity, 
     or potency.

       ``(8) Guidance documents.--
       ``(A) In general.--The Secretary may, after opportunity for 
     public comment, issue guidance in accordance, except as 
     provided in subparagraph (B)(i), with section 701(h) of the 
     Federal Food, Drug, and Cosmetic Act with respect to the 
     licensure of a biological product under this subsection. Any 
     such guidance may be general or specific.
       ``(B) Public comment.--
       ``(i) In general.--The Secretary shall provide the public 
     an opportunity to comment on any proposed guidance issued 
     under subparagraph (A) before issuing final guidance.
       ``(ii) Input regarding most valuable guidance.--The 
     Secretary shall establish a process through which the public 
     may provide the Secretary with input regarding priorities for 
     issuing guidance.
       ``(C) No requirement for application consideration.--The 
     issuance (or non-issuance) of guidance under subparagraph (A) 
     shall not preclude the review of, or action on, an 
     application submitted under this subsection.
       ``(D) Requirement for product class-specific guidance.--If 
     the Secretary issues product class-specific guidance under 
     subparagraph (A), such guidance shall include a description 
     of--
       ``(i) the criteria that the Secretary will use to determine 
     whether a biological product is highly similar to a reference 
     product in such product class; and
       ``(ii) the criteria, if available, that the Secretary will 
     use to determine whether a biological product meets the 
     standards described in paragraph (4).
       ``(E) Certain product classes.--
       ``(i) Guidance.--The Secretary may indicate in a guidance 
     document that the science and experience, as of the date of 
     such guidance, with respect to a product or product class 
     (not including any recombinant protein) does not allow 
     approval of an application for a license as provided under 
     this subsection for such product or product class.
       ``(ii) Modification or reversal.--The Secretary may issue a 
     subsequent guidance document under subparagraph (A) to modify 
     or reverse a guidance document under clause (i).
       ``(iii) No effect on ability to deny license.--Clause (i) 
     shall not be construed to require the Secretary to approve a 
     product with respect to which the Secretary has not indicated 
     in a guidance document that the science and experience, as 
     described in clause (i), does not allow approval of such an 
     application.
       ``(l) Patents.--
       ``(1) Confidential access to subsection (k) application.--
       ``(A) Application of paragraph.--Unless otherwise agreed to 
     by a person that submits an application under subsection (k) 
     (referred to in this subsection as the `subsection (k) 
     applicant') and the sponsor of the application for the 
     reference product (referred to in this subsection as the 
     `reference product sponsor'), the provisions of this 
     paragraph shall apply to the exchange of information 
     described in this subsection.
       ``(B) In general.--
       ``(i) Provision of confidential information.--When a 
     subsection (k) applicant submits an application under 
     subsection (k), such applicant shall provide to the persons 
     described in clause (ii), subject to the terms of this 
     paragraph, confidential access to the information required to 
     be produced pursuant to paragraph (2) and any other 
     information that the subsection (k) applicant determines, in 
     its sole discretion, to be appropriate (referred to in this 
     subsection as the `confidential information').
       ``(ii) Recipients of information.--The persons described in 
     this clause are the following:

       ``(I) Outside counsel.--One or more attorneys designated by 
     the reference product sponsor who are employees of an entity 
     other than the reference product sponsor (referred to in this 
     paragraph as the `outside counsel'), provided that such 
     attorneys do not engage, formally or informally, in patent 
     prosecution relevant or related to the reference product.
       ``(II) In-house counsel.--One attorney that represents the 
     reference product sponsor who is an employee of the reference 
     product sponsor, provided that such attorney does not engage, 
     formally or informally, in patent prosecution relevant or 
     related to the reference product.

       ``(iii) Patent owner access.--A representative of the owner 
     of a patent exclusively licensed to a reference product 
     sponsor with respect to the reference product and who has 
     retained a right to assert the patent or participate in 
     litigation concerning the patent may be provided the 
     confidential information, provided that the representative 
     informs the reference product sponsor and the subsection (k) 
     applicant of his or her agreement to be subject to the 
     confidentiality provisions set forth in this paragraph, 
     including those under clause (ii).
       ``(C) Limitation on disclosure.--No person that receives 
     confidential information pursuant to subparagraph (B) shall 
     disclose any confidential information to any other person or 
     entity, including the reference product sponsor employees, 
     outside scientific consultants, or other outside counsel 
     retained

[[Page 28577]]

     by the reference product sponsor, without the prior written 
     consent of the subsection (k) applicant, which shall not be 
     unreasonably withheld.
       ``(D) Use of confidential information.--Confidential 
     information shall be used for the sole and exclusive purpose 
     of determining, with respect to each patent assigned to or 
     exclusively licensed by the reference product sponsor, 
     whether a claim of patent infringement could reasonably be 
     asserted if the subsection (k) applicant engaged in the 
     manufacture, use, offering for sale, sale, or importation 
     into the United States of the biological product that is the 
     subject of the application under subsection (k).
       ``(E) Ownership of confidential information.--The 
     confidential information disclosed under this paragraph is, 
     and shall remain, the property of the subsection (k) 
     applicant. By providing the confidential information pursuant 
     to this paragraph, the subsection (k) applicant does not 
     provide the reference product sponsor or the outside counsel 
     any interest in or license to use the confidential 
     information, for purposes other than those specified in 
     subparagraph (D).
       ``(F) Effect of infringement action.--In the event that the 
     reference product sponsor files a patent infringement suit, 
     the use of confidential information shall continue to be 
     governed by the terms of this paragraph until such time as a 
     court enters a protective order regarding the information. 
     Upon entry of such order, the subsection (k) applicant may 
     redesignate confidential information in accordance with the 
     terms of that order. No confidential information shall be 
     included in any publicly-available complaint or other 
     pleading. In the event that the reference product sponsor 
     does not file an infringement action by the date specified in 
     paragraph (6), the reference product sponsor shall return or 
     destroy all confidential information received under this 
     paragraph, provided that if the reference product sponsor 
     opts to destroy such information, it will confirm destruction 
     in writing to the subsection (k) applicant.
       ``(G) Rule of construction.--Nothing in this paragraph 
     shall be construed--
       ``(i) as an admission by the subsection (k) applicant 
     regarding the validity, enforceability, or infringement of 
     any patent; or
       ``(ii) as an agreement or admission by the subsection (k) 
     applicant with respect to the competency, relevance, or 
     materiality of any confidential information.
       ``(H) Effect of violation.--The disclosure of any 
     confidential information in violation of this paragraph shall 
     be deemed to cause the subsection (k) applicant to suffer 
     irreparable harm for which there is no adequate legal remedy 
     and the court shall consider immediate injunctive relief to 
     be an appropriate and necessary remedy for any violation or 
     threatened violation of this paragraph.
       ``(2) Subsection (k) application information.--Not later 
     than 20 days after the Secretary notifies the subsection (k) 
     applicant that the application has been accepted for review, 
     the subsection (k) applicant--
       ``(A) shall provide to the reference product sponsor a copy 
     of the application submitted to the Secretary under 
     subsection (k), and such other information that describes the 
     process or processes used to manufacture the biological 
     product that is the subject of such application; and
       ``(B) may provide to the reference product sponsor 
     additional information requested by or on behalf of the 
     reference product sponsor.
       ``(3) List and description of patents.--
       ``(A) List by reference product sponsor.--Not later than 60 
     days after the receipt of the application and information 
     under paragraph (2), the reference product sponsor shall 
     provide to the subsection (k) applicant--
       ``(i) a list of patents for which the reference product 
     sponsor believes a claim of patent infringement could 
     reasonably be asserted by the reference product sponsor, or 
     by a patent owner that has granted an exclusive license to 
     the reference product sponsor with respect to the reference 
     product, if a person not licensed by the reference product 
     sponsor engaged in the making, using, offering to sell, 
     selling, or importing into the United States of the 
     biological product that is the subject of the subsection (k) 
     application; and
       ``(ii) an identification of the patents on such list that 
     the reference product sponsor would be prepared to license to 
     the subsection (k) applicant.
       ``(B) List and description by subsection (k) applicant.--
     Not later than 60 days after receipt of the list under 
     subparagraph (A), the subsection (k) applicant--
       ``(i) may provide to the reference product sponsor a list 
     of patents to which the subsection (k) applicant believes a 
     claim of patent infringement could reasonably be asserted by 
     the reference product sponsor if a person not licensed by the 
     reference product sponsor engaged in the making, using, 
     offering to sell, selling, or importing into the United 
     States of the biological product that is the subject of the 
     subsection (k) application;
       ``(ii) shall provide to the reference product sponsor, with 
     respect to each patent listed by the reference product 
     sponsor under subparagraph (A) or listed by the subsection 
     (k) applicant under clause (i)--

       ``(I) a detailed statement that describes, on a claim by 
     claim basis, the factual and legal basis of the opinion of 
     the subsection (k) applicant that such patent is invalid, 
     unenforceable, or will not be infringed by the commercial 
     marketing of the biological product that is the subject of 
     the subsection (k) application; or
       ``(II) a statement that the subsection (k) applicant does 
     not intend to begin commercial marketing of the biological 
     product before the date that such patent expires; and

       ``(iii) shall provide to the reference product sponsor a 
     response regarding each patent identified by the reference 
     product sponsor under subparagraph (A)(ii).
       ``(C) Description by reference product sponsor.--Not later 
     than 60 days after receipt of the list and statement under 
     subparagraph (B), the reference product sponsor shall provide 
     to the subsection (k) applicant a detailed statement that 
     describes, with respect to each patent described in 
     subparagraph (B)(ii)(I), on a claim by claim basis, the 
     factual and legal basis of the opinion of the reference 
     product sponsor that such patent will be infringed by the 
     commercial marketing of the biological product that is the 
     subject of the subsection (k) application and a response to 
     the statement concerning validity and enforceability provided 
     under subparagraph (B)(ii)(I).
       ``(4) Patent resolution negotiations.--
       ``(A) In general.--After receipt by the subsection (k) 
     applicant of the statement under paragraph (3)(C), the 
     reference product sponsor and the subsection (k) applicant 
     shall engage in good faith negotiations to agree on which, if 
     any, patents listed under paragraph (3) by the subsection (k) 
     applicant or the reference product sponsor shall be the 
     subject of an action for patent infringement under paragraph 
     (6).
       ``(B) Failure to reach agreement.--If, within 15 days of 
     beginning negotiations under subparagraph (A), the subsection 
     (k) applicant and the reference product sponsor fail to agree 
     on a final and complete list of which, if any, patents listed 
     under paragraph (3) by the subsection (k) applicant or the 
     reference product sponsor shall be the subject of an action 
     for patent infringement under paragraph (6), the provisions 
     of paragraph (5) shall apply to the parties.
       ``(5) Patent resolution if no agreement.--
       ``(A) Number of patents.--The subsection (k) applicant 
     shall notify the reference product sponsor of the number of 
     patents that such applicant will provide to the reference 
     product sponsor under subparagraph (B)(i)(I).
       ``(B) Exchange of patent lists.--
       ``(i) In general.--On a date agreed to by the subsection 
     (k) applicant and the reference product sponsor, but in no 
     case later than 5 days after the subsection (k) applicant 
     notifies the reference product sponsor under subparagraph 
     (A), the subsection (k) applicant and the reference product 
     sponsor shall simultaneously exchange--

       ``(I) the list of patents that the subsection (k) applicant 
     believes should be the subject of an action for patent 
     infringement under paragraph (6); and
       ``(II) the list of patents, in accordance with clause (ii), 
     that the reference product sponsor believes should be the 
     subject of an action for patent infringement under paragraph 
     (6).

       ``(ii) Number of patents listed by reference product 
     sponsor.--

       ``(I) In general.--Subject to subclause (II), the number of 
     patents listed by the reference product sponsor under clause 
     (i)(II) may not exceed the number of patents listed by the 
     subsection (k) applicant under clause (i)(I).
       ``(II) Exception.--If a subsection (k) applicant does not 
     list any patent under clause (i)(I), the reference product 
     sponsor may list 1 patent under clause (i)(II).

       ``(6) Immediate patent infringement action.--
       ``(A) Action if agreement on patent list.--If the 
     subsection (k) applicant and the reference product sponsor 
     agree on patents as described in paragraph (4), not later 
     than 30 days after such agreement, the reference product 
     sponsor shall bring an action for patent infringement with 
     respect to each such patent.
       ``(B) Action if no agreement on patent list.--If the 
     provisions of paragraph (5) apply to the parties as described 
     in paragraph (4)(B), not later than 30 days after the 
     exchange of lists under paragraph (5)(B), the reference 
     product sponsor shall bring an action for patent infringement 
     with respect to each patent that is included on such lists.
       ``(C) Notification and publication of complaint.--
       ``(i) Notification to secretary.--Not later than 30 days 
     after a complaint is served to a subsection (k) applicant in 
     an action for patent infringement described under this 
     paragraph, the subsection (k) applicant shall provide the 
     Secretary with notice and a copy of such complaint.
       ``(ii) Publication by secretary.--The Secretary shall 
     publish in the Federal Register notice of a complaint 
     received under clause (i).
       ``(7) Newly issued or licensed patents.--In the case of a 
     patent that--
       ``(A) is issued to, or exclusively licensed by, the 
     reference product sponsor after the

[[Page 28578]]

     date that the reference product sponsor provided the list to 
     the subsection (k) applicant under paragraph (3)(A); and
       ``(B) the reference product sponsor reasonably believes 
     that, due to the issuance of such patent, a claim of patent 
     infringement could reasonably be asserted by the reference 
     product sponsor if a person not licensed by the reference 
     product sponsor engaged in the making, using, offering to 
     sell, selling, or importing into the United States of the 
     biological product that is the subject of the subsection (k) 
     application,

     not later than 30 days after such issuance or licensing, the 
     reference product sponsor shall provide to the subsection (k) 
     applicant a supplement to the list provided by the reference 
     product sponsor under paragraph (3)(A) that includes such 
     patent, not later than 30 days after such supplement is 
     provided, the subsection (k) applicant shall provide a 
     statement to the reference product sponsor in accordance with 
     paragraph (3)(B), and such patent shall be subject to 
     paragraph (8).
       ``(8) Notice of commercial marketing and preliminary 
     injunction.--
       ``(A) Notice of commercial marketing.--The subsection (k) 
     applicant shall provide notice to the reference product 
     sponsor not later than 180 days before the date of the first 
     commercial marketing of the biological product licensed under 
     subsection (k).
       ``(B) Preliminary injunction.--After receiving the notice 
     under subparagraph (A) and before such date of the first 
     commercial marketing of such biological product, the 
     reference product sponsor may seek a preliminary injunction 
     prohibiting the subsection (k) applicant from engaging in the 
     commercial manufacture or sale of such biological product 
     until the court decides the issue of patent validity, 
     enforcement, and infringement with respect to any patent that 
     is--
       ``(i) included in the list provided by the reference 
     product sponsor under paragraph (3)(A) or in the list 
     provided by the subsection (k) applicant under paragraph 
     (3)(B); and
       ``(ii) not included, as applicable, on--

       ``(I) the list of patents described in paragraph (4); or
       ``(II) the lists of patents described in paragraph (5)(B).

       ``(C) Reasonable cooperation.--If the reference product 
     sponsor has sought a preliminary injunction under 
     subparagraph (B), the reference product sponsor and the 
     subsection (k) applicant shall reasonably cooperate to 
     expedite such further discovery as is needed in connection 
     with the preliminary injunction motion.
       ``(9) Limitation on declaratory judgment action.--
       ``(A) Subsection (k) application provided.--If a subsection 
     (k) applicant provides the application and information 
     required under paragraph (2)(A), neither the reference 
     product sponsor nor the subsection (k) applicant may, prior 
     to the date notice is received under paragraph (8)(A), bring 
     any action under section 2201 of title 28, United States 
     Code, for a declaration of infringement, validity, or 
     enforceability of any patent that is described in clauses (i) 
     and (ii) of paragraph (8)(B).
       ``(B) Subsequent failure to act by subsection (k) 
     applicant.--If a subsection (k) applicant fails to complete 
     an action required of the subsection (k) applicant under 
     paragraph (3)(B)(ii), paragraph (5), paragraph (6)(C)(i), 
     paragraph (7), or paragraph (8)(A), the reference product 
     sponsor, but not the subsection (k) applicant, may bring an 
     action under section 2201 of title 28, United States Code, 
     for a declaration of infringement, validity, or 
     enforceability of any patent included in the list described 
     in paragraph (3)(A), including as provided under paragraph 
     (7).
       ``(C) Subsection (k) application not provided.--If a 
     subsection (k) applicant fails to provide the application and 
     information required under paragraph (2)(A), the reference 
     product sponsor, but not the subsection (k) applicant, may 
     bring an action under section 2201 of title 28, United States 
     Code, for a declaration of infringement, validity, or 
     enforceability of any patent that claims the biological 
     product or a use of the biological product.''.
       (b) Definitions.--Section 351(i) of the Public Health 
     Service Act (42 U.S.C. 262(i)) is amended--
       (1) by striking ``In this section, the term `biological 
     product' means'' and inserting the following: ``In this 
     section:
       ``(1) The term `biological product' means'';
       (2) in paragraph (1), as so designated, by inserting 
     ``protein (except any chemically synthesized polypeptide),'' 
     after ``allergenic product,''; and
       (3) by adding at the end the following:
       ``(2) The term `biosimilar' or `biosimilarity', in 
     reference to a biological product that is the subject of an 
     application under subsection (k), means--
       ``(A) that the biological product is highly similar to the 
     reference product notwithstanding minor differences in 
     clinically inactive components; and
       ``(B) there are no clinically meaningful differences 
     between the biological product and the reference product in 
     terms of the safety, purity, and potency of the product.
       ``(3) The term `interchangeable' or `interchangeability', 
     in reference to a biological product that is shown to meet 
     the standards described in subsection (k)(4), means that the 
     biological product may be substituted for the reference 
     product without the intervention of the health care provider 
     who prescribed the reference product.
       ``(4) The term `reference product' means the single 
     biological product licensed under subsection (a) against 
     which a biological product is evaluated in an application 
     submitted under subsection (k).''.
       (c) Conforming Amendments Relating to Patents.--
       (1) Patents.--Section 271(e) of title 35, United States 
     Code, is amended--
       (A) in paragraph (2)--
       (i) in subparagraph (A), by striking ``or'' at the end;
       (ii) in subparagraph (B), by adding ``or'' at the end; and
       (iii) by inserting after subparagraph (B) the following:
       ``(C)(i) with respect to a patent that is identified in the 
     list of patents described in section 351(l)(3) of the Public 
     Health Service Act (including as provided under section 
     351(l)(7) of such Act), an application seeking approval of a 
     biological product, or
       ``(ii) if the applicant for the application fails to 
     provide the application and information required under 
     section 351(l)(2)(A) of such Act, an application seeking 
     approval of a biological product for a patent that could be 
     identified pursuant to section 351(l)(3)(A)(i) of such 
     Act,''; and
       (iv) in the matter following subparagraph (C) (as added by 
     clause (iii)), by striking ``or veterinary biological 
     product'' and inserting ``, veterinary biological product, or 
     biological product'';
       (B) in paragraph (4)--
       (i) in subparagraph (B), by--

       (I) striking ``or veterinary biological product'' and 
     inserting ``, veterinary biological product, or biological 
     product''; and
       (II) striking ``and'' at the end;

       (ii) in subparagraph (C), by--

       (I) striking ``or veterinary biological product'' and 
     inserting ``, veterinary biological product, or biological 
     product''; and
       (II) striking the period and inserting ``, and'';

       (iii) by inserting after subparagraph (C) the following:
       ``(D) the court shall order a permanent injunction 
     prohibiting any infringement of the patent by the biological 
     product involved in the infringement until a date which is 
     not earlier than the date of the expiration of the patent 
     that has been infringed under paragraph (2)(C), provided the 
     patent is the subject of a final court decision, as defined 
     in section 351(k)(6) of the Public Health Service Act, in an 
     action for infringement of the patent under section 351(l)(6) 
     of such Act, and the biological product has not yet been 
     approved because of section 351(k)(7) of such Act.''; and
       (iv) in the matter following subparagraph (D) (as added by 
     clause (iii)), by striking ``and (C)'' and inserting ``(C), 
     and (D)''; and
       (C) by adding at the end the following:
       ``(6)(A) Subparagraph (B) applies, in lieu of paragraph 
     (4), in the case of a patent--
       ``(i) that is identified, as applicable, in the list of 
     patents described in section 351(l)(4) of the Public Health 
     Service Act or the lists of patents described in section 
     351(l)(5)(B) of such Act with respect to a biological 
     product; and
       ``(ii) for which an action for infringement of the patent 
     with respect to the biological product--
       ``(I) was brought after the expiration of the 30-day period 
     described in subparagraph (A) or (B), as applicable, of 
     section 351(l)(6) of such Act; or
       ``(II) was brought before the expiration of the 30-day 
     period described in subclause (I), but which was dismissed 
     without prejudice or was not prosecuted to judgment in good 
     faith.
       ``(B) In an action for infringement of a patent described 
     in subparagraph (A), the sole and exclusive remedy that may 
     be granted by a court, upon a finding that the making, using, 
     offering to sell, selling, or importation into the United 
     States of the biological product that is the subject of the 
     action infringed the patent, shall be a reasonable royalty.
       ``(C) The owner of a patent that should have been included 
     in the list described in section 351(l)(3)(A) of the Public 
     Health Service Act, including as provided under section 
     351(l)(7) of such Act for a biological product, but was not 
     timely included in such list, may not bring an action under 
     this section for infringement of the patent with respect to 
     the biological product.''.
       (2) Conforming amendment under title 28.--Section 2201(b) 
     of title 28, United States Code, is amended by inserting 
     before the period the following: ``, or section 351 of the 
     Public Health Service Act''.
       (d) Conforming Amendments Under the Federal Food, Drug, and 
     Cosmetic Act.--
       (1) Content and review of applications.--Section 
     505(b)(5)(B) of the Federal Food, Drug, and Cosmetic Act (21 
     U.S.C. 355(b)(5)(B)) is amended by inserting before the 
     period at the end of the first sentence the following: ``or, 
     with respect to an applicant for approval of a biological 
     product under section 351(k) of the Public Health

[[Page 28579]]

     Service Act, any necessary clinical study or studies''.
       (2) New active ingredient.--Section 505B of the Federal 
     Food, Drug, and Cosmetic Act (21 U.S.C. 355c) is amended by 
     adding at the end the following:
       ``(n) New Active Ingredient.--
       ``(1) Non-interchangeable biosimilar biological product.--A 
     biological product that is biosimilar to a reference product 
     under section 351 of the Public Health Service Act, and that 
     the Secretary has not determined to meet the standards 
     described in subsection (k)(4) of such section for 
     interchangeability with the reference product, shall be 
     considered to have a new active ingredient under this 
     section.
       ``(2) Interchangeable biosimilar biological product.--A 
     biological product that is interchangeable with a reference 
     product under section 351 of the Public Health Service Act 
     shall not be considered to have a new active ingredient under 
     this section.''.
       (e) Products Previously Approved Under Section 505.--
       (1) Requirement to follow section 351.--Except as provided 
     in paragraph (2), an application for a biological product 
     shall be submitted under section 351 of the Public Health 
     Service Act (42 U.S.C. 262) (as amended by this Act).
       (2) Exception.--An application for a biological product may 
     be submitted under section 505 of the Federal Food, Drug, and 
     Cosmetic Act (21 U.S.C. 355) if--
       (A) such biological product is in a product class for which 
     a biological product in such product class is the subject of 
     an application approved under such section 505 not later than 
     the date of enactment of this Act; and
       (B) such application--
       (i) has been submitted to the Secretary of Health and Human 
     Services (referred to in this subtitle as the ``Secretary'') 
     before the date of enactment of this Act; or
       (ii) is submitted to the Secretary not later than the date 
     that is 10 years after the date of enactment of this Act.
       (3) Limitation.--Notwithstanding paragraph (2), an 
     application for a biological product may not be submitted 
     under section 505 of the Federal Food, Drug, and Cosmetic Act 
     (21 U.S.C. 355) if there is another biological product 
     approved under subsection (a) of section 351 of the Public 
     Health Service Act that could be a reference product with 
     respect to such application (within the meaning of such 
     section 351) if such application were submitted under 
     subsection (k) of such section 351.
       (4) Deemed approved under section 351.--An approved 
     application for a biological product under section 505 of the 
     Federal Food, Drug, and Cosmetic Act (21 U.S.C. 355) shall be 
     deemed to be a license for the biological product under such 
     section 351 on the date that is 10 years after the date of 
     enactment of this Act.
       (5) Definitions.--For purposes of this subsection, the term 
     ``biological product'' has the meaning given such term under 
     section 351 of the Public Health Service Act (42 U.S.C. 262) 
     (as amended by this Act).
       (f) Follow-on Biologics User Fees.--
       (1) Development of user fees for biosimilar biological 
     products.--
       (A) In general.--Beginning not later than October 1, 2010, 
     the Secretary shall develop recommendations to present to 
     Congress with respect to the goals, and plans for meeting the 
     goals, for the process for the review of biosimilar 
     biological product applications submitted under section 
     351(k) of the Public Health Service Act (as added by this 
     Act) for the first 5 fiscal years after fiscal year 2012. In 
     developing such recommendations, the Secretary shall consult 
     with--
       (i) the Committee on Health, Education, Labor, and Pensions 
     of the Senate;
       (ii) the Committee on Energy and Commerce of the House of 
     Representatives;
       (iii) scientific and academic experts;
       (iv) health care professionals;
       (v) representatives of patient and consumer advocacy 
     groups; and
       (vi) the regulated industry.
       (B) Public review of recommendations.--After negotiations 
     with the regulated industry, the Secretary shall--
       (i) present the recommendations developed under 
     subparagraph (A) to the Congressional committees specified in 
     such subparagraph;
       (ii) publish such recommendations in the Federal Register;
       (iii) provide for a period of 30 days for the public to 
     provide written comments on such recommendations;
       (iv) hold a meeting at which the public may present its 
     views on such recommendations; and
       (v) after consideration of such public views and comments, 
     revise such recommendations as necessary.
       (C) Transmittal of recommendations.--Not later than January 
     15, 2012, the Secretary shall transmit to Congress the 
     revised recommendations under subparagraph (B), a summary of 
     the views and comments received under such subparagraph, and 
     any changes made to the recommendations in response to such 
     views and comments.
       (2) Establishment of user fee program.--It is the sense of 
     the Senate that, based on the recommendations transmitted to 
     Congress by the Secretary pursuant to paragraph (1)(C), 
     Congress should authorize a program, effective on October 1, 
     2012, for the collection of user fees relating to the 
     submission of biosimilar biological product applications 
     under section 351(k) of the Public Health Service Act (as 
     added by this Act).
       (3) Transitional provisions for user fees for biosimilar 
     biological products.--
       (A) Application of the prescription drug user fee 
     provisions.--Section 735(1)(B) of the Federal Food, Drug, and 
     Cosmetic Act (21 U.S.C. 379g(1)(B)) is amended by striking 
     ``section 351'' and inserting ``subsection (a) or (k) of 
     section 351''.
       (B) Evaluation of costs of reviewing biosimilar biological 
     product applications.--During the period beginning on the 
     date of enactment of this Act and ending on October 1, 2010, 
     the Secretary shall collect and evaluate data regarding the 
     costs of reviewing applications for biological products 
     submitted under section 351(k) of the Public Health Service 
     Act (as added by this Act) during such period.
       (C) Audit.--
       (i) In general.--On the date that is 2 years after first 
     receiving a user fee applicable to an application for a 
     biological product under section 351(k) of the Public Health 
     Service Act (as added by this Act), and on a biennial basis 
     thereafter until October 1, 2013, the Secretary shall perform 
     an audit of the costs of reviewing such applications under 
     such section 351(k). Such an audit shall compare--

       (I) the costs of reviewing such applications under such 
     section 351(k) to the amount of the user fee applicable to 
     such applications; and
       (II)(aa) such ratio determined under subclause (I); to
       (bb) the ratio of the costs of reviewing applications for 
     biological products under section 351(a) of such Act (as 
     amended by this Act) to the amount of the user fee applicable 
     to such applications under such section 351(a).

       (ii) Alteration of user fee.--If the audit performed under 
     clause (i) indicates that the ratios compared under subclause 
     (II) of such clause differ by more than 5 percent, then the 
     Secretary shall alter the user fee applicable to applications 
     submitted under such section 351(k) to more appropriately 
     account for the costs of reviewing such applications.
       (iii) Accounting standards.--The Secretary shall perform an 
     audit under clause (i) in conformance with the accounting 
     principles, standards, and requirements prescribed by the 
     Comptroller General of the United States under section 3511 
     of title 31, United State Code, to ensure the validity of any 
     potential variability.
       (4) Authorization of appropriations.--There is authorized 
     to be appropriated to carry out this subsection such sums as 
     may be necessary for each of fiscal years 2010 through 2012.
       (g) Pediatric Studies of Biological Products.--
       (1) In general.--Section 351 of the Public Health Service 
     Act (42 U.S.C. 262) is amended by adding at the end the 
     following:
       ``(m) Pediatric Studies.--
       ``(1) Application of certain provisions.--The provisions of 
     subsections (a), (d), (e), (f), (i), (j), (k), (l), (p), and 
     (q) of section 505A of the Federal Food, Drug, and Cosmetic 
     Act shall apply with respect to the extension of a period 
     under paragraphs (2) and (3) to the same extent and in the 
     same manner as such provisions apply with respect to the 
     extension of a period under subsection (b) or (c) of section 
     505A of the Federal Food, Drug, and Cosmetic Act.
       ``(2) Market exclusivity for new biological products.--If, 
     prior to approval of an application that is submitted under 
     subsection (a), the Secretary determines that information 
     relating to the use of a new biological product in the 
     pediatric population may produce health benefits in that 
     population, the Secretary makes a written request for 
     pediatric studies (which shall include a timeframe for 
     completing such studies), the applicant agrees to the 
     request, such studies are completed using appropriate 
     formulations for each age group for which the study is 
     requested within any such timeframe, and the reports thereof 
     are submitted and accepted in accordance with section 
     505A(d)(3) of the Federal Food, Drug, and Cosmetic Act--
       ``(A) the periods for such biological product referred to 
     in subsection (k)(7) are deemed to be 4 years and 6 months 
     rather than 4 years and 12 years and 6 months rather than 12 
     years; and
       ``(B) if the biological product is designated under section 
     526 for a rare disease or condition, the period for such 
     biological product referred to in section 527(a) is deemed to 
     be 7 years and 6 months rather than 7 years.
       ``(3) Market exclusivity for already-marketed biological 
     products.--If the Secretary determines that information 
     relating to the use of a licensed biological product in the 
     pediatric population may produce health benefits in that 
     population and makes a written request to the holder of an 
     approved application under subsection (a) for pediatric 
     studies (which shall include a timeframe for completing such 
     studies), the holder agrees to the request, such studies are 
     completed using appropriate formulations for each age group 
     for which the study is requested within any such timeframe, 
     and the reports

[[Page 28580]]

     thereof are submitted and accepted in accordance with section 
     505A(d)(3) of the Federal Food, Drug, and Cosmetic Act--
       ``(A) the periods for such biological product referred to 
     in subsection (k)(7) are deemed to be 4 years and 6 months 
     rather than 4 years and 12 years and 6 months rather than 12 
     years; and
       ``(B) if the biological product is designated under section 
     526 for a rare disease or condition, the period for such 
     biological product referred to in section 527(a) is deemed to 
     be 7 years and 6 months rather than 7 years.
       ``(4) Exception.--The Secretary shall not extend a period 
     referred to in paragraph (2)(A), (2)(B), (3)(A), or (3)(B) if 
     the determination under section 505A(d)(3) is made later than 
     9 months prior to the expiration of such period.''.
       (2) Studies regarding pediatric research.--
       (A) Program for pediatric study of drugs.--Subsection 
     (a)(1) of section 409I of the Public Health Service Act (42 
     U.S.C. 284m) is amended by inserting ``, biological 
     products,'' after ``including drugs''.
       (B) Institute of medicine study.--Section 505A(p) of the 
     Federal Food, Drug, and Cosmetic Act (21 U.S.C. 355b(p)) is 
     amended by striking paragraphs (4) and (5) and inserting the 
     following:
       ``(4) review and assess the number and importance of 
     biological products for children that are being tested as a 
     result of the amendments made by the Biologics Price 
     Competition and Innovation Act of 2009 and the importance for 
     children, health care providers, parents, and others of 
     labeling changes made as a result of such testing;
       ``(5) review and assess the number, importance, and 
     prioritization of any biological products that are not being 
     tested for pediatric use; and
       ``(6) offer recommendations for ensuring pediatric testing 
     of biological products, including consideration of any 
     incentives, such as those provided under this section or 
     section 351(m) of the Public Health Service Act.''.
       (h) Orphan Products.--If a reference product, as defined in 
     section 351 of the Public Health Service Act (42 U.S.C. 262) 
     (as amended by this Act) has been designated under section 
     526 of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 
     360bb) for a rare disease or condition, a biological product 
     seeking approval for such disease or condition under 
     subsection (k) of such section 351 as biosimilar to, or 
     interchangeable with, such reference product may be licensed 
     by the Secretary only after the expiration for such reference 
     product of the later of--
       (1) the 7-year period described in section 527(a) of the 
     Federal Food, Drug, and Cosmetic Act (21 U.S.C. 360cc(a)); 
     and
       (2) the 12-year period described in subsection (k)(7) of 
     such section 351.

     SEC. 7003. SAVINGS.

       (a) Determination.--The Secretary of the Treasury, in 
     consultation with the Secretary of Health and Human Services, 
     shall for each fiscal year determine the amount of savings to 
     the Federal Government as a result of the enactment of this 
     subtitle.
       (b) Use.--Notwithstanding any other provision of this 
     subtitle (or an amendment made by this subtitle), the savings 
     to the Federal Government generated as a result of the 
     enactment of this subtitle shall be used for deficit 
     reduction.

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

     SEC. 7101. EXPANDED PARTICIPATION IN 340B PROGRAM.

       (a) Expansion of Covered Entities Receiving Discounted 
     Prices.--Section 340B(a)(4) of the Public Health Service Act 
     (42 U.S.C. 256b(a)(4)) is amended by adding at the end the 
     following:
       ``(M) A children's hospital excluded from the Medicare 
     prospective payment system pursuant to section 
     1886(d)(1)(B)(iii) of the Social Security Act, or a free-
     standing cancer hospital excluded from the Medicare 
     prospective payment system pursuant to section 
     1886(d)(1)(B)(v) of the Social Security Act, that would meet 
     the requirements of subparagraph (L), including the 
     disproportionate share adjustment percentage requirement 
     under clause (ii) of such subparagraph, if the hospital were 
     a subsection (d) hospital as defined by section 1886(d)(1)(B) 
     of the Social Security Act.
       ``(N) An entity that is a critical access hospital (as 
     determined under section 1820(c)(2) of the Social Security 
     Act), and that meets the requirements of subparagraph (L)(i).
       ``(O) An entity that is a rural referral center, as defined 
     by section 1886(d)(5)(C)(i) of the Social Security Act, or a 
     sole community hospital, as defined by section 
     1886(d)(5)(C)(iii) of such Act, and that both meets the 
     requirements of subparagraph (L)(i) and has a 
     disproportionate share adjustment percentage equal to or 
     greater than 8 percent.''.
       (b) Extension of Discount to Inpatient Drugs.--Section 340B 
     of the Public Health Service Act (42 U.S.C. 256b) is 
     amended--
       (1) in paragraphs (2), (5), (7), and (9) of subsection (a), 
     by striking ``outpatient'' each place it appears; and
       (2) in subsection (b)--
       (A) by striking ``Other Definition'' and all that follows 
     through ``In this section'' and inserting the following: 
     ``Other Definitions.--
       ``(1) In general.--In this section''; and
       (B) by adding at the end the following new paragraph:
       ``(2) Covered drug.--In this section, the term `covered 
     drug'--
       ``(A) means a covered outpatient drug (as defined in 
     section 1927(k)(2) of the Social Security Act); and
       ``(B) includes, notwithstanding paragraph (3)(A) of section 
     1927(k) of such Act, a drug used in connection with an 
     inpatient or outpatient service provided by a hospital 
     described in subparagraph (L), (M), (N), or (O) of subsection 
     (a)(4) that is enrolled to participate in the drug discount 
     program under this section.''.
       (c) Prohibition on Group Purchasing Arrangements.--Section 
     340B(a) of the Public Health Service Act (42 U.S.C. 256b(a)) 
     is amended--
       (1) in paragraph (4)(L)--
       (A) in clause (i), by adding ``and'' at the end;
       (B) in clause (ii), by striking ``; and'' and inserting a 
     period; and
       (C) by striking clause (iii); and
       (2) in paragraph (5), as amended by subsection (b)--
       (A) by redesignating subparagraphs (C) and (D) as 
     subparagraphs (D) and (E); respectively; and
       (B) by inserting after subparagraph (B), the following:
       ``(C) Prohibition on group purchasing arrangements.--
       ``(i) In general.--A hospital described in subparagraph 
     (L), (M), (N), or (O) of paragraph (4) shall not obtain 
     covered outpatient drugs through a group purchasing 
     organization or other group purchasing arrangement, except as 
     permitted or provided for pursuant to clauses (ii) or (iii).
       ``(ii) Inpatient drugs.--Clause (i) shall not apply to 
     drugs purchased for inpatient use.
       ``(iii) Exceptions.--The Secretary shall establish 
     reasonable exceptions to clause (i)--

       ``(I) with respect to a covered outpatient drug that is 
     unavailable to be purchased through the program under this 
     section due to a drug shortage problem, manufacturer 
     noncompliance, or any other circumstance beyond the 
     hospital's control;
       ``(II) to facilitate generic substitution when a generic 
     covered outpatient drug is available at a lower price; or
       ``(III) to reduce in other ways the administrative burdens 
     of managing both inventories of drugs subject to this section 
     and inventories of drugs that are not subject to this 
     section, so long as the exceptions do not create a duplicate 
     discount problem in violation of subparagraph (A) or a 
     diversion problem in violation of subparagraph (B).

       ``(iv) Purchasing arrangements for inpatient drugs.--The 
     Secretary shall ensure that a hospital described in 
     subparagraph (L), (M), (N), or (O) of subsection (a)(4) that 
     is enrolled to participate in the drug discount program under 
     this section shall have multiple options for purchasing 
     covered drugs for inpatients, including by utilizing a group 
     purchasing organization or other group purchasing 
     arrangement, establishing and utilizing its own group 
     purchasing program, purchasing directly from a manufacturer, 
     and any other purchasing arrangements that the Secretary 
     determines is appropriate to ensure access to drug discount 
     pricing under this section for inpatient drugs taking into 
     account the particular needs of small and rural hospitals.''.
       (d) Medicaid Credits on Inpatient Drugs.--Section 340B of 
     the Public Health Service Act (42 U.S.C. 256b) is amended by 
     striking subsection (c) and inserting the following:
       ``(c) Medicaid Credit.--Not later than 90 days after the 
     date of filing of the hospital's most recently filed Medicare 
     cost report, the hospital shall issue a credit as determined 
     by the Secretary to the State Medicaid program for inpatient 
     covered drugs provided to Medicaid recipients.''.
       (e) Effective Dates.--
       (1) In general.--The amendments made by this section and 
     section 7102 shall take effect on January 1, 2010, and shall 
     apply to drugs purchased on or after January 1, 2010.
       (2) Effectiveness.--The amendments made by this section and 
     section 7102 shall be effective and shall be taken into 
     account in determining whether a manufacturer is deemed to 
     meet the requirements of section 340B(a) of the Public Health 
     Service Act (42 U.S.C. 256b(a)), notwithstanding any other 
     provision of law.

     SEC. 7102. IMPROVEMENTS TO 340B PROGRAM INTEGRITY.

       (a) Integrity Improvements.--Subsection (d) of section 340B 
     of the Public Health Service Act (42 U.S.C. 256b) is amended 
     to read as follows:
       ``(d) Improvements in Program Integrity.--
       ``(1) Manufacturer compliance.--
       ``(A) In general.--From amounts appropriated under 
     paragraph (4), the Secretary shall provide for improvements 
     in compliance by manufacturers with the requirements of this 
     section in order to prevent

[[Page 28581]]

     overcharges and other violations of the discounted pricing 
     requirements specified in this section.
       ``(B) Improvements.--The improvements described in 
     subparagraph (A) shall include the following:
       ``(i) The development of a system to enable the Secretary 
     to verify the accuracy of ceiling prices calculated by 
     manufacturers under subsection (a)(1) and charged to covered 
     entities, which shall include the following:

       ``(I) Developing and publishing through an appropriate 
     policy or regulatory issuance, precisely defined standards 
     and methodology for the calculation of ceiling prices under 
     such subsection.
       ``(II) Comparing regularly the ceiling prices calculated by 
     the Secretary with the quarterly pricing data that is 
     reported by manufacturers to the Secretary.
       ``(III) Performing spot checks of sales transactions by 
     covered entities.
       ``(IV) Inquiring into the cause of any pricing 
     discrepancies that may be identified and either taking, or 
     requiring manufacturers to take, such corrective action as is 
     appropriate in response to such price discrepancies.

       ``(ii) The establishment of procedures for manufacturers to 
     issue refunds to covered entities in the event that there is 
     an overcharge by the manufacturers, including the following:

       ``(I) Providing the Secretary with an explanation of why 
     and how the overcharge occurred, how the refunds will be 
     calculated, and to whom the refunds will be issued.
       ``(II) Oversight by the Secretary to ensure that the 
     refunds are issued accurately and within a reasonable period 
     of time, both in routine instances of retroactive adjustment 
     to relevant pricing data and exceptional circumstances such 
     as erroneous or intentional overcharging for covered drugs.

       ``(iii) The provision of access through the Internet 
     website of the Department of Health and Human Services to the 
     applicable ceiling prices for covered drugs as calculated and 
     verified by the Secretary in accordance with this section, in 
     a manner (such as through the use of password protection) 
     that limits such access to covered entities and adequately 
     assures security and protection of privileged pricing data 
     from unauthorized re-disclosure.
       ``(iv) The development of a mechanism by which--

       ``(I) rebates and other discounts provided by manufacturers 
     to other purchasers subsequent to the sale of covered drugs 
     to covered entities are reported to the Secretary; and
       ``(II) appropriate credits and refunds are issued to 
     covered entities if such discounts or rebates have the effect 
     of lowering the applicable ceiling price for the relevant 
     quarter for the drugs involved.

       ``(v) Selective auditing of manufacturers and wholesalers 
     to ensure the integrity of the drug discount program under 
     this section.
       ``(vi) The imposition of sanctions in the form of civil 
     monetary penalties, which--

       ``(I) shall be assessed according to standards established 
     in regulations to be promulgated by the Secretary not later 
     than 180 days after the date of enactment of the Patient 
     Protection and Affordable Care Act;
       ``(II) shall not exceed $5,000 for each instance of 
     overcharging a covered entity that may have occurred; and
       ``(III) shall apply to any manufacturer with an agreement 
     under this section that knowingly and intentionally charges a 
     covered entity a price for purchase of a drug that exceeds 
     the maximum applicable price under subsection (a)(1).

       ``(2) Covered entity compliance.--
       ``(A) In general.--From amounts appropriated under 
     paragraph (4), the Secretary shall provide for improvements 
     in compliance by covered entities with the requirements of 
     this section in order to prevent diversion and violations of 
     the duplicate discount provision and other requirements 
     specified under subsection (a)(5).
       ``(B) Improvements.--The improvements described in 
     subparagraph (A) shall include the following:
       ``(i) The development of procedures to enable and require 
     covered entities to regularly update (at least annually) the 
     information on the Internet website of the Department of 
     Health and Human Services relating to this section.
       ``(ii) The development of a system for the Secretary to 
     verify the accuracy of information regarding covered entities 
     that is listed on the website described in clause (i).
       ``(iii) The development of more detailed guidance 
     describing methodologies and options available to covered 
     entities for billing covered drugs to State Medicaid agencies 
     in a manner that avoids duplicate discounts pursuant to 
     subsection (a)(5)(A).
       ``(iv) The establishment of a single, universal, and 
     standardized identification system by which each covered 
     entity site can be identified by manufacturers, distributors, 
     covered entities, and the Secretary for purposes of 
     facilitating the ordering, purchasing, and delivery of 
     covered drugs under this section, including the processing of 
     chargebacks for such drugs.
       ``(v) The imposition of sanctions, in appropriate cases as 
     determined by the Secretary, additional to those to which 
     covered entities are subject under subsection (a)(5)(E), 
     through one or more of the following actions:

       ``(I) Where a covered entity knowingly and intentionally 
     violates subsection (a)(5)(B), the covered entity shall be 
     required to pay a monetary penalty to a manufacturer or 
     manufacturers in the form of interest on sums for which the 
     covered entity is found liable under subsection (a)(5)(E), 
     such interest to be compounded monthly and equal to the 
     current short term interest rate as determined by the Federal 
     Reserve for the time period for which the covered entity is 
     liable.
       ``(II) Where the Secretary determines a violation of 
     subsection (a)(5)(B) was systematic and egregious as well as 
     knowing and intentional, removing the covered entity from the 
     drug discount program under this section and disqualifying 
     the entity from re-entry into such program for a reasonable 
     period of time to be determined by the Secretary.
       ``(III) Referring matters to appropriate Federal 
     authorities within the Food and Drug Administration, the 
     Office of Inspector General of Department of Health and Human 
     Services, or other Federal agencies for consideration of 
     appropriate action under other Federal statutes, such as the 
     Prescription Drug Marketing Act (21 U.S.C. 353).

       ``(3) Administrative dispute resolution process.--
       ``(A) In general.--Not later than 180 days after the date 
     of enactment of the Patient Protection and Affordable Care 
     Act, the Secretary shall promulgate regulations to establish 
     and implement an administrative process for the resolution of 
     claims by covered entities that they have been overcharged 
     for drugs purchased under this section, and claims by 
     manufacturers, after the conduct of audits as authorized by 
     subsection (a)(5)(D), of violations of subsections (a)(5)(A) 
     or (a)(5)(B), including appropriate procedures for the 
     provision of remedies and enforcement of determinations made 
     pursuant to such process through mechanisms and sanctions 
     described in paragraphs (1)(B) and (2)(B).
       ``(B) Deadlines and procedures.--Regulations promulgated by 
     the Secretary under subparagraph (A) shall--
       ``(i) designate or establish a decision-making official or 
     decision-making body within the Department of Health and 
     Human Services to be responsible for reviewing and finally 
     resolving claims by covered entities that they have been 
     charged prices for covered drugs in excess of the ceiling 
     price described in subsection (a)(1), and claims by 
     manufacturers that violations of subsection (a)(5)(A) or 
     (a)(5)(B) have occurred;
       ``(ii) establish such deadlines and procedures as may be 
     necessary to ensure that claims shall be resolved fairly, 
     efficiently, and expeditiously;
       ``(iii) establish procedures by which a covered entity may 
     discover and obtain such information and documents from 
     manufacturers and third parties as may be relevant to 
     demonstrate the merits of a claim that charges for a 
     manufacturer's product have exceeded the applicable ceiling 
     price under this section, and may submit such documents and 
     information to the administrative official or body 
     responsible for adjudicating such claim;
       ``(iv) require that a manufacturer conduct an audit of a 
     covered entity pursuant to subsection (a)(5)(D) as a 
     prerequisite to initiating administrative dispute resolution 
     proceedings against a covered entity;
       ``(v) permit the official or body designated under clause 
     (i), at the request of a manufacturer or manufacturers, to 
     consolidate claims brought by more than one manufacturer 
     against the same covered entity where, in the judgment of 
     such official or body, consolidation is appropriate and 
     consistent with the goals of fairness and economy of 
     resources; and
       ``(vi) include provisions and procedures to permit multiple 
     covered entities to jointly assert claims of overcharges by 
     the same manufacturer for the same drug or drugs in one 
     administrative proceeding, and permit such claims to be 
     asserted on behalf of covered entities by associations or 
     organizations representing the interests of such covered 
     entities and of which the covered entities are members.
       ``(C) Finality of administrative resolution.--The 
     administrative resolution of a claim or claims under the 
     regulations promulgated under subparagraph (A) shall be a 
     final agency decision and shall be binding upon the parties 
     involved, unless invalidated by an order of a court of 
     competent jurisdiction.
       ``(4) Authorization of appropriations.--There are 
     authorized to be appropriated to carry out this subsection, 
     such sums as may be necessary for fiscal year 2010 and each 
     succeeding fiscal year.''.
       (b) Conforming Amendments.--Section 340B(a) of the Public 
     Health Service Act (42 U.S.C. 256b(a)) is amended--
       (1) in subsection (a)(1), by adding at the end the 
     following: ``Each such agreement shall require that the 
     manufacturer furnish the Secretary with reports, on a 
     quarterly basis, of the price for each covered drug subject 
     to the agreement that, according to the manufacturer, 
     represents the maximum price that covered entities may 
     permissibly be required to pay for the drug (referred to in 
     this section as the `ceiling price'), and shall require that 
     the manufacturer offer each

[[Page 28582]]

     covered entity covered drugs for purchase at or below the 
     applicable ceiling price if such drug is made available to 
     any other purchaser at any price.''; and
       (2) in the first sentence of subsection (a)(5)(E), as 
     redesignated by section 7101(c), by inserting ``after audit 
     as described in subparagraph (D) and'' after ``finds,''.

     SEC. 7103. GAO STUDY TO MAKE RECOMMENDATIONS ON IMPROVING THE 
                   340B PROGRAM.

       (a) Report.--Not later than 18 months after the date of 
     enactment of this Act, the Comptroller General of the United 
     States shall submit to Congress a report that examines 
     whether those individuals served by the covered entities 
     under the program under section 340B of the Public Health 
     Service Act (42 U.S.C. 256b) (referred to in this section as 
     the ``340B program'') are receiving optimal health care 
     services.
       (b) Recommendations.--The report under subsection (a) shall 
     include recommendations on the following:
       (1) Whether the 340B program should be expanded since it is 
     anticipated that the 47,000,000 individuals who are uninsured 
     as of the date of enactment of this Act will have health care 
     coverage once this Act is implemented.
       (2) Whether mandatory sales of certain products by the 340B 
     program could hinder patients access to those therapies 
     through any provider.
       (3) Whether income from the 340B program is being used by 
     the covered entities under the program to further the program 
     objectives.

                         TITLE VIII--CLASS ACT

     SEC. 8001. SHORT TITLE OF TITLE.

       This title may be cited as the ``Community Living 
     Assistance Services and Supports Act'' or the ``CLASS Act''.

     SEC. 8002. ESTABLISHMENT OF NATIONAL VOLUNTARY INSURANCE 
                   PROGRAM FOR PURCHASING COMMUNITY LIVING 
                   ASSISTANCE SERVICES AND SUPPORT.

       (a) Establishment of CLASS Program.--
       (1) In general.--The Public Health Service Act (42 U.S.C. 
     201 et seq.), as amended by section 4302(a), is amended by 
     adding at the end the following:

    ``TITLE XXXII--COMMUNITY LIVING ASSISTANCE SERVICES AND SUPPORTS

     ``SEC. 3201. PURPOSE.

       ``The purpose of this title is to establish a national 
     voluntary insurance program for purchasing community living 
     assistance services and supports in order to--
       ``(1) provide individuals with functional limitations with 
     tools that will allow them to maintain their personal and 
     financial independence and live in the community through a 
     new financing strategy for community living assistance 
     services and supports;
       ``(2) establish an infrastructure that will help address 
     the Nation's community living assistance services and 
     supports needs;
       ``(3) alleviate burdens on family caregivers; and
       ``(4) address institutional bias by providing a financing 
     mechanism that supports personal choice and independence to 
     live in the community.

     ``SEC. 3202. DEFINITIONS.

       ``In this title:
       ``(1) Active enrollee.--The term `active enrollee' means an 
     individual who is enrolled in the CLASS program in accordance 
     with section 3204 and who has paid any premiums due to 
     maintain such enrollment.
       ``(2) Actively employed.--The term `actively employed' 
     means an individual who--
       ``(A) is reporting for work at the individual's usual place 
     of employment or at another location to which the individual 
     is required to travel because of the individual's employment 
     (or in the case of an individual who is a member of the 
     uniformed services, is on active duty and is physically able 
     to perform the duties of the individual's position); and
       ``(B) is able to perform all the usual and customary duties 
     of the individual's employment on the individual's regular 
     work schedule.
       ``(3) Activities of daily living.--The term `activities of 
     daily living' means each of the following activities 
     specified in section 7702B(c)(2)(B) of the Internal Revenue 
     Code of 1986:
       ``(A) Eating.
       ``(B) Toileting.
       ``(C) Transferring.
       ``(D) Bathing.
       ``(E) Dressing.
       ``(F) Continence.
       ``(4) CLASS program.--The term `CLASS program' means the 
     program established under this title.
       ``(5) Eligibility assessment system.--The term `Eligibility 
     Assessment System' means the entity established by the 
     Secretary under section 3205(a)(2) to make functional 
     eligibility determinations for the CLASS program.
       ``(6) Eligible beneficiary.--
       ``(A) In general.--The term `eligible beneficiary' means 
     any individual who is an active enrollee in the CLASS program 
     and, as of the date described in subparagraph (B)--
       ``(i) has paid premiums for enrollment in such program for 
     at least 60 months;
       ``(ii) has earned, with respect to at least 3 calendar 
     years that occur during the first 60 months for which the 
     individual has paid premiums for enrollment in the program, 
     at least an amount equal to the amount of wages and self-
     employment income which an individual must have in order to 
     be credited with a quarter of coverage under section 213(d) 
     of the Social Security Act for the year; and
       ``(iii) has paid premiums for enrollment in such program 
     for at least 24 consecutive months, if a lapse in premium 
     payments of more than 3 months has occurred during the period 
     that begins on the date of the individual's enrollment and 
     ends on the date of such determination.
       ``(B) Date described.--For purposes of subparagraph (A), 
     the date described in this subparagraph is the date on which 
     the individual is determined to have a functional limitation 
     described in section 3203(a)(1)(C) that is expected to last 
     for a continuous period of more than 90 days.
       ``(C) Regulations.--The Secretary shall promulgate 
     regulations specifying exceptions to the minimum earnings 
     requirements under subparagraph (A)(ii) for purposes of being 
     considered an eligible beneficiary for certain populations.
       ``(7) Hospital; nursing facility; intermediate care 
     facility for the mentally retarded; institution for mental 
     diseases.--The terms `hospital', `nursing facility', 
     `intermediate care facility for the mentally retarded', and 
     `institution for mental diseases' have the meanings given 
     such terms for purposes of Medicaid.
       ``(8) CLASS independence advisory council.--The term `CLASS 
     Independence Advisory Council' or `Council' means the 
     Advisory Council established under section 3207 to advise the 
     Secretary.
       ``(9) CLASS independence benefit plan.--The term `CLASS 
     Independence Benefit Plan' means the benefit plan developed 
     and designated by the Secretary in accordance with section 
     3203.
       ``(10) CLASS independence fund.--The term `CLASS 
     Independence Fund' or `Fund' means the fund established under 
     section 3206.
       ``(11) Medicaid.--The term `Medicaid' means the program 
     established under title XIX of the Social Security Act (42 
     U.S.C. 1396 et seq.).
       ``(12) Poverty line.--The term `poverty line' has the 
     meaning given that term in section 2110(c)(5) of the Social 
     Security Act (42 U.S.C. 1397jj(c)(5)).
       ``(13) Protection and advocacy system.--The term 
     `Protection and Advocacy System' means the system for each 
     State established under section 143 of the Developmental 
     Disabilities Assistance and Bill of Rights Act of 2000 (42 
     U.S.C. 15043).

     ``SEC. 3203. CLASS INDEPENDENCE BENEFIT PLAN.

       ``(a) Process for Development.--
       ``(1) In general.--The Secretary, in consultation with 
     appropriate actuaries and other experts, shall develop at 
     least 3 actuarially sound benefit plans as alternatives for 
     consideration for designation by the Secretary as the CLASS 
     Independence Benefit Plan under which eligible beneficiaries 
     shall receive benefits under this title. Each of the plan 
     alternatives developed shall be designed to provide eligible 
     beneficiaries with the benefits described in section 3205 
     consistent with the following requirements:
       ``(A) Premiums.--
       ``(i) In general.--Beginning with the first year of the 
     CLASS program, and for each year thereafter, subject to 
     clauses (ii) and (iii), the Secretary shall establish all 
     premiums to be paid by enrollees for the year based on an 
     actuarial analysis of the 75-year costs of the program that 
     ensures solvency throughout such 75-year period.
       ``(ii) Nominal premium for poorest individuals and full-
     time students.--

       ``(I) In general.--The monthly premium for enrollment in 
     the CLASS program shall not exceed the applicable dollar 
     amount per month determined under subclause (II) for--

       ``(aa) any individual whose income does not exceed the 
     poverty line; and
       ``(bb) any individual who has not attained age 22, and is 
     actively employed during any period in which the individual 
     is a full-time student (as determined by the Secretary).

       ``(II) Applicable dollar amount.--The applicable dollar 
     amount described in this subclause is the amount equal to $5, 
     increased by the percentage increase in the consumer price 
     index for all urban consumers (U.S. city average) for each 
     year occurring after 2009 and before such year.

       ``(iii) Class independence fund reserves.--At such time as 
     the CLASS program has been in operation for 10 years, the 
     Secretary shall establish all premiums to be paid by 
     enrollees for the year based on an actuarial analysis that 
     accumulated reserves in the CLASS Independence Fund would not 
     decrease in that year. At such time as the Secretary 
     determines the CLASS program demonstrates a sustained ability 
     to finance expected yearly expenses with expected yearly 
     premiums and interest credited to the CLASS Independence 
     Fund, the Secretary may decrease the required amount of CLASS 
     Independence Fund reserves.
       ``(B) Vesting period.--A 5-year vesting period for 
     eligibility for benefits.

[[Page 28583]]

       ``(C) Benefit triggers.--A benefit trigger for provision of 
     benefits that requires a determination that an individual has 
     a functional limitation, as certified by a licensed health 
     care practitioner, described in any of the following clauses 
     that is expected to last for a continuous period of more than 
     90 days:
       ``(i) The individual is determined to be unable to perform 
     at least the minimum number (which may be 2 or 3) of 
     activities of daily living as are required under the plan for 
     the provision of benefits without substantial assistance (as 
     defined by the Secretary) from another individual.
       ``(ii) The individual requires substantial supervision to 
     protect the individual from threats to health and safety due 
     to substantial cognitive impairment.
       ``(iii) The individual has a level of functional limitation 
     similar (as determined under regulations prescribed by the 
     Secretary) to the level of functional limitation described in 
     clause (i) or (ii).
       ``(D) Cash benefit.--Payment of a cash benefit that 
     satisfies the following requirements:
       ``(i) Minimum required amount.--The benefit amount provides 
     an eligible beneficiary with not less than an average of $50 
     per day (as determined based on the reasonably expected 
     distribution of beneficiaries receiving benefits at various 
     benefit levels).
       ``(ii) Amount scaled to functional ability.--The benefit 
     amount is varied based on a scale of functional ability, with 
     not less than 2, and not more than 6, benefit level amounts.
       ``(iii) Daily or weekly.--The benefit is paid on a daily or 
     weekly basis.
       ``(iv) No lifetime or aggregate limit.--The benefit is not 
     subject to any lifetime or aggregate limit.
       ``(E) Coordination with supplemental coverage obtained 
     through the exchange.--The benefits allow for coordination 
     with any supplemental coverage purchased through an Exchange 
     established under section 1311 of the Patient Protection and 
     Affordable Care Act.
       ``(2) Review and recommendation by the class independence 
     advisory council.--The CLASS Independence Advisory Council 
     shall--
       ``(A) evaluate the alternative benefit plans developed 
     under paragraph (1); and
       ``(B) recommend for designation as the CLASS Independence 
     Benefit Plan for offering to the public the plan that the 
     Council determines best balances price and benefits to meet 
     enrollees' needs in an actuarially sound manner, while 
     optimizing the probability of the long-term sustainability of 
     the CLASS program.
       ``(3) Designation by the secretary.--Not later than October 
     1, 2012, the Secretary, taking into consideration the 
     recommendation of the CLASS Independence Advisory Council 
     under paragraph (2)(B), shall designate a benefit plan as the 
     CLASS Independence Benefit Plan. The Secretary shall publish 
     such designation, along with details of the plan and the 
     reasons for the selection by the Secretary, in a final rule 
     that allows for a period of public comment.
       ``(b) Additional Premium Requirements.--
       ``(1) Adjustment of premiums.--
       ``(A) In general.--Except as provided in subparagraphs (B), 
     (C), (D), and (E), the amount of the monthly premium 
     determined for an individual upon such individual's 
     enrollment in the CLASS program shall remain the same for as 
     long as the individual is an active enrollee in the program.
       ``(B) Recalculated premium if required for program 
     solvency.--
       ``(i) In general.--Subject to clause (ii), if the Secretary 
     determines, based on the most recent report of the Board of 
     Trustees of the CLASS Independence Fund, the advice of the 
     CLASS Independence Advisory Council, and the annual report of 
     the Inspector General of the Department of Health and Human 
     Services, and waste, fraud, and abuse, or such other 
     information as the Secretary determines appropriate, that the 
     monthly premiums and income to the CLASS Independence Fund 
     for a year are projected to be insufficient with respect to 
     the 20-year period that begins with that year, the Secretary 
     shall adjust the monthly premiums for individuals enrolled in 
     the CLASS program as necessary (but maintaining a nominal 
     premium for enrollees whose income is below the poverty line 
     or who are full-time students actively employed).
       ``(ii) Exemption from increase.--Any increase in a monthly 
     premium imposed as result of a determination described in 
     clause (i) shall not apply with respect to the monthly 
     premium of any active enrollee who--

       ``(I) has attained age 65;
       ``(II) has paid premiums for enrollment in the program for 
     at least 20 years; and
       ``(III) is not actively employed.

       ``(C) Recalculated premium if reenrollment after more than 
     a 3-month lapse.--
       ``(i) In general.--The reenrollment of an individual after 
     a 90-day period during which the individual failed to pay the 
     monthly premium required to maintain the individual's 
     enrollment in the CLASS program shall be treated as an 
     initial enrollment for purposes of age-adjusting the premium 
     for enrollment in the program.
       ``(ii) Credit for prior months if reenrolled within 5 
     years.--An individual who reenrolls in the CLASS program 
     after such a 90-day period and before the end of the 5-year 
     period that begins with the first month for which the 
     individual failed to pay the monthly premium required to 
     maintain the individual's enrollment in the program shall 
     be--

       ``(I) credited with any months of paid premiums that 
     accrued prior to the individual's lapse in enrollment; and
       ``(II) notwithstanding the total amount of any such 
     credited months, required to satisfy section 3202(6)(A)(ii) 
     before being eligible to receive benefits.

       ``(D) No longer status as a full-time student.--An 
     individual subject to a nominal premium on the basis of being 
     described in subsection (a)(1)(A)(ii)(I)(bb) who ceases to be 
     described in that subsection, beginning with the first month 
     following the month in which the individual ceases to be so 
     described, shall be subject to the same monthly premium as 
     the monthly premium that applies to an individual of the same 
     age who first enrolls in the program under the most similar 
     circumstances as the individual (such as the first year of 
     eligibility for enrollment in the program or in a subsequent 
     year).
       ``(E) Penalty for reenrollment after 5-year lapse.--In the 
     case of an individual who reenrolls in the CLASS program 
     after the end of the 5-year period described in subparagraph 
     (C)(ii), the monthly premium required for the individual 
     shall be the age-adjusted premium that would be applicable to 
     an initially enrolling individual who is the same age as the 
     reenrolling individual, increased by the greater of--
       ``(i) an amount that the Secretary determines is 
     actuarially sound for each month that occurs during the 
     period that begins with the first month for which the 
     individual failed to pay the monthly premium required to 
     maintain the individual's enrollment in the CLASS program and 
     ends with the month preceding the month in which the 
     reenollment is effective; or
       ``(ii) 1 percent of the applicable age-adjusted premium for 
     each such month occurring in such period.
       ``(2) Administrative expenses.--In determining the monthly 
     premiums for the CLASS program the Secretary may factor in 
     costs for administering the program, not to exceed for any 
     year in which the program is in effect under this title, an 
     amount equal to 3 percent of all premiums paid during the 
     year.
       ``(3) No underwriting requirements.--No underwriting (other 
     than on the basis of age in accordance with subparagraphs (D) 
     and (E) of paragraph (1)) shall be used to--
       ``(A) determine the monthly premium for enrollment in the 
     CLASS program; or
       ``(B) prevent an individual from enrolling in the program.
       ``(c) Self-attestation and Verification of Income.--The 
     Secretary shall establish procedures to--
       ``(1) permit an individual who is eligible for the nominal 
     premium required under subsection (a)(1)(A)(ii), as part of 
     their automatic enrollment in the CLASS program, to self-
     attest that their income does not exceed the poverty line or 
     that their status as a full-time student who is actively 
     employed;
       ``(2) verify, using procedures similar to the procedures 
     used by the Commissioner of Social Security under section 
     1631(e)(1)(B)(ii) of the Social Security Act and consistent 
     with the requirements applicable to the conveyance of data 
     and information under section 1942 of such Act, the validity 
     of such self-attestation; and
       ``(3) require an individual to confirm, on at least an 
     annual basis, that their income does not exceed the poverty 
     line or that they continue to maintain such status.

     ``SEC. 3204. ENROLLMENT AND DISENROLLMENT REQUIREMENTS.

       ``(a) Automatic Enrollment.--
       ``(1) In general.--Subject to paragraph (2), the Secretary, 
     in coordination with the Secretary of the Treasury, shall 
     establish procedures under which each individual described in 
     subsection (c) may be automatically enrolled in the CLASS 
     program by an employer of such individual in the same manner 
     as an employer may elect to automatically enroll employees in 
     a plan under section 401(k), 403(b), or 457 of the Internal 
     Revenue Code of 1986.
       ``(2) Alternative enrollment procedures.--The procedures 
     established under paragraph (1) shall provide for an 
     alternative enrollment process for an individual described in 
     subsection (c) in the case of such an individual--
       ``(A) who is self-employed;
       ``(B) who has more than 1 employer; or
       ``(C) whose employer does not elect to participate in the 
     automatic enrollment process established by the Secretary.
       ``(3) Administration.--
       ``(A) In general.--The Secretary and the Secretary of the 
     Treasury shall, by regulation, establish procedures to ensure 
     that an individual is not automatically enrolled in the CLASS 
     program by more than 1 employer.
       ``(B) Form.--Enrollment in the CLASS program shall be made 
     in such manner as the Secretary may prescribe in order to 
     ensure ease of administration.
       ``(b) Election to Opt-out.--An individual described in 
     subsection (c) may elect to

[[Page 28584]]

     waive enrollment in the CLASS program at any time in such 
     form and manner as the Secretary and the Secretary of the 
     Treasury shall prescribe.
       ``(c) Individual Described.--For purposes of enrolling in 
     the CLASS program, an individual described in this paragraph 
     is an individual--
       ``(1) who has attained age 18;
       ``(2) who--
       ``(A) receives wages on which there is imposed a tax under 
     section 3201(a) of the Internal Revenue Code of 1986; or
       ``(B) derives self-employment income on which there is 
     imposed a tax under section 1401(a) of the Internal Revenue 
     Code of 1986;
       ``(3) who is actively employed; and
       ``(4) who is not--
       ``(A) a patient in a hospital or nursing facility, an 
     intermediate care facility for the mentally retarded, or an 
     institution for mental diseases and receiving medical 
     assistance under Medicaid; or
       ``(B) confined in a jail, prison, other penal institution 
     or correctional facility, or by court order pursuant to 
     conviction of a criminal offense or in connection with a 
     verdict or finding described in section 202(x)(1)(A)(ii) of 
     the Social Security Act (42 U.S.C. 402(x)(1)(A)(ii)).
       ``(d) Rule of Construction.--Nothing in this title shall be 
     construed as requiring an active enrollee to continue to 
     satisfy subparagraph (B) or (C) of subsection (c)(1) in order 
     to maintain enrollment in the CLASS program.
       ``(e) Payment.--
       ``(1) Payroll deduction.--An amount equal to the monthly 
     premium for the enrollment in the CLASS program of an 
     individual shall be deducted from the wages or self-
     employment income of such individual in accordance with such 
     procedures as the Secretary, in coordination with the 
     Secretary of the Treasury, shall establish for employers who 
     elect to deduct and withhold such premiums on behalf of 
     enrolled employees.
       ``(2) Alternative payment mechanism.--The Secretary, in 
     coordination with the Secretary of the Treasury, shall 
     establish alternative procedures for the payment of monthly 
     premiums by an individual enrolled in the CLASS program--
       ``(A) who does not have an employer who elects to deduct 
     and withhold premiums in accordance with subparagraph (A); or
       ``(B) who does not earn wages or derive self-employment 
     income.
       ``(f) Transfer of Premiums Collected.--
       ``(1) In general.--During each calendar year the Secretary 
     of the Treasury shall deposit into the CLASS Independence 
     Fund a total amount equal, in the aggregate, to 100 percent 
     of the premiums collected during that year.
       ``(2) Transfers based on estimates.--The amount deposited 
     pursuant to paragraph (1) shall be transferred in at least 
     monthly payments to the CLASS Independence Fund on the basis 
     of estimates by the Secretary and certified to the Secretary 
     of the Treasury of the amounts collected in accordance with 
     subparagraphs (A) and (B) of paragraph (5). Proper 
     adjustments shall be made in amounts subsequently transferred 
     to the Fund to the extent prior estimates were in excess of, 
     or were less than, actual amounts collected.
       ``(g) Other Enrollment and Disenrollment Opportunities.--
     The Secretary, in coordination with the Secretary of the 
     Treasury, shall establish procedures under which--
       ``(1) an individual who, in the year of the individual's 
     initial eligibility to enroll in the CLASS program, has 
     elected to waive enrollment in the program, is eligible to 
     elect to enroll in the program, in such form and manner as 
     the Secretaries shall establish, only during an open 
     enrollment period established by the Secretaries that is 
     specific to the individual and that may not occur more 
     frequently than biennially after the date on which the 
     individual first elected to waive enrollment in the program; 
     and
       ``(2) an individual shall only be permitted to disenroll 
     from the program (other than for nonpayment of premiums) 
     during an annual disenrollment period established by the 
     Secretaries and in such form and manner as the Secretaries 
     shall establish.

     ``SEC. 3205. BENEFITS.

       ``(a) Determination of Eligibility.--
       ``(1) Application for receipt of benefits.--The Secretary 
     shall establish procedures under which an active enrollee 
     shall apply for receipt of benefits under the CLASS 
     Independence Benefit Plan.
       ``(2) Eligibility assessments.--
       ``(A) In general.--Not later than January 1, 2012, the 
     Secretary shall--
       ``(i) establish an Eligibility Assessment System (other 
     than a service with which the Commissioner of Social Security 
     has entered into an agreement, with respect to any State, to 
     make disability determinations for purposes of title II or 
     XVI of the Social Security Act) to provide for eligibility 
     assessments of active enrollees who apply for receipt of 
     benefits;
       ``(ii) enter into an agreement with the Protection and 
     Advocacy System for each State to provide advocacy services 
     in accordance with subsection (d); and
       ``(iii) enter into an agreement with public and private 
     entities to provide advice and assistance counseling in 
     accordance with subsection (e).
       ``(B) Regulations.--The Secretary shall promulgate 
     regulations to develop an expedited nationally equitable 
     eligibility determination process, as certified by a licensed 
     health care practitioner, an appeals process, and a 
     redetermination process, as certified by a licensed health 
     care practitioner, including whether an active enrollee is 
     eligible for a cash benefit under the program and if so, the 
     amount of the cash benefit (in accordance the sliding scale 
     established under the plan).
       ``(C) Presumptive eligibility for certain institutionalized 
     enrollees planning to discharge.--An active enrollee shall be 
     deemed presumptively eligible if the enrollee--
       ``(i) has applied for, and attests is eligible for, the 
     maximum cash benefit available under the sliding scale 
     established under the CLASS Independence Benefit Plan;
       ``(ii) is a patient in a hospital (but only if the 
     hospitalization is for long-term care), nursing facility, 
     intermediate care facility for the mentally retarded, or an 
     institution for mental diseases; and
       ``(iii) is in the process of, or about to begin the process 
     of, planning to discharge from the hospital, facility, or 
     institution, or within 60 days from the date of discharge 
     from the hospital, facility, or institution.
       ``(D) Appeals.--The Secretary shall establish procedures 
     under which an applicant for benefits under the CLASS 
     Independence Benefit Plan shall be guaranteed the right to 
     appeal an adverse determination.
       ``(b) Benefits.--An eligible beneficiary shall receive the 
     following benefits under the CLASS Independence Benefit Plan:
       ``(1) Cash benefit.--A cash benefit established by the 
     Secretary in accordance with the requirements of section 
     3203(a)(1)(D) that--
       ``(A) the first year in which beneficiaries receive the 
     benefits under the plan, is not less than the average dollar 
     amount specified in clause (i) of such section; and
       ``(B) for any subsequent year, is not less than the average 
     per day dollar limit applicable under this subparagraph for 
     the preceding year, increased by the percentage increase in 
     the consumer price index for all urban consumers (U.S. city 
     average) over the previous year.
       ``(2) Advocacy services.--Advocacy services in accordance 
     with subsection (d).
       ``(3) Advice and assistance counseling.--Advice and 
     assistance counseling in accordance with subsection (e).
       ``(4) Administrative expenses.--Advocacy services and 
     advise and assistance counseling services under paragraphs 
     (2) and (3) of this subsection shall be included as 
     administrative expenses under section 3203(b)(3).
       ``(c) Payment of Benefits.--
       ``(1) Life independence account.--
       ``(A) In general.--The Secretary shall establish procedures 
     for administering the provision of benefits to eligible 
     beneficiaries under the CLASS Independence Benefit Plan, 
     including the payment of the cash benefit for the beneficiary 
     into a Life Independence Account established by the Secretary 
     on behalf of each eligible beneficiary.
       ``(B) Use of cash benefits.--Cash benefits paid into a Life 
     Independence Account of an eligible beneficiary shall be used 
     to purchase nonmedical services and supports that the 
     beneficiary needs to maintain his or her independence at home 
     or in another residential setting of their choice in the 
     community, including (but not limited to) home modifications, 
     assistive technology, accessible transportation, homemaker 
     services, respite care, personal assistance services, home 
     care aides, and nursing support. Nothing in the preceding 
     sentence shall prevent an eligible beneficiary from using 
     cash benefits paid into a Life Independence Account for 
     obtaining assistance with decision making concerning medical 
     care, including the right to accept or refuse medical or 
     surgical treatment and the right to formulate advance 
     directives or other written instructions recognized under 
     State law, such as a living will or durable power of attorney 
     for health care, in the case that an injury or illness causes 
     the individual to be unable to make health care decisions.
       ``(C) Electronic management of funds.--The Secretary shall 
     establish procedures for--
       ``(i) crediting an account established on behalf of a 
     beneficiary with the beneficiary's cash daily benefit;
       ``(ii) allowing the beneficiary to access such account 
     through debit cards; and
       ``(iii) accounting for withdrawals by the beneficiary from 
     such account.
       ``(D) Primary payor rules for beneficiaries who are 
     enrolled in medicaid.--In the case of an eligible beneficiary 
     who is enrolled in Medicaid, the following payment rules 
     shall apply:
       ``(i) Institutionalized beneficiary.--If the beneficiary is 
     a patient in a hospital, nursing facility, intermediate care 
     facility for the mentally retarded, or an institution for 
     mental diseases, the beneficiary shall retain an amount equal 
     to 5 percent of the beneficiary's daily or weekly cash 
     benefit (as applicable) (which shall be in addition to the 
     amount of the beneficiary's personal needs

[[Page 28585]]

     allowance provided under Medicaid), and the remainder of such 
     benefit shall be applied toward the facility's cost of 
     providing the beneficiary's care, and Medicaid shall provide 
     secondary coverage for such care.
       ``(ii) Beneficiaries receiving home and community-based 
     services.--

       ``(I) 50 percent of benefit retained by beneficiary.--
     Subject to subclause (II), if a beneficiary is receiving 
     medical assistance under Medicaid for home and community 
     based services, the beneficiary shall retain an amount equal 
     to 50 percent of the beneficiary's daily or weekly cash 
     benefit (as applicable), and the remainder of the daily or 
     weekly cash benefit shall be applied toward the cost to the 
     State of providing such assistance (and shall not be used to 
     claim Federal matching funds under Medicaid), and Medicaid 
     shall provide secondary coverage for the remainder of any 
     costs incurred in providing such assistance.
       ``(II) Requirement for state offset.--A State shall be paid 
     the remainder of a beneficiary's daily or weekly cash benefit 
     under subclause (I) only if the State home and community-
     based waiver under section 1115 of the Social Security Act 
     (42 U.S.C. 1315) or subsection (c) or (d) of section 1915 of 
     such Act (42 U.S.C. 1396n), or the State plan amendment under 
     subsection (i) of such section does not include a waiver of 
     the requirements of section 1902(a)(1) of the Social Security 
     Act (relating to statewideness) or of section 1902(a)(10)(B) 
     of such Act (relating to comparability) and the State offers 
     at a minimum case management services, personal care 
     services, habilitation services, and respite care under such 
     a waiver or State plan amendment.
       ``(III) Definition of home and community-based services.--
     In this clause, the term `home and community-based services' 
     means any services which may be offered under a home and 
     community-based waiver authorized for a State under section 
     1115 of the Social Security Act (42 U.S.C. 1315) or 
     subsection (c) or (d) of section 1915 of such Act (42 U.S.C. 
     1396n) or under a State plan amendment under subsection (i) 
     of such section.

       ``(iii) Beneficiaries enrolled in programs of all-inclusive 
     care for the elderly (pace).--

       ``(I) In general.--Subject to subclause (II), if a 
     beneficiary is receiving medical assistance under Medicaid 
     for PACE program services under section 1934 of the Social 
     Security Act (42 U.S.C. 1396u-4), the beneficiary shall 
     retain an amount equal to 50 percent of the beneficiary's 
     daily or weekly cash benefit (as applicable), and the 
     remainder of the daily or weekly cash benefit shall be 
     applied toward the cost to the State of providing such 
     assistance (and shall not be used to claim Federal matching 
     funds under Medicaid), and Medicaid shall provide secondary 
     coverage for the remainder of any costs incurred in providing 
     such assistance.
       ``(II) Institutionalized recipients of pace program 
     services.--If a beneficiary receiving assistance under 
     Medicaid for PACE program services is a patient in a 
     hospital, nursing facility, intermediate care facility for 
     the mentally retarded, or an institution for mental diseases, 
     the beneficiary shall be treated as in institutionalized 
     beneficiary under clause (i).

       ``(2) Authorized representatives.--
       ``(A) In general.--The Secretary shall establish procedures 
     to allow access to a beneficiary's cash benefits by an 
     authorized representative of the eligible beneficiary on 
     whose behalf such benefits are paid.
       ``(B) Quality assurance and protection against fraud and 
     abuse.--The procedures established under subparagraph (A) 
     shall ensure that authorized representatives of eligible 
     beneficiaries comply with standards of conduct established by 
     the Secretary, including standards requiring that such 
     representatives provide quality services on behalf of such 
     beneficiaries, do not have conflicts of interest, and do not 
     misuse benefits paid on behalf of such beneficiaries or 
     otherwise engage in fraud or abuse.
       ``(3) Commencement of benefits.--Benefits shall be paid to, 
     or on behalf of, an eligible beneficiary beginning with the 
     first month in which an application for such benefits is 
     approved.
       ``(4) Rollover option for lump-sum payment.--An eligible 
     beneficiary may elect to--
       ``(A) defer payment of their daily or weekly benefit and to 
     rollover any such deferred benefits from month-to-month, but 
     not from year-to-year; and
       ``(B) receive a lump-sum payment of such deferred benefits 
     in an amount that may not exceed the lesser of--
       ``(i) the total amount of the accrued deferred benefits; or
       ``(ii) the applicable annual benefit.
       ``(5) Period for determination of annual benefits.--
       ``(A) In general.--The applicable period for determining 
     with respect to an eligible beneficiary the applicable annual 
     benefit and the amount of any accrued deferred benefits is 
     the 12-month period that commences with the first month in 
     which the beneficiary began to receive such benefits, and 
     each 12-month period thereafter.
       ``(B) Inclusion of increased benefits.--The Secretary shall 
     establish procedures under which cash benefits paid to an 
     eligible beneficiary that increase or decrease as a result of 
     a change in the functional status of the beneficiary before 
     the end of a 12-month benefit period shall be included in the 
     determination of the applicable annual benefit paid to the 
     eligible beneficiary.
       ``(C) Recoupment of unpaid, accrued benefits.--
       ``(i) In general.--The Secretary, in coordination with the 
     Secretary of the Treasury, shall recoup any accrued benefits 
     in the event of--

       ``(I) the death of a beneficiary; or
       ``(II) the failure of a beneficiary to elect under 
     paragraph (4)(B) to receive such benefits as a lump-sum 
     payment before the end of the 12-month period in which such 
     benefits accrued.

       ``(ii) Payment into class independence fund.--Any benefits 
     recouped in accordance with clause (i) shall be paid into the 
     CLASS Independence Fund and used in accordance with section 
     3206.
       ``(6) Requirement to recertify eligibility for receipt of 
     benefits.--An eligible beneficiary shall periodically, as 
     determined by the Secretary--
       ``(A) recertify by submission of medical evidence the 
     beneficiary's continued eligibility for receipt of benefits; 
     and
       ``(B) submit records of expenditures attributable to the 
     aggregate cash benefit received by the beneficiary during the 
     preceding year.
       ``(7) Supplement, not supplant other health care 
     benefits.--Subject to the Medicaid payment rules under 
     paragraph (1)(D), benefits received by an eligible 
     beneficiary shall supplement, but not supplant, other health 
     care benefits for which the beneficiary is eligible under 
     Medicaid or any other Federally funded program that provides 
     health care benefits or assistance.
       ``(d) Advocacy Services.--An agreement entered into under 
     subsection (a)(2)(A)(ii) shall require the Protection and 
     Advocacy System for the State to--
       ``(1) assign, as needed, an advocacy counselor to each 
     eligible beneficiary that is covered by such agreement and 
     who shall provide an eligible beneficiary with--
       ``(A) information regarding how to access the appeals 
     process established for the program;
       ``(B) assistance with respect to the annual recertification 
     and notification required under subsection (c)(6); and
       ``(C) such other assistance with obtaining services as the 
     Secretary, by regulation, shall require; and
       ``(2) ensure that the System and such counselors comply 
     with the requirements of subsection (h).
       ``(e) Advice and Assistance Counseling.--An agreement 
     entered into under subsection (a)(2)(A)(iii) shall require 
     the entity to assign, as requested by an eligible beneficiary 
     that is covered by such agreement, an advice and assistance 
     counselor who shall provide an eligible beneficiary with 
     information regarding--
       ``(1) accessing and coordinating long-term services and 
     supports in the most integrated setting;
       ``(2) possible eligibility for other benefits and services;
       ``(3) development of a service and support plan;
       ``(4) information about programs established under the 
     Assistive Technology Act of 1998 and the services offered 
     under such programs;
       ``(5) available assistance with decision making concerning 
     medical care, including the right to accept or refuse medical 
     or surgical treatment and the right to formulate advance 
     directives or other written instructions recognized under 
     State law, such as a living will or durable power of attorney 
     for health care, in the case that an injury or illness causes 
     the individual to be unable to make health care decisions; 
     and
       ``(6) such other services as the Secretary, by regulation, 
     may require.
       ``(f) No Effect on Eligibility for Other Benefits.--
     Benefits paid to an eligible beneficiary under the CLASS 
     program shall be disregarded for purposes of determining or 
     continuing the beneficiary's eligibility for receipt of 
     benefits under any other Federal, State, or locally funded 
     assistance program, including benefits paid under titles II, 
     XVI, XVIII, XIX, or XXI of the Social Security Act (42 U.S.C. 
     401 et seq., 1381 et seq., 1395 et seq., 1396 et seq., 1397aa 
     et seq.), under the laws administered by the Secretary of 
     Veterans Affairs, under low-income housing assistance 
     programs, or under the supplemental nutrition assistance 
     program established under the Food and Nutrition Act of 2008 
     (7 U.S.C. 2011 et seq.).
       ``(g) Rule of Construction.--Nothing in this title shall be 
     construed as prohibiting benefits paid under the CLASS 
     Independence Benefit Plan from being used to compensate a 
     family caregiver for providing community living assistance 
     services and supports to an eligible beneficiary.
       ``(h) Protection Against Conflict of Interests.--The 
     Secretary shall establish procedures to ensure that the 
     Eligibility Assessment System, the Protection and Advocacy 
     System for a State, advocacy counselors for eligible 
     beneficiaries, and any other entities that provide services 
     to active enrollees and eligible beneficiaries under the 
     CLASS program comply with the following:

[[Page 28586]]

       ``(1) If the entity provides counseling or planning 
     services, such services are provided in a manner that fosters 
     the best interests of the active enrollee or beneficiary.
       ``(2) The entity has established operating procedures that 
     are designed to avoid or minimize conflicts of interest 
     between the entity and an active enrollee or beneficiary.
       ``(3) The entity provides information about all services 
     and options available to the active enrollee or beneficiary, 
     to the best of its knowledge, including services available 
     through other entities or providers.
       ``(4) The entity assists the active enrollee or beneficiary 
     to access desired services, regardless of the provider.
       ``(5) The entity reports the number of active enrollees and 
     beneficiaries provided with assistance by age, disability, 
     and whether such enrollees and beneficiaries received 
     services from the entity or another entity.
       ``(6) If the entity provides counseling or planning 
     services, the entity ensures that an active enrollee or 
     beneficiary is informed of any financial interest that the 
     entity has in a service provider.
       ``(7) The entity provides an active enrollee or beneficiary 
     with a list of available service providers that can meet the 
     needs of the active enrollee or beneficiary.

     ``SEC. 3206. CLASS INDEPENDENCE FUND.

       ``(a) Establishment of CLASS Independence Fund.--There is 
     established in the Treasury of the United States a trust fund 
     to be known as the `CLASS Independence Fund'. The Secretary 
     of the Treasury shall serve as Managing Trustee of such Fund. 
     The Fund shall consist of all amounts derived from payments 
     into the Fund under sections 3204(f) and 3205(c)(5)(C)(ii), 
     and remaining after investment of such amounts under 
     subsection (b), including additional amounts derived as 
     income from such investments. The amounts held in the Fund 
     are appropriated and shall remain available without fiscal 
     year limitation--
       ``(1) to be held for investment on behalf of individuals 
     enrolled in the CLASS program;
       ``(2) to pay the administrative expenses related to the 
     Fund and to investment under subsection (b); and
       ``(3) to pay cash benefits to eligible beneficiaries under 
     the CLASS Independence Benefit Plan.
       ``(b) Investment of Fund Balance.--The Secretary of the 
     Treasury shall invest and manage the CLASS Independence Fund 
     in the same manner, and to the same extent, as the Federal 
     Supplementary Medical Insurance Trust Fund may be invested 
     and managed under subsections (c), (d), and (e) of section 
     1841(d) of the Social Security Act (42 U.S.C. 1395t).
       ``(c) Board of Trustees.--
       ``(1) In general.--With respect to the CLASS Independence 
     Fund, there is hereby created a body to be known as the Board 
     of Trustees of the CLASS Independence Fund (hereinafter in 
     this section referred to as the `Board of Trustees') composed 
     of the Secretary of the Treasury, the Secretary of Labor, and 
     the Secretary of Health and Human Services, all ex officio, 
     and of two members of the public (both of whom may not be 
     from the same political party), who shall be nominated by the 
     President for a term of 4 years and subject to confirmation 
     by the Senate. A member of the Board of Trustees serving as a 
     member of the public and nominated and confirmed to fill a 
     vacancy occurring during a term shall be nominated and 
     confirmed only for the remainder of such term. An individual 
     nominated and confirmed as a member of the public may serve 
     in such position after the expiration of such member's term 
     until the earlier of the time at which the member's successor 
     takes office or the time at which a report of the Board is 
     first issued under paragraph (2) after the expiration of the 
     member's term. The Secretary of the Treasury shall be the 
     Managing Trustee of the Board of Trustees. The Board of 
     Trustees shall meet not less frequently than once each 
     calendar year. A person serving on the Board of Trustees 
     shall not be considered to be a fiduciary and shall not be 
     personally liable for actions taken in such capacity with 
     respect to the Trust Fund.
       ``(2) Duties.--
       ``(A) In general.--It shall be the duty of the Board of 
     Trustees to do the following:
       ``(i) Hold the CLASS Independence Fund.
       ``(ii) Report to the Congress not later than the first day 
     of April of each year on the operation and status of the 
     CLASS Independence Fund during the preceding fiscal year and 
     on its expected operation and status during the current 
     fiscal year and the next 2 fiscal years.
       ``(iii) Report immediately to the Congress whenever the 
     Board is of the opinion that the amount of the CLASS 
     Independence Fund is not actuarially sound in regards to the 
     projection under section 3203(b)(1)(B)(i).
       ``(iv) Review the general policies followed in managing the 
     CLASS Independence Fund, and recommend changes in such 
     policies, including necessary changes in the provisions of 
     law which govern the way in which the CLASS Independence Fund 
     is to be managed.
       ``(B) Report.--The report provided for in subparagraph 
     (A)(ii) shall--
       ``(i) include--

       ``(I) a statement of the assets of, and the disbursements 
     made from, the CLASS Independence Fund during the preceding 
     fiscal year;
       ``(II) an estimate of the expected income to, and 
     disbursements to be made from, the CLASS Independence Fund 
     during the current fiscal year and each of the next 2 fiscal 
     years;
       ``(III) a statement of the actuarial status of the CLASS 
     Independence Fund for the current fiscal year, each of the 
     next 2 fiscal years, and as projected over the 75-year period 
     beginning with the current fiscal year; and
       ``(IV) an actuarial opinion by the Chief Actuary of the 
     Centers for Medicare & Medicaid Services certifying that the 
     techniques and methodologies used are generally accepted 
     within the actuarial profession and that the assumptions and 
     cost estimates used are reasonable; and

       ``(ii) be printed as a House document of the session of the 
     Congress to which the report is made.
       ``(C) Recommendations.--If the Board of Trustees determines 
     that enrollment trends and expected future benefit claims on 
     the CLASS Independence Fund are not actuarially sound in 
     regards to the projection under section 3203(b)(1)(B)(i) and 
     are unlikely to be resolved with reasonable premium increases 
     or through other means, the Board of Trustees shall include 
     in the report provided for in subparagraph (A)(ii) 
     recommendations for such legislative action as the Board of 
     Trustees determine to be appropriate, including whether to 
     adjust monthly premiums or impose a temporary moratorium on 
     new enrollments.

     ``SEC. 3207. CLASS INDEPENDENCE ADVISORY COUNCIL.

       ``(a) Establishment.--There is hereby created an Advisory 
     Committee to be known as the `CLASS Independence Advisory 
     Council'.
       ``(b) Membership.--
       ``(1) In general.--The CLASS Independence Advisory Council 
     shall be composed of not more than 15 individuals, not 
     otherwise in the employ of the United States--
       ``(A) who shall be appointed by the President without 
     regard to the civil service laws and regulations; and
       ``(B) a majority of whom shall be representatives of 
     individuals who participate or are likely to participate in 
     the CLASS program, and shall include representatives of older 
     and younger workers, individuals with disabilities, family 
     caregivers of individuals who require services and supports 
     to maintain their independence at home or in another 
     residential setting of their choice in the community, 
     individuals with expertise in long-term care or disability 
     insurance, actuarial science, economics, and other relevant 
     disciplines, as determined by the Secretary.
       ``(2) Terms.--
       ``(A) In general.--The members of the CLASS Independence 
     Advisory Council shall serve overlapping terms of 3 years 
     (unless appointed to fill a vacancy occurring prior to the 
     expiration of a term, in which case the individual shall 
     serve for the remainder of the term).
       ``(B) Limitation.--A member shall not be eligible to serve 
     for more than 2 consecutive terms.
       ``(3) Chair.--The President shall, from time to time, 
     appoint one of the members of the CLASS Independence Advisory 
     Council to serve as the Chair.
       ``(c) Duties.--The CLASS Independence Advisory Council 
     shall advise the Secretary on matters of general policy in 
     the administration of the CLASS program established under 
     this title and in the formulation of regulations under this 
     title including with respect to--
       ``(1) the development of the CLASS Independence Benefit 
     Plan under section 3203;
       ``(2) the determination of monthly premiums under such 
     plan; and
       ``(3) the financial solvency of the program.
       ``(d) Application of FACA.--The Federal Advisory Committee 
     Act (5 U.S.C. App.), other than section 14 of that Act, shall 
     apply to the CLASS Independence Advisory Council.
       ``(e) Authorization of Appropriations.--
       ``(1) In general.--There are authorized to be appropriated 
     to the CLASS Independence Advisory Council to carry out its 
     duties under this section, such sums as may be necessary for 
     fiscal year 2011 and for each fiscal year thereafter.
       ``(2) Availability.--Any sums appropriated under the 
     authorization contained in this section shall remain 
     available, without fiscal year limitation, until expended.

     ``SEC. 3208. SOLVENCY AND FISCAL INDEPENDENCE; REGULATIONS; 
                   ANNUAL REPORT.

       ``(a) Solvency.--The Secretary shall regularly consult with 
     the Board of Trustees of the CLASS Independence Fund and the 
     CLASS Independence Advisory Council, for purposes of ensuring 
     that enrollees premiums are adequate to ensure the financial 
     solvency of the CLASS program, both with respect to fiscal 
     years occurring in the near-term and fiscal years occurring 
     over 20- and 75-year periods, taking into account the 
     projections required for such periods under subsections 
     (a)(1)(A)(i) and (b)(1)(B)(i) of section 3202.

[[Page 28587]]

       ``(b) No Taxpayer Funds Used to Pay Benefits.--No taxpayer 
     funds shall be used for payment of benefits under a CLASS 
     Independent Benefit Plan. For purposes of this subsection, 
     the term `taxpayer funds' means any Federal funds from a 
     source other than premiums deposited by CLASS program 
     participants in the CLASS Independence Fund and any 
     associated interest earnings.
       ``(c) Regulations.--The Secretary shall promulgate such 
     regulations as are necessary to carry out the CLASS program 
     in accordance with this title. Such regulations shall include 
     provisions to prevent fraud and abuse under the program.
       ``(d) Annual Report.--Beginning January 1, 2014, the 
     Secretary shall submit an annual report to Congress on the 
     CLASS program. Each report shall include the following:
       ``(1) The total number of enrollees in the program.
       ``(2) The total number of eligible beneficiaries during the 
     fiscal year.
       ``(3) The total amount of cash benefits provided during the 
     fiscal year.
       ``(4) A description of instances of fraud or abuse 
     identified during the fiscal year.
       ``(5) Recommendations for such administrative or 
     legislative action as the Secretary determines is necessary 
     to improve the program, ensure the solvency of the program, 
     or to prevent the occurrence of fraud or abuse.

     ``SEC. 3209. INSPECTOR GENERAL'S REPORT.

       ``The Inspector General of the Department of Health and 
     Human Services shall submit an annual report to the Secretary 
     and Congress relating to the overall progress of the CLASS 
     program and of the existence of waste, fraud, and abuse in 
     the CLASS program. Each such report shall include findings in 
     the following areas:
       ``(1) The eligibility determination process.
       ``(2) The provision of cash benefits.
       ``(3) Quality assurance and protection against waste, 
     fraud, and abuse.
       ``(4) Recouping of unpaid and accrued benefits.

     ``SEC. 3210. TAX TREATMENT OF PROGRAM.

       ``The CLASS program shall be treated for purposes of the 
     Internal Revenue Code of 1986 in the same manner as a 
     qualified long-term care insurance contract for qualified 
     long-term care services.''.
       (2) Conforming amendments to medicaid.--Section 1902(a) of 
     the Social Security Act (42 U.S.C. 1396a(a)), as amended by 
     section 6505, is amended by inserting after paragraph (80) 
     the following:
       ``(81) provide that the State will comply with such 
     regulations regarding the application of primary and 
     secondary payor rules with respect to individuals who are 
     eligible for medical assistance under this title and are 
     eligible beneficiaries under the CLASS program established 
     under title XXXII of the Public Health Service Act as the 
     Secretary shall establish; and''.
       (b) Assurance of Adequate Infrastructure for the Provision 
     of Personal Care Attendant Workers.--Section 1902(a) of the 
     Social Security Act (42 U.S.C. 1396a(a)), as amended by 
     subsection (a)(2), is amended by inserting after paragraph 
     (81) the following:
       ``(82) provide that, not later than 2 years after the date 
     of enactment of the Community Living Assistance Services and 
     Supports Act, each State shall--
       ``(A) assess the extent to which entities such as providers 
     of home care, home health services, home and community 
     service providers, public authorities created to provide 
     personal care services to individuals eligible for medical 
     assistance under the State plan, and nonprofit organizations, 
     are serving or have the capacity to serve as fiscal agents 
     for, employers of, and providers of employment-related 
     benefits for, personal care attendant workers who provide 
     personal care services to individuals receiving benefits 
     under the CLASS program established under title XXXII of the 
     Public Health Service Act, including in rural and underserved 
     areas;
       ``(B) designate or create such entities to serve as fiscal 
     agents for, employers of, and providers of employment-related 
     benefits for, such workers to ensure an adequate supply of 
     the workers for individuals receiving benefits under the 
     CLASS program, including in rural and underserved areas; and
       ``(C) ensure that the designation or creation of such 
     entities will not negatively alter or impede existing 
     programs, models, methods, or administration of service 
     delivery that provide for consumer controlled or self-
     directed home and community services and further ensure that 
     such entities will not impede the ability of individuals to 
     direct and control their home and community services, 
     including the ability to select, manage, dismiss, co-employ, 
     or employ such workers or inhibit such individuals from 
     relying on family members for the provision of personal care 
     services.''.
       (c) Personal Care Attendants Workforce Advisory Panel.--
       (1) Establishment.--Not later than 90 days after the date 
     of enactment of this Act, the Secretary of Health and Human 
     Services shall establish a Personal Care Attendants Workforce 
     Advisory Panel for the purpose of examining and advising the 
     Secretary and Congress on workforce issues related to 
     personal care attendant workers, including with respect to 
     the adequacy of the number of such workers, the salaries, 
     wages, and benefits of such workers, and access to the 
     services provided by such workers.
       (2) Membership.--In appointing members to the Personal Care 
     Attendants Workforce Advisory Panel, the Secretary shall 
     ensure that such members include the following:
       (A) Individuals with disabilities of all ages.
       (B) Senior individuals.
       (C) Representatives of individuals with disabilities.
       (D) Representatives of senior individuals.
       (E) Representatives of workforce and labor organizations.
       (F) Representatives of home and community-based service 
     providers.
       (G) Representatives of assisted living providers.
       (d) Inclusion of Information on Supplemental Coverage in 
     the National Clearinghouse for Long-term Care Information; 
     Extension of Funding.--Section 6021(d) of the Deficit 
     Reduction Act of 2005 (42 U.S.C. 1396p note) is amended--
       (1) in paragraph (2)(A)--
       (A) in clause (ii), by striking ``and'' at the end;
       (B) in clause (iii), by striking the period at the end and 
     inserting ``; and''; and
       (C) by adding at the end the following:
       ``(iv) include information regarding the CLASS program 
     established under title XXXII of the Public Health Service 
     Act and coverage available for purchase through a Exchange 
     established under section 1311 of the Patient Protection and 
     Affordable Care Act that is supplemental coverage to the 
     benefits provided under a CLASS Independence Benefit Plan 
     under that program, and information regarding how benefits 
     provided under a CLASS Independence Benefit Plan differ from 
     disability insurance benefits.''; and
       (2) in paragraph (3), by striking ``2010'' and inserting 
     ``2015''.
       (e) Effective Date.--The amendments made by subsections 
     (a), (b), and (d) take effect on January 1, 2011.
       (f) Rule of Construction.--Nothing in this title or the 
     amendments made by this title are intended to replace or 
     displace public or private disability insurance benefits, 
     including such benefits that are for income replacement.

                      TITLE IX--REVENUE PROVISIONS

                 Subtitle A--Revenue Offset Provisions

     SEC. 9001. EXCISE TAX ON HIGH COST EMPLOYER-SPONSORED HEALTH 
                   COVERAGE.

       (a) In General.--Chapter 43 of the Internal Revenue Code of 
     1986, as amended by section 1513, is amended by adding at the 
     end the following:

     ``SEC. 4980I. EXCISE TAX ON HIGH COST EMPLOYER-SPONSORED 
                   HEALTH COVERAGE.

       ``(a) Imposition of Tax.--If--
       ``(1) an employee is covered under any applicable employer-
     sponsored coverage of an employer at any time during a 
     taxable period, and
       ``(2) there is any excess benefit with respect to the 
     coverage,

     there is hereby imposed a tax equal to 40 percent of the 
     excess benefit.
       ``(b) Excess Benefit.--For purposes of this section--
       ``(1) In general.--The term `excess benefit' means, with 
     respect to any applicable employer-sponsored coverage made 
     available by an employer to an employee during any taxable 
     period, the sum of the excess amounts determined under 
     paragraph (2) for months during the taxable period.
       ``(2) Monthly excess amount.--The excess amount determined 
     under this paragraph for any month is the excess (if any) 
     of--
       ``(A) the aggregate cost of the applicable employer-
     sponsored coverage of the employee for the month, over
       ``(B) an amount equal to \1/12\ of the annual limitation 
     under paragraph (3) for the calendar year in which the month 
     occurs.
       ``(3) Annual limitation.--For purposes of this subsection--
       ``(A) In general.--The annual limitation under this 
     paragraph for any calendar year is the dollar limit 
     determined under subparagraph (C) for the calendar year.
       ``(B) Applicable annual limitation.--The annual limitation 
     which applies for any month shall be determined on the basis 
     of the type of coverage (as determined under subsection 
     (f)(1)) provided to the employee by the employer as of the 
     beginning of the month.
       ``(C) Applicable dollar limit.--Except as provided in 
     subparagraph (D)--
       ``(i) 2013.--In the case of 2013, the dollar limit under 
     this subparagraph is--

       ``(I) in the case of an employee with self-only coverage, 
     $8,500, and
       ``(II) in the case of an employee with coverage other than 
     self-only coverage, $23,000.

       ``(ii) Exception for certain individuals.--In the case of 
     an individual who is a qualified retiree or who participates 
     in a plan sponsored by an employer the majority of whose 
     employees are engaged in a high-risk profession or employed 
     to repair or install electrical or telecommunications lines--

       ``(I) the dollar amount in clause (i)(I) (determined after 
     the application of subparagraph (D)) shall be increased by 
     $1,350, and
       ``(II) the dollar amount in clause (i)(II) (determined 
     after the application of subparagraph (D)) shall be increased 
     by $3,000.

       ``(iii) Subsequent years.--In the case of any calendar year 
     after 2013, each of the dollar amounts under clauses (i) and 
     (ii) shall be

[[Page 28588]]

     increased to the amount equal to such amount as in effect for 
     the calendar year preceding such year, increased by an amount 
     equal to the product of--

       ``(I) such amount as so in effect, multiplied by
       ``(II) the cost-of-living adjustment determined under 
     section 1(f)(3) for such year (determined by substituting the 
     calendar year that is 2 years before such year for `1992' in 
     subparagraph (B) thereof), increased by 1 percentage point.

     If any amount determined under this clause is not a multiple 
     of $50, such amount shall be rounded to the nearest multiple 
     of $50.
       ``(D) Transition rule for states with highest coverage 
     costs.--
       ``(i) In general.--If an employee is a resident of a high 
     cost State on the first day of any month beginning in 2013, 
     2014, or 2015, the annual limitation under this paragraph for 
     such month with respect to such employee shall be an amount 
     equal to the applicable percentage of the annual limitation 
     (determined without regard to this subparagraph or 
     subparagraph (C)(ii)).
       ``(ii) Applicable percentage.--The applicable percentage is 
     120 percent for 2013, 110 percent for 2014, and 105 percent 
     for 2015.
       ``(iii) High cost state.--The term `high cost State' means 
     each of the 17 States which the Secretary of Health and Human 
     Services, in consultation with the Secretary, estimates had 
     the highest average cost during 2012 for employer-sponsored 
     coverage under health plans. The Secretary's estimate shall 
     be made on the basis of aggregate premiums paid in the State 
     for such health plans, determined using the most recent data 
     available as of August 31, 2012.
       ``(c) Liability to Pay Tax.--
       ``(1) In general.--Each coverage provider shall pay the tax 
     imposed by subsection (a) on its applicable share of the 
     excess benefit with respect to an employee for any taxable 
     period.
       ``(2) Coverage provider.--For purposes of this subsection, 
     the term `coverage provider' means each of the following:
       ``(A) Health insurance coverage.--If the applicable 
     employer-sponsored coverage consists of coverage under a 
     group health plan which provides health insurance coverage, 
     the health insurance issuer.
       ``(B) HSA and msa contributions.--If the applicable 
     employer-sponsored coverage consists of coverage under an 
     arrangement under which the employer makes contributions 
     described in subsection (b) or (d) of section 106, the 
     employer.
       ``(C) Other coverage.--In the case of any other applicable 
     employer-sponsored coverage, the person that administers the 
     plan benefits.
       ``(3) Applicable share.--For purposes of this subsection, a 
     coverage provider's applicable share of an excess benefit for 
     any taxable period is the amount which bears the same ratio 
     to the amount of such excess benefit as--
       ``(A) the cost of the applicable employer-sponsored 
     coverage provided by the provider to the employee during such 
     period, bears to
       ``(B) the aggregate cost of all applicable employer-
     sponsored coverage provided to the employee by all coverage 
     providers during such period.
       ``(4) Responsibility to calculate tax and applicable 
     shares.--
       ``(A) In general.--Each employer shall--
       ``(i) calculate for each taxable period the amount of the 
     excess benefit subject to the tax imposed by subsection (a) 
     and the applicable share of such excess benefit for each 
     coverage provider, and
       ``(ii) notify, at such time and in such manner as the 
     Secretary may prescribe, the Secretary and each coverage 
     provider of the amount so determined for the provider.
       ``(B) Special rule for multiemployer plans.--In the case of 
     applicable employer-sponsored coverage made available to 
     employees through a multiemployer plan (as defined in section 
     414(f)), the plan sponsor shall make the calculations, and 
     provide the notice, required under subparagraph (A).
       ``(d) Applicable Employer-Sponsored Coverage; Cost.--For 
     purposes of this section--
       ``(1) Applicable employer-sponsored coverage.--
       ``(A) In general.--The term `applicable employer-sponsored 
     coverage' means, with respect to any employee, coverage under 
     any group health plan made available to the employee by an 
     employer which is excludable from the employee's gross income 
     under section 106, or would be so excludable if it were 
     employer-provided coverage (within the meaning of such 
     section 106).
       ``(B) Exceptions.--The term `applicable employer-sponsored 
     coverage' shall not include--
       ``(i) any coverage (whether through insurance or otherwise) 
     described in section 9832(c)(1)(A) or for long-term care, or
       ``(ii) any coverage described in section 9832(c)(3) the 
     payment for which is not excludable from gross income and for 
     which a deduction under section 162(l) is not allowable.
       ``(C) Coverage includes employee paid portion.--Coverage 
     shall be treated as applicable employer-sponsored coverage 
     without regard to whether the employer or employee pays for 
     the coverage.
       ``(D) Self-employed individual.--In the case of an 
     individual who is an employee within the meaning of section 
     401(c)(1), coverage under any group health plan providing 
     health insurance coverage shall be treated as applicable 
     employer-sponsored coverage if a deduction is allowable under 
     section 162(l) with respect to all or any portion of the cost 
     of the coverage.
       ``(E) Governmental plans included.--Applicable employer-
     sponsored coverage shall include coverage under any group 
     health plan established and maintained primarily for its 
     civilian employees by the Government of the United States, by 
     the government of any State or political subdivision thereof, 
     or by any agency or instrumentality of any such government.
       ``(2) Determination of cost.--
       ``(A) In general.--The cost of applicable employer-
     sponsored coverage shall be determined under rules similar to 
     the rules of section 4980B(f)(4), except that in determining 
     such cost, any portion of the cost of such coverage which is 
     attributable to the tax imposed under this section shall not 
     be taken into account and the amount of such cost shall be 
     calculated separately for self-only coverage and other 
     coverage. In the case of applicable employer-sponsored 
     coverage which provides coverage to retired employees, the 
     plan may elect to treat a retired employee who has not 
     attained the age of 65 and a retired employee who has 
     attained the age of 65 as similarly situated beneficiaries.
       ``(B) Health fsas.--In the case of applicable employer-
     sponsored coverage consisting of coverage under a flexible 
     spending arrangement (as defined in section 106(c)(2)), the 
     cost of the coverage shall be equal to the sum of--
       ``(i) the amount of employer contributions under any salary 
     reduction election under the arrangement, plus
       ``(ii) the amount determined under subparagraph (A) with 
     respect to any reimbursement under the arrangement in excess 
     of the contributions described in clause (i).
       ``(C) Archer msas and hsas.--In the case of applicable 
     employer-sponsored coverage consisting of coverage under an 
     arrangement under which the employer makes contributions 
     described in subsection (b) or (d) of section 106, the cost 
     of the coverage shall be equal to the amount of employer 
     contributions under the arrangement.
       ``(D) Allocation on a monthly basis.--If cost is determined 
     on other than a monthly basis, the cost shall be allocated to 
     months in a taxable period on such basis as the Secretary may 
     prescribe.
       ``(e) Penalty for Failure to Properly Calculate Excess 
     Benefit.--
       ``(1) In general.--If, for any taxable period, the tax 
     imposed by subsection (a) exceeds the tax determined under 
     such subsection with respect to the total excess benefit 
     calculated by the employer or plan sponsor under subsection 
     (c)(4)--
       ``(A) each coverage provider shall pay the tax on its 
     applicable share (determined in the same manner as under 
     subsection (c)(4)) of the excess, but no penalty shall be 
     imposed on the provider with respect to such amount, and
       ``(B) the employer or plan sponsor shall, in addition to 
     any tax imposed by subsection (a), pay a penalty in an amount 
     equal to such excess, plus interest at the underpayment rate 
     determined under section 6621 for the period beginning on the 
     due date for the payment of tax imposed by subsection (a) to 
     which the excess relates and ending on the date of payment of 
     the penalty.
       ``(2) Limitations on penalty.--
       ``(A) Penalty not to apply where failure not discovered 
     exercising reasonable diligence.--No penalty shall be imposed 
     by paragraph (1)(B) on any failure to properly calculate the 
     excess benefit during any period for which it is established 
     to the satisfaction of the Secretary that the employer or 
     plan sponsor neither knew, nor exercising reasonable 
     diligence would have known, that such failure existed.
       ``(B) Penalty not to apply to failures corrected within 30 
     days.--No penalty shall be imposed by paragraph (1)(B) on any 
     such failure if--
       ``(i) such failure was due to reasonable cause and not to 
     willful neglect, and
       ``(ii) such failure is corrected during the 30-day period 
     beginning on the 1st date that the employer knew, or 
     exercising reasonable diligence would have known, that such 
     failure existed.
       ``(C) Waiver by secretary.--In the case of any such failure 
     which is due to reasonable cause and not to willful neglect, 
     the Secretary may waive part or all of the penalty imposed by 
     paragraph (1), to the extent that the payment of such penalty 
     would be excessive or otherwise inequitable relative to the 
     failure involved.
       ``(f) Other Definitions and Special Rules.--For purposes of 
     this section--
       ``(1) Coverage determinations.--
       ``(A) In general.--Except as provided in subparagraph (B), 
     an employee shall be treated as having self-only coverage 
     with respect to any applicable employer-sponsored coverage of 
     an employer.
       ``(B) Minimum essential coverage.--An employee shall be 
     treated as having coverage other than self-only coverage only 
     if the employee is enrolled in coverage other than

[[Page 28589]]

     self-only coverage in a group health plan which provides 
     minimum essential coverage (as defined in section 5000A(f)) 
     to the employee and at least one other beneficiary, and the 
     benefits provided under such minimum essential coverage do 
     not vary based on whether any individual covered under such 
     coverage is the employee or another beneficiary.
       ``(2) Qualified retiree.--The term `qualified retiree' 
     means any individual who--
       ``(A) is receiving coverage by reason of being a retiree,
       ``(B) has attained age 55, and
       ``(C) is not entitled to benefits or eligible for 
     enrollment under the Medicare program under title XVIII of 
     the Social Security Act.
       ``(3) Employees engaged in high-risk profession.--The term 
     `employees engaged in a high-risk profession' means law 
     enforcement officers (as such term is defined in section 1204 
     of the Omnibus Crime Control and Safe Streets Act of 1968), 
     employees in fire protection activities (as such term is 
     defined in section 3(y) of the Fair Labor Standards Act of 
     1938), individuals who provide out-of-hospital emergency 
     medical care (including emergency medical technicians, 
     paramedics, and first-responders), and individuals engaged in 
     the construction, mining, agriculture (not including food 
     processing), forestry, and fishing industries. Such term 
     includes an employee who is retired from a high-risk 
     profession described in the preceding sentence, if such 
     employee satisfied the requirements of such sentence for a 
     period of not less than 20 years during the employee's 
     employment.
       ``(4) Group health plan.--The term `group health plan' has 
     the meaning given such term by section 5000(b)(1).
       ``(5) Health insurance coverage; health insurance issuer.--
       ``(A) Health insurance coverage.--The term `health 
     insurance coverage' has the meaning given such term by 
     section 9832(b)(1) (applied without regard to subparagraph 
     (B) thereof, except as provided by the Secretary in 
     regulations).
       ``(B) Health insurance issuer.--The term `health insurance 
     issuer' has the meaning given such term by section 
     9832(b)(2).
       ``(6) Person that administers the plan benefits.--The term 
     `person that administers the plan benefits' shall include the 
     plan sponsor if the plan sponsor administers benefits under 
     the plan.
       ``(7) Plan sponsor.--The term `plan sponsor' has the 
     meaning given such term in section 3(16)(B) of the Employee 
     Retirement Income Security Act of 1974.
       ``(8) Taxable period.--The term `taxable period' means the 
     calendar year or such shorter period as the Secretary may 
     prescribe. The Secretary may have different taxable periods 
     for employers of varying sizes.
       ``(9) Aggregation rules.--All employers treated as a single 
     employer under subsection (b), (c), (m), or (o) of section 
     414 shall be treated as a single employer.
       ``(10) Denial of deduction.--For denial of a deduction for 
     the tax imposed by this section, see section 275(a)(6).
       ``(g) Regulations.--The Secretary shall prescribe such 
     regulations as may be necessary to carry out this section.''.
       (b) Clerical Amendment.--The table of sections for chapter 
     43 of such Code, as amended by section 1513, is amended by 
     adding at the end the following new item:

``Sec. 4980I. Excise tax on high cost employer-sponsored health 
              coverage.''.

       (c) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning after December 31, 
     2012.

     SEC. 9002. INCLUSION OF COST OF EMPLOYER-SPONSORED HEALTH 
                   COVERAGE ON W-2.

       (a) In General.--Section 6051(a) of the Internal Revenue 
     Code of 1986 (relating to receipts for employees) is amended 
     by striking ``and'' at the end of paragraph (12), by striking 
     the period at the end of paragraph (13) and inserting ``, 
     and'', and by adding after paragraph (13) the following new 
     paragraph:
       ``(14) the aggregate cost (determined under rules similar 
     to the rules of section 4980B(f)(4)) of applicable employer-
     sponsored coverage (as defined in section 4980I(d)(1)), 
     except that this paragraph shall not apply to--
       ``(A) coverage to which paragraphs (11) and (12) apply, or
       ``(B) the amount of any salary reduction contributions to a 
     flexible spending arrangement (within the meaning of section 
     125).''.
       (b) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning after December 31, 
     2010.

     SEC. 9003. DISTRIBUTIONS FOR MEDICINE QUALIFIED ONLY IF FOR 
                   PRESCRIBED DRUG OR INSULIN.

       (a) HSAs.--Subparagraph (A) of section 223(d)(2) of the 
     Internal Revenue Code of 1986 is amended by adding at the end 
     the following: ``Such term shall include an amount paid for 
     medicine or a drug only if such medicine or drug is a 
     prescribed drug (determined without regard to whether such 
     drug is available without a prescription) or is insulin.''.
       (b) Archer MSAs.--Subparagraph (A) of section 220(d)(2) of 
     the Internal Revenue Code of 1986 is amended by adding at the 
     end the following: ``Such term shall include an amount paid 
     for medicine or a drug only if such medicine or drug is a 
     prescribed drug (determined without regard to whether such 
     drug is available without a prescription) or is insulin.''.
       (c) Health Flexible Spending Arrangements and Health 
     Reimbursement Arrangements.--Section 106 of the Internal 
     Revenue Code of 1986 is amended by adding at the end the 
     following new subsection:
       ``(f) Reimbursements for Medicine Restricted to Prescribed 
     Drugs and Insulin.--For purposes of this section and section 
     105, reimbursement for expenses incurred for a medicine or a 
     drug shall be treated as a reimbursement for medical expenses 
     only if such medicine or drug is a prescribed drug 
     (determined without regard to whether such drug is available 
     without a prescription) or is insulin.''.
       (d) Effective Dates.--
       (1) Distributions from savings accounts.--The amendments 
     made by subsections (a) and (b) shall apply to amounts paid 
     with respect to taxable years beginning after December 31, 
     2010.
       (2) Reimbursements.--The amendment made by subsection (c) 
     shall apply to expenses incurred with respect to taxable 
     years beginning after December 31, 2010.

     SEC. 9004. INCREASE IN ADDITIONAL TAX ON DISTRIBUTIONS FROM 
                   HSAS AND ARCHER MSAS NOT USED FOR QUALIFIED 
                   MEDICAL EXPENSES.

       (a) HSAs.--Section 223(f)(4)(A) of the Internal Revenue 
     Code of 1986 is amended by striking ``10 percent'' and 
     inserting ``20 percent''.
       (b) Archer MSAs.--Section 220(f)(4)(A) of the Internal 
     Revenue Code of 1986 is amended by striking ``15 percent'' 
     and inserting ``20 percent''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to distributions made after December 31, 2010.

     SEC. 9005. LIMITATION ON HEALTH FLEXIBLE SPENDING 
                   ARRANGEMENTS UNDER CAFETERIA PLANS.

       (a) In General.--Section 125 of the Internal Revenue Code 
     of 1986 is amended--
       (1) by redesignating subsections (i) and (j) as subsections 
     (j) and (k), respectively, and
       (2) by inserting after subsection (h) the following new 
     subsection:
       ``(i) Limitation on Health Flexible Spending 
     Arrangements.--For purposes of this section, if a benefit is 
     provided under a cafeteria plan through employer 
     contributions to a health flexible spending arrangement, such 
     benefit shall not be treated as a qualified benefit unless 
     the cafeteria plan provides that an employee may not elect 
     for any taxable year to have salary reduction contributions 
     in excess of $2,500 made to such arrangement.''.
       (b) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning after December 31, 
     2010.

     SEC. 9006. EXPANSION OF INFORMATION REPORTING REQUIREMENTS.

       (a) In General.--Section 6041 of the Internal Revenue Code 
     of 1986 is amended by adding at the end the following new 
     subsections:
       ``(h) Application to Corporations.--Notwithstanding any 
     regulation prescribed by the Secretary before the date of the 
     enactment of this subsection, for purposes of this section 
     the term `person' includes any corporation that is not an 
     organization exempt from tax under section 501(a).
       ``(i) Regulations.--The Secretary may prescribe such 
     regulations and other guidance as may be appropriate or 
     necessary to carry out the purposes of this section, 
     including rules to prevent duplicative reporting of 
     transactions.''.
       (b) Payments for Property and Other Gross Proceeds.--
     Subsection (a) of section 6041 of the Internal Revenue Code 
     of 1986 is amended--
       (1) by inserting ``amounts in consideration for property,'' 
     after ``wages,'',
       (2) by inserting ``gross proceeds,'' after ``emoluments, or 
     other'', and
       (3) by inserting ``gross proceeds,'' after ``setting forth 
     the amount of such''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to payments made after December 31, 2011.

     SEC. 9007. ADDITIONAL REQUIREMENTS FOR CHARITABLE HOSPITALS.

       (a) Requirements to Qualify as Section 501(c)(3) Charitable 
     Hospital Organization.--Section 501 of the Internal Revenue 
     Code of 1986 (relating to exemption from tax on corporations, 
     certain trusts, etc.) is amended by redesignating subsection 
     (r) as subsection (s) and by inserting after subsection (q) 
     the following new subsection:
       ``(r) Additional Requirements for Certain Hospitals.--
       ``(1) In general.--A hospital organization to which this 
     subsection applies shall not be treated as described in 
     subsection (c)(3) unless the organization--
       ``(A) meets the community health needs assessment 
     requirements described in paragraph (3),
       ``(B) meets the financial assistance policy requirements 
     described in paragraph (4),
       ``(C) meets the requirements on charges described in 
     paragraph (5), and
       ``(D) meets the billing and collection requirement 
     described in paragraph (6).
       ``(2) Hospital organizations to which subsection applies.--

[[Page 28590]]

       ``(A) In general.--This subsection shall apply to--
       ``(i) an organization which operates a facility which is 
     required by a State to be licensed, registered, or similarly 
     recognized as a hospital, and
       ``(ii) any other organization which the Secretary 
     determines has the provision of hospital care as its 
     principal function or purpose constituting the basis for its 
     exemption under subsection (c)(3) (determined without regard 
     to this subsection).
       ``(B) Organizations with more than 1 hospital facility.--If 
     a hospital organization operates more than 1 hospital 
     facility--
       ``(i) the organization shall meet the requirements of this 
     subsection separately with respect to each such facility, and
       ``(ii) the organization shall not be treated as described 
     in subsection (c)(3) with respect to any such facility for 
     which such requirements are not separately met.
       ``(3) Community health needs assessments.--
       ``(A) In general.--An organization meets the requirements 
     of this paragraph with respect to any taxable year only if 
     the organization--
       ``(i) has conducted a community health needs assessment 
     which meets the requirements of subparagraph (B) in such 
     taxable year or in either of the 2 taxable years immediately 
     preceding such taxable year, and
       ``(ii) has adopted an implementation strategy to meet the 
     community health needs identified through such assessment.
       ``(B) Community health needs assessment.--A community 
     health needs assessment meets the requirements of this 
     paragraph if such community health needs assessment--
       ``(i) takes into account input from persons who represent 
     the broad interests of the community served by the hospital 
     facility, including those with special knowledge of or 
     expertise in public health, and
       ``(ii) is made widely available to the public.
       ``(4) Financial assistance policy.--An organization meets 
     the requirements of this paragraph if the organization 
     establishes the following policies:
       ``(A) Financial assistance policy.--A written financial 
     assistance policy which includes--
       ``(i) eligibility criteria for financial assistance, and 
     whether such assistance includes free or discounted care,
       ``(ii) the basis for calculating amounts charged to 
     patients,
       ``(iii) the method for applying for financial assistance,
       ``(iv) in the case of an organization which does not have a 
     separate billing and collections policy, the actions the 
     organization may take in the event of non-payment, including 
     collections action and reporting to credit agencies, and
       ``(v) measures to widely publicize the policy within the 
     community to be served by the organization.
       ``(B) Policy relating to emergency medical care.--A written 
     policy requiring the organization to provide, without 
     discrimination, care for emergency medical conditions (within 
     the meaning of section 1867 of the Social Security Act (42 
     U.S.C. 1395dd)) to individuals regardless of their 
     eligibility under the financial assistance policy described 
     in subparagraph (A).
       ``(5) Limitation on charges.--An organization meets the 
     requirements of this paragraph if the organization--
       ``(A) limits amounts charged for emergency or other 
     medically necessary care provided to individuals eligible for 
     assistance under the financial assistance policy described in 
     paragraph (4)(A) to not more than the lowest amounts charged 
     to individuals who have insurance covering such care, and
       ``(B) prohibits the use of gross charges.
       ``(6) Billing and collection requirements.--An organization 
     meets the requirement of this paragraph only if the 
     organization does not engage in extraordinary collection 
     actions before the organization has made reasonable efforts 
     to determine whether the individual is eligible for 
     assistance under the financial assistance policy described in 
     paragraph (4)(A).
       ``(7) Regulatory authority.--The Secretary shall issue such 
     regulations and guidance as may be necessary to carry out the 
     provisions of this subsection, including guidance relating to 
     what constitutes reasonable efforts to determine the 
     eligibility of a patient under a financial assistance policy 
     for purposes of paragraph (6).''.
       (b) Excise Tax for Failures to Meet Hospital Exemption 
     Requirements.--
       (1) In general.--Subchapter D of chapter 42 of the Internal 
     Revenue Code of 1986 (relating to failure by certain 
     charitable organizations to meet certain qualification 
     requirements) is amended by adding at the end the following 
     new section:

     ``SEC. 4959. TAXES ON FAILURES BY HOSPITAL ORGANIZATIONS.

       ``If a hospital organization to which section 501(r) 
     applies fails to meet the requirement of section 501(r)(3) 
     for any taxable year, there is imposed on the organization a 
     tax equal to $50,000.''.
       (2) Conforming amendment.--The table of sections for 
     subchapter D of chapter 42 of such Code is amended by adding 
     at the end the following new item:

``Sec. 4959. Taxes on failures by hospital organizations.''.
       (c) Mandatory Review of Tax Exemption for Hospitals.--The 
     Secretary of the Treasury or the Secretary's delegate shall 
     review at least once every 3 years the community benefit 
     activities of each hospital organization to which section 
     501(r) of the Internal Revenue Code of 1986 (as added by this 
     section) applies.
       (d) Additional Reporting Requirements.--
       (1) Community health needs assessments and audited 
     financial statements.--Section 6033(b) of the Internal 
     Revenue Code of 1986 (relating to certain organizations 
     described in section 501(c)(3)) is amended by striking 
     ``and'' at the end of paragraph (14), by redesignating 
     paragraph (15) as paragraph (16), and by inserting after 
     paragraph (14) the following new paragraph:
       ``(15) in the case of an organization to which the 
     requirements of section 501(r) apply for the taxable year--
       ``(A) a description of how the organization is addressing 
     the needs identified in each community health needs 
     assessment conducted under section 501(r)(3) and a 
     description of any such needs that are not being addressed 
     together with the reasons why such needs are not being 
     addressed, and
       ``(B) the audited financial statements of such organization 
     (or, in the case of an organization the financial statements 
     of which are included in a consolidated financial statement 
     with other organizations, such consolidated financial 
     statement).''.
       (2) Taxes.--Section 6033(b)(10) of such Code is amended by 
     striking ``and'' at the end of subparagraph (B), by inserting 
     ``and'' at the end of subparagraph (C), and by adding at the 
     end the following new subparagraph:
       ``(D) section 4959 (relating to taxes on failures by 
     hospital organizations),''.
       (e) Reports.--
       (1) Report on levels of charity care.--The Secretary of the 
     Treasury, in consultation with the Secretary of Health and 
     Human Services, shall submit to the Committees on Ways and 
     Means, Education and Labor, and Energy and Commerce of the 
     House of Representatives and to the Committees on Finance and 
     Health, Education, Labor, and Pensions of the Senate an 
     annual report on the following:
       (A) Information with respect to private tax-exempt, 
     taxable, and government-owned hospitals regarding--
       (i) levels of charity care provided,
       (ii) bad debt expenses,
       (iii) unreimbursed costs for services provided with respect 
     to means-tested government programs, and
       (iv) unreimbursed costs for services provided with respect 
     to non-means tested government programs.
       (B) Information with respect to private tax-exempt 
     hospitals regarding costs incurred for community benefit 
     activities.
       (2) Report on trends.--
       (A) Study.--The Secretary of the Treasury, in consultation 
     with the Secretary of Health and Human Services, shall 
     conduct a study on trends in the information required to be 
     reported under paragraph (1).
       (B) Report.--Not later than 5 years after the date of the 
     enactment of this Act, the Secretary of the Treasury, in 
     consultation with the Secretary of Health and Human Services, 
     shall submit a report on the study conducted under 
     subparagraph (A) to the Committees on Ways and Means, 
     Education and Labor, and Energy and Commerce of the House of 
     Representatives and to the Committees on Finance and Health, 
     Education, Labor, and Pensions of the Senate.
       (f) Effective Dates.--
       (1) In general.--Except as provided in paragraphs (2) and 
     (3), the amendments made by this section shall apply to 
     taxable years beginning after the date of the enactment of 
     this Act.
       (2) Community health needs assessment.--The requirements of 
     section 501(r)(3) of the Internal Revenue Code of 1986, as 
     added by subsection (a), shall apply to taxable years 
     beginning after the date which is 2 years after the date of 
     the enactment of this Act.
       (3) Excise tax.--The amendments made by subsection (b) 
     shall apply to failures occurring after the date of the 
     enactment of this Act.

     SEC. 9008. IMPOSITION OF ANNUAL FEE ON BRANDED PRESCRIPTION 
                   PHARMACEUTICAL MANUFACTURERS AND IMPORTERS.

       (a) Imposition of Fee.--
       (1) In general.--Each covered entity engaged in the 
     business of manufacturing or importing branded prescription 
     drugs shall pay to the Secretary of the Treasury not later 
     than the annual payment date of each calendar year beginning 
     after 2009 a fee in an amount determined under subsection 
     (b).
       (2) Annual payment date.--For purposes of this section, the 
     term ``annual payment date'' means with respect to any 
     calendar year the date determined by the Secretary, but in no 
     event later than September 30 of such calendar year.
       (b) Determination of Fee Amount.--
       (1) In general.--With respect to each covered entity, the 
     fee under this section for any calendar year shall be equal 
     to an amount that bears the same ratio to $2,300,000,000 as--

[[Page 28591]]

       (A) the covered entity's branded prescription drug sales 
     taken into account during the preceding calendar year, bear 
     to
       (B) the aggregate branded prescription drug sales of all 
     covered entities taken into account during such preceding 
     calendar year.
       (2) Sales taken into account.--For purposes of paragraph 
     (1), the branded prescription drug sales taken into account 
     during any calendar year with respect to any covered entity 
     shall be determined in accordance with the following table:


 
   With respect to a covered entity's
  aggregate branded prescription drug      The percentage of such sales
  sales during the  calendar year that        taken into account is:
                  are:
 
  Not more than $5,000,000.............  0 percent
  More than $5,000,000 but not more      10 percent
   than $125,000,000.
  More than $125,000,000 but not more    40 percent
   than $225,000,000.
  More than $225,000,000 but not more    75 percent
   than $400,000,000.
  More than $400,000,000...............  100 percent.
 

       (3) Secretarial determination.--The Secretary of the 
     Treasury shall calculate the amount of each covered entity's 
     fee for any calendar year under paragraph (1). In calculating 
     such amount, the Secretary of the Treasury shall determine 
     such covered entity's branded prescription drug sales on the 
     basis of reports submitted under subsection (g) and through 
     the use of any other source of information available to the 
     Secretary of the Treasury.
       (c) Transfer of Fees to Medicare Part B Trust Fund.--There 
     is hereby appropriated to the Federal Supplementary Medical 
     Insurance Trust Fund established under section 1841 of the 
     Social Security Act an amount equal to the fees received by 
     the Secretary of the Treasury under subsection (a).
       (d) Covered Entity.--
       (1) In general.--For purposes of this section, the term 
     ``covered entity'' means any manufacturer or importer with 
     gross receipts from branded prescription drug sales.
       (2) Controlled groups.--
       (A) In general.--For purposes of this subsection, all 
     persons treated as a single employer under subsection (a) or 
     (b) of section 52 of the Internal Revenue Code of 1986 or 
     subsection (m) or (o) of section 414 of such Code shall be 
     treated as a single covered entity.
       (B) Inclusion of foreign corporations.--For purposes of 
     subparagraph (A), in applying subsections (a) and (b) of 
     section 52 of such Code to this section, section 1563 of such 
     Code shall be applied without regard to subsection (b)(2)(C) 
     thereof.
       (e) Branded Prescription Drug Sales.--For purposes of this 
     section--
       (1) In general.--The term ``branded prescription drug 
     sales'' means sales of branded prescription drugs to any 
     specified government program or pursuant to coverage under 
     any such program.
       (2) Branded prescription drugs.--
       (A) In general.--The term ``branded prescription drug'' 
     means--
       (i) any prescription drug the application for which was 
     submitted under section 505(b) of the Federal Food, Drug, and 
     Cosmetic Act (21 U.S.C. 355(b)), or
       (ii) any biological product the license for which was 
     submitted under section 351(a) of the Public Health Service 
     Act (42 U.S.C. 262(a)).
       (B) Prescription drug.--For purposes of subparagraph 
     (A)(i), the term ``prescription drug'' means any drug which 
     is subject to section 503(b) of the Federal Food, Drug, and 
     Cosmetic Act (21 U.S.C. 353(b)).
       (3) Exclusion of orphan drug sales.--The term ``branded 
     prescription drug sales'' shall not include sales of any drug 
     or biological product with respect to which a credit was 
     allowed for any taxable year under section 45C of the 
     Internal Revenue Code of 1986. The preceding sentence shall 
     not apply with respect to any such drug or biological product 
     after the date on which such drug or biological product is 
     approved by the Food and Drug Administration for marketing 
     for any indication other than the treatment of the rare 
     disease or condition with respect to which such credit was 
     allowed.
       (4) Specified government program.--The term ``specified 
     government program'' means--
       (A) the Medicare Part D program under part D of title XVIII 
     of the Social Security Act,
       (B) the Medicare Part B program under part B of title XVIII 
     of the Social Security Act,
       (C) the Medicaid program under title XIX of the Social 
     Security Act,
       (D) any program under which branded prescription drugs are 
     procured by the Department of Veterans Affairs,
       (E) any program under which branded prescription drugs are 
     procured by the Department of Defense, or
       (F) the TRICARE retail pharmacy program under section 1074g 
     of title 10, United States Code.
       (f) Tax Treatment of Fees.--The fees imposed by this 
     section--
       (1) for purposes of subtitle F of the Internal Revenue Code 
     of 1986, shall be treated as excise taxes with respect to 
     which only civil actions for refund under procedures of such 
     subtitle shall apply, and
       (2) for purposes of section 275 of such Code, shall be 
     considered to be a tax described in section 275(a)(6).
       (g) Reporting Requirement.--Not later than the date 
     determined by the Secretary of the Treasury following the end 
     of any calendar year, the Secretary of Health and Human 
     Services, the Secretary of Veterans Affairs, and the 
     Secretary of Defense shall report to the Secretary of the 
     Treasury, in such manner as the Secretary of the Treasury 
     prescribes, the total branded prescription drug sales for 
     each covered entity with respect to each specified government 
     program under such Secretary's jurisdiction using the 
     following methodology:
       (1) Medicare part d program.--The Secretary of Health and 
     Human Services shall report, for each covered entity and for 
     each branded prescription drug of the covered entity covered 
     by the Medicare Part D program, the product of--
       (A) the per-unit ingredient cost, as reported to the 
     Secretary of Health and Human Services by prescription drug 
     plans and Medicare Advantage prescription drug plans, minus 
     any per-unit rebate, discount, or other price concession 
     provided by the covered entity, as reported to the Secretary 
     of Health and Human Services by the prescription drug plans 
     and Medicare Advantage prescription drug plans, and
       (B) the number of units of the branded prescription drug 
     paid for under the Medicare Part D program.

       (2) Medicare part b program.--The Secretary of Health and 
     Human Services shall report, for each covered entity and for 
     each branded prescription drug of the covered entity covered 
     by the Medicare Part B program under section 1862(a) of the 
     Social Security Act, the product of--
       (A) the per-unit average sales price (as defined in section 
     1847A(c) of the Social Security Act) or the per-unit Part B 
     payment rate for a separately paid branded prescription drug 
     without a reported average sales price, and
       (B) the number of units of the branded prescription drug 
     paid for under the Medicare Part B program.
     The Centers for Medicare and Medicaid Services shall 
     establish a process for determining the units and the 
     allocated price for purposes of this section for those 
     branded prescription drugs that are not separately payable or 
     for which National Drug Codes are not reported.
       (3) Medicaid program.--The Secretary of Health and Human 
     Services shall report, for each covered entity and for each 
     branded prescription drug of the covered entity covered under 
     the Medicaid program, the product of--
       (A) the per-unit ingredient cost paid to pharmacies by 
     States for the branded prescription drug dispensed to 
     Medicaid beneficiaries, minus any per-unit rebate paid by the 
     covered entity under section 1927 of the Social Security Act 
     and any State supplemental rebate, and
       (B) the number of units of the branded prescription drug 
     paid for under the Medicaid program.
       (4) Department of veterans affairs programs.--The Secretary 
     of Veterans Affairs shall report, for each covered entity and 
     for each branded prescription drug of the covered entity the 
     total amount paid for each such branded prescription drug 
     procured by the Department of Veterans Affairs for its 
     beneficiaries.
       (5) Department of defense programs and tricare.--The 
     Secretary of Defense shall report, for each covered entity 
     and for each branded prescription drug of the covered entity, 
     the sum of--
       (A) the total amount paid for each such branded 
     prescription drug procured by the Department of Defense for 
     its beneficiaries, and
       (B) for each such branded prescription drug dispensed under 
     the TRICARE retail pharmacy program, the product of--
       (i) the per-unit ingredient cost, minus any per-unit rebate 
     paid by the covered entity, and
       (ii) the number of units of the branded prescription drug 
     dispensed under such program.
       (h) Secretary.--For purposes of this section, the term 
     ``Secretary'' includes the Secretary's delegate.

[[Page 28592]]

       (i) Guidance.--The Secretary of the Treasury shall publish 
     guidance necessary to carry out the purposes of this section.
       (j) Application of Section.--This section shall apply to 
     any branded prescription drug sales after December 31, 2008.
       (k) Conforming Amendment.--Section 1841(a) of the Social 
     Security Act is amended by inserting ``or section 9008(c) of 
     the Patient Protection and Affordable Care Act of 2009'' 
     after ``this part''.

     SEC. 9009. IMPOSITION OF ANNUAL FEE ON MEDICAL DEVICE 
                   MANUFACTURERS AND IMPORTERS.

       (a) Imposition of Fee.--
       (1) In general.--Each covered entity engaged in the 
     business of manufacturing or importing medical devices shall 
     pay to the Secretary not later than the annual payment date 
     of each calendar year beginning after 2009 a fee in an amount 
     determined under subsection (b).
       (2) Annual payment date.--For purposes of this section, the 
     term ``annual payment date'' means with respect to any 
     calendar year the date determined by the Secretary, but in no 
     event later than September 30 of such calendar year.
       (b) Determination of Fee Amount.--
       (1) In general.--With respect to each covered entity, the 
     fee under this section for any calendar year shall be equal 
     to an amount that bears the same ratio to $2,000,000,000 as--
       (A) the covered entity's gross receipts from medical device 
     sales taken into account during the preceding calendar year, 
     bear to
       (B) the aggregate gross receipts of all covered entities 
     from medical device sales taken into account during such 
     preceding calendar year.
       (2) Gross receipts from sales taken into account.--For 
     purposes of paragraph (1), the gross receipts from medical 
     device sales taken into account during any calendar year with 
     respect to any covered entity shall be determined in 
     accordance with the following table:


 
   With respect to a covered entity's
 aggregate gross receipts from medical       The percentage of gross
 device sales during the calendar year   receipts taken into account is:
               that are:
 
  Not more than $5,000,000.............  0 percent
  More than $5,000,000 but not more      50 percent
   than $25,000,000.
  More than $25,000,000................  100 percent.
 

       (3) Secretarial determination.--The Secretary shall 
     calculate the amount of each covered entity's fee for any 
     calendar year under paragraph (1). In calculating such 
     amount, the Secretary shall determine such covered entity's 
     gross receipts from medical device sales on the basis of 
     reports submitted by the covered entity under subsection (f) 
     and through the use of any other source of information 
     available to the Secretary.
       (c) Covered Entity.--
       (1) In general.--For purposes of this section, the term 
     ``covered entity'' means any manufacturer or importer with 
     gross receipts from medical device sales.
       (2) Controlled groups.--
       (A) In general.--For purposes of this subsection, all 
     persons treated as a single employer under subsection (a) or 
     (b) of section 52 of the Internal Revenue Code of 1986 or 
     subsection (m) or (o) of section 414 of such Code shall be 
     treated as a single covered entity.
       (B) Inclusion of foreign corporations.--For purposes of 
     subparagraph (A), in applying subsections (a) and (b) of 
     section 52 of such Code to this section, section 1563 of such 
     Code shall be applied without regard to subsection (b)(2)(C) 
     thereof.
       (d) Medical Device Sales.--For purposes of this section--
       (1) In general.--The term ``medical device sales'' means 
     sales for use in the United States of any medical device, 
     other than the sales of a medical device that--
       (A) has been classified in class II under section 513 of 
     the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 360c) and 
     is primarily sold to consumers at retail for not more than 
     $100 per unit, or
       (B) has been classified in class I under such section.
       (2) United states.--For purposes of paragraph (1), the term 
     ``United States'' means the several States, the District of 
     Columbia, the Commonwealth of Puerto Rico, and the 
     possessions of the United States.
       (3) Medical device.--For purposes of paragraph (1), the 
     term ``medical device'' means any device (as defined in 
     section 201(h) of the Federal Food, Drug, and Cosmetic Act 
     (21 U.S.C. 321(h))) intended for humans.
       (e) Tax Treatment of Fees.--The fees imposed by this 
     section--
       (1) for purposes of subtitle F of the Internal Revenue Code 
     of 1986, shall be treated as excise taxes with respect to 
     which only civil actions for refund under procedures of such 
     subtitle shall apply, and
       (2) for purposes of section 275 of such Code, shall be 
     considered to be a tax described in section 275(a)(6).
       (f) Reporting Requirement.--
       (1) In general.--Not later than the date determined by the 
     Secretary following the end of any calendar year, each 
     covered entity shall report to the Secretary, in such manner 
     as the Secretary prescribes, the gross receipts from medical 
     device sales of such covered entity during such calendar 
     year.
       (2) Penalty for failure to report.--
       (A) In general.--In the case of any failure to make a 
     report containing the information required by paragraph (1) 
     on the date prescribed therefor (determined with regard to 
     any extension of time for filing), unless it is shown that 
     such failure is due to reasonable cause, there shall be paid 
     by the covered entity failing to file such report, an amount 
     equal to--
       (i) $10,000, plus
       (ii) the lesser of--

       (I) an amount equal to $1,000, multiplied by the number of 
     days during which such failure continues, or
       (II) the amount of the fee imposed by this section for 
     which such report was required.

       (B) Treatment of penalty.--The penalty imposed under 
     subparagraph (A)--
       (i) shall be treated as a penalty for purposes of subtitle 
     F of the Internal Revenue Code of 1986,
       (ii) shall be paid on notice and demand by the Secretary 
     and in the same manner as tax under such Code, and
       (iii) with respect to which only civil actions for refund 
     under procedures of such subtitle F shall apply.
       (g) Secretary.--For purposes of this section, the term 
     ``Secretary'' means the Secretary of the Treasury or the 
     Secretary's delegate.
       (h) Guidance.--The Secretary shall publish guidance 
     necessary to carry out the purposes of this section, 
     including identification of medical devices described in 
     subsection (d)(1)(A) and with respect to the treatment of 
     gross receipts from sales of medical devices to another 
     covered entity or to another entity by reason of the 
     application of subsection (c)(2).
       (i) Application of Section.--This section shall apply to 
     any medical device sales after December 31, 2008.

     SEC. 9010. IMPOSITION OF ANNUAL FEE ON HEALTH INSURANCE 
                   PROVIDERS.

       (a) Imposition of Fee.--
       (1) In general.--Each covered entity engaged in the 
     business of providing health insurance shall pay to the 
     Secretary not later than the annual payment date of each 
     calendar year beginning after 2009 a fee in an amount 
     determined under subsection (b).
       (2) Annual payment date.--For purposes of this section, the 
     term ``annual payment date'' means with respect to any 
     calendar year the date determined by the Secretary, but in no 
     event later than September 30 of such calendar year.
       (b) Determination of Fee Amount.--
       (1) In general.--With respect to each covered entity, the 
     fee under this section for any calendar year shall be equal 
     to an amount that bears the same ratio to $6,700,000,000 as--
       (A) the sum of--
       (i) the covered entity's net premiums written with respect 
     to health insurance for any United States health risk that 
     are taken into account during the preceding calendar year, 
     plus
       (ii) 200 percent of the covered entity's third party 
     administration agreement fees that are taken into account 
     during the preceding calendar year, bears to
       (B) the sum of--
       (i) the aggregate net premiums written with respect to such 
     health insurance of all covered entities that are taken into 
     account during such preceding calendar year, plus
       (ii) 200 percent of the aggregate third party 
     administration agreement fees of all covered entities that 
     are taken into account during such preceding calendar year.
       (2) Amounts taken into account.--For purposes of paragraph 
     (1)--
       (A) Net premiums written.--The net premiums written with 
     respect to health insurance for any United States health risk 
     that are taken into account during any calendar year with 
     respect to any covered entity shall be determined in 
     accordance with the following table:


[[Page 28593]]



 
 With respect to a covered entity's net   The percentage of net premiums
  premiums written during the calendar     written that are taken into
             year that are:                        account is:
 
  Not more than $25,000,000............  0 percent
  More than $25,000,000 but not more     50 percent
   than $50,000,000.
  More than $50,000,000................  100 percent.
 

       (B) Third party administration agreement fees.--The third 
     party administration agreement fees that are taken into 
     account during any calendar year with respect to any covered 
     entity shall be determined in accordance with the following 
     table:


 
   With respect to a covered entity's     The percentage of third party
  third party administration agreement    administration agreement fees
fees during the calendar year that are:  that are taken into account is:
 
  Not more than $5,000,000.............  0 percent
  More than $5,000,000 but not more      50 percent
   than $10,000,000.
  More than $10,000,000................  100 percent.
 

       (3) Secretarial determination.--The Secretary shall 
     calculate the amount of each covered entity's fee for any 
     calendar year under paragraph (1). In calculating such 
     amount, the Secretary shall determine such covered entity's 
     net premiums written with respect to any United States health 
     risk and third party administration agreement fees on the 
     basis of reports submitted by the covered entity under 
     subsection (g) and through the use of any other source of 
     information available to the Secretary.
       (c) Covered Entity.--
       (1) In general.--For purposes of this section, the term 
     ``covered entity'' means any entity which provides health 
     insurance for any United States health risk.
       (2) Exclusion.--Such term does not include--
       (A) any employer to the extent that such employer self-
     insures its employees' health risks, or
       (B) any governmental entity (except to the extent such an 
     entity provides health insurance coverage through the 
     community health insurance option under section 1323).
       (3) Controlled groups.--
       (A) In general.--For purposes of this subsection, all 
     persons treated as a single employer under subsection (a) or 
     (b) of section 52 of the Internal Revenue Code of 1986 or 
     subsection (m) or (o) of section 414 of such Code shall be 
     treated as a single covered entity (or employer for purposes 
     of paragraph (2)).
       (B) Inclusion of foreign corporations.--For purposes of 
     subparagraph (A), in applying subsections (a) and (b) of 
     section 52 of such Code to this section, section 1563 of such 
     Code shall be applied without regard to subsection (b)(2)(C) 
     thereof.
       (d) United States Health Risk.--For purposes of this 
     section, the term ``United States health risk'' means the 
     health risk of any individual who is--
       (1) a United States citizen,
       (2) a resident of the United States (within the meaning of 
     section 7701(b)(1)(A) of the Internal Revenue Code of 1986), 
     or
       (3) located in the United States, with respect to the 
     period such individual is so located.
       (e) Third Party Administration Agreement Fees.--For 
     purposes of this section, the term ``third party 
     administration agreement fees'' means, with respect to any 
     covered entity, amounts received from an employer which are 
     in excess of payments made by such covered entity for health 
     benefits under an arrangement under which such employer self-
     insures the United States health risk of its employees.
       (f) Tax Treatment of Fees.--The fees imposed by this 
     section--
       (1) for purposes of subtitle F of the Internal Revenue Code 
     of 1986, shall be treated as excise taxes with respect to 
     which only civil actions for refund under procedures of such 
     subtitle shall apply, and
       (2) for purposes of section 275 of such Code shall be 
     considered to be a tax described in section 275(a)(6).
       (g) Reporting Requirement.--
       (1) In general.--Not later than the date determined by the 
     Secretary following the end of any calendar year, each 
     covered entity shall report to the Secretary, in such manner 
     as the Secretary prescribes, the covered entity's net 
     premiums written with respect to health insurance for any 
     United States health risk and third party administration 
     agreement fees for such calendar year.
       (2) Penalty for failure to report.--
       (A) In general.--In the case of any failure to make a 
     report containing the information required by paragraph (1) 
     on the date prescribed therefor (determined with regard to 
     any extension of time for filing), unless it is shown that 
     such failure is due to reasonable cause, there shall be paid 
     by the covered entity failing to file such report, an amount 
     equal to--
       (i) $10,000, plus
       (ii) the lesser of--

       (I) an amount equal to $1,000, multiplied by the number of 
     days during which such failure continues, or
       (II) the amount of the fee imposed by this section for 
     which such report was required.

       (B) Treatment of penalty.--The penalty imposed under 
     subparagraph (A)--
       (i) shall be treated as a penalty for purposes of subtitle 
     F of the Internal Revenue Code of 1986,
       (ii) shall be paid on notice and demand by the Secretary 
     and in the same manner as tax under such Code, and
       (iii) with respect to which only civil actions for refund 
     under procedures of such subtitle F shall apply.
       (h) Additional Definitions.--For purposes of this section--
       (1) Secretary.--The term ``Secretary'' means the Secretary 
     of the Treasury or the Secretary's delegate.
       (2) United states.--The term ``United States'' means the 
     several States, the District of Columbia, the Commonwealth of 
     Puerto Rico, and the possessions of the United States.
       (3) Health insurance.--The term ``health insurance'' shall 
     not include insurance for long-term care or disability.
       (i) Guidance.--The Secretary shall publish guidance 
     necessary to carry out the purposes of this section.
       (j) Application of Section.--This section shall apply to 
     any net premiums written after December 31, 2008, with 
     respect to health insurance for any United States health 
     risk, and any third party administration agreement fees 
     received after such date.

     SEC. 9011. STUDY AND REPORT OF EFFECT ON VETERANS HEALTH 
                   CARE.

       (a) In General.--The Secretary of Veterans Affairs shall 
     conduct a study on the effect (if any) of the provisions of 
     sections 9008, 9009, and 9010 on--
       (1) the cost of medical care provided to veterans, and
       (2) veterans' access to medical devices and branded 
     prescription drugs.
       (b) Report.--The Secretary of Veterans Affairs shall report 
     the results of the study under subsection (a) to the 
     Committee on Ways and Means of the House of Representatives 
     and to the Committee on Finance of the Senate not later than 
     December 31, 2012.

     SEC. 9012. ELIMINATION OF DEDUCTION FOR EXPENSES ALLOCABLE TO 
                   MEDICARE PART D SUBSIDY.

       (a) In General.--Section 139A of the Internal Revenue Code 
     of 1986 is amended by striking the second sentence.
       (b) Effective Date.--The amendment made by this section 
     shall apply to taxable years beginning after December 31, 
     2010.

     SEC. 9013. MODIFICATION OF ITEMIZED DEDUCTION FOR MEDICAL 
                   EXPENSES.

       (a) In General.--Subsection (a) of section 213 of the 
     Internal Revenue Code of 1986 is amended by striking ``7.5 
     percent'' and inserting ``10 percent''.
       (b) Temporary Waiver of Increase for Certain Seniors.--
     Section 213 of the Internal Revenue Code of 1986 is amended 
     by adding at the end the following new subsection:
       ``(f) Special Rule for 2013, 2014, 2015, and 2016.--In the 
     case of any taxable year beginning after December 31, 2012, 
     and ending before January 1, 2017, subsection (a) shall be 
     applied with respect to a taxpayer by substituting `7.5 
     percent' for `10 percent' if such taxpayer or such taxpayer's 
     spouse has attained age 65 before the close of such taxable 
     year.''.
       (c) Conforming Amendment.--Section 56(b)(1)(B) of the 
     Internal Revenue Code of 1986 is amended by striking ``by 
     substituting `10 percent' for `7.5 percent''' and inserting 
     ``without regard to subsection (f) of such section''.
       (d) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning after December 31, 
     2012.

     SEC. 9014. LIMITATION ON EXCESSIVE REMUNERATION PAID BY 
                   CERTAIN HEALTH INSURANCE PROVIDERS.

       (a) In General.--Section 162(m) of the Internal Revenue 
     Code of 1986 is amended by

[[Page 28594]]

     adding at the end the following new subparagraph:
       ``(6) Special rule for application to certain health 
     insurance providers.--
       ``(A) In general.--No deduction shall be allowed under this 
     chapter--
       ``(i) in the case of applicable individual remuneration 
     which is for any disqualified taxable year beginning after 
     December 31, 2012, and which is attributable to services 
     performed by an applicable individual during such taxable 
     year, to the extent that the amount of such remuneration 
     exceeds $500,000, or
       ``(ii) in the case of deferred deduction remuneration for 
     any taxable year beginning after December 31, 2012, which is 
     attributable to services performed by an applicable 
     individual during any disqualified taxable year beginning 
     after December 31, 2009, to the extent that the amount of 
     such remuneration exceeds $500,000 reduced (but not below 
     zero) by the sum of--

       ``(I) the applicable individual remuneration for such 
     disqualified taxable year, plus
       ``(II) the portion of the deferred deduction remuneration 
     for such services which was taken into account under this 
     clause in a preceding taxable year (or which would have been 
     taken into account under this clause in a preceding taxable 
     year if this clause were applied by substituting `December 
     31, 2009' for `December 31, 2012' in the matter preceding 
     subclause (I)).

       ``(B) Disqualified taxable year.--For purposes of this 
     paragraph, the term `disqualified taxable year' means, with 
     respect to any employer, any taxable year for which such 
     employer is a covered health insurance provider.
       ``(C) Covered health insurance provider.--For purposes of 
     this paragraph--
       ``(i) In general.--The term `covered health insurance 
     provider' means--

       ``(I) with respect to taxable years beginning after 
     December 31, 2009, and before January 1, 2013, any employer 
     which is a health insurance issuer (as defined in section 
     9832(b)(2)) and which receives premiums from providing health 
     insurance coverage (as defined in section 9832(b)(1)), and
       ``(II) with respect to taxable years beginning after 
     December 31, 2012, any employer which is a health insurance 
     issuer (as defined in section 9832(b)(2)) and with respect to 
     which not less than 25 percent of the gross premiums received 
     from providing health insurance coverage (as defined in 
     section 9832(b)(1)) is from minimum essential coverage (as 
     defined in section 5000A(f)).

       ``(ii) Aggregation rules.--Two or more persons who are 
     treated as a single employer under subsection (b), (c), (m), 
     or (o) of section 414 shall be treated as a single employer, 
     except that in applying section 1563(a) for purposes of any 
     such subsection, paragraphs (2) and (3) thereof shall be 
     disregarded.
       ``(D) Applicable individual remuneration.--For purposes of 
     this paragraph, the term `applicable individual remuneration' 
     means, with respect to any applicable individual for any 
     disqualified taxable year, the aggregate amount allowable as 
     a deduction under this chapter for such taxable year 
     (determined without regard to this subsection) for 
     remuneration (as defined in paragraph (4) without regard to 
     subparagraphs (B), (C), and (D) thereof) for services 
     performed by such individual (whether or not during the 
     taxable year). Such term shall not include any deferred 
     deduction remuneration with respect to services performed 
     during the disqualified taxable year.
       ``(E) Deferred deduction remuneration.--For purposes of 
     this paragraph, the term `deferred deduction remuneration' 
     means remuneration which would be applicable individual 
     remuneration for services performed in a disqualified taxable 
     year but for the fact that the deduction under this chapter 
     (determined without regard to this paragraph) for such 
     remuneration is allowable in a subsequent taxable year.
       ``(F) Applicable individual.--For purposes of this 
     paragraph, the term `applicable individual' means, with 
     respect to any covered health insurance provider for any 
     disqualified taxable year, any individual--
       ``(i) who is an officer, director, or employee in such 
     taxable year, or
       ``(ii) who provides services for or on behalf of such 
     covered health insurance provider during such taxable year.
       ``(G) Coordination.--Rules similar to the rules of 
     subparagraphs (F) and (G) of paragraph (4) shall apply for 
     purposes of this paragraph.
       ``(H) Regulatory authority.--The Secretary may prescribe 
     such guidance, rules, or regulations as are necessary to 
     carry out the purposes of this paragraph.''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to taxable years beginning after December 31, 
     2009, with respect to services performed after such date.

     SEC. 9015. ADDITIONAL HOSPITAL INSURANCE TAX ON HIGH-INCOME 
                   TAXPAYERS.

       (a) FICA.--
       (1) In general.--Section 3101(b) of the Internal Revenue 
     Code of 1986 is amended--
       (A) by striking ``In addition'' and inserting the 
     following:
       ``(1) In general.--In addition'',
       (B) by striking ``the following percentages of the'' and 
     inserting ``1.45 percent of the'',
       (C) by striking ``(as defined in section 3121(b))--'' and 
     all that follows and inserting ``(as defined in section 
     3121(b)).'', and
       (D) by adding at the end the following new paragraph:
       ``(2) Additional tax.--In addition to the tax imposed by 
     paragraph (1) and the preceding subsection, there is hereby 
     imposed on every taxpayer (other than a corporation, estate, 
     or trust) a tax equal to 0.5 percent of wages which are 
     received with respect to employment (as defined in section 
     3121(b)) during any taxable year beginning after December 31, 
     2012, and which are in excess of--
       ``(A) in the case of a joint return, $250,000, and
       ``(B) in any other case, $200,000.''.
       (2) Collection of tax.--Section 3102 of the Internal 
     Revenue Code of 1986 is amended by adding at the end the 
     following new subsection:
       ``(f) Special Rules for Additional Tax.--
       ``(1) In general.--In the case of any tax imposed by 
     section 3101(b)(2), subsection (a) shall only apply to the 
     extent to which the taxpayer receives wages from the employer 
     in excess of $200,000, and the employer may disregard the 
     amount of wages received by such taxpayer's spouse.
       ``(2) Collection of amounts not withheld.--To the extent 
     that the amount of any tax imposed by section 3101(b)(2) is 
     not collected by the employer, such tax shall be paid by the 
     employee.
       ``(3) Tax paid by recipient.--If an employer, in violation 
     of this chapter, fails to deduct and withhold the tax imposed 
     by section 3101(b)(2) and thereafter the tax is paid by the 
     employee, the tax so required to be deducted and withheld 
     shall not be collected from the employer, but this paragraph 
     shall in no case relieve the employer from liability for any 
     penalties or additions to tax otherwise applicable in respect 
     of such failure to deduct and withhold.''.
       (b) SECA.--
       (1) In general.--Section 1401(b) of the Internal Revenue 
     Code of 1986 is amended--
       (A) by striking ``In addition'' and inserting the 
     following:
       ``(1) In general.--In addition'', and
       (B) by adding at the end the following new paragraph:
       ``(2) Additional tax.--
       ``(A) In general.--In addition to the tax imposed by 
     paragraph (1) and the preceding subsection, there is hereby 
     imposed on every taxpayer (other than a corporation, estate, 
     or trust) for each taxable year beginning after December 31, 
     2012, a tax equal to 0.5 percent of the self-employment 
     income for such taxable year which is in excess of--
       ``(i) in the case of a joint return, $250,000, and
       ``(ii) in any other case, $200,000.
       ``(B) Coordination with fica.--The amounts under clauses 
     (i) and (ii) of subparagraph (A) shall be reduced (but not 
     below zero) by the amount of wages taken into account in 
     determining the tax imposed under section 3121(b)(2) with 
     respect to the taxpayer.''.
       (2) No deduction for additional tax.--
       (A) In general.--Section 164(f) of such Code is amended by 
     inserting ``(other than the taxes imposed by section 
     1401(b)(2))'' after ``section 1401)''.
       (B) Deduction for net earnings from self-employment.--
     Subparagraph (B) of section 1402(a)(12) is amended by 
     inserting ``(determined without regard to the rate imposed 
     under paragraph (2) of section 1401(b))'' after ``for such 
     year''.
       (c) Effective Date.--The amendments made by this section 
     shall apply with respect to remuneration received, and 
     taxable years beginning, after December 31, 2012.

     SEC. 9016. MODIFICATION OF SECTION 833 TREATMENT OF CERTAIN 
                   HEALTH ORGANIZATIONS.

       (a) In General.--Subsection (c) of section 833 of the 
     Internal Revenue Code of 1986 is amended by adding at the end 
     the following new paragraph:
       ``(5) Nonapplication of section in case of low medical loss 
     ratio.--Notwithstanding the preceding paragraphs, this 
     section shall not apply to any organization unless such 
     organization's percentage of total premium revenue expended 
     on reimbursement for clinical services provided to enrollees 
     under its policies during such taxable year (as reported 
     under section 2718 of the Public Health Service Act) is not 
     less than 85 percent.''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to taxable years beginning after December 31, 
     2009.

     SEC. 9017. EXCISE TAX ON ELECTIVE COSMETIC MEDICAL 
                   PROCEDURES.

       (a) In General.--Subtitle D of the Internal Revenue Code of 
     1986, as amended by this Act, is amended by adding at the end 
     the following new chapter:

           ``CHAPTER 49--ELECTIVE COSMETIC MEDICAL PROCEDURES

``Sec. 5000B. Imposition of tax on elective cosmetic medical 
              procedures.

     ``SEC. 5000B. IMPOSITION OF TAX ON ELECTIVE COSMETIC MEDICAL 
                   PROCEDURES.

       ``(a) In General.--There is hereby imposed on any cosmetic 
     surgery and medical procedure a tax equal to 5 percent of the 
     amount paid for such procedure (determined without regard to 
     this section), whether paid by insurance or otherwise.

[[Page 28595]]

       ``(b) Cosmetic Surgery and Medical Procedure.--For purposes 
     of this section, the term `cosmetic surgery and medical 
     procedure' means any cosmetic surgery (as defined in section 
     213(d)(9)(B)) or other similar procedure which--
       ``(1) is performed by a licensed medical professional, and
       ``(2) is not necessary to ameliorate a deformity arising 
     from, or directly related to, a congenital abnormality, a 
     personal injury resulting from an accident or trauma, or 
     disfiguring disease.
       ``(c) Payment of Tax.--
       ``(1) In general.--The tax imposed by this section shall be 
     paid by the individual on whom the procedure is performed.
       ``(2) Collection.--Every person receiving a payment for 
     procedures on which a tax is imposed under subsection (a) 
     shall collect the amount of the tax from the individual on 
     whom the procedure is performed and remit such tax quarterly 
     to the Secretary at such time and in such manner as provided 
     by the Secretary.
       ``(3) Secondary liability.--Where any tax imposed by 
     subsection (a) is not paid at the time payments for cosmetic 
     surgery and medical procedures are made, then to the extent 
     that such tax is not collected, such tax shall be paid by the 
     person who performs the procedure.''.
       (b) Clerical Amendment.--The table of chapters for subtitle 
     D of the Internal Revenue Code of 1986, as amended by this 
     Act, is amended by inserting after the item relating to 
     chapter 48 the following new item:

         ``Chapter 49--Elective Cosmetic Medical Procedures''.

       (c) Effective Date.--The amendments made by this section 
     shall apply to procedures performed on or after January 1, 
     2010.

                      Subtitle B--Other Provisions

     SEC. 9021. EXCLUSION OF HEALTH BENEFITS PROVIDED BY INDIAN 
                   TRIBAL GOVERNMENTS.

       (a) In General.--Part III of subchapter B of chapter 1 of 
     the Internal Revenue Code of 1986 is amended by inserting 
     after section 139C the following new section:

     ``SEC. 139D. INDIAN HEALTH CARE BENEFITS.

       ``(a) General Rule.--Except as otherwise provided in this 
     section, gross income does not include the value of any 
     qualified Indian health care benefit.
       ``(b) Qualified Indian Health Care Benefit.--For purposes 
     of this section, the term `qualified Indian health care 
     benefit' means--
       ``(1) any health service or benefit provided or purchased, 
     directly or indirectly, by the Indian Health Service through 
     a grant to or a contract or compact with an Indian tribe or 
     tribal organization, or through a third-party program funded 
     by the Indian Health Service,
       ``(2) medical care provided or purchased by, or amounts to 
     reimburse for such medical care provided by, an Indian tribe 
     or tribal organization for, or to, a member of an Indian 
     tribe, including a spouse or dependent of such a member,
       ``(3) coverage under accident or health insurance (or an 
     arrangement having the effect of accident or health 
     insurance), or an accident or health plan, provided by an 
     Indian tribe or tribal organization for medical care to a 
     member of an Indian tribe, include a spouse or dependent of 
     such a member, and
       ``(4) any other medical care provided by an Indian tribe or 
     tribal organization that supplements, replaces, or 
     substitutes for a program or service relating to medical care 
     provided by the Federal government to Indian tribes or 
     members of such a tribe.
       ``(c) Definitions.--For purposes of this section--
       ``(1) Indian tribe.--The term `Indian tribe' has the 
     meaning given such term by section 45A(c)(6).
       ``(2) Tribal organization.--The term `tribal organization' 
     has the meaning given such term by section 4(l) of the Indian 
     Self-Determination and Education Assistance Act.
       ``(3) Medical care.--The term `medical care' has the same 
     meaning as when used in section 213.
       ``(4) Accident or health insurance; accident or health 
     plan.--The terms `accident or health insurance' and `accident 
     or health plan' have the same meaning as when used in section 
     105.
       ``(5) Dependent.--The term `dependent' has the meaning 
     given such term by section 152, determined without regard to 
     subsections (b)(1), (b)(2), and (d)(1)(B) thereof.
       ``(d) Denial of Double Benefit.--Subsection (a) shall not 
     apply to the amount of any qualified Indian health care 
     benefit which is not includible in gross income of the 
     beneficiary of such benefit under any other provision of this 
     chapter, or to the amount of any such benefit for which a 
     deduction is allowed to such beneficiary under any other 
     provision of this chapter.''.
       (b) Clerical Amendment.--The table of sections for part III 
     of subchapter B of chapter 1 of the Internal Revenue Code of 
     1986 is amended by inserting after the item relating to 
     section 139C the following new item:

``Sec. 139D. Indian health care benefits.''.

       (c) Effective Date.--The amendments made by this section 
     shall apply to benefits and coverage provided after the date 
     of the enactment of this Act.
       (d) No Inference.--Nothing in the amendments made by this 
     section shall be construed to create an inference with 
     respect to the exclusion from gross income of--
       (1) benefits provided by an Indian tribe or tribal 
     organization that are not within the scope of this section, 
     and
       (2) benefits provided prior to the date of the enactment of 
     this Act.

     SEC. 9022. ESTABLISHMENT OF SIMPLE CAFETERIA PLANS FOR SMALL 
                   BUSINESSES.

       (a) In General.--Section 125 of the Internal Revenue Code 
     of 1986 (relating to cafeteria plans), as amended by this 
     Act, is amended by redesignating subsections (j) and (k) as 
     subsections (k) and (l), respectively, and by inserting after 
     subsection (i) the following new subsection:
       ``(j) Simple Cafeteria Plans for Small Businesses.--
       ``(1) In general.--An eligible employer maintaining a 
     simple cafeteria plan with respect to which the requirements 
     of this subsection are met for any year shall be treated as 
     meeting any applicable nondiscrimination requirement during 
     such year.
       ``(2) Simple cafeteria plan.--For purposes of this 
     subsection, the term `simple cafeteria plan' means a 
     cafeteria plan--
       ``(A) which is established and maintained by an eligible 
     employer, and
       ``(B) with respect to which the contribution requirements 
     of paragraph (3), and the eligibility and participation 
     requirements of paragraph (4), are met.
       ``(3) Contribution requirements.--
       ``(A) In general.--The requirements of this paragraph are 
     met if, under the plan the employer is required, without 
     regard to whether a qualified employee makes any salary 
     reduction contribution, to make a contribution to provide 
     qualified benefits under the plan on behalf of each qualified 
     employee in an amount equal to--
       ``(i) a uniform percentage (not less than 2 percent) of the 
     employee's compensation for the plan year, or
       ``(ii) an amount which is not less than the lesser of--

       ``(I) 6 percent of the employee's compensation for the plan 
     year, or
       ``(II) twice the amount of the salary reduction 
     contributions of each qualified employee.

       ``(B) Matching contributions on behalf of highly 
     compensated and key employees.--The requirements of 
     subparagraph (A)(ii) shall not be treated as met if, under 
     the plan, the rate of contributions with respect to any 
     salary reduction contribution of a highly compensated or key 
     employee at any rate of contribution is greater than that 
     with respect to an employee who is not a highly compensated 
     or key employee.
       ``(C) Additional contributions.--Subject to subparagraph 
     (B), nothing in this paragraph shall be treated as 
     prohibiting an employer from making contributions to provide 
     qualified benefits under the plan in addition to 
     contributions required under subparagraph (A).
       ``(D) Definitions.--For purposes of this paragraph--
       ``(i) Salary reduction contribution.--The term `salary 
     reduction contribution' means, with respect to a cafeteria 
     plan, any amount which is contributed to the plan at the 
     election of the employee and which is not includible in gross 
     income by reason of this section.
       ``(ii) Qualified employee.--The term `qualified employee' 
     means, with respect to a cafeteria plan, any employee who is 
     not a highly compensated or key employee and who is eligible 
     to participate in the plan.
       ``(iii) Highly compensated employee.--The term `highly 
     compensated employee' has the meaning given such term by 
     section 414(q).
       ``(iv) Key employee.--The term `key employee' has the 
     meaning given such term by section 416(i).
       ``(4) Minimum eligibility and participation requirements.--
       ``(A) In general.--The requirements of this paragraph shall 
     be treated as met with respect to any year if, under the 
     plan--
       ``(i) all employees who had at least 1,000 hours of service 
     for the preceding plan year are eligible to participate, and
       ``(ii) each employee eligible to participate in the plan 
     may, subject to terms and conditions applicable to all 
     participants, elect any benefit available under the plan.
       ``(B) Certain employees may be excluded.--For purposes of 
     subparagraph (A)(i), an employer may elect to exclude under 
     the plan employees--
       ``(i) who have not attained the age of 21 before the close 
     of a plan year,
       ``(ii) who have less than 1 year of service with the 
     employer as of any day during the plan year,
       ``(iii) who are covered under an agreement which the 
     Secretary of Labor finds to be a collective bargaining 
     agreement if there is evidence that the benefits covered 
     under the cafeteria plan were the subject of good faith 
     bargaining between employee representatives and the employer, 
     or
       ``(iv) who are described in section 410(b)(3)(C) (relating 
     to nonresident aliens working outside the United States).
     A plan may provide a shorter period of service or younger age 
     for purposes of clause (i) or (ii).

[[Page 28596]]

       ``(5) Eligible employer.--For purposes of this subsection--
       ``(A) In general.--The term `eligible employer' means, with 
     respect to any year, any employer if such employer employed 
     an average of 100 or fewer employees on business days during 
     either of the 2 preceding years. For purposes of this 
     subparagraph, a year may only be taken into account if the 
     employer was in existence throughout the year.
       ``(B) Employers not in existence during preceding year.--If 
     an employer was not in existence throughout the preceding 
     year, the determination under subparagraph (A) shall be based 
     on the average number of employees that it is reasonably 
     expected such employer will employ on business days in the 
     current year.
       ``(C) Growing employers retain treatment as small 
     employer.--
       ``(i) In general.--If--

       ``(I) an employer was an eligible employer for any year (a 
     `qualified year'), and
       ``(II) such employer establishes a simple cafeteria plan 
     for its employees for such year,

     then, notwithstanding the fact the employer fails to meet the 
     requirements of subparagraph (A) for any subsequent year, 
     such employer shall be treated as an eligible employer for 
     such subsequent year with respect to employees (whether or 
     not employees during a qualified year) of any trade or 
     business which was covered by the plan during any qualified 
     year.
       ``(ii) Exception.--This subparagraph shall cease to apply 
     if the employer employs an average of 200 or more employees 
     on business days during any year preceding any such 
     subsequent year.
       ``(D) Special rules.--
       ``(i) Predecessors.--Any reference in this paragraph to an 
     employer shall include a reference to any predecessor of such 
     employer.
       ``(ii) Aggregation rules.--All persons treated as a single 
     employer under subsection (a) or (b) of section 52, or 
     subsection (n) or (o) of section 414, shall be treated as one 
     person.
       ``(6) Applicable nondiscrimination requirement.--For 
     purposes of this subsection, the term `applicable 
     nondiscrimination requirement' means any requirement under 
     subsection (b) of this section, section 79(d), section 
     105(h), or paragraph (2), (3), (4), or (8) of section 129(d).
       ``(7) Compensation.--The term `compensation' has the 
     meaning given such term by section 414(s).''.
       (b) Effective Date.--The amendments made by this section 
     shall apply to years beginning after December 31, 2010.

     SEC. 9023. QUALIFYING THERAPEUTIC DISCOVERY PROJECT CREDIT.

       (a) In General.--Subpart E of part IV of subchapter A of 
     chapter 1 of the Internal Revenue Code of 1986 is amended by 
     inserting after section 48C the following new section:

     ``SEC. 48D. QUALIFYING THERAPEUTIC DISCOVERY PROJECT CREDIT.

       ``(a) In General.--For purposes of section 46, the 
     qualifying therapeutic discovery project credit for any 
     taxable year is an amount equal to 50 percent of the 
     qualified investment for such taxable year with respect to 
     any qualifying therapeutic discovery project of an eligible 
     taxpayer.
       ``(b) Qualified Investment.--
       ``(1) In general.--For purposes of subsection (a), the 
     qualified investment for any taxable year is the aggregate 
     amount of the costs paid or incurred in such taxable year for 
     expenses necessary for and directly related to the conduct of 
     a qualifying therapeutic discovery project.
       ``(2) Limitation.--The amount which is treated as qualified 
     investment for all taxable years with respect to any 
     qualifying therapeutic discovery project shall not exceed the 
     amount certified by the Secretary as eligible for the credit 
     under this section.
       ``(3) Exclusions.--The qualified investment for any taxable 
     year with respect to any qualifying therapeutic discovery 
     project shall not take into account any cost--
       ``(A) for remuneration for an employee described in section 
     162(m)(3),
       ``(B) for interest expenses,
       ``(C) for facility maintenance expenses,
       ``(D) which is identified as a service cost under section 
     1.263A-1(e)(4) of title 26, Code of Federal Regulations, or
       ``(E) for any other expense as determined by the Secretary 
     as appropriate to carry out the purposes of this section.
       ``(4) Certain progress expenditure rules made applicable.--
     In the case of costs described in paragraph (1) that are paid 
     for property of a character subject to an allowance for 
     depreciation, rules similar to the rules of subsections 
     (c)(4) and (d) of section 46 (as in effect on the day before 
     the date of the enactment of the Revenue Reconciliation Act 
     of 1990) shall apply for purposes of this section.
       ``(5) Application of subsection.--An investment shall be 
     considered a qualified investment under this subsection only 
     if such investment is made in a taxable year beginning in 
     2009 or 2010.
       ``(c) Definitions.--
       ``(1) Qualifying therapeutic discovery project.--The term 
     `qualifying therapeutic discovery project' means a project 
     which is designed--
       ``(A) to treat or prevent diseases or conditions by 
     conducting pre-clinical activities, clinical trials, and 
     clinical studies, or carrying out research protocols, for the 
     purpose of securing approval of a product under section 
     505(b) of the Federal Food, Drug, and Cosmetic Act or section 
     351(a) of the Public Health Service Act,
       ``(B) to diagnose diseases or conditions or to determine 
     molecular factors related to diseases or conditions by 
     developing molecular diagnostics to guide therapeutic 
     decisions, or
       ``(C) to develop a product, process, or technology to 
     further the delivery or administration of therapeutics.
       ``(2) Eligible taxpayer.--
       ``(A) In general.--The term `eligible taxpayer' means a 
     taxpayer which employs not more than 250 employees in all 
     businesses of the taxpayer at the time of the submission of 
     the application under subsection (d)(2).
       ``(B) Aggregation rules.--All persons treated as a single 
     employer under subsection (a) or (b) of section 52, or 
     subsection (m) or (o) of section 414, shall be so treated for 
     purposes of this paragraph.
       ``(3) Facility maintenance expenses.--The term `facility 
     maintenance expenses' means costs paid or incurred to 
     maintain a facility, including--
       ``(A) mortgage or rent payments,
       ``(B) insurance payments,
       ``(C) utility and maintenance costs, and
       ``(D) costs of employment of maintenance personnel.
       ``(d) Qualifying Therapeutic Discovery Project Program.--
       ``(1) Establishment.--
       ``(A) In general.--Not later than 60 days after the date of 
     the enactment of this section, the Secretary, in consultation 
     with the Secretary of Health and Human Services, shall 
     establish a qualifying therapeutic discovery project program 
     to consider and award certifications for qualified 
     investments eligible for credits under this section to 
     qualifying therapeutic discovery project sponsors.
       ``(B) Limitation.--The total amount of credits that may be 
     allocated under the program shall not exceed $1,000,000,000 
     for the 2-year period beginning with 2009.
       ``(2) Certification.--
       ``(A) Application period.--Each applicant for certification 
     under this paragraph shall submit an application containing 
     such information as the Secretary may require during the 
     period beginning on the date the Secretary establishes the 
     program under paragraph (1).
       ``(B) Time for review of applications.--The Secretary shall 
     take action to approve or deny any application under 
     subparagraph (A) within 30 days of the submission of such 
     application.
       ``(C) Multi-year applications.--An application for 
     certification under subparagraph (A) may include a request 
     for an allocation of credits for more than 1 of the years 
     described in paragraph (1)(B).
       ``(3) Selection criteria.--In determining the qualifying 
     therapeutic discovery projects with respect to which 
     qualified investments may be certified under this section, 
     the Secretary--
       ``(A) shall take into consideration only those projects 
     that show reasonable potential--
       ``(i) to result in new therapies--

       ``(I) to treat areas of unmet medical need, or
       ``(II) to prevent, detect, or treat chronic or acute 
     diseases and conditions,

       ``(ii) to reduce long-term health care costs in the United 
     States, or
       ``(iii) to significantly advance the goal of curing cancer 
     within the 30-year period beginning on the date the Secretary 
     establishes the program under paragraph (1), and
       ``(B) shall take into consideration which projects have the 
     greatest potential--
       ``(i) to create and sustain (directly or indirectly) high 
     quality, high-paying jobs in the United States, and
       ``(ii) to advance United States competitiveness in the 
     fields of life, biological, and medical sciences.
       ``(4) Disclosure of allocations.--The Secretary shall, upon 
     making a certification under this subsection, publicly 
     disclose the identity of the applicant and the amount of the 
     credit with respect to such applicant.
       ``(e) Special Rules.--
       ``(1) Basis adjustment.--For purposes of this subtitle, if 
     a credit is allowed under this section for an expenditure 
     related to property of a character subject to an allowance 
     for depreciation, the basis of such property shall be reduced 
     by the amount of such credit.
       ``(2) Denial of double benefit.--
       ``(A) Bonus depreciation.--A credit shall not be allowed 
     under this section for any investment for which bonus 
     depreciation is allowed under section 168(k), 1400L(b)(1), or 
     1400N(d)(1).
       ``(B) Deductions.--No deduction under this subtitle shall 
     be allowed for the portion of the expenses otherwise 
     allowable as a deduction taken into account in determining 
     the credit under this section for the taxable year which is 
     equal to the amount of the credit determined for such taxable 
     year under subsection (a) attributable to such portion. This 
     subparagraph shall not apply to expenses related to property 
     of a character subject to an allowance for depreciation the 
     basis of which

[[Page 28597]]

     is reduced under paragraph (1), or which are described in 
     section 280C(g).
       ``(C) Credit for research activities.--
       ``(i) In general.--Except as provided in clause (ii), any 
     expenses taken into account under this section for a taxable 
     year shall not be taken into account for purposes of 
     determining the credit allowable under section 41 or 45C for 
     such taxable year.
       ``(ii) Expenses included in determining base period 
     research expenses.--Any expenses for any taxable year which 
     are qualified research expenses (within the meaning of 
     section 41(b)) shall be taken into account in determining 
     base period research expenses for purposes of applying 
     section 41 to subsequent taxable years.
       ``(f) Coordination With Department of Treasury Grants.--In 
     the case of any investment with respect to which the 
     Secretary makes a grant under section 9023(e) of the Patient 
     Protection and Affordable Care Act of 2009--
       ``(1) Denial of credit.--No credit shall be determined 
     under this section with respect to such investment for the 
     taxable year in which such grant is made or any subsequent 
     taxable year.
       ``(2) Recapture of credits for progress expenditures made 
     before grant.--If a credit was determined under this section 
     with respect to such investment for any taxable year ending 
     before such grant is made--
       ``(A) the tax imposed under subtitle A on the taxpayer for 
     the taxable year in which such grant is made shall be 
     increased by so much of such credit as was allowed under 
     section 38,
       ``(B) the general business carryforwards under section 39 
     shall be adjusted so as to recapture the portion of such 
     credit which was not so allowed, and
       ``(C) the amount of such grant shall be determined without 
     regard to any reduction in the basis of any property of a 
     character subject to an allowance for depreciation by reason 
     of such credit.
       ``(3) Treatment of grants.--Any such grant shall not be 
     includible in the gross income of the taxpayer.''.
       (b) Inclusion as Part of Investment Credit.--Section 46 of 
     the Internal Revenue Code of 1986 is amended--
       (1) by adding a comma at the end of paragraph (2),
       (2) by striking the period at the end of paragraph (5) and 
     inserting ``, and'', and
       (3) by adding at the end the following new paragraph:
       ``(6) the qualifying therapeutic discovery project 
     credit.''.
       (c) Conforming Amendments.--
       (1) Section 49(a)(1)(C) of the Internal Revenue Code of 
     1986 is amended--
       (A) by striking ``and'' at the end of clause (iv),
       (B) by striking the period at the end of clause (v) and 
     inserting ``, and'', and
       (C) by adding at the end the following new clause:
       ``(vi) the basis of any property to which paragraph (1) of 
     section 48D(e) applies which is part of a qualifying 
     therapeutic discovery project under such section 48D.''.
       (2) Section 280C of such Code is amended by adding at the 
     end the following new subsection:
       ``(g) Qualifying Therapeutic Discovery Project Credit.--
       ``(1) In general.--No deduction shall be allowed for that 
     portion of the qualified investment (as defined in section 
     48D(b)) otherwise allowable as a deduction for the taxable 
     year which--
       ``(A) would be qualified research expenses (as defined in 
     section 41(b)), basic research expenses (as defined in 
     section 41(e)(2)), or qualified clinical testing expenses (as 
     defined in section 45C(b)) if the credit under section 41 or 
     section 45C were allowed with respect to such expenses for 
     such taxable year, and
       ``(B) is equal to the amount of the credit determined for 
     such taxable year under section 48D(a), reduced by--
       ``(i) the amount disallowed as a deduction by reason of 
     section 48D(e)(2)(B), and
       ``(ii) the amount of any basis reduction under section 
     48D(e)(1).
       ``(2) Similar rule where taxpayer capitalizes rather than 
     deducts expenses.--In the case of expenses described in 
     paragraph (1)(A) taken into account in determining the credit 
     under section 48D for the taxable year, if--
       ``(A) the amount of the portion of the credit determined 
     under such section with respect to such expenses, exceeds
       ``(B) the amount allowable as a deduction for such taxable 
     year for such expenses (determined without regard to 
     paragraph (1)),
     the amount chargeable to capital account for the taxable year 
     for such expenses shall be reduced by the amount of such 
     excess.
       ``(3) Controlled groups.--Paragraph (3) of subsection (b) 
     shall apply for purposes of this subsection.''.
       (d) Clerical Amendment.--The table of sections for subpart 
     E of part IV of subchapter A of chapter 1 of the Internal 
     Revenue Code of 1986 is amended by inserting after the item 
     relating to section 48C the following new item:

``Sec. 48D. Qualifying therapeutic discovery project credit.''.

       (e) Grants for Qualified Investments in Therapeutic 
     Discovery Projects in Lieu of Tax Credits.--
       (1) In general.--Upon application, the Secretary of the 
     Treasury shall, subject to the requirements of this 
     subsection, provide a grant to each person who makes a 
     qualified investment in a qualifying therapeutic discovery 
     project in the amount of 50 percent of such investment. No 
     grant shall be made under this subsection with respect to any 
     investment unless such investment is made during a taxable 
     year beginning in 2009 or 2010.
       (2) Application.--
       (A) In general.--At the stated election of the applicant, 
     an application for certification under section 48D(d)(2) of 
     the Internal Revenue Code of 1986 for a credit under such 
     section for the taxable year of the applicant which begins in 
     2009 shall be considered to be an application for a grant 
     under paragraph (1) for such taxable year.
       (B) Taxable years beginning in 2010.--An application for a 
     grant under paragraph (1) for a taxable year beginning in 
     2010 shall be submitted--
       (i) not earlier than the day after the last day of such 
     taxable year, and
       (ii) not later than the due date (including extensions) for 
     filing the return of tax for such taxable year.
       (C) Information to be submitted.--An application for a 
     grant under paragraph (1) shall include such information and 
     be in such form as the Secretary may require to state the 
     amount of the credit allowable (but for the receipt of a 
     grant under this subsection) under section 48D for the 
     taxable year for the qualified investment with respect to 
     which such application is made.
       (3) Time for payment of grant.--
       (A) In general.--The Secretary of the Treasury shall make 
     payment of the amount of any grant under paragraph (1) during 
     the 30-day period beginning on the later of--
       (i) the date of the application for such grant, or
       (ii) the date the qualified investment for which the grant 
     is being made is made.
       (B) Regulations.--In the case of investments of an ongoing 
     nature, the Secretary shall issue regulations to determine 
     the date on which a qualified investment shall be deemed to 
     have been made for purposes of this paragraph.
       (4) Qualified investment.--For purposes of this subsection, 
     the term ``qualified investment'' means a qualified 
     investment that is certified under section 48D(d) of the 
     Internal Revenue Code of 1986 for purposes of the credit 
     under such section 48D.
       (5) Application of certain rules.--
       (A) In general.--In making grants under this subsection, 
     the Secretary of the Treasury shall apply rules similar to 
     the rules of section 50 of the Internal Revenue Code of 1986. 
     In applying such rules, any increase in tax under chapter 1 
     of such Code by reason of an investment ceasing to be a 
     qualified investment shall be imposed on the person to whom 
     the grant was made.
       (B) Special rules.--
       (i) Recapture of excessive grant amounts.--If the amount of 
     a grant made under this subsection exceeds the amount 
     allowable as a grant under this subsection, such excess shall 
     be recaptured under subparagraph (A) as if the investment to 
     which such excess portion of the grant relates had ceased to 
     be a qualified investment immediately after such grant was 
     made.
       (ii) Grant information not treated as return information.--
     In no event shall the amount of a grant made under paragraph 
     (1), the identity of the person to whom such grant was made, 
     or a description of the investment with respect to which such 
     grant was made be treated as return information for purposes 
     of section 6103 of the Internal Revenue Code of 1986.
       (6) Exception for certain non-taxpayers.--The Secretary of 
     the Treasury shall not make any grant under this subsection 
     to--
       (A) any Federal, State, or local government (or any 
     political subdivision, agency, or instrumentality thereof),
       (B) any organization described in section 501(c) of the 
     Internal Revenue Code of 1986 and exempt from tax under 
     section 501(a) of such Code,
       (C) any entity referred to in paragraph (4) of section 
     54(j) of such Code, or
       (D) any partnership or other pass-thru entity any partner 
     (or other holder of an equity or profits interest) of which 
     is described in subparagraph (A), (B) or (C).
     In the case of a partnership or other pass-thru entity 
     described in subparagraph (D), partners and other holders of 
     any equity or profits interest shall provide to such 
     partnership or entity such information as the Secretary of 
     the Treasury may require to carry out the purposes of this 
     paragraph.
       (7) Secretary.--Any reference in this subsection to the 
     Secretary of the Treasury shall be treated as including the 
     Secretary's delegate.
       (8) Other terms.--Any term used in this subsection which is 
     also used in section 48D of the Internal Revenue Code of 1986 
     shall have the same meaning for purposes of this subsection 
     as when used in such section.
       (9) Denial of double benefit.--No credit shall be allowed 
     under section 46(6) of the Internal Revenue Code of 1986 by 
     reason of section 48D of such Code for any investment for

[[Page 28598]]

     which a grant is awarded under this subsection.
       (10) Appropriations.--There is hereby appropriated to the 
     Secretary of the Treasury such sums as may be necessary to 
     carry out this subsection.
       (11) Termination.--The Secretary of the Treasury shall not 
     make any grant to any person under this subsection unless the 
     application of such person for such grant is received before 
     January 1, 2013.
       (f) Effective Date.--The amendments made by subsections (a) 
     through (d) of this section shall apply to amounts paid or 
     incurred after December 31, 2008, in taxable years beginning 
     after such date.

                          ____________________