    [House Report 111-299]
    [From the U.S. Government Publishing Office]

    111th Congress                                            Rept. 111-299
                            HOUSE OF REPRESENTATIVES
     1st Session                                                     Part 1
    _______________________________________________________________________

                AMERICA'S AFFORDABLE HEALTH CHOICES ACT OF 2009

                                   ----------

                                  R E P O R T

                                     of the

                        COMMITTEE ON ENERGY AND COMMERCE

                                       on

                                   H.R. 3200

                                 together with

                                DISSENTING VIEWS

                    October 14, 2009.--Ordered to be printed
            AMERICA'S AFFORDABLE HEALTH CHOICES ACT OF 2009--PART 1

    For Sale by the Superintendent of Documents, U.S. Government Printing Office
    Internet: bookstore.gpo.gov  Phone: toll free (866) 512-1800; (202) 512�091800
    Fax: (202) 512�092104 Mail: Stop IDCC, Washington, DC 20402�090001

    111th Congress
     1st Session            HOUSE OF REPRESENTATIVES          Rept. 111-299
                                                                     Part 1
    _______________________________________________________________________

                AMERICA'S AFFORDABLE HEALTH CHOICES ACT OF 2009

                                   __________

                                  R E P O R T

                                     of the

                        COMMITTEE ON ENERGY AND COMMERCE

                                       on

                                   H.R. 3200

                                 together with

                                DISSENTING VIEWS

                    October 14, 2009.--Ordered to be printed

    111th Congress                                            Rept. 111-299
                            HOUSE OF REPRESENTATIVES
     1st Session                                                     Part 1

    ======================================================================

                AMERICA'S AFFORDABLE HEALTH CHOICES ACT OF 2009

                                    _______

    October 14, 2009.--Committed to the Committee of the Whole House on the
                  State of the Union and ordered to be printed

                                    _______

     Mr. Waxman, from the Committee on Energy and Commerce, submitted the
                                   following

                                  R E P O R T

                                 together with

                                DISSENTING VIEWS

                            [To accompany H.R. 3200]

      The Committee on Energy and Commerce, to whom was referred
    the bill (H.R. 3200) to provide affordable, quality health care
    for all Americans and reduce the growth in health care
    spending, and for other purposes, having considered the same,
    report favorably thereon with an amendment and recommend that
    the bill as amended do pass.

                                    CONTENTS

                                                                       Page
    Amendment........................................................     2
    Purpose and Summary..............................................   318
    Background and Need for Legislation..............................   320
    Legislative History..............................................   328
    Committee Consideration..........................................   329
    Committee Votes..................................................   329
    Committee Oversight Findings and Recommendations.................   368
    New Budget Authority, Entitlement Authority, and Tax Expenditures   368
    Statement of General Performance Goals and Objectives............   368
    Constitutional Authority Statement...............................   368
    Earmarks and Tax and Tariff Benefits.............................   368
    Advisory Committee Statement.....................................   368
    Applicability of Law to Legislative Branch.......................   369
    Federal Mandates Statement.......................................   369
    Committee Cost Estimate..........................................   369
    Congressional Budget Office Estimate.............................   369
    Section-by-Section Analysis of the Legislation...................   369
    Additional Committee Action Relating to H.R. 3200................   746
    Changes in Existing Law Made by the Bill, as Reported............   748
    Dissenting Views.................................................  1167
    Appendix A--Text of Motion to Instruct the Chairman on H.R. 3200.  1183

                                   Amendment

      The amendment is as follows:
      Strike all after the enacting clause (other than sections 321
    and 322, title IV of division A, subtitle A of title I of
    division B, and title VIII of division B) and insert the
    following:

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

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

                   DIVISION A--AFFORDABLE HEALTH CARE CHOICES

    TITLE I--PROTECTIONS AND STANDARDS FOR QUALIFIED HEALTH BENEFITS PLANS
    Subtitle A--General Standards
    Subtitle B--Standards Guaranteeing Access to Affordable Coverage
    Subtitle C--Standards Guaranteeing Access to Essential Benefits
    Subtitle D--Additional Consumer Protections
    Subtitle E--Governance
    Subtitle F--Relation to Other Requirements; Miscellaneous
    Subtitle G--Early Investments
    TITLE II--HEALTH INSURANCE EXCHANGE AND RELATED PROVISIONS
    Subtitle A--Health Insurance Exchange
    Subtitle B--Public Health Insurance Option
    Subtitle C--Individual Affordability Credits
    Subtitle D--Health Insurance Cooperatives
    TITLE III--SHARED RESPONSIBILITY
    Subtitle A--Individual Responsibility
    Subtitle B--Employer Responsibility
    TITLE IV--AMENDMENTS TO INTERNAL REVENUE CODE OF 1986
    Subtitle A--Shared Responsibility
    Subtitle B--Credit for Small Business Employee Health Coverage Expenses
    Subtitle C--Disclosures To Carry Out Health Insurance Exchange
    Subsidies
    Subtitle D--Other Revenue Provisions

                 DIVISION B--MEDICARE AND MEDICAID IMPROVEMENTS

    TITLE I--IMPROVING HEALTH CARE VALUE
    Subtitle A--Provisions Related to Medicare Part A
    Subtitle B--Provisions Related to Medicare Part B
    Subtitle C--Provisions Related to Medicare Parts A and B
    Subtitle D--Medicare Advantage Reforms
    Subtitle E--Improvements to Medicare Part D
    Subtitle F--Medicare Rural Access Protections
    TITLE II--MEDICARE BENEFICIARY IMPROVEMENTS
    Subtitle A--Improving and Simplifying Financial Assistance for Low
    Income Medicare Beneficiaries
    Subtitle B--Reducing Health Disparities
    Subtitle C--Miscellaneous Improvements
    TITLE III--PROMOTING PRIMARY CARE, MENTAL HEALTH SERVICES, AND
    COORDINATED CARE
    TITLE IV--QUALITY
    Subtitle A--Comparative Effectiveness Research
    Subtitle B--Nursing Home Transparency
    Subtitle C--Quality Measurements
    Subtitle D--Physician Payments Sunshine Provision
    Subtitle E--Public Reporting on Health Care-Associated Infections
    TITLE V--MEDICARE GRADUATE MEDICAL EDUCATION
    TITLE VI--PROGRAM INTEGRITY
    Subtitle A--Increased Funding To Fight Waste, Fraud, and Abuse
    Subtitle B--Enhanced Penalties for Fraud and Abuse
    Subtitle C--Enhanced Program and Provider Protections
    Subtitle D--Access to Information Needed To Prevent Fraud, Waste, and
    Abuse
    TITLE VII--MEDICAID AND CHIP
    Subtitle A--Medicaid and Health Reform
    Subtitle B--Prevention
    Subtitle C--Access
    Subtitle D--Coverage
    Subtitle E--Financing
    Subtitle F--Waste, Fraud, and Abuse
    Subtitle G--Payments to the Territories
    Subtitle H--Miscellaneous
    TITLE VIII--REVENUE-RELATED PROVISIONS
    TITLE IX--MISCELLANEOUS PROVISIONS

              DIVISION C--PUBLIC HEALTH AND WORKFORCE DEVELOPMENT

    TITLE I--COMMUNITY HEALTH CENTERS
    TITLE II--WORKFORCE
    Subtitle A--Primary Care Workforce
    Subtitle B--Nursing Workforce
    Subtitle C--Public Health Workforce
    Subtitle D--Adapting Workforce to Evolving Health System Needs
    TITLE III--PREVENTION AND WELLNESS
    TITLE IV--QUALITY AND SURVEILLANCE
    TITLE V--OTHER PROVISIONS
    Subtitle A--Drug Discount for Rural and Other Hospitals
    Subtitle B--Programs
    Subtitle C--Food and Drug Administration
    Subtitle D--Community Living Assistance Services and Supports
    Subtitle E--Miscellaneous

                   DIVISION A--AFFORDABLE HEALTH CARE CHOICES

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

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

    Sec. 100. Purpose; table of contents of division; general definitions.

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

                         Subtitle A--General Standards

    Sec. 101. Requirements reforming health insurance marketplace.
    Sec. 102. Protecting the choice to keep current coverage.

        Subtitle B--Standards Guaranteeing Access to Affordable Coverage

    Sec. 111. Prohibiting preexisting condition exclusions.
    Sec. 112. Guaranteed issue and renewal for insured plans.
    Sec. 113. Insurance rating rules.
    Sec. 114. Nondiscrimination in benefits; parity in mental health and
    substance abuse disorder benefits.
    Sec. 115. Ensuring adequacy of provider networks.
    Sec. 116. Ensuring value and lower premiums.

        Subtitle C--Standards Guaranteeing Access to Essential Benefits

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

                  Subtitle D--Additional Consumer Protections

    Sec. 131. Requiring fair marketing practices by health insurers.
    Sec. 132. Requiring fair grievance and appeals mechanisms.
    Sec. 133. Requiring information transparency and plan disclosure.
    Sec. 134. Application to qualified health benefits plans not offered
    through the Health Insurance Exchange.
    Sec. 135. Timely payment of claims.
    Sec. 136. Standardized rules for coordination and subrogation of
    benefits.
    Sec. 137. Application of administrative simplification.
    Sec. 138. Information on end-of-life planning.
    Sec. 139. Utilization review activities.
    Sec. 139A. Internal appeals procedures.
    Sec. 139B. External appeals procedures.

                             Subtitle E--Governance

    Sec. 141. Health Choices Administration; Health Choices Commissioner.
    Sec. 142. Duties and authority of Commissioner.
    Sec. 143. Consultation and coordination.
    Sec. 144.  Health Insurance Ombudsman.

           Subtitle F--Relation to Other Requirements; Miscellaneous

    Sec. 151. Relation to other requirements.
    Sec. 152. Prohibiting discrimination in health care.
    Sec. 153. Whistleblower protection.
    Sec. 154. Construction regarding collective bargaining.
    Sec. 155. Severability.
    Sec. 156. Application of State and Federal laws regarding abortion.
    Sec. 157. Non-discrimination on abortion and respect for rights of
    conscience.

                         Subtitle G--Early Investments

    Sec. 161. Ensuring value and lower premiums.
    Sec. 162. Ending health insurance rescission abuse.
    Sec. 163. Ending health insurance denials and delays of necessary
    treatment for children with deformities.
    Sec. 164. Administrative simplification.
    Sec. 165. Expansion of electronic transactions in medicare.
    Sec. 166. Reinsurance program for retirees.
    Sec. 167. Limitations on preexisting condition exclusions in group
    health plans and health insurance coverage in the group and individual
    markets in advance of applicability of new prohibition of preexisting
    condition exclusions.

           TITLE II--HEALTH INSURANCE EXCHANGE AND RELATED PROVISIONS

                     Subtitle A--Health Insurance Exchange

    Sec. 201. Establishment of Health Insurance Exchange; outline of
    duties; definitions.
    Sec. 202. Exchange-eligible individuals and employers.
    Sec. 203. Benefits package levels.
    Sec. 204. Contracts for the offering of Exchange-participating health
    benefits plans.
    Sec. 205. Outreach and enrollment of Exchange-eligible individuals and
    employers in Exchange-participating health benefits plans.
    Sec. 206. Other functions.
    Sec. 207. Health Insurance Exchange Trust Fund.
    Sec. 208. Optional operation of State-based health insurance exchanges.
    Sec. 209. Limitation on premium increases under Exchange-participating
    health benefits plans.

                   Subtitle B--Public Health Insurance Option

    Sec. 221. Establishment and administration of a public health insurance
    option as an Exchange-qualified health benefits plan.
    Sec. 222. Premiums and financing.
    Sec. 223. Negotiated payment rates for items and services.
    Sec. 224. Modernized payment initiatives and delivery system reform.
    Sec. 225. Provider participation.
    Sec. 226. Application of fraud and abuse provisions.
    Sec. 227. Application of HIPAA insurance requirements.
    Sec. 228. Application of health information privacy, security, and
    electronic transaction requirements.
    Sec. 229. Enrollment in public health insurance option is voluntary.

                  Subtitle C--Individual Affordability Credits

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

                   Subtitle D--Health Insurance Cooperatives

    Sec. 251. Establishment.
    Sec. 252. Start-up and solvency grants and loans.
    Sec. 253. Definitions.

                        TITLE III--SHARED RESPONSIBILITY

                     Subtitle A--Individual Responsibility

    Sec. 301. Individual responsibility.

                      Subtitle B--Employer Responsibility

               Part 1--Health Coverage Participation Requirements

    Sec. 311. Health coverage participation requirements.
    Sec. 312. Employer responsibility to contribute towards employee and
    dependent coverage.
    Sec. 313. Employer contributions in lieu of coverage.
    Sec. 314. Authority related to improper steering.

       Part 2--Satisfaction of Health Coverage Participation Requirements

    Sec. 321. Satisfaction of health coverage participation requirements
    under the Employee Retirement Income Security Act of 1974.
    Sec. 322. Satisfaction of health coverage participation requirements
    under the Internal Revenue Code of 1986.
    Sec. 323. Satisfaction of health coverage participation requirements
    under the Public Health Service Act.
    Sec. 324. Additional rules relating to health coverage participation
    requirements.

             TITLE IV--AMENDMENTS TO INTERNAL REVENUE CODE OF 1986

                       Subtitle A--Shared Responsibility

                       Part 1--Individual Responsibility

    Sec. 401. Tax on individuals without acceptable health care coverage.

                        Part 2--Employer Responsibility

    Sec. 411. Election to satisfy health coverage participation
    requirements.
    Sec. 412. Responsibilities of nonelecting employers.

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

    Sec. 421. Credit for small business employee health coverage expenses.

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

    Sec. 431. Disclosures to carry out health insurance exchange subsidies.

                      Subtitle D--Other Revenue Provisions

                           Part 1--General Provisions

    Sec. 441. Surcharge on high income individuals.
    Sec. 442. Delay in application of worldwide allocation of interest.

                      Part 2--Prevention of Tax Avoidance

    Sec. 451. Limitation on treaty benefits for certain deductible
    payments.
    Sec. 452. Codification of economic substance doctrine.
    Sec. 453. Penalties for underpayments.

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

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

                         Subtitle A--General Standards

    SEC. 101. REQUIREMENTS REFORMING HEALTH INSURANCE MARKETPLACE.

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

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

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

        Subtitle B--Standards Guaranteeing Access to Affordable Coverage

    SEC. 111. PROHIBITING PREEXISTING CONDITION EXCLUSIONS.

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

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

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

    SEC. 113. INSURANCE RATING RULES.

      (a) In General.--The premium rate charged for an insured qualified
    health benefits plan and for coverage under the public health insurance
    option may not vary except as follows:
              (1) Limited age variation permitted.--By age (within such age
            categories as the Commissioner shall specify) so long as the
            ratio of the highest such premium to the lowest such premium
            does not exceed the ratio of 2 to 1.
              (2) By area.--By premium rating area (as permitted by State
            insurance regulators or, in the case of Exchange-participating
            health benefits plans, as specified by the Commissioner in
            consultation with such regulators).
              (3) By family enrollment.--By family enrollment (such as
            variations within categories and compositions of families) so
            long as the ratio of the premium for family enrollment (or
            enrollments) to the premium for individual enrollment is
            uniform, as specified under State law and consistent with rules
            of the Commissioner.
      (b) Actuarial Value of Optional Service Coverage.--
              (1) In general.--The Commissioner shall estimate the basic
            per enrollee, per month cost, determined on an average
            actuarial basis, for including coverage under a basic plan of
            the services described in section 122(d)(4)(A).
              (2) Considerations.--In making such estimate the
            Commissioner--
                      (A) 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;
                      (B) shall estimate such costs as if such coverage
                    were included for the entire population covered; and
                      (C) may not estimate such a cost at less than $1 per
                    enrollee, per month.
      (c) Study and Reports.--
              (1) Study.--The Commissioner, in coordination with the
            Secretary of Health and Human Services and the Secretary of
            Labor, shall conduct a study of the large group insured and
            self-insured employer health care markets. Such study shall
            examine the following:
                      (A) The types of employers by key characteristics,
                    including size, that purchase insured products versus
                    those that self-insure.
                      (B) The similarities and differences between typical
                    insured and self-insured health plans.
                      (C) The financial solvency and capital reserve levels
                    of employers that self-insure by employer size.
                      (D) The risk of self-insured employers not being able
                    to pay obligations or otherwise becoming financially
                    insolvent.
                      (E) The extent to which rating rules are likely to
                    cause adverse selection in the large group market or to
                    encourage small and mid size employers to self-insure
              (2) Reports.--Not later than 18 months after the date of the
            enactment of this Act, the Commissioner shall submit to
            Congress and the applicable agencies a report on the study
            conducted under paragraph (1). Such report shall include any
            recommendations the Commissioner deems appropriate to ensure
            that the law does not provide incentives for small and mid-size
            employers to self-insure or create adverse selection in the
            risk pools of large group insurers and self-insured employers.
            Not later than 18 months after the first day of Y1, the
            Commissioner shall submit to Congress and the applicable
            agencies an updated report on such study, including updates on
            such recommendations.

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

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

    SEC. 115. ENSURING ADEQUACY OF PROVIDER NETWORKS.

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

    SEC. 116. ENSURING VALUE AND LOWER PREMIUMS.

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

        Subtitle C--Standards Guaranteeing Access to Essential Benefits

    SEC. 121. COVERAGE OF ESSENTIAL BENEFITS PACKAGE.

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

    SEC. 122. ESSENTIAL BENEFITS PACKAGE DEFINED.

      (a) In General.--In this division, the term ``essential benefits
    package'' means health benefits coverage, consistent with standards
    adopted under section 124 to ensure the provision of quality health
    care and financial security, that--
              (1) provides payment for the items and services described in
            subsection (b) in accordance with generally accepted standards
            of medical or other appropriate clinical or professional
            practice;
              (2) limits cost-sharing for such covered health care items
            and services in accordance with such benefit standards,
            consistent with subsection (c);
              (3) does not impose any annual or lifetime limit on the
            coverage of covered health care items and services;
              (4) complies with section 115(a) (relating to network
            adequacy); and
              (5) is equivalent, as certified by Office of the Actuary of
            the Centers for Medicare & Medicaid Services, to the average
            prevailing employer-sponsored coverage.
      (b) Minimum Services to Be Covered.--Subject to subsection (d), the
    items and services described in this subsection are the following:
              (1) Hospitalization.
              (2) Outpatient hospital and outpatient clinic services,
            including emergency department services.
              (3) Professional services of physicians and other health
            professionals.
              (4) Such services, equipment, and supplies incident to the
            services of a physician's or a health professional's delivery
            of care in institutional settings, physician offices, patients'
            homes or place of residence, or other settings, as appropriate.
              (5) Prescription drugs.
              (6) Rehabilitative and habilitative services.
              (7) Mental health and substance use disorder services,
            including behavioral health treatments.
              (8) Preventive services, including those services recommended
            with a grade of A or B by the Task Force on Clinical Preventive
            Services and those vaccines recommended for use by the Director
            of the Centers for Disease Control and Prevention.
              (9) Maternity care.
              (10) Well baby and well child care; treatment of a congenital
            or developmental deformity, disease, or injury; and oral
            health, vision, and hearing services, equipment, and supplies
            at least for children under 21 years of age.
      (c) Requirements Relating to Cost-sharing and Minimum Actuarial
    Value.--
              (1) No cost-sharing for preventive services.--There shall be
            no cost-sharing under the essential benefits package for
            preventive items and services (as specified under the benefit
            standards), including well baby and well child care.
              (2) Annual limitation.--
                      (A) Annual limitation.--The cost-sharing incurred
                    under the essential benefits package with respect to an
                    individual (or family) for a year does not exceed the
                    applicable level specified in subparagraph (B).
                      (B) Applicable level.--The applicable level specified
                    in this subparagraph for Y1 is $5,000 for an individual
                    and $10,000 for a family. Such levels shall be
                    increased (rounded to the nearest $100) for each
                    subsequent year by the annual percentage increase in
                    the Consumer Price Index (United States city average)
                    applicable to such year.
                      (C) Use of copayments.--In establishing cost-sharing
                    levels for basic, enhanced, and premium plans under
                    this subsection, the Secretary shall, to the maximum
                    extent possible, use only copayments and not
                    coinsurance.
              (3) Minimum actuarial value.--
                      (A) In general.--The cost-sharing under the essential
                    benefits package shall be designed to provide a level
                    of coverage that is designed to provide benefits that
                    are actuarially equivalent to approximately 70 percent
                    of the full actuarial value of the benefits provided
                    under the reference benefits package described in
                    subparagraph (B).
                      (B) Reference benefits package described.--The
                    reference benefits package described in this
                    subparagraph is the essential benefits package if there
                    were no cost-sharing imposed.
      (d) Abortion Coverage Prohibited as Part of Minimum Benefits
    Package.--
              (1) Prohibition of required coverage.--The Health Benefits
            Advisory Committee may not recommend under section 123(b) and
            the Secretary may not adopt in standards under section 124(b),
            the services described in paragraph (4)(A) or (4)(B) as part of
            the essential benefits package and the Commissioner may not
            require such services for qualified health benefits plans to
            participate in the Health Insurance Exchange.
              (2) Voluntary choice of coverage by plan.--In the case of a
            qualified health benefits plan, the plan is not required (or
            prohibited) under this Act from providing coverage of services
            described in paragraph (4)(A) or (4)(B) and the QHBP offering
            entity shall determine whether such coverage is provided.
              (3) Coverage under public health insurance option.--The
            public health insurance option shall provide coverage for
            services described in paragraph (4)(B). Nothing in this Act
            shall be construed as preventing the public health insurance
            option from providing for or prohibiting coverage of services
            described in paragraph (4)(A).
              (4) Abortion services.--
                      (A) Abortions for which public funding is
                    prohibited.--The services described in this
                    subparagraph 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.
                      (B) Abortions for which public funding is allowed.--
                    The services described in this subparagraph 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.
      (e) Stand-alone Coverage.--
              (1) No application to adult coverage.--Nothing in this
            subtitle shall be construed as requiring an individual who is
            21 years of age or older to be provided stand-alone dental-only
            or vision-only coverage.
              (2) Treatment of combined coverage.--The combination of
            stand-alone coverage described in paragraph (1) and a qualified
            health benefits plan without coverage of such oral and vision
            services shall be treated as satisfying the essential benefits
            package under this division.

    SEC. 123. HEALTH BENEFITS ADVISORY COMMITTEE.

      (a) Establishment.--
              (1) In general.--There is established a private-public
            advisory committee which shall be a panel of medical and other
            experts to be known as the Health Benefits Advisory Committee
            to recommend covered benefits and essential, enhanced, and
            premium plans.
              (2) Chair.--The Surgeon General shall be a member and the
            chair of the Health Benefits Advisory Committee.
              (3) Membership.--The Health Benefits Advisory Committee shall
            be composed of the following members, in addition to the
            Surgeon General:
                      (A) 9 members who are not Federal employees or
                    officers and who are appointed by the President.
                      (B) 9 members who are not Federal employees or
                    officers and who are appointed by the Comptroller
                    General of the United States in a manner similar to the
                    manner in which the Comptroller General appoints
                    members to the Medicare Payment Advisory Commission
                    under section 1805(c) of the Social Security Act.
                      (C) Such even number of members (not to exceed 8) who
                    are Federal employees and officers, as the President
                    may appoint.
            Such initial appointments shall be made not later than 60 days
            after the date of the enactment of this Act.
              (4) Terms.--Each member of the Health Benefits Advisory
            Committee shall serve a 3-year term on the Committee, except
            that the terms of the initial members shall be adjusted in
            order to provide for a staggered term of appointment for all
            such members.
              (5) Participation.--The membership of the Health Benefits
            Advisory Committee shall at least reflect providers, consumer
            representatives, employers, labor, health insurance issuers,
            experts in health care financing and delivery, experts in
            racial and ethnic disparities, experts in care for those with
            disabilities, representatives of relevant governmental
            agencies. and at least one practicing physician or other health
            professional and an expert on children's health and shall
            represent a balance among various sectors of the health care
            system so that no single sector unduly influences the
            recommendations of such Committee. Not less than 25 percent of
            the members of the Committee shall be practicing health care
            practitioners who, as of the date of their appointment,
            practice in a rural area and who have practiced in a rural area
            for at least the 5-year period preceding such date.
      (b) Duties.--
              (1) Recommendations on benefit standards.--The Health
            Benefits Advisory Committee shall recommend to the Secretary of
            Health and Human Services (in this subtitle referred to as the
            ``Secretary'') benefit standards (as defined in paragraph (4)),
            and periodic updates to such standards. In developing such
            recommendations, the Committee shall take into account
            innovation in health care and consider how such standards could
            reduce health disparities.
              (2) Deadline.--The Health Benefits Advisory Committee shall
            recommend initial benefit standards to the Secretary not later
            than 1 year after the date of the enactment of this Act.
              (3) Public input.--The Health Benefits Advisory Committee
            shall allow for public input as a part of developing
            recommendations under this subsection.
              (4) Benefit standards defined.--In this subtitle, the term
            ``benefit standards'' means standards respecting--
                      (A) the essential benefits package described in
                    section 122, including categories of covered
                    treatments, items and services within benefit classes,
                    and cost-sharing consistent with subsection (d) of such
                    section; and
                      (B) the cost-sharing levels for enhanced plans and
                    premium plans (as provided under section 203(c))
                    consistent with paragraph (5).
              (5) Levels of cost-sharing for enhanced and premium plans.--
                      (A) Enhanced plan.--The level of cost-sharing for
                    enhanced plans shall be designed so that such plans
                    have benefits that are actuarially equivalent to
                    approximately 85 percent of the actuarial value of the
                    benefits provided under the reference benefits package
                    described in section 122(c)(3)(B).
                      (B) Premium plan.--The level of cost-sharing for
                    premium plans shall be designed so that such plans have
                    benefits that are actuarially equivalent to
                    approximately 95 percent of the actuarial value of the
                    benefits provided under the reference benefits package
                    described in section 122(c)(3)(B).
      (c) Operations.--
              (1) Per diem pay.--Each member of the Health Benefits
            Advisory Committee shall receive travel expenses, including per
            diem in accordance with applicable provisions under subchapter
            I of chapter 57 of title 5, United States Code, and shall
            otherwise serve without additional pay.
              (2) Members not treated as federal employees.--Members of the
            Health Benefits Advisory Committee shall not be considered
            employees of the Federal government solely by reason of any
            service on the Committee.
              (3) Application of faca.--The Federal Advisory Committee Act
            (5 U.S.C. App.), other than section 14, shall apply to the
            Health Benefits Advisory Committee.
      (d) Publication.--The Secretary shall provide for publication in the
    Federal Register and the posting on the Internet website of the
    Department of Health and Human Services of all recommendations made by
    the Health Benefits Advisory Committee under this section.

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

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

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

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

                  Subtitle D--Additional Consumer Protections

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

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

    SEC. 132. REQUIRING FAIR GRIEVANCE AND APPEALS MECHANISMS.

      A QHBP offering entity shall provide for timely grievance and appeals
    mechanisms as the Commissioner shall establish consistent with sections
    139 through 139B.

    SEC. 133. REQUIRING INFORMATION TRANSPARENCY AND PLAN DISCLOSURE.

      (a) Accurate and Timely Disclosure.--
              (1) In general.--A qualified health benefits plan (including
            the public health insurance option) shall comply with standards
            established by the Commissioner for the accurate and timely
            disclosure of plan documents, plan terms and conditions, claims
            payment policies and practices, periodic financial disclosure,
            data on enrollment, data on disenrollment, data on the number
            of claims denials, data on rating practices, information on
            cost-sharing and payments with respect to any out-of-network
            coverage, and other information as determined appropriate by
            the Commissioner. The Commissioner shall require that such
            disclosure be provided in plain language.
              (2) Plain language.--In this subsection, the term ``plain
            language'' means language that the intended audience, including
            individuals with limited English proficiency, can readily
            understand and use because that language is clean, concise,
            well-organized, and follows other best practices of plain
            language writing.
              (3) Guidance.--The Commissioner shall develop and issue
            guidance on best practices of plain language writing.
      (b) Contracting Reimbursement.--A qualified health benefits plan
    (including the public health insurance option) shall comply with
    standards established by the Commissioner to ensure transparency to
    each health care provider relating to reimbursement arrangements
    between such plan and such provider.
      (c) Advance Notice of Plan Changes.--A change in a qualified health
    benefits plan (including the public health insurance option) shall not
    be made without such reasonable and timely advance notice to enrollees
    of such change.
      (d) Pharmacy Benefit Managers Transparency Requirements.--
              (1) In general.--Notwithstanding any other provision of law,
            a qualified health benefits plan shall enter into a contract
            with a pharmacy benefit managers (in this subsection referred
            to as a ``PBM'') to manage the prescription drug coverage
            provided under such plan, or to control the costs of such
            prescription drug coverage, only if as a condition of such
            contract the PBM is required to provide at least annually to
            the Commissioner and to the QHBP offering entity offering such
            plan the following information:
                      (A) Information on the volume of prescriptions under
                    the contract that are filled via mail order and at
                    retail pharmacies.
                      (B) An estimate of aggregate average payments under
                    the contract, per prescription (weighted by
                    prescription volume), made to mail order and retail
                    pharmacists, and the average amount, per prescription,
                    that the PBM was paid by the plan for prescriptions
                    filled at mail order and retail pharmacists.
                      (C) An estimate of the aggregate average payment per
                    prescription (weighted by prescription volume) under
                    the contract received from pharmaceutical
                    manufacturers, including all rebates, discounts, prices
                    concessions, or administrative, and other payments from
                    pharmaceutical manufacturers, and a description of the
                    types of payments, and the amount of these payments
                    that were shared with the plan, and a description of
                    the percentage of prescriptions for which the PBM
                    received such payments.
                      (D) Information on the overall percentage of generic
                    drugs dispensed under the contract at retail and mail
                    order pharmacies, and the percentage of cases in which
                    a generic drug is dispensed when available.
                      (E) Information on the percentage and number of cases
                    under the contract in which individuals were switched
                    from a prescribed drug that was less expensive to a
                    drug that was more expensive, the rationale for these
                    switches, and a description of the PBM policies
                    governing such switches.
              (2) Confidentiality of information.--Notwithstanding any
            other provision of law, information disclosed by a PBM to the
            Commissioner or a QHBP offering entity under this subsection is
            confidential and shall not be disclosed by the Commissioner or
            the QHBP offering entity in a form which discloses the identity
            of a specific PBM or prices charged by such PBM or a specific
            retailer, manufacturer, or wholesaler, except--
                      (A) as the Commissioner determines to be necessary to
                    carry out this subsection;
                      (B) to permit the Comptroller General to review the
                    information provided;
                      (C) to permit the Director of the Congressional
                    Budget Office to review the information provided; and
                      (D) to permit the Commissioner to disclose industry-
                    wide aggregate or average information to be used in
                    assessing the overall impact of PBMs on prescription
                    drug prices and spending.

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

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

    SEC. 135. TIMELY PAYMENT OF CLAIMS.

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

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

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

    SEC. 137. APPLICATION OF ADMINISTRATIVE SIMPLIFICATION.

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

    SEC. 138. INFORMATION ON END-OF-LIFE PLANNING.

      (a) In General.--The QHBP offering entity --
              (1) shall provide for the dissemination of information
            related to end-of-life planning to individuals seeking
            enrollment in Exchange-participating health benefits plans
            offered through the Exchange;
              (2) shall present such individuals with--
                      (A) the option to establish advanced directives and
                    physician's orders for life sustaining treatment
                    according to the laws of the State in which the
                    individual resides; and
                      (B) information related to other planning tools; and
              (3) shall not promote suicide, assisted suicide, or the
            active hastening of death.
    The information presented under paragraph (2) shall not presume the
    withdrawal of treatment and shall include end-of-life planning
    information that includes options to maintain all or most medical
    interventions.
      (b) Construction.-- Nothing in this section shall be construed--
              (1) to require an individual to complete an advanced
            directive or a physician's order for life sustaining treatment
            or other end-of-life planning document;
              (2) to require an individual to consent to restrictions on
            the amount, duration, or scope of medical benefits otherwise
            covered under a qualified health benefits plan; or
              (3) to encourage the hastening of death or the promotion of
            assisted suicide.
      (c) Advanced Directive Defined.--In this section, the term ``advanced
    directive'' includes a living will, a comfort care order, or a durable
    power of attorney for health care
      (d) Prohibition on the Promotion of Assisted Suicide.--
              (1) In general.--Subject to paragraph (3), information
            provided to meet the requirements of subsection (a)(2) shall
            not include advanced directives or other planning tools that
            list or describe as an option suicide, assisted suicide or the
            intentional hastening of death regardless of legality.
              (2) Construction.--Nothing in paragraph (1) shall be
            construed to apply to or affect any option to--
                      (A) the withhold or withdraw of medical treatment or
                    medical care;
                      (B) withhold or withdraw of nutrition or hydration;
                    and
                      (C) provide palliative or hospice care or use 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.
              (3) Exemption.--The requirements of subsection (a) shall not
            apply to any State that as of August 1, 2009, requires the
            inclusion of information prohibited in such paragraph in
            advanced directives or other planning tools.

    SEC. 139. UTILIZATION REVIEW ACTIVITIES.

      (a) Compliance With Requirements.--
              (1) In general.--A qualified health benefits plan, and a QHBP
            offering entity that offers such plan, shall conduct
            utilization review activities in connection with the provision
            of benefits under such plan only in accordance with a
            utilization review program that meets the requirements of this
            section.
              (2) Use of outside agents.--Nothing in this section shall be
            construed as preventing a qualified health benefits plan or
            QHBP offering entity from arranging through a contract or
            otherwise for persons or entities to conduct utilization review
            activities on behalf of the plan entity, so long as such
            activities are conducted in accordance with a utilization
            review program that meets the requirements of this section.
              (3) Utilization review defined.--For purposes of this
            section, the terms ``utilization review'' and ``utilization
            review activities'' mean procedures used to monitor or evaluate
            the use or coverage, clinical necessity, appropriateness,
            efficacy, or efficiency of health care services, procedures or
            settings, and includes prospective review, concurrent review,
            second opinions, case management, discharge planning, or
            retrospective review.
      (b) Written Policies and Criteria.--
              (1) Written policies.--A utilization review program shall be
            conducted consistent with written policies and procedures that
            govern all aspects of the program.
              (2) Use of written criteria.--
                      (A) In general.--Such a program shall utilize written
                    clinical review criteria developed with input from a
                    range of appropriate actively practicing health care
                    professionals, as determined by the plan, pursuant to
                    the program. Such criteria shall include written
                    clinical review criteria that are based on valid
                    clinical evidence where available and that are directed
                    specifically at meeting the needs of at-risk
                    populations and covered individuals with chronic
                    conditions or severe illnesses, including gender-
                    specific criteria and pediatric-specific criteria where
                    available and appropriate.
                      (B) Continuing use of standards in retrospective
                    review.--If a health care service has been specifically
                    pre-authorized or approved for an enrollee under such a
                    program, the program shall not, pursuant to
                    retrospective review, revise or modify the specific
                    standards, criteria, or procedures used for the
                    utilization review for procedures, treatment, and
                    services delivered to the enrollee during the same
                    course of treatment.
                      (C) Review of sample of claims denials.--Such a
                    program shall provide for an evaluation of the clinical
                    appropriateness of at least a sample of denials of
                    claims for benefits.
      (c) Conduct of Program Activities.--
              (1) Administration by health care professionals.--A
            utilization review program shall be administered by qualified
            health care professionals who shall oversee review decisions.
              (2) Use of qualified, independent personnel.--
                      (A) In general.--A utilization review program shall
                    provide for the conduct of utilization review
                    activities only through personnel who are qualified and
                    have received appropriate training in the conduct of
                    such activities under the program.
                      (B) Prohibition of contingent compensation
                    arrangements.--Such a program shall not, with respect
                    to utilization review activities, permit or provide
                    compensation or anything of value to its employees,
                    agents, or contractors in a manner that encourages
                    denials of claims for benefits.
                      (C) Prohibition of conflicts.--Such a program shall
                    not permit a health care professional who is providing
                    health care services to an individual to perform
                    utilization review activities in connection with the
                    health care services being provided to the individual.
              (3) Accessibility of review.--Such a program shall provide
            that appropriate personnel performing utilization review
            activities under the program, including the utilization review
            administrator, are reasonably accessible by toll-free telephone
            during normal business hours to discuss patient care and allow
            response to telephone requests, and that appropriate provision
            is made to receive and respond promptly to calls received
            during other hours.
              (4) Limits on frequency.--Such a program shall not provide
            for the performance of utilization review activities with
            respect to a class of services furnished to an individual more
            frequently than is reasonably required to assess whether the
            services under review are medically necessary or appropriate.
      (d) Deadline for Determinations.--
              (1) Prior authorization services.--
                      (A) In general.--Except as provided in paragraph (2),
                    in the case of a utilization review activity involving
                    the prior authorization of health care items and
                    services for an individual, the utilization review
                    program shall make a determination concerning such
                    authorization, and provide notice of the determination
                    to the individual or the individual's designee and the
                    individual's health care provider by telephone and in
                    printed form, as soon as possible in accordance with
                    the medical exigencies of the case, and in no event
                    later than the deadline specified in subparagraph (B).
                      (B) Deadline.--
                              (i) In general.--Subject to clauses (ii),
                            (iii), and (iv), the deadline specified in this
                            subparagraph is 14 days after the date of
                            receipt of the request for prior authorization,
                            but in no event later than 3 business days
                            after the date of receipt of information that
                            is reasonably necessary to make such
                            determination.
                              (ii) Extension permitted where notice of
                            additional information required.--If a
                            utilization review program--
                                      (I) receives a request for a prior
                                    authorization;
                                      (II) determines that additional
                                    information is necessary to complete
                                    the review and make the determination
                                    on the request; and
                                      (III) notifies the requester, not
                                    later than 5 business days after the
                                    date of receiving the request, of the
                                    need for such specified additional
                                    information;
                            the deadline specified in this subparagraph is
                            14 days after the date the program receives the
                            specified additional information, but in no
                            case later than 28 days after the date of
                            receipt of the request for the prior
                            authorization. This clause shall not apply if
                            the deadline is specified in clause (iii).
                              (iii) Expedited cases.--In the case of a
                            situation described in section 139A(c)(1)(A),
                            the deadline specified in this subparagraph is
                            72 hours after the time of the request for
                            prior authorization.
                              (iv) Exception for emergency services.--No
                            prior approval shall be required in the case of
                            emergency services provided by a hospital.
              (2) Ongoing care.--
                      (A) Concurrent review.--
                              (i) In general.--Subject to subparagraph (B),
                            in the case of a concurrent review of ongoing
                            care (including hospitalization), which results
                            in a termination or reduction of such care, the
                            plan must provide by telephone and in printed
                            form notice of the concurrent review
                            determination to the individual or the
                            individual's designee and the individual's
                            health care provider as soon as possible in
                            accordance with the medical exigencies of the
                            case, and in no event later than 1 business day
                            after the date of receipt of information that
                            is reasonably necessary to make such
                            determination, with sufficient time prior to
                            the termination or reduction to allow for an
                            appeal under section 139A(c)(1)(A) to be
                            completed before the termination or reduction
                            takes effect.
                              (ii) Contents of notice.--Such notice shall
                            include, with respect to ongoing health care
                            items and services, the number of ongoing
                            services approved, the new total of approved
                            services, the date of onset of services, and
                            the next review date, if any, as well as a
                            statement of the individual"s rights to further
                            appeal.
                      (B) Exception.--Subparagraph (A) shall not be
                    interpreted as requiring plans or issuers to provide
                    coverage of care that would exceed the coverage
                    limitations for such care.
              (3) Previously provided services.--In the case of a
            utilization review activity involving retrospective review of
            health care services previously provided for an individual, the
            utilization review program shall make a determination
            concerning such services, and provide notice of the
            determination to the individual or the individual's designee
            and the individual's health care provider by telephone and in
            printed form, within 30 days of the date of receipt of
            information that is reasonably necessary to make such
            determination, but in no case later than 60 days after the date
            of receipt of the claim for benefits.
              (4) Failure to meet deadline.--In a case in which a qualified
            health benefits plan or QHBP offering entity fails to make a
            determination on a claim for benefit under paragraph (1),
            (2)(A), or (3) by the applicable deadline established under the
            respective paragraph, the failure shall be treated under this
            subtitle as a denial of the claim as of the date of the
            deadline.
      (e) Notice of Denials of Claims for Benefits.--
              (1) In general.--Notice of a denial of claims for benefits
            under a utilization review program shall be provided in printed
            form and written in a manner calculated to be understood by the
            participant, beneficiary, or enrollee and shall include--
                      (A) the reasons for the denial (including the
                    clinical rationale);
                      (B) instructions on how to initiate an appeal under
                    section 139A; and
                      (C) notice of the availability, upon request of the
                    individual (or the individual"s designee) of the
                    clinical review criteria relied upon to make such
                    denial.
              (2) Specification of any additional information.--Such a
            notice shall also specify what (if any) additional necessary
            information must be provided to, or obtained by, the person
            making the denial in order to make a decision on such an
            appeal.
      (f) Claim for Benefits and Denial of Claim for Benefits Defined.--For
    purposes of this subtitle:
              (1) Claim for benefits.--The term ``claim for benefits''
            means any request for coverage (including authorization of
            coverage), for eligibility, or for payment in whole or in part,
            for an item or service under a qualified health benefits plan.
              (2) Denial of claim for benefits.--The term ``denial'' means,
            with respect to a claim for benefits, means a denial, or a
            failure to act on a timely basis upon, in whole or in part, the
            claim for benefits and includes a failure to provide benefits
            (including items and services) required to be provided under
            this title.

    SEC. 139A. INTERNAL APPEALS PROCEDURES.

      (a) Right of Review.--
              (1) In general.--Each qualified health benefits plan, and
            each QHBP offering entity offering such plan--
                      (A) shall provide adequate notice in writing to any
                    participant or beneficiary under such plan, or enrollee
                    under such coverage, whose claim for benefits under the
                    plan has been denied (within the meaning of section
                    139(f)(2)), setting forth the specific reasons for such
                    denial of claim for benefits and rights to any further
                    review or appeal, written in a manner calculated to be
                    understood by the participant, beneficiary, or
                    enrollee; and
                      (B) shall afford such a participant, beneficiary, or
                    enrollee (and any provider or other person acting on
                    behalf of such an individual with the individual"s
                    consent or without such consent if the individual is
                    medically unable to provide such consent) who is
                    dissatisfied with such a denial of claim for benefits a
                    reasonable opportunity (of not less than 180 days) to
                    request and obtain a full and fair review by a named
                    fiduciary (with respect to such plan) or named
                    appropriate individual (with respect to such coverage)
                    of the decision denying the claim.
              (2) Treatment of oral requests.--The request for review under
            paragraph (1)(B) may be made orally, but, in the case of an
            oral request, shall be followed by a request in writing.
      (b) Internal Review Process.--
              (1) Conduct of review.--
                      (A) In general.--A review of a denial of claim under
                    this section shall be made by an individual who--
                              (i) in a case involving medical judgment,
                            shall be a physician or, in the case of limited
                            scope coverage (as defined in subparagraph (B),
                            shall be an appropriate specialist;
                              (ii) has been selected by the plan or entity;
                            and
                              (iii) did not make the initial denial in the
                            internally appealable decision.
                      (B) Limited scope coverage defined.--For purposes of
                    subparagraph (A), the term ``limited scope coverage''
                    means a qualified health benefits plan the only
                    benefits under which are for benefits described in
                    section 2791(c)(2)(A) of the Public Health Service Act
                    (42 U.S.C. 300gg-91(c)(2)).
              (2) Time limits for internal reviews.--
                      (A) In general.--Having received such a request for
                    review of a denial of claim, the QHBP offering entity
                    offering a qualified health benefits plan, in
                    accordance with the medical exigencies of the case but
                    not later than the deadline specified in subparagraph
                    (B), complete the review on the denial and transmit to
                    the participant, beneficiary, enrollee, or other person
                    involved a decision that affirms, reverses, or modifies
                    the denial. If the decision does not reverse the
                    denial, the plan or issuer shall transmit, in printed
                    form, a notice that sets forth the grounds for such
                    decision and that includes a description of rights to
                    any further appeal. Such decision shall be treated as
                    the final decision of the plan. Failure to issue such a
                    decision by such deadline shall be treated as a final
                    decision affirming the denial of claim.
                      (B) Deadline.--
                              (i) In general.--Subject to clauses (ii) and
                            (iii), the deadline specified in this
                            subparagraph is 14 days after the date of
                            receipt of the request for internal review.
                              (ii) Extension permitted where notice of
                            additional information required.--If a
                            qualified health benefits plan of QHBP offering
                            entity--
                                      (I) receives a request for internal
                                    review,
                                      (II) determines that additional
                                    information is necessary to complete
                                    the review and make the determination
                                    on the request, and
                                      (III) notifies the requester, not
                                    later than 5 business days after the
                                    date of receiving the request, of the
                                    need for such specified additional
                                    information,
                            the deadline specified in this subparagraph is
                            14 days after the date the plan or entity
                            receives the specified additional information,
                            but in no case later than 28 days after the
                            date of receipt of the request for the internal
                            review. This clause shall not apply if the
                            deadline is specified in clause (iii).
                              (iii) Expedited cases.--In the case of a
                            situation described in subsection (c)(1)(A),
                            the deadline specified in this subparagraph is
                            72 hours after the time of the request for
                            review.
      (c) Expedited Review Process.--
              (1) In general.--A qualified health benefits plan, and a QHBP
            offering entity, shall establish procedures in writing for the
            expedited consideration of requests for review under subsection
            (b) in situations--
                      (A) in which, as determined by the plan or issuer or
                    as certified in writing by a treating health care
                    professional, the application of the normal timeframe
                    for making a determination could seriously jeopardize
                    the life or health of the participant, beneficiary, or
                    enrollee or such an individual"s ability to regain
                    maximum function; or
                      (B) described in section 139(d)(2) (relating to
                    requests for continuation of ongoing care which would
                    otherwise be reduced or terminated).
              (2) Process.--Under such procedures--
                      (A) the request for expedited review may be submitted
                    orally or in writing by an individual or provider who
                    is otherwise entitled to request the review;
                      (B) all necessary information, including the plan's
                    or entity's decision, shall be transmitted between the
                    plan or issuer and the requester by telephone,
                    facsimile, or other similarly expeditious available
                    method; and
                      (C) the plan or issuer shall expedite the review in
                    the case of any of the situations described in
                    subparagraph (A) or (B) of paragraph (1).
              (3) Deadline for decision.--The decision on the expedited
            review must be made and communicated to the parties as soon as
            possible in accordance with the medical exigencies of the case,
            and in no event later than 72 hours after the time of receipt
            of the request for expedited review, except that in a case
            described in paragraph (1)(B), the decision must be made before
            the end of the approved period of care.
      (d) Waiver of Process.--A plan or entity may waive its rights for an
    internal review under subsection (b). In such case the participant,
    beneficiary, or enrollee involved (and any designee or provider
    involved) shall be relieved of any obligation to complete the review
    involved and may, at the option of such participant, beneficiary,
    enrollee, designee, or provider, proceed directly to seek further
    appeal through any applicable external appeals process.

    SEC. 139B. EXTERNAL APPEALS PROCEDURES.

      (a) Right to External Appeal.--
              (1) In general.--A qualified health benefits plan, and a QHBP
            offering entity, shall provide for an external appeals process
            that meets the requirements of this section in the case of an
            externally appealable decision described in paragraph (2), for
            which a timely appeal is made either by the plan or entity or
            by the participant, beneficiary, or enrollee (and any provider
            or other person acting on behalf of such an individual with the
            individual's consent or without such consent if such an
            individual is medically unable to provide such consent). The
            appropriate Secretary shall establish standards to carry out
            such requirements.
              (2) Externally appealable decision defined.--
                      (A) In general.--For purposes of this section, the
                    term ``externally appealable decision'' means a denial
                    of claim for benefits (as defined in section
                    139(f)(2))--
                              (i) that is based in whole or in part on a
                            decision that the item or service is not
                            medically necessary or appropriate or is
                            investigational or experimental; or
                              (ii) in which the decision as to whether a
                            benefit is covered involves a medical judgment.
                      (B) Inclusion.--Such term also includes a failure to
                    meet an applicable deadline for internal review under
                    section 139A.
                      (C) Exclusions.--Such term does not include--
                              (i) specific exclusions or express
                            limitations on the amount, duration, or scope
                            of coverage that do not involve medical
                            judgment; or
                              (ii) a decision regarding whether an
                            individual is a participant, beneficiary, or
                            enrollee under the plan.
              (3) Exhaustion of internal review process.--Except as
            provided under section 139A(d), a plan or entity may condition
            the use of an external appeal process in the case of an
            externally appealable decision upon a final decision in an
            internal review under section 140, but only if the decision is
            made in a timely basis consistent with the deadlines provided
            under this subtitle.
              (4) Filing fee requirement.--
                      (A) In general.--Subject to subparagraph (B), a plan
                    or entity may condition the use of an external appeal
                    process upon payment to the plan or entity of a filing
                    fee that does not exceed $25.
                      (B) Exception for indigency.--The plan or issuer may
                    not require payment of the filing fee in the case of an
                    individual participant, beneficiary, or enrollee who
                    certifies (in a form and manner specified in guidelines
                    established by the Secretary of Health and Human
                    Services) that the individual is indigent (as defined
                    in such guidelines).
                      (C) Refunding fee in case of successful appeals.--The
                    plan or entity shall refund payment of the filing fee
                    under this paragraph if the recommendation of the
                    external appeal entity is to reverse or modify the
                    denial of a claim for benefits which is the subject of
                    the appeal.
      (b) General Elements of External Appeals Process.--
              (1) Contract with qualified external appeal entity.--
                      (A) Contract requirement.--Except as provided in
                    subparagraph (D), the external appeal process under
                    this section of a plan or entity shall be conducted
                    under a contract between the plan or issuer and one or
                    more qualified external appeal entities (as defined in
                    subsection (c)).
                      (B) Limitation on plan or issuer selection.--The
                    applicable authority shall implement procedures--
                              (i) to assure that the selection process
                            among qualified external appeal entities will
                            not create any incentives for external appeal
                            entities to make a decision in a biased manner,
                            and
                              (ii) for auditing a sample of decisions by
                            such entities to assure that no such decisions
                            are made in a biased manner.
                      (C) Other terms and conditions.--The terms and
                    conditions of a contract under this paragraph shall be
                    consistent with the standards the appropriate Secretary
                    shall establish to assure there is no real or apparent
                    conflict of interest in the conduct of external appeal
                    activities. Such contract shall provide that all costs
                    of the process (except those incurred by the
                    participant, beneficiary, enrollee, or treating
                    professional in support of the appeal) shall be paid by
                    the plan or entity, and not by the participant,
                    beneficiary, or enrollee. The previous sentence shall
                    not be construed as applying to the imposition of a
                    filing fee under subsection (a)(4).
                      (D) State authority with respect to qualified
                    external appeal entity for health insurance issuers.--
                    With respect to QHBP offering entities offering
                    qualified health benefits plans in a State, the State
                    may provide for external review activities to be
                    conducted by a qualified external appeal entity that is
                    designated by the State or that is selected by the
                    State in a manner determined by the State to assure an
                    unbiased determination.
              (2) Elements of process.--An external appeal process shall be
            conducted consistent with standards established by the
            appropriate Secretary that include at least the following:
                      (A) Fair and de novo determination.--The process
                    shall provide for a fair, de novo determination.
                    However, nothing in this paragraph shall be construed
                    as providing for coverage of items and services for
                    which benefits are specifically excluded under the
                    plan.
                      (B) Standard of review.--An external appeal entity
                    shall determine whether the plan's or issuer's decision
                    is in accordance with the medical needs of the patient
                    involved (as determined by the entity) taking into
                    account, as of the time of the entity's determination,
                    the patient's medical condition and any relevant and
                    reliable evidence the entity obtains under subparagraph
                    (D). If the entity determines the decision is in
                    accordance with such needs, the entity shall affirm the
                    decision and to the extent that the entity determines
                    the decision is not in accordance with such needs, the
                    entity shall reverse or modify the decision.
                      (C) Consideration of plan or coverage definitions.--
                    In making such determination, the external appeal
                    entity shall consider (but not be bound by) any
                    language in the plan or coverage document relating to
                    the definitions of the terms medical necessity,
                    medically necessary or appropriate, or experimental,
                    investigational, or related terms.
                      (D) Evidence.--
                              (i) In general.--An external appeal entity
                            shall include, among the evidence taken into
                            consideration--
                                      (I) the decision made by the plan or
                                    QHBP offering entity upon internal
                                    review under section 140 and any
                                    guidelines or standards used by the
                                    plan or QHBP offering entity in
                                    reaching such decision;
                                      (II) any personal health and medical
                                    information supplied with respect to
                                    the individual whose denial of claim
                                    for benefits has been appealed; and
                                      (III) the opinion of the individual's
                                    treating physician or health care
                                    professional.
                              (ii) Additional evidence.--Such external
                            appeal entity may also take into consideration
                            but not be limited to the following evidence
                            (to the extent available):
                                      (I) The results of studies that meet
                                    professionally recognized standards of
                                    validity and replicability or that have
                                    been published in peer-reviewed
                                    journals.
                                      (II) The results of professional
                                    consensus conferences conducted or
                                    financed in whole or in part by one or
                                    more government agencies.
                                      (III) Practice and treatment
                                    guidelines prepared or financed in
                                    whole or in part by government
                                    agencies.
                                      (IV) Government-issued coverage and
                                    treatment policies.
                                      (V) Community standard of care and
                                    generally accepted principles of
                                    professional medical practice.
                                      (VI) To the extent that the entity
                                    determines it to be free of any
                                    conflict of interest, the opinions of
                                    individuals who are qualified as
                                    experts in one or more fields of health
                                    care which are directly related to the
                                    matters under appeal.
                                      (VII) To the extent that the entity
                                    determines it to be free of any
                                    conflict of interest, the results of
                                    peer reviews conducted by the plan
                                    involved.
                      (E) Determination concerning externally appealable
                    decisions.--A qualified external appeal entity shall
                    determine--
                              (i) whether a denial of claim for benefits is
                            an externally appealable decision (within the
                            meaning of subsection (a)(2));
                              (ii) whether an externally appealable
                            decision involves an expedited appeal; and
                              (iii) for purposes of initiating an external
                            review, whether the internal review process has
                            been completed.
                      (F) Opportunity to submit evidence.--Each party to an
                    externally appealable decision may submit evidence
                    related to the issues in dispute.
                      (G) Provision of information.--The plan or issuer
                    involved shall provide timely access to the external
                    appeal entity to information and to provisions of the
                    plan relating to the matter of the externally
                    appealable decision, as determined by the entity.
                      (H) Timely decisions.--A determination by the
                    external appeal entity on the decision shall--
                              (i) be made orally or in writing and, if it
                            is made orally, shall be supplied to the
                            parties in writing as soon as possible;
                              (ii) be made in accordance with the medical
                            exigencies of the case involved, but in no
                            event later than 21 days after the date (or, in
                            the case of an expedited appeal, 72 hours after
                            the time) of requesting an external appeal of
                            the decision;
                              (iii) state, in layperson's language, the
                            basis for the determination, including, if
                            relevant, any basis in the terms or conditions
                            of the plan; and
                              (iv) inform the participant, beneficiary, or
                            enrollee of the individual's rights (including
                            any limitation on such rights) to seek further
                            review by the courts (or other process) of the
                            external appeal determination.
                      (I) Compliance with determination.--If the external
                    appeal entity reverses or modifies the denial of a
                    claim for benefits, the plan shall--
                              (i) upon the receipt of the determination,
                            authorize benefits in accordance with such
                            determination;
                              (ii) take such actions as may be necessary to
                            provide benefits (including items or services)
                            in a timely manner consistent with such
                            determination; and
                              (iii) submit information to the entity
                            documenting compliance with the entity's
                            determination and this subparagraph.
      (c) Qualifications of External Appeal Entities.--
              (1) In general.--For purposes of this section, the term
            ``qualified external appeal entity'' means, in relation to a
            plan or issuer, an entity that is certified under paragraph (2)
            as meeting the following requirements:
                      (A) The entity meets the independence requirements of
                    paragraph (3).
                      (B) The entity conducts external appeal activities
                    through a panel of not fewer than 3 clinical peers.
                      (C) The entity has sufficient medical, legal, and
                    other expertise and sufficient staffing to conduct
                    external appeal activities for the plan on a timely
                    basis consistent with subsection (b)(2)(G).
                      (D) The entity meets such other requirements as the
                    appropriate Secretary may impose.
              (2) Initial certification of external appeal entities.--
                      (A) In general.--In order to be treated as a
                    qualified external appeal entity with respect to--
                              (i) a qualified health benefits plan that is
                            a group health plan, the entity must be
                            certified (and, in accordance with subparagraph
                            (B), periodically recertified) as meeting the
                            requirements of paragraph (1)--
                                      (I) by the Secretary of Labor;
                                      (II) under a process recognized or
                                    approved by the Secretary of Labor; or
                                      (III) to the extent provided in
                                    subparagraph (C)(i), by a qualified
                                    private standard-setting organization
                                    (certified under such subparagraph); or
                              (ii) a QHBP offering entity that is a health
                            insurance issuer operating in a State, the
                            qualified external appeal entity must be
                            certified (and, in accordance with subparagraph
                            (B), periodically recertified) as meeting such
                            requirements--
                                      (I) by the applicable State authority
                                    (or under a process recognized or
                                    approved by such authority); or
                                      (II) if the State has not established
                                    a certification and recertification
                                    process for such entities, by the
                                    Secretary of Health and Human Services,
                                    under a process recognized or approved
                                    by such Secretary, or to the extent
                                    provided in subparagraph (C)(ii), by a
                                    qualified private standard-setting
                                    organization (certified under such
                                    subparagraph).
                      (B) Recertification process.--The appropriate
                    Secretary shall develop standards for the
                    recertification of external appeal entities. Such
                    standards shall include a review of--
                              (i) the number of cases reviewed;
                              (ii) a summary of the disposition of those
                            cases;
                              (iii) the length of time in making
                            determinations on those cases;
                              (iv) updated information of what was required
                            to be submitted as a condition of certification
                            for the entity's performance of external appeal
                            activities; and
                              (v) such information as may be necessary to
                            assure the independence of the entity from the
                            plans or issuers for which external appeal
                            activities are being conducted.
                      (C) Certification of qualified private standard-
                    setting organizations.--
                              (i) For external reviews of group health
                            plans.--For purposes of subparagraph
                            (A)(i)(III), the Secretary of Labor may provide
                            for a process for certification (and periodic
                            recertification) of qualified private standard-
                            setting organizations which provide for
                            certification of external review entities. Such
                            an organization shall only be certified if the
                            organization does not certify an external
                            review entity unless it meets standards
                            required for certification of such an entity by
                            such Secretary under subparagraph (A)(i)(I).
                              (ii) For external reviews of health insurance
                            issuers.--For purposes of subparagraph
                            (A)(ii)(II), the Secretary of Health and Human
                            Services may provide for a process for
                            certification (and periodic recertification) of
                            qualified private standard-setting
                            organizations which provide for certification
                            of external review entities. Such an
                            organization shall only be certified if the
                            organization does not certify an external
                            review entity unless it meets standards
                            required for certification of such an entity by
                            such Secretary under subparagraph (A)(ii)(II).
              (3) Independence requirements.--
                      (A) In general.--A clinical peer or other entity
                    meets the independence requirements of this paragraph
                    if--
                              (i) the peer or entity does not have a
                            familial, financial, or professional
                            relationship with any related party;
                              (ii) any compensation received by such peer
                            or entity in connection with the external
                            review is reasonable and not contingent on any
                            decision rendered by the peer or entity;
                              (iii) except as provided in paragraph (4),
                            the plan and the issuer have no recourse
                            against the peer or entity in connection with
                            the external review; and
                              (iv) the peer or entity does not otherwise
                            have a conflict of interest with a related
                            party as determined under any regulations which
                            the Secretary may prescribe.
                      (B) Related party.--For purposes of this paragraph,
                    the term ``related party'' means--
                              (i) with respect to--
                                      (I) a qualified health benefits plan
                                    that is a group health plan, the plan
                                    or QHBP offering entity of such plan;
                                    or
                                      (II) a qualified health benefits plan
                                    that is individual health insurance
                                    coverage, the health insurance issuer
                                    offering such coverage, or any plan
                                    sponsor, fiduciary, officer, director,
                                    or management employee of such plan or
                                    issuer;
                              (ii) the health care professional that
                            provided the health care involved in the
                            coverage decision;
                              (iii) the institution at which the health
                            care involved in the coverage decision is
                            provided;
                              (iv) the manufacturer of any drug or other
                            item that was included in the health care
                            involved in the coverage decision; or
                              (v) any other party determined under any
                            regulations which the Secretary may prescribe
                            to have a substantial interest in the coverage
                            decision.
              (4) Limitation on liability of reviewers.--No qualified
            external appeal entity having a contract with a qualified
            health benefits plan under this part and no person who is
            employed by any such entity or who furnishes professional
            services to such entity, shall be held by reason of the
            performance of any duty, function, or activity required or
            authorized pursuant to this section, to have violated any
            criminal law, or to be civilly liable under any law of the
            United States or of any State (or political subdivision
            thereof) if due care was exercised in the performance of such
            duty, function, or activity and there was no actual malice or
            gross misconduct in the performance of such duty, function, or
            activity.
      (d) External Appeal Determination Binding on Plan.--The determination
    by an external appeal entity under this section is binding on the plan
    involved in the determination.
      (e) Penalties Against Authorized Officials for Refusing to Authorize
    the Determination of an External Review Entity.--
              (1) Monetary penalties.--In any case in which the
            determination of an external review entity is not followed by a
            qualified health benefits plan, any person who, acting in the
            capacity of authorizing the benefit, causes such refusal may,
            in the discretion in a court of competent jurisdiction, be
            liable to an aggrieved participant, beneficiary, or enrollee
            for a civil penalty in an amount of up to $1,000 a day from the
            date on which the determination was transmitted to the plan by
            the external review entity until the date the refusal to
            provide the benefit is corrected.
              (2) Cease and desist order and order of attorney's fees.--In
            any action described in paragraph (1) brought by a participant,
            beneficiary, or enrollee with respect to a qualified health
            benefits plan, in which a plaintiff alleges that a person
            referred to in such paragraph has taken an action resulting in
            a refusal of a benefit determined by an external appeal entity
            in violation of such terms of the plan, coverage, or this
            subtitle, or has failed to take an action for which such person
            is responsible under the plan or this title and which is
            necessary under the plan or coverage for authorizing a benefit,
            the court shall cause to be served on the defendant an order
            requiring the defendant--
                      (A) to cease and desist from the alleged action or
                    failure to act; and
                      (B) to pay to the plaintiff a reasonable attorney's
                    fee and other reasonable costs relating to the
                    prosecution of the action on the charges on which the
                    plaintiff prevails.
              (3) Additional civil penalties.--
                      (A) In general.--In addition to any penalty imposed
                    under paragraph (1) or (2), the appropriate Secretary
                    may assess a civil penalty against a person acting in
                    the capacity of authorizing a benefit determined by an
                    external review entity for one or more qualified health
                    benefits plans, for--
                              (i) any pattern or practice of repeated
                            refusal to authorize a benefit determined by an
                            external appeal entity in violation of the
                            terms of such a plan, or this title; or
                              (ii) any pattern or practice of repeated
                            violations of the requirements of this section
                            with respect to such plan or plans.
                      (B) Standard of proof and amount of penalty.--Such
                    penalty shall be payable only upon proof by clear and
                    convincing evidence of such pattern or practice and
                    shall be in an amount not to exceed the lesser of--
                              (i) 25 percent of the aggregate value of
                            benefits shown by the appropriate Secretary to
                            have not been provided, or unlawfully delayed,
                            in violation of this section under such pattern
                            or practice, or
                              (ii) $500,000.
              (4) Removal and disqualification.--Any person acting in the
            capacity of authorizing benefits who has engaged in any such
            pattern or practice described in paragraph (3)(A) with respect
            to a plan or coverage, upon the petition of the appropriate
            Secretary, may be removed by the court from such position, and
            from any other involvement, with respect to such a plan or
            coverage, and may be precluded from returning to any such
            position or involvement for a period determined by the court.
      (f) Protection of Legal Rights.--Nothing in this subtitle shall be
    construed as altering or eliminating any cause of action or legal
    rights or remedies of participants, beneficiaries, enrollees, and
    others under State or Federal law (including sections 502 and 503 of
    the Employee Retirement Income Security Act of 1974), including the
    right to file judicial actions to enforce actions.
      (g) Application to All Acceptable Coverage.--The provisions of this
    section shall apply with respect to all acceptable coverage in the same
    manner as such provisions apply with respect to qualified health
    benefits plans under this section.

                             Subtitle E--Governance

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

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

    SEC. 142. DUTIES AND AUTHORITY OF COMMISSIONER.

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

    SEC. 143. CONSULTATION AND COORDINATION.

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

    SEC. 144. HEALTH INSURANCE OMBUDSMAN.

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

           Subtitle F--Relation to Other Requirements; Miscellaneous

    SEC. 151. RELATION TO OTHER REQUIREMENTS.

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

    SEC. 152. PROHIBITING DISCRIMINATION IN HEALTH CARE.

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

    SEC. 153. WHISTLEBLOWER PROTECTION.

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

    SEC. 154. CONSTRUCTION REGARDING COLLECTIVE BARGAINING.

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

    SEC. 155. SEVERABILITY.

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

    SEC. 156. APPLICATION OF STATE AND FEDERAL LAWS REGARDING ABORTION.

      (a) 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.
      (b) No Effect on Federal Laws Regarding Abortion.--
              (1) In general.--Nothing in this Act shall be construed to
            have any effect on Federal laws regarding--
                      (A) conscience protection;
                      (B) willingness or refusal to provide abortion; and
                      (C) 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.
      (c) No Effect on Federal Civil Rights Law.--Nothing in this section
    shall alter the rights and obligations of employees and employers under
    title VII of the Civil Rights Act of 1964.

    SEC. 157. NON-DISCRIMINATION ON ABORTION AND RESPECT FOR RIGHTS OF
                        CONSCIENCE.

       (a) Non-discrimination.--A Federal agency or program, and any State
    or local government that receives Federal financial assistance under
    this Act (or an amendment made by this Act), may not--
              (1) subject any individual or institutional health care
            entity to discrimination, or
              (2) require any health plan created or regulated under this
            Act (or an amendment made by this Act) to subject any
            individual or institutional health care entity to
            discrimination,
    on the basis that the health care entity does not provide, pay for,
    provide coverage of, or refer for abortions.
      (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) 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, and coordinate the investigation
    of such complaints.

                         Subtitle G--Early Investments

    SEC. 161. ENSURING VALUE AND LOWER PREMIUMS.

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

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

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

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

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

    SEC. 162. ENDING HEALTH INSURANCE RESCISSION ABUSE.

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

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

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

    SEC. 163. ENDING HEALTH INSURANCE DENIALS AND DELAYS OF NECESSARY
                        TREATMENT FOR CHILDREN WITH DEFORMITIES.

      (a) In General.--Subpart 2 of part A of title XXVII of the Public
    Health Service Act is amended by adding at the end the following new
    section:

    ``SEC. 2708. STANDARDS RELATING TO BENEFITS FOR MINOR CHILD'S
                        CONGENITAL OR DEVELOPMENTAL DEFORMITY OR DISORDER.

      ``(a) Requirements for Treatment for Children With Deformities.--
              ``(1) In general.--A group health plan, and a health
            insurance issuer offering group health insurance coverage, that
            provides coverage for surgical benefits shall provide coverage
            for outpatient and inpatient diagnosis and treatment of a minor
            child's congenital or developmental deformity, disease, or
            injury. A minor child shall include any individual who 21 years
            of age or younger.
              ``(2) Requirements.--Any coverage provided under paragraph
            (1) shall be subject to pre-authorization or pre-certification
            as required by the plan or issuer, and such coverage shall
            include any surgical treatment which, in the opinion of the
            treating physician, is medically necessary to approximate a
            normal appearance.
              ``(3) Treatment defined.--
                      ``(A) In general.--In this section, the term
                    `treatment' includes reconstructive surgical procedures
                    (procedures that are generally performed to improve
                    function, but may also be performed to approximate a
                    normal appearance) that are performed on abnormal
                    structures of the body caused by congenital defects,
                    developmental abnormalities, trauma, infection, tumors,
                    or disease, including--
                              ``(i) procedures that do not materially
                            affect the function of the body part being
                            treated; and
                              ``(ii) procedures for secondary conditions
                            and follow-up treatment.
                      ``(B) Exception.--Such term does not include cosmetic
                    surgery performed to reshape normal structures of the
                    body to improve appearance or self-esteem.
      ``(b) Notice.--A group health plan under this part shall comply with
    the notice requirement under section 714(b) of the Employee Retirement
    Income Security Act of 1974 with respect to the requirements of this
    section as if such section applied to such plan.''.
      (b) Individual Health Insurance.--Subpart 2 of part B of title XXVII
    of the Public Health Service Act, as amended by section 161(b), is
    further amended by adding at the end the following new section:

    ``SEC. 2755. STANDARDS RELATING TO BENEFITS FOR MINOR CHILD'S
                        CONGENITAL OR DEVELOPMENTAL DEFORMITY OR DISORDER.

      ``(a) Requirements for Reconstructive Surgery.--
              ``(1) In general.--A health insurance issuer offering health
            insurance coverage in the individual market that provides
            coverage for surgical benefits shall provide coverage for
            outpatient and inpatient diagnosis and treatment of a minor
            child's congenital or developmental deformity, disease, or
            injury. A minor child shall include any individual through 21
            years of age.
              ``(2) Requirements.--Any coverage provided under paragraph
            (1) shall be subject to pre-authorization or pre-certification
            as required by the insurance issuer offering such coverage, and
            such coverage shall include any surgical treatment which, in
            the opinion of the treating physician, is medically necessary
            to approximate a normal appearance.
              ``(3) Treatment defined.--
                      ``(A) In general.--In this section, the term
                    `treatment' includes reconstructive surgical procedures
                    (procedures that are generally performed to improve
                    function, but may also be performed to approximate a
                    normal appearance) that are performed on abnormal
                    structures of the body caused by congenital defects,
                    developmental abnormalities, trauma, infection, tumors,
                    or disease, including--
                              ``(i) procedures that do not materially
                            affect the function of the body part being
                            treated; and
                              ``(ii) procedures for secondary conditions
                            and follow-up treatment.
                      ``(B) Exception.--Such term does not include cosmetic
                    surgery performed to reshape normal structures of the
                    body to improve appearance or self-esteem.
      ``(b) Notice.--A health insurance issuer under this part shall comply
    with the notice requirement under section 714(b) of the Employee
    Retirement Income Security Act of 1974 with respect to the requirements
    referred to in subsection (a) as if such section applied to such issuer
    and such issuer were a group health plan.''.
      (c) Conforming Amendments.--
              (1) Section 2723(c) of such Act (42 U.S.C. 300gg-23(c)) is
            amended by striking ``section 2704'' and inserting ``sections
            2704 and 2708''.
              (2) Section 2762(b)(2) of such Act (42 U.S.C. 300gg-62(b)(2))
            is amended by striking ``section 2751'' and inserting
            ``sections 2751 and 2754''.
      (d) Effective Dates.--
              (1) The amendments made by subsection (a) shall apply with
            respect to group health plans for plan years beginning on or
            after January 1, 2010.
              (2) The amendment made by subsection (b) shall apply with
            respect to health insurance coverage offered, sold, issued,
            renewed, in effect, or operated in the individual market on or
            after such date.
      (e) Coordination Rules.--
              (1) The amendments made by subsection (a) shall remain in
            effect until such time as benefit standards are adopted subject
            to section 124 of this title.
              (2) Section 104(1) of the Health Insurance Portability and
            Accountability Act of 1996 is amended by striking ``this
            subtitle (and the amendments made by this subtitle and section
            401)'' and inserting ``the provisions of part 7 of subtitle B
            of title I of the Employee Retirement Income Security Act of
            1974, the provisions of parts A and C of title XXVII of the
            Public Health Service Act, and chapter 100 of the Internal
            Revenue Code of 1986''.

    SEC. 164. ADMINISTRATIVE SIMPLIFICATION.

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

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

      ``(a) Standards for Financial and Administrative Transactions.--
              ``(1) In general.--The Secretary shall adopt and regularly
            update standards consistent with the goals described in
            paragraph (2).
              ``(2) Goals for financial and administrative transactions.--
            The goals for standards under paragraph (1) are that such
            standards shall--
                      ``(A) be unique with no conflicting or redundant
                    standards;
                      ``(B) be authoritative, permitting no additions or
                    constraints for electronic transactions, including
                    companion guides;
                      ``(C) be comprehensive, efficient and robust,
                    requiring minimal augmentation by paper transactions or
                    clarification by further communications;
                      ``(D) enable the real-time (or near real-time)
                    determination of an individual's financial
                    responsibility at the point of service and, to the
                    extent possible, prior to service, including whether
                    the individual is eligible for a specific service with
                    a specific physician at a specific facility, which may
                    include utilization of a machine-readable health plan
                    beneficiary identification card;
                      ``(E) enable, where feasible, near real-time
                    adjudication of claims;
                      ``(F) provide for timely acknowledgment, response,
                    and status reporting applicable to any electronic
                    transaction deemed appropriate by the Secretary;
                      ``(G) describe all data elements (such as reason and
                    remark codes) in unambiguous terms, not permit optional
                    fields, require that data elements be either required
                    or conditioned upon set values in other fields, and
                    prohibit additional conditions; and
                      ``(H) harmonize all common data elements across
                    administrative and clinical transaction standards.
              ``(3) Time for adoption.--Not later than 2 years after the
            date of implementation of the X12 Version 5010 transaction
            standards implemented under this part, the Secretary shall
            adopt standards under this section.
              ``(4) Requirements for specific standards.--The standards
            under this section shall be developed, adopted, and enforced so
            as to--
                      ``(A) clarify, refine, complete, and expand, as
                    needed, the standards required under section 1173;
                      ``(B) require paper versions of standardized
                    transactions to comply with the same standards as to
                    data content such that a fully compliant, equivalent
                    electronic transaction can be populated from the data
                    from a paper version;
                      ``(C) enable electronic funds transfers, in order to
                    allow automated reconciliation with the related health
                    care payment and remittance advice;
                      ``(D) require timely and transparent claim and denial
                    management processes, including tracking, adjudication,
                    and appeal processing;
                      ``(E) require the use of a standard electronic
                    transaction with which health care providers may
                    quickly and efficiently enroll with a health plan to
                    conduct the other electronic transactions provided for
                    in this part; and
                      ``(F) provide for other requirements relating to
                    administrative simplification as identified by the
                    Secretary, in consultation with stakeholders.
              ``(5) Building on existing standards.--In developing the
            standards under this section, the Secretary shall build upon
            existing and planned standards.
              ``(6) Implementation and enforcement.--Not later than 6
            months after the date of the enactment of this section, the
            Secretary shall submit to the appropriate committees of
            Congress a plan for the implementation and enforcement, by not
            later than 5 years after such date of enactment, of the
            standards under this section. Such plan shall include--
                      ``(A) a process and timeframe with milestones for
                    developing the complete set of standards;
                      ``(B) an expedited upgrade program for continually
                    developing and approving additions and modifications to
                    the standards as often as annually to improve their
                    quality and extend their functionality to meet evolving
                    requirements in health care;
                      ``(C) programs to provide incentives for, and ease
                    the burden of, implementation for certain health care
                    providers, with special consideration given to such
                    providers serving rural or underserved areas and ensure
                    coordination with standards, implementation
                    specifications, and certification criteria being
                    adopted under the HITECH Act;
                      ``(D) programs to provide incentives for, and ease
                    the burden of, health care providers who volunteer to
                    participate in the process of setting standards for
                    electronic transactions;
                      ``(E) an estimate of total funds needed to ensure
                    timely completion of the implementation plan; and
                      ``(F) an enforcement process that includes timely
                    investigation of complaints, random audits to ensure
                    compliance, civil monetary and programmatic penalties
                    for non-compliance consistent with existing laws and
                    regulations, and a fair and reasonable appeals process
                    building off of enforcement provisions under this part.
      ``(b) Limitations on Use of Data.--Nothing in this section shall be
    construed to permit the use of information collected under this section
    in a manner that would adversely affect any individual.
      ``(c) Protection of Data.--The Secretary shall ensure (through the
    promulgation of regulations or otherwise) that all data collected
    pursuant to subsection (a) are--
              ``(1) used and disclosed in a manner that meets the HIPAA
            privacy and security law (as defined in section 3009(a)(2) of
            the Public Health Service Act), including any privacy or
            security standard adopted under section 3004 of such Act; and
              ``(2) protected from all inappropriate internal use by any
            entity that collects, stores, or receives the data, including
            use of such data in determinations of eligibility (or continued
            eligibility) in health plans, and from other inappropriate
            uses, as defined by the Secretary.

    ``SEC. 1173B. OPERATING RULES.

      ``(a) In General.--The Secretary shall adopt operating rules for each
    transaction described in section 1173(a)(2) of the Social Security Act
    (42 U.S.C. 1320d-2(a))
      ``(b) Operating Rules Development.--In adopting such rules, the
    Secretary shall take into account the development of operating rules
    that have been developed by a nonprofit entity that meets the following
    criteria:
              ``(1) The entity focuses its mission on administrative
            simplification.
              ``(2) The entity demonstrates a established multi-stakeholder
            process that creates consensus based operating rules using a
            voting policy with balanced representation by the critical
            stakeholders (including health plans and health care providers)
            so that no one group dominates the entity and shall include
            others such as standards development organizations, and
            relevant Federal agencies.
              ``(3) The entity has in place a public set of guiding
            principles that ensure the operating rules and process are open
            and transparent.
              ``(4) The entity shall coordinate its activities with the HIT
            Policy Committee and the HIT Standards Committee (established
            under title XXX of the Public Health Service Act) and
            complements the efforts of the Office of the National
            Healthcare Coordinator and its related health information
            exchange goals.
              ``(5) The entity incorporates national standards, including
            the transaction standards issued under Health Insurance
            Portability and Accountability Act of 1996.
              ``(6) The entity uses existing market research and proven
            best practices.
              ``(7) The entity has a set of measures that allow for the
            evaluation of their market impact and public reporting of
            aggregate stakeholder impact.
              ``(8) The entity supports nondiscrimination and conflict of
            interest policies that demonstrate a commitment to open, fair,
            and nondiscriminatory practices.
              ``(9) The entity allows for public reviews and updates of the
            operating rules.
      ``(c) Implementation.--The Secretary shall adopt operating rules
    under this section, by regulation or otherwise, only after taking into
    account the rules developed by the entity under subsection (b) and
    having ensured consultation with providers. The first set of operating
    rules for the transactions for eligibility for health plan and health
    claims status under this section shall be adopted not later than
    October 1, 2011, in a manner such that such set of rules is effective
    beginning not later than January 1, 2013. The second set of operating
    rules for the remainder of the transactions described in section
    1173(a)(2) of the Social Security Act (42 U.S.C. 1320d-2(a)) shall be
    adopted not later than October 1, 2012, in a manner such that such set
    of rules is effective beginning not later than January 1, 2014.''.
              (2) Definitions.--Section 1171 of such Act (42 U.S.C. 1320d)
            is amended--
                      (A) in paragraph (7), by striking ``with reference
                    to'' and all that follows and inserting ``with
                    reference to a transaction or data element of health
                    information in section 1173 means implementation
                    specifications, certification criteria, operating
                    rules, messaging formats, codes, and code sets adopted
                    or established by the Secretary for the electronic
                    exchange and use of information.''; and
                      (B) by adding at the end the following new paragraph:
              ``(9) Operating rules.--The term `operating rules' means
            business rules for using and processing transactions. Operating
            rules should address the following:
                      ``(A) Requirements for data content using available
                    and established national standards.
                      ``(B) Infrastructure requirements that establish best
                    practices for streamlining data flow to yield timely
                    execution of transactions.
                      ``(C) Policies defining the transaction related
                    rights and responsibilities for entities that are
                    transmitting or receiving data.''.
              (3) Conforming amendment.--Section 1179 of such Act (42
            U.S.C. 1320d-8) is amended, in the matter before paragraph
            (1)--
                      (A) by inserting ``on behalf of an individual'' after
                    ``1978)''; and
                      (B) by inserting ``on behalf of an individual'' after
                    ``for a financial institution''.
      (b) Standards for Claims Attachments and Coordination of Benefits .--
              (1) Standard for health claims attachments.--Not later than 1
            year after the date of the enactment of this Act, the Secretary
            of Health and Human Services shall promulgate a final rule to
            establish a standard for health claims attachment transaction
            described in section 1173(a)(2)(B) of the Social Security Act
            (42 U.S.C. 1320d-2(a)(2)(B)) and coordination of benefits.
              (2) Revision in processing payment transactions by financial
            institutions.--
                      (A) In general.--Section 1179 of the Social Security
                    Act (42 U.S.C. 1320d-8) is amended, in the matter
                    before paragraph (1)--
                              (i) by striking ``or is engaged'' and
                            inserting ``and is engaged''; and
                              (ii) by inserting ``(other than as a business
                            associate for a covered entity)'' after ``for a
                            financial institution''.
                      (B) Effective date.--The amendments made by paragraph
                    (1) shall apply to transactions occurring on or after
                    such date (not later than 6 months after the date of
                    the enactment of this Act) as the Secretary of Health
                    and Human Services shall specify.
      (c) Unique Health Plan Identifier.--Not later than 2 years after the
    date of the enactment of this Act, the Secretary of Health and Human
    Services shall promulgate a final rule to establish a unique health
    plan identifier described in section 1173(b) of the Social Security Act
    (42 U.S.C. 1320d-2(b)) based on the input of the National Committee of
    Vital and Health Statistics and consultation with health plans. The
    Secretary may do so on an interim final basis and effective not later
    than October 1, 2012.

    SEC. 165. EXPANSION OF ELECTRONIC TRANSACTIONS IN MEDICARE.

      (a) In General.--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) subject to subsection (h), not later than January 1,
            2015, 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.''.
      (b) Effective Date.--The amendments made by subsection (a) shall take
    effect upon the date of the enactment of this Act.

    SEC. 166. REINSURANCE PROGRAM FOR RETIREES.

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

    SEC. 167. LIMITATIONS ON PREEXISTING CONDITION EXCLUSIONS IN GROUP
                        HEALTH PLANS AND HEALTH INSURANCE COVERAGE IN THE
                        GROUP AND INDIVIDUAL MARKETS IN ADVANCE OF
                        APPLICABILITY OF NEW PROHIBITION OF PREEXISTING
                        CONDITION EXCLUSIONS.

      (a) Amendments Relating to Preexisting Condition Exclusions Under
    Group Health Plans.--
              (1) Reduction in look-back period.--Section 2701(a)(1) of the
            Public Health Service Act (42 U.S.C. 300gg(a)(1)) is amended by
            striking ``6-month period'' and inserting ``30-day period''.
              (2) Reduction in permitted preexisting condition limitation
            period.--Section 2701(a)(2) of such Act (42 U.S.C. 300gg(a)(2))
            is amended by striking ``12 months'' and inserting ``3
            months'', and by striking ``18 months'' and inserting ``9
            months''.
              (3) Effective date.--
                      (A) In general.--Except as provided in subparagraph
                    (B), the amendments made by this subsection shall apply
                    with respect to group health plans for plan years
                    beginning after the end of the 6th calendar month
                    following the date of the enactment of this Act.
                      (B) Special rule for collective bargaining
                    agreements.--In the case of a group health plan
                    maintained pursuant to one or more collective
                    bargaining agreements between employee representatives
                    and one or more employers ratified before the date of
                    the enactment of this Act, the amendments made by this
                    subsection shall not apply to plan years beginning
                    before the earlier of--
                              (i) the date on which the last of the
                            collective bargaining agreements relating to
                            the plan terminates (determined without regard
                            to any extension thereof agreed to after the
                            date of the enactment of this Act), or
                              (ii) 3 years after the date of the enactment
                            of this Act.
                    For purposes of clause (i), any plan amendment made
                    pursuant to a collective bargaining agreement relating
                    to the plan which amends the plan solely to conform to
                    any requirement added by the amendments made by this
                    section shall not be treated as a termination of such
                    collective bargaining agreement.
      (b) Amendments Relating to Preexisting Condition Exclusions in Health
    Insurance Coverage in the Individual Market Under Grandfathered Health
    Insurance Coverage.--
              (1) Applicability of group health insurance limitations on
            imposition of preexisting condition exclusions.--
                      (A) In general.--Section 2741 of the Public Health
                    Service Act (42 U.S.C. 300gg-41) is amended--
                              (i) by redesignating the second subsection
                            (e) (relating to market requirements) and
                            subsection (f) as subsections (f) and (g),
                            respectively; and
                              (ii) by adding at the end the following new
                            subsection:
      ``(h) Application of Group Health Insurance Limitations on Imposition
    of Preexisting Condition Exclusions.--
              ``(1) In general.--Subject to paragraph (2), a health
            insurance issuer that provides individual health insurance
            coverage may not impose a preexisting condition exclusion (as
            defined in subsection (b)(1)(A) of section 2701) with respect
            to such coverage except to the extent that such exclusion could
            be imposed consistent with such section if such coverage were
            group health insurance coverage.
              ``(2) Limitation.--In the case of an individual who--
                      ``(A) is enrolled in individual health insurance
                    coverage;
                      ``(B) during the period of such enrollment has a
                    condition for which no medical advice, diagnosis, care,
                    or treatment had been recommended or received as of the
                    enrollment date; and
                      ``(C) seeks to enroll under other individual health
                    insurance coverage which provides benefits different
                    from those provided under the coverage referred to in
                    subparagraph (A) with respect to such condition,
            the issuer of the individual health insurance coverage
            described in subparagraph (C) may impose a preexisting
            condition exclusion with respect to such condition and any
            benefits in addition to those provided under the coverage
            referred to in subparagraph (A), but such exclusion may not
            extend for a period of more than 3 months.''.
                      (B) Elimination of cobra requirement.--Subsection (b)
                    of such section is amended--
                              (i) by adding ``and'' at the end of paragraph
                            (2);
                              (ii) by striking the semicolon at the end of
                            paragraph (3) and inserting a period; and
                              (iii) by striking paragraphs (4) and (5).
                      (C) Conforming amendment.--Section 2744(a)(1) of such
                    Act (42 U.S.C. 300gg-44(a)(1)) is amended by inserting
                    ``(other than subsection (h))'' after ``section 2741''.
              (2) Effective date.--The amendments made by this subsection
            shall apply with respect to health insurance coverage offered,
            sold, issued, renewed, in effect, or operated in the individual
            market beginning after the end of the 6th calendar month
            following the date of the enactment of this Act.
      (c) Inapplicability of Interim Limitations Upon Applicability of
    Total Prohibition of Exclusion.--Section 2701 of such Act and the
    amendments made by subsection (b) of this section to sections 2741 and
    2744 of such Act shall cease to be effective in the case of any health
    benefits plan as of the date on which such plan becomes subject to the
    requirements of section 111 of this Act (relating to prohibiting
    preexisting condition exclusions).

           TITLE II--HEALTH INSURANCE EXCHANGE AND RELATED PROVISIONS

                     Subtitle A--Health Insurance Exchange

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

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

    SEC. 202. EXCHANGE-ELIGIBLE INDIVIDUALS AND EMPLOYERS.

      (a) Access to Coverage.--Except as provided in subsection (i) and in
    accordance with this section, all individuals are eligible to obtain
    coverage through enrollment in an Exchange-participating health
    benefits plan offered through the Health Insurance Exchange unless such
    individuals are enrolled in another qualified health benefits plan or
    other acceptable coverage.
      (b) Definitions.--In this division:
              (1) Exchange-eligible individual.--The term ``Exchange-
            eligible individual'' means an individual who is eligible under
            this section to be enrolled through the Health Insurance
            Exchange in an Exchange-participating health benefits plan and,
            with respect to family coverage, includes dependents of such
            individual.
              (2) Exchange-eligible employer.--The term ``Exchange-eligible
            employer'' means an employer that is eligible under this
            section to enroll through the Health Insurance Exchange
            employees of the employer (and their dependents) in Exchange-
            eligible health benefits plans.
              (3) Employment-related definitions.--The terms ``employer'',
            ``employee'', ``full-time employee'', and ``part-time
            employee'' have the meanings given such terms by the
            Commissioner for purposes of this division.
      (c) Transition.--Individuals and employers shall only be eligible to
    enroll or participate in the Health Insurance Exchange in accordance
    with the following transition schedule:
              (1) First year.--In Y1 (as defined in section 100(c))--
                      (A) individuals described in subsection (d)(1),
                    including individuals described in paragraphs (3) and
                    (4) of subsection (d); and
                      (B) smallest employers described in subsection
                    (e)(1).
              (2) Second year.--In Y2--
                      (A) individuals and employers described in paragraph
                    (1); and
                      (B) smaller employers described in subsection (e)(2).
              (3) Third and subsequent years.--In Y3 and subsequent years--
                      (A) individuals and employers described in paragraph
                    (2); and
                      (B) larger employers as permitted by the Commissioner
                    under subsection (e)(3).
      (d) Individuals.--
              (1) Individual described.--Subject to the succeeding
            provisions of this subsection, an individual described in this
            paragraph is an individual who--
                      (A) is not enrolled in coverage described in
                    subparagraphs (C) through (F) of paragraph (2); and
                      (B) is not enrolled in coverage as a full-time
                    employee (or as a dependent of such an employee) under
                    a group health plan if the coverage and an employer
                    contribution under the plan meet the requirements of
                    section 312.
            For purposes of subparagraph (B), in the case of an individual
            who is self-employed, who has at least 1 employee, and who
            meets the requirements of section 312, such individual shall be
            deemed a full-time employee described in such subparagraph.
              (2) Acceptable coverage.--For purposes of this division, the
            term ``acceptable coverage'' means any of the following:
                      (A) Qualified health benefits plan coverage.--
                    Coverage under a qualified health benefits plan.
                      (B) Grandfathered health insurance coverage; coverage
                    under current group health plan.--Coverage under a
                    grandfathered health insurance coverage (as defined in
                    subsection (a) of section 102) or under a current group
                    health plan (described in subsection (b) of such
                    section).
                      (C) Medicare.--Coverage under part A of title XVIII
                    of the Social Security Act.
                      (D) Medicaid.--Coverage for medical assistance under
                    title XIX of the Social Security Act, excluding such
                    coverage that is only available because of the
                    application of subsection (u), (z), or (aa) of section
                    1902 of such Act
                      (E) Members of the armed forces and dependents
                    (including tricare).--Coverage under chapter 55 of
                    title 10, United States Code, including similar
                    coverage furnished under section 1781 of title 38 of
                    such Code.
                      (F) VA.--Coverage under the veteran's health care
                    program under chapter 17 of title 38, United States
                    Code, but only if the coverage for the individual
                    involved is determined by the Commissioner in
                    coordination with the Secretary of Treasury to be not
                    less than a level specified by the Commissioner and
                    Secretary of Veteran's Affairs, in coordination with
                    the Secretary of Treasury, based on the individual's
                    priority for services as provided under section 1705(a)
                    of such title.
                      (G) Other coverage.--Such other health benefits
                    coverage, such as a State health benefits risk pool, as
                    the Commissioner, in coordination with the Secretary of
                    the Treasury, recognizes for purposes of this
                    paragraph.
            The Commissioner shall make determinations under this paragraph
            in coordination with the Secretary of the Treasury.
              (3) Treatment of certain non-traditional medicaid eligible
            individuals.--An individual who is a non-traditional Medicaid
            eligible individual (as defined in section 205(e)(4)(C)) in a
            State may be an Exchange-eligible individual if the individual
            was enrolled in a qualified health benefits plan, grandfathered
            health insurance coverage, or current group health plan during
            the 6 months before the individual became a non-traditional
            Medicaid eligible individual. During the period in which such
            an individual has chosen to enroll in an Exchange-participating
            health benefits plan, the individual is not also eligible for
            medical assistance under Medicaid.
              (4) Continuing eligibility permitted.--
                      (A) In general.--Except as provided in subparagraph
                    (B), once an individual qualifies as an Exchange-
                    eligible individual under this subsection (including as
                    an employee or dependent of an employee of an Exchange-
                    eligible employer) and enrolls under an Exchange-
                    participating health benefits plan through the Health
                    Insurance Exchange, the individual shall continue to be
                    treated as an Exchange-eligible individual until the
                    individual is no longer enrolled with an Exchange-
                    participating health benefits plan.
                      (B) Exceptions.--
                              (i) In general.--Subparagraph (A) shall not
                            apply to an individual once the individual
                            becomes eligible for coverage--
                                      (I) under part A of the Medicare
                                    program;
                                      (II) under the Medicaid program as a
                                    Medicaid eligible individual, except as
                                    permitted under paragraph (3) or clause
                                    (ii); or
                                      (III) in such other circumstances as
                                    the Commissioner may provide.
                              (ii) Transition period.--In the case
                            described in clause (i)(II), the Commissioner
                            shall permit the individual to continue
                            treatment under subparagraph (A) until such
                            limited time as the Commissioner determines it
                            is administratively feasible, consistent with
                            minimizing disruption in the individual's
                            access to health care.
      (e) Employers.--
              (1) Smallest employer.--Subject to paragraph (4), smallest
            employers described in this paragraph are employers with 10 or
            fewer employees.
              (2) Smaller employers.--Subject to paragraph (4), smaller
            employers described in this paragraph are employers that are
            not smallest employers described in paragraph (1) and have 20
            or fewer employees.
              (3) Larger employers.--
                      (A) In general.--Beginning with Y3, the Commissioner
                    may permit employers not described in paragraph (1) or
                    (2) to be Exchange-eligible employers.
                      (B) Phase-in.--In applying subparagraph (A), the
                    Commissioner may phase-in the application of such
                    subparagraph based on the number of full-time employees
                    of an employer and such other considerations as the
                    Commissioner deems appropriate.
              (4) Continuing eligibility.--Once an employer is permitted to
            be an Exchange-eligible employer under this subsection and
            enrolls employees through the Health Insurance Exchange, the
            employer shall continue to be treated as an Exchange-eligible
            employer for each subsequent plan year regardless of the number
            of employees involved unless and until the employer meets the
            requirement of section 311(a) through paragraph (1) of such
            section by offering a group health plan and not through
            offering an Exchange-participating health benefits plan.
              (5) Employer participation and contributions.--
                      (A) Satisfaction of employer responsibility.--For any
                    year in which an employer is an Exchange-eligible
                    employer, such employer may meet the requirements of
                    section 312 with respect to employees of such employer
                    by offering such employees the option of enrolling with
                    Exchange-participating health benefits plans through
                    the Health Insurance Exchange consistent with the
                    provisions of subtitle B of title III.
                      (B) Employee choice.--Any employee offered Exchange-
                    participating health benefits plans by the employer of
                    such employee under subparagraph (A) may choose
                    coverage under any such plan. That choice includes,
                    with respect to family coverage, coverage of the
                    dependents of such employee.
              (6) Affiliated groups.--Any employer which is part of a group
            of employers who are treated as a single employer under
            subsection (b), (c), (m), or (o) of section 414 of the Internal
            Revenue Code of 1986 shall be treated, for purposes of this
            subtitle, as a single employer.
              (7) Other counting rules.--The Commissioner shall establish
            rules relating to how employees are counted for purposes of
            carrying out this subsection.
      (f) Special Situation Authority.--The Commissioner shall have the
    authority to establish such rules as may be necessary to deal with
    special situations with regard to uninsured individuals and employers
    participating as Exchange-eligible individuals and employers, such as
    transition periods for individuals and employers who gain, or lose,
    Exchange-eligible participation status, and to establish grace periods
    for premium payment.
      (g) Surveys of Individuals and Employers.--The Commissioner shall
    provide for periodic surveys of Exchange-eligible individuals and
    employers concerning satisfaction of such individuals and employers
    with the Health Insurance Exchange and Exchange-participating health
    benefits plans.
      (h) Exchange Access Study.--
              (1) In general.--The Commissioner shall conduct a study of
            access to the Health Insurance Exchange for individuals and for
            employers, including individuals and employers who are not
            eligible and enrolled in Exchange-participating health benefits
            plans. The goal of the study is to determine if there are
            significant groups and types of individuals and employers who
            are not Exchange-eligible individuals or employers, but who
            would have improved benefits and affordability if made eligible
            for coverage in the Exchange.
              (2) Items included in study.--Such study also shall examine--
                      (A) the terms, conditions, and affordability of group
                    health coverage offered by employers and QHBP offering
                    entities outside of the Exchange compared to Exchange-
                    participating health benefits plans; and
                      (B) the affordability-test standard for access of
                    certain employed individuals to coverage in the Health
                    Insurance Exchange.
              (3) Report.--Not later than January 1 of Y3, in Y6, and
            thereafter, the Commissioner shall submit to Congress on the
            study conducted under this subsection and shall include in such
            report recommendations regarding changes in standards for
            Exchange eligibility for individuals and employers.
      (i) Exception for Veterans and Members of Armed Forces.--
    Notwithstanding any other provision of this Act, an individual with
    acceptable coverage described in subparagraph (E) or (F) of subsection
    (d)(2) is eligible to obtain coverage through enrollment in an
    Exchange-participating health benefits plan offered through the Health
    Insurance Exchange.
      (j) Department of Veterans Affairs and Department of Defense Health
    Programs.--Nothing in this section shall be construed as affecting any
    authority under title 38, United States Code, or chapter 55 of title
    10, United States Code.
      (k) Report on Comparable Coverage for CHIP Children; Special Rule for
    CHIP Children.--
              (1) Report.--No later than December 31, 2011, the Secretary
            of Health and Human Services shall submit to Congress a report
            that compares the benefits packages offered in 2011 to an
            average State child health plan under title XXI of the Social
            Security Act and to the benefit standards adopted under section
            124 for the essential benefits package and the affordability
            credits under subtitle C.
              (2) Certification of secretary.--Notwithstanding the previous
            provisions of this section, no child who would be eligible for
            coverage under title XXI of the Social Security Act shall be
            enrolled in an Exchange participating health benefits plan
            until the Secretary of Health and Human Services has certified,
            based on the findings in the report under paragraph (1) and
            changes made pursuant to the recommendations in the report, if
            any, that the coverage (as described in section 121(a)) is at
            least comparable to the coverage provided to children under an
            average State child health plan under such title as in effect
            in 2011.

    SEC. 203. BENEFITS PACKAGE LEVELS.

      (a) In General.--The Commissioner shall specify the benefits to be
    made available under Exchange-participating health benefits plans
    during each plan year, consistent with subtitle C of title I and this
    section.
      (b) Limitation on Health Benefits Plans Offered by Offering
    Entities.--The Commissioner may not enter into a contract with a QHBP
    offering entity under section 204(c) for the offering of an Exchange-
    participating health benefits plan in a service area unless the
    following requirements are met:
              (1) Required offering of basic plan.--The entity offers only
            one basic plan for such service area.
              (2) Optional offering of enhanced plan.--If and only if the
            entity offers a basic plan for such service area, the entity
            may offer one enhanced plan for such area.
              (3) Optional offering of premium plan.--If and only if the
            entity offers an enhanced plan for such service area, the
            entity may offer one premium plan for such area.
              (4) Optional offering of premium-plus plans.--If and only if
            the entity offers a premium plan for such service area, the
            entity may offer one or more premium-plus plans for such area.
    All such plans may be offered under a single contract with the
    Commissioner.
      (c) Specification of Benefit Levels for Plans.--
              (1) In general.--The Commissioner shall establish the
            following standards consistent with this subsection and title
            I:
                      (A) Basic, enhanced, and premium plans.--Standards
                    for 3 levels of Exchange-participating health benefits
                    plans: basic, enhanced, and premium (in this division
                    referred to as a ``basic plan'', ``enhanced plan'', and
                    ``premium plan'', respectively).
                      (B) Premium-plus plan benefits.--Standards for
                    additional benefits that may be offered, consistent
                    with this subsection and subtitle C of title I, under a
                    premium plan (such a plan with additional benefits
                    referred to in this division as a ``premium-plus
                    plan'') .
              (2) Basic plan.--
                      (A) In general.--A basic plan shall offer the
                    essential benefits package required under title I for a
                    qualified health benefits plan.
                      (B) Tiered cost-sharing for affordable credit
                    eligible individuals.--In the case of an affordable
                    credit eligible individual (as defined in section
                    242(a)(1)) enrolled in an Exchange-participating health
                    benefits plan, the benefits under a basic plan are
                    modified to provide for the reduced cost-sharing for
                    the income tier applicable to the individual under
                    section 244(c).
              (3) Enhanced plan.--An enhanced plan shall offer, in addition
            to the level of benefits under the basic plan, a lower level of
            cost-sharing as provided under title I consistent with section
            123(b)(5)(A).
              (4) Premium plan.--A premium plan shall offer, in addition to
            the level of benefits under the basic plan, a lower level of
            cost-sharing as provided under title I consistent with section
            123(b)(5)(B).
              (5) Premium-plus plan.--A premium-plus plan is a premium plan
            that also provides additional benefits, such as adult oral
            health and vision care, approved by the Commissioner. The
            portion of the premium that is attributable to such additional
            benefits shall be separately specified.
              (6) Range of permissible variation in cost-sharing.--The
            Commissioner shall establish a permissible range of variation
            of cost-sharing for each basic, enhanced, and premium plan,
            except with respect to any benefit for which there is no cost-
            sharing permitted under the essential benefits package. Such
            variation shall permit a variation of not more than plus (or
            minus) 10 percent in cost-sharing with respect to each benefit
            category specified under section 122.
      (d) Treatment of State Benefit Mandates.--Insofar as a State requires
    a health insurance issuer offering health insurance coverage to include
    benefits beyond the essential benefits package, such requirement shall
    continue to apply to an Exchange-participating health benefits plan, if
    the State has entered into an arrangement satisfactory to the
    Commissioner to reimburse the Commissioner for the amount of any net
    increase in affordability premium credits under subtitle C as a result
    of an increase in premium in basic plans as a result of application of
    such requirement.
      (e) Rules Regarding Coverage of and Affordability Credits for
    Specified Services.--
              (1) Assured availability of varied coverage through the
            health insurance exchange.--The Commissioner shall assure that,
            of the Exchange participating health benefits plan offered in
            each premium rating area of the Health Insurance Exchange--
                      (A) there is at least one such plan that provides
                    coverage of services described in subparagraphs (A) and
                    (B) of section 122(d)(4); and
                      (B) there is at least one such plan that does not
                    provide coverage of services described in section
                    122(d)(4)(A) which plan may also be one that does not
                    provide coverage of services described in section
                    122(d)(4)(B).
              (2) Segregation of funds.--If a qualified health benefits
            plan provides coverage of services described in section
            122(d)(4)(A), the plan shall provide assurances satisfactory to
            the Commissioner that--
                      (A) any affordability credits provided under subtitle
                    C of title II are not used for purposes of paying for
                    such services; and
                      (B) only premium amounts attributable to the
                    actuarial value described in section 113(b) are used
                    for such purpose.

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

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

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

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

    SEC. 206. OTHER FUNCTIONS.

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

    SEC. 207. HEALTH INSURANCE EXCHANGE TRUST FUND.

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

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

      (a) In General.--If--
              (1) a State (or group of States, subject to the approval of
            the Commissioner) applies to the Commissioner for approval of a
            State-based Health Insurance Exchange to operate in the State
            (or group of States); and
              (2) the Commissioner approves such State-based Health
            Insurance Exchange,
    then, subject to subsections (c) and (d), the State-based Health
    Insurance Exchange shall operate, instead of the Health Insurance
    Exchange, with respect to such State (or group of States). The
    Commissioner shall approve a State-based Health Insurance Exchange if
    it meets the requirements for approval under subsection (b).
      (b) Requirements for Approval.--
              (1) In general.--The Commissioner may not approve a State-
            based Health Insurance Exchange under this section unless the
            following requirements are met:
                      (A) The State-based Health Insurance Exchange must
                    demonstrate the capacity to and provide assurances
                    satisfactory to the Commissioner that the State-based
                    Health Insurance Exchange will carry out the functions
                    specified for the Health Insurance Exchange in the
                    State (or States) involved, including--
                              (i) negotiating and contracting with QHBP
                            offering entities for the offering of Exchange-
                            participating health benefits plan, which
                            satisfy the standards and requirements of this
                            title and title I;
                              (ii) enrolling Exchange-eligible individuals
                            and employers in such State in such plans;
                              (iii) the establishment of sufficient local
                            offices to meet the needs of Exchange-eligible
                            individuals and employers;
                              (iv) administering affordability credits
                            under subtitle B using the same methodologies
                            (and at least the same income verification
                            methods) as would otherwise apply under such
                            subtitle and at a cost to the Federal
                            Government which does exceed the cost to the
                            Federal Government if this section did not
                            apply; and
                              (v) enforcement activities consistent with
                            federal requirements.
                      (B) There is no more than one Health Insurance
                    Exchange operating with respect to any one State.
                      (C) The State provides assurances satisfactory to the
                    Commissioner that approval of such an Exchange will not
                    result in any net increase in expenditures to the
                    Federal Government.
                      (D) The State provides for reporting of such
                    information as the Commissioner determines and
                    assurances satisfactory to the Commissioner that it
                    will vigorously enforce violations of applicable
                    requirements.
                      (E) The State is eligible to receive an incentive
                    payment for enacting and implementing medical liability
                    reforms as specified in subsection (g).
                      (F) Such other requirements as the Commissioner may
                    specify.
              (2) Presumption for certain state-operated exchanges.--
                      (A) In general.--In the case of a State operating an
                    Exchange prior to January 1, 2010 that seeks to operate
                    the State-based Health Insurance Exchange under this
                    section, the Commissioner shall presume that such
                    Exchange meets the standards under this section unless
                    the Commissioner determines, after completion of the
                    process established under subparagraph (B), that the
                    Exchange does not comply with such standards.
                      (B) Process.--The Commissioner shall establish a
                    process to work with a State described in subparagraph
                    (A) to provide assistance necessary to assure that the
                    State's Exchange comes into compliance with the
                    standards for approval under this section.
      (c) Ceasing Operation.--
              (1) In general.--A State-based Health Insurance Exchange may,
            at the option of each State involved, and only after providing
            timely and reasonable notice to the Commissioner, cease
            operation as such an Exchange, in which case the Health
            Insurance Exchange shall operate, instead of such State-based
            Health Insurance Exchange, with respect to such State (or
            States).
              (2) Termination; health insurance exchange resumption of
            functions.--The Commissioner may terminate the approval (for
            some or all functions) of a State-based Health Insurance
            Exchange under this section if the Commissioner determines that
            such Exchange no longer meets the requirements of subsection
            (b) or is no longer capable of carrying out such functions in
            accordance with the requirements of this subtitle. In lieu of
            terminating such approval, the Commissioner may temporarily
            assume some or all functions of the State-based Health
            Insurance Exchange until such time as the Commissioner
            determines the State-based Health Insurance Exchange meets such
            requirements of subsection (b) and is capable of carrying out
            such functions in accordance with the requirements of this
            subtitle.
              (3) Effectiveness.--The ceasing or termination of a State-
            based Health Insurance Exchange under this subsection shall be
            effective in such time and manner as the Commissioner shall
            specify.
      (d) Retention of Authority.--
              (1) Authority retained.--Enforcement authorities of the
            Commissioner shall be retained by the Commissioner.
              (2) Discretion to retain additional authority.--The
            Commissioner may specify functions of the Health Insurance
            Exchange that--
                      (A) may not be performed by a State-based Health
                    Insurance Exchange under this section; or
                      (B) may be performed by the Commissioner and by such
                    a State-based Health Insurance Exchange.
      (e) References.--In the case of a State-based Health Insurance
    Exchange, except as the Commissioner may otherwise specify under
    subsection (d), any references in this subtitle to the Health Insurance
    Exchange or to the Commissioner in the area in which the State-based
    Health Insurance Exchange operates shall be deemed a reference to the
    State-based Health Insurance Exchange and the head of such Exchange,
    respectively.
      (f) Funding.--In the case of a State-based Health Insurance Exchange,
    there shall be assistance provided for the operation of such Exchange
    in the form of a matching grant with a State share of expenditures
    required.
      (g) Medical Liability Alternatives.--
              (1) Purposes.--The purposes of this subsection are--
                      (A) to ensure quality healthcare is readily available
                    by providing an alternative framework to reduce the
                    costs of defensive medicine and allow victims of
                    malpractice to be fairly compensated; and
                      (B) to do the above without limiting attorneys fees
                    or imposing caps on damages.
              (2) Incentive payments for medical liability reform.--
                      (A) In general.--Each State is eligible to receive an
                    incentive payment, in an amount determined by the
                    Secretary subject to the availability of
                    appropriations, if the State enacts after the date of
                    the enactment of this subsection, and is implementing,
                    an alternative medical liability law that complies with
                    this subsection.
                      (B) Determination by secretary.--The Secretary shall
                    determine that a State's alternative medical liability
                    law complies with this subsection if the Secretary is
                    satisfied that the State--
                              (i) has enacted and is currently implementing
                            that law; and
                              (ii) that law is effective.
                      (C) Considerations for determination.--In making a
                    determination of the effectiveness of a law, the
                    Secretary shall consider whether the law--
                              (i) makes the medical liability system more
                            reliable through prevention of or prompt and
                            fair resolution of disputes;
                              (ii) encourages the disclosure of health care
                            errors; and
                              (iii) maintains access to affordable
                            liability insurance.
                      (D) Optional contents of alternative medical
                    liability law.--An alternative medical liability law
                    shall contain any one or a combination of the following
                    litigation alternatives:
                              (i) Certificate of Merit.
                              (ii) Early offer.
                      (E) Use of incentive payments.--The State shall use
                    an incentive payment received under this subsection to
                    improve health care in that State.
              (3) Application.--Each State seeking an incentive payment
            under this subsection shall submit to the Secretary an
            application, at such time, in such manner, and containing such
            information as the Secretary may require.
              (4) Technical assistance.--The Secretary may provide
            technical assistance to the States applying for or awarded an
            incentive payment under this subsection.
              (5) Reports.--Beginning not later than one year after the
            date of the enactment of this subsection, the Secretary shall
            submit to Congress an annual report on the progress States have
            made in adopting and implementing alternative medical liability
            laws that comply with this subsection. Such reports shall
            contain sufficient documentation regarding the effectiveness of
            such laws to enable an objective comparative analysis of them.
              (6) Rulemaking.--The Secretary may make rules to carry out
            this subsection.
              (7) Definition.--In this subsection--
                      (A) the term ``Secretary'' means the Secretary of
                    Health and Human Services; and
                      (B) the term ``State'' includes the District of
                    Columbia, Puerto Rico, and each other territory or
                    possession of the United States.
              (8) Authorization of appropriations.--There are authorized to
            be appropriated to carry out this subsection such sums as may
            be necessary, to remain available until expended.

    SEC. 209. LIMITATION ON PREMIUM INCREASES UNDER EXCHANGE-PARTICIPATING
                        HEALTH BENEFITS PLANS.

      (a) In General.--The annual increase in the premiums charged under
    any Exchange-participating health benefits plan may not exceed 150
    percent of the annual percentage increase in medical inflation for the
    12-month period ending in June of the prior year, unless the plan
    receives approval for a higher rate increase in accordance with
    subsection (b) or (c).
      (b) Exception for Additional Required Benefits.--If the Health
    Choices Commissioner requires Exchange-participating health benefits
    plans to provide additional benefits, the annual increase permitted
    under subsection (a) with respect to the first year to which such
    benefits are required shall be increased to take into account the costs
    of such additional benefits.
      (c) Exception to Where Financial Viability Threatened.--Subsection
    (a) shall not apply to any Exchange-participating health benefits plan
    for any year if such plan demonstrates to the Commissioner (or, if
    determined appropriate by the Commissioner, the insurance commissioner
    for the State in which the plan is offered) that complying with
    subsection (a) for such year would threaten its financial viability or
    its ability to provide timely benefits to plan participants.
      (d) Non-preemption.--Nothing in this section shall be construed as
    preempting existing State prior approval laws.

                   Subtitle B--Public Health Insurance Option

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

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

    SEC. 222. PREMIUMS AND FINANCING.

      (a) Establishment of Premiums.--
              (1) In general.--The Secretary shall establish
            geographically-adjusted premium rates for the public health
            insurance option in a manner--
                      (A) that complies with the premium rules established
                    by the Commissioner under section 113 for Exchange-
                    participating health benefit plans; and
                      (B) at a level sufficient to fully finance the costs
                    of--
                              (i) health benefits provided by the public
                            health insurance option; and
                              (ii) administrative costs related to
                            operating the public health insurance option.
              (2) Contingency margin.--In establishing premium rates under
            paragraph (1), the Secretary shall include an appropriate
            amount for a contingency margin (which shall be not less than
            90 days of estimated claims). Before setting such appropriate
            amount for years starting with Y3, the Secretary shall solicit
            a recommendation on such amount from the American Academy of
            Actuaries.
      (b) Account.--
              (1) Establishment.--There is established in the Treasury of
            the United States an Account for the receipts and disbursements
            attributable to the operation of the public health insurance
            option, including the start-up funding under paragraph (2).
            Section 1854(g) of the Social Security Act shall apply to
            receipts described in the previous sentence in the same manner
            as such section applies to payments or premiums described in
            such section.
              (2) Start-up funding.--
                      (A) In general.--In order to provide for the
                    establishment of the public health insurance option
                    there is hereby appropriated to the Secretary, out of
                    any funds in the Treasury not otherwise appropriated,
                    $2,000,000,000. In order to provide for initial claims
                    reserves before the collection of premiums, there is
                    hereby appropriated to the Secretary, out of any funds
                    in the Treasury not otherwise appropriated, such sums
                    as necessary to cover 90 days worth of claims reserves
                    based on projected enrollment.
                      (B) Amortization of start-up funding.--The Secretary
                    shall provide for the repayment of the startup funding
                    provided under subparagraph (A) to the Treasury in an
                    amortized manner over the 10-year period beginning with
                    Y1.
                      (C) Limitation on funding.--Nothing in this section
                    shall be construed as authorizing any additional
                    appropriations to the Account, other than such amounts
                    as are otherwise provided with respect to other
                    Exchange-participating health benefits plans.
              (3) No bailouts.--In no case shall the public health
            insurance option receive any Federal funds for purposes of
            insolvency in any manner similar to the manner in which
            entities receive Federal funding under the Troubled Assets
            Relief Program of the Secretary of the Treasury.

    SEC. 223. NEGOTIATED PAYMENT RATES FOR ITEMS AND SERVICES.

      (a) Negotiation of Payment Rates.--
              (1) In general.--The Secretary shall negotiate payment rates
            for the public health insurance option for services and health
            care providers consistent with this section and section 224.
              (2) Manner of negotiation.--The Secretary shall negotiate
            such rates in a manner that results in payment rates that are
            not lower, in the aggregate, than rates under title XVIII of
            the Social Security Act, and not higher, in the aggregate, than
            the average rates paid by other QHBP offering entities for
            services and health care providers.
              (3) Innovative payment methods.--Nothing in this subsection
            shall be construed as preventing the use of innovative payment
            methods such as those described in section 224 in connection
            with the negotiation of payment rates under this subsection.
              (4) Prescription drugs.--Notwithstanding any other provision
            of law, the Secretary shall establish a particular formulary
            for prescription drugs under the public health insurance
            option.
      (b) Establishment of a Provider Network.--
              (1) In general.--Health care providers (including physicians
            and hospitals) participating in Medicare are participating
            providers in the public health insurance option unless they opt
            out in a process established by the Secretary consistent with
            this subsection.
              (2) Requirements for opt-out process.--Under the process
            established under paragraph (1)--
                      (A) providers described in such subparagraph shall be
                    provided at least a 1-year period prior to the first
                    day of Y1 to opt out of participating in the public
                    health insurance option;
                      (B) no provider shall be subject to a penalty for not
                    participating in the public health insurance option;
                      (C) the Secretary shall include information on how
                    providers participating in Medicare who chose to opt
                    out of participating in the public health insurance
                    option may opt back in; and
                      (D) there shall be an annual enrollment period in
                    which providers may decide whether to participate in
                    the public health insurance option.
              (3) Rulemaking.--Not later than 18 months before the first
            day of Y1, the Secretary shall promulgate rules (pursuant to
            notice and comment) for the process described in paragraph (1).
      (c) Limitations on Review.--There shall be no administrative or
    judicial review of a payment rate or methodology established under this
    section or under section 224.

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

      (a) In General.--For plan years beginning with Y1, the Secretary may
    utilize innovative payment mechanisms and policies to determine
    payments for items and services under the public health insurance
    option. The payment mechanisms and policies under this section may
    include patient-centered medical home and other care management
    payments, accountable care organizations, value-based purchasing,
    bundling of services, differential payment rates, performance or
    utilization based payments, partial capitation, and direct contracting
    with providers.
      (b) Requirements for Innovative Payments.--The Secretary shall design
    and implement the payment mechanisms and policies under this section in
    a manner that--
              (1) seeks to--
                      (A) improve health outcomes;
                      (B) reduce health disparities (including racial,
                    ethnic, and other disparities);
                      (C) provide efficient and affordable care;
                      (D) address geographic variation in the provision of
                    health services; or
                      (E) prevent or manage chronic illness; and
              (2) promotes care that is integrated, patient-centered,
            quality, and efficient.
      (c) Encouraging the Use of High Value Services.--To the extent
    allowed by the benefit standards applied to all Exchange-participating
    health benefits plans, the public health insurance option may modify
    cost sharing and payment rates to encourage the use of services that
    promote health and value.
      (d) Promotion of Delivery System Reform.--The Secretary shall monitor
    and evaluate the progress of payment and delivery system reforms under
    this section and shall seek to implement such reforms subject to the
    following:
              (1) To the extent that the Secretary finds a payment and
            delivery system reform successful in improving quality and
            reducing costs, the Secretary shall implement such reform on as
            large a geographic scale as practical and economical.
              (2) The Secretary may delay the implementation of such a
            reform in geographic areas in which such implementation would
            place the public health insurance option at a competitive
            disadvantage.
              (3) The Secretary may prioritize implementation of such a
            reform in high cost geographic areas or otherwise in order to
            reduce total program costs or to promote high value care.
      (e) Non-uniformity Permitted.--Nothing in this subtitle shall prevent
    the Secretary from varying payments based on different payment
    structure models (such as accountable care organizations and medical
    homes) under the public health insurance option for different
    geographic areas.

    SEC. 225. PROVIDER PARTICIPATION.

      (a) In General.--The Secretary shall establish conditions of
    participation for health care providers under the public health
    insurance option.
      (b) Licensure or Certification.--The Secretary shall not allow a
    health care provider to participate in the public health insurance
    option unless such provider is appropriately licensed or certified
    under State law.
      (c) Payment Terms for Providers.--The Secretary shall establish terms
    and conditions for the participation (on an annual or other basis
    specified by the Secretary) of physicians and other health care
    providers under the public health insurance option, for which payment
    may be made for services furnished during the year.
      (d) Exclusion of Certain Providers.--The Secretary shall exclude from
    participation under the public health insurance option a health care
    provider that is excluded from participation in a Federal health care
    program (as defined in section 1128B(f) of the Social Security Act).

    SEC. 226. APPLICATION OF FRAUD AND ABUSE PROVISIONS.

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

    SEC. 227. APPLICATION OF HIPAA INSURANCE REQUIREMENTS.

      The requirements of sections 2701 through 2792 of the Public Health
    Service Act shall apply to the public health insurance option in the
    same manner as they apply to health insurance coverage offered by a
    health insurance issuer in the individual market.

    SEC. 228. APPLICATION OF HEALTH INFORMATION PRIVACY, SECURITY, AND
                        ELECTRONIC TRANSACTION REQUIREMENTS.

      Part C of title XI of the Social Security Act, relating to standards
    for protections against the wrongful disclosure of individually
    identifiable health information, health information security, and the
    electronic exchange of health care information, shall apply to the
    public health insurance option in the same manner as such part applies
    to other health plans (as defined in section 1171(5) of such Act).

    SEC. 229. ENROLLMENT IN PUBLIC HEALTH INSURANCE OPTION IS VOLUNTARY.

      Nothing in this division shall be construed as requiring anyone to
    enroll in the public health insurance option. Enrollment in such option
    is voluntary.

                  Subtitle C--Individual Affordability Credits

    SEC. 241. AVAILABILITY THROUGH HEALTH INSURANCE EXCHANGE.

      (a) In General.--Subject to the succeeding provisions of this
    subtitle, in the case of an affordable credit eligible individual
    enrolled in an Exchange-participating health benefits plan--
              (1) the individual shall be eligible for, in accordance with
            this subtitle, affordability credits consisting of--
                      (A) an affordability premium credit under section 243
                    to be applied against the premium for the Exchange-
                    participating health benefits plan in which the
                    individual is enrolled; and
                      (B) an affordability cost-sharing credit under
                    section 244 to be applied as a reduction of the cost-
                    sharing otherwise applicable to such plan; and
              (2) the Commissioner shall pay the QHBP offering entity that
            offers such plan from the Health Insurance Exchange Trust Fund
            the aggregate amount of affordability credits for all
            affordable credit eligible individuals enrolled in such plan.
      (b) Application.--
              (1) In general.--An Exchange eligible individual may apply to
            the Commissioner through the Health Insurance Exchange or
            through another entity under an arrangement made with the
            Commissioner, in a form and manner specified by the
            Commissioner. The Commissioner through the Health Insurance
            Exchange or through another public entity under an arrangement
            made with the Commissioner shall make a determination as to
            eligibility of an individual for affordability credits under
            this subtitle. The Commissioner shall establish a process
            whereby, on the basis of information otherwise available,
            individuals may be deemed to be affordable credit eligible
            individuals. In carrying this subtitle, the Commissioner shall
            establish effective methods that ensure that individuals with
            limited English proficiency are able to apply for affordability
            credits.
              (2) Use of state medicaid agencies.--If the Commissioner
            determines that a State Medicaid agency has the capacity to
            make a determination of eligibility for affordability credits
            under this subtitle and under the same standards as used by the
            Commissioner, under the Medicaid memorandum of understanding
            (as defined in section 205(c)(4))--
                      (A) the State Medicaid agency is authorized to
                    conduct such determinations for any Exchange-eligible
                    individual who requests such a determination; and
                      (B) the Commissioner shall reimburse the State
                    Medicaid agency for the costs of conducting such
                    determinations.
              (3) Medicaid screen and enroll obligation.--In the case of an
            application made under paragraph (1), there shall be a
            determination of whether the individual is a Medicaid-eligible
            individual. If the individual is determined to be so eligible,
            the Commissioner, through the Medicaid memorandum of
            understanding, shall provide for the enrollment of the
            individual under the State Medicaid plan in accordance with the
            Medicaid memorandum of understanding. In the case of such an
            enrollment, the State shall provide for the same periodic
            redetermination of eligibility under Medicaid as would
            otherwise apply if the individual had directly applied for
            medical assistance to the State Medicaid agency.
      (c) Use of Affordability Credits.--
              (1) In general.--In Y1 and Y2 an affordable credit eligible
            individual may use an affordability credit only with respect to
            a basic plan.
              (2) Flexibility in plan enrollment authorized.--Beginning
            with Y3, the Commissioner shall establish a process to allow an
            affordability credit to be used for enrollees in enhanced or
            premium plans. In the case of an affordable credit eligible
            individual who enrolls in an enhanced or premium plan, the
            individual shall be responsible for any difference between the
            premium for such plan and the affordable credit amount
            otherwise applicable if the individual had enrolled in a basic
            plan.
              (3) Prohibition of use of public funds for abortion
            coverage.--An affordability credit may not be used for payment
            for services described in section 122(d)(4)(A).
      (d) Access to Data.--In carrying out this subtitle, the Commissioner
    shall request from the Secretary of the Treasury consistent with
    section 6103 of the Internal Revenue Code of 1986 such information as
    may be required to carry out this subtitle.
      (e) No Cash Rebates.--In no case shall an affordable credit eligible
    individual receive any cash payment as a result of the application of
    this subtitle.

    SEC. 242. AFFORDABLE CREDIT ELIGIBLE INDIVIDUAL.

      (a) Definition.--
              (1) In general.--For purposes of this division, the term
            ``affordable credit eligible individual'' means, subject to
            subsection (b), an individual who is lawfully present in a
            State in the United States (other than as a nonimmigrant
            described in a subparagraph (excluding subparagraphs (K), (T),
            (U), and (V)) of section 101(a)(15) of the Immigration and
            Nationality Act)--
                      (A) who is enrolled under an Exchange-participating
                    health benefits plan and is not enrolled under such
                    plan as an employee (or dependent of an employee)
                    through an employer qualified health benefits plan that
                    meets the requirements of section 312;
                      (B) with family income below 400 percent of the
                    Federal poverty level for a family of the size
                    involved; and
                      (C) who is not a Medicaid eligible individual, other
                    than an individual described in section 202(d)(3) or an
                    individual during a transition period under section
                    202(d)(4)(B)(ii).
              (2) Treatment of family.--Except as the Commissioner may
            otherwise provide, members of the same family who are
            affordable credit eligible individuals shall be treated as a
            single affordable credit individual eligible for the applicable
            credit for such a family under this subtitle.
              (3) Equal treatment of certain employed individuals.--
                      (A) In general.--For purposes of applying this
                    section with respect to an individual who is an
                    employee of an employer that has an annual payroll (for
                    the preceding calendar year) which does not exceed
                    $750,000 and that makes the contribution which would be
                    required under section 313(a) if the table specified in
                    subparagraph (B) were substituted for the table
                    specified in section 313(b)(1) (and if, in applying
                    section 313(b)(2), $750,000 were substituted for
                    $400,000), such individual shall be treated in the same
                    manner as an employee of an employer that makes the
                    contribution described in section 313(a) (without
                    regard to this paragraph).
                      (B) Table.--The table specified in this subparagraph
                    is the following:

    If the annual payroll of such employer   The applicable percentage is:
     for the preceding calendar year:
      Does not exceed $500,000.............  0 percent
      Exceeds $500,000, but does not exceed  2 percent
       $585,000.
      Exceeds $585,000, but does not exceed  4 percent
       $670,000.
      Exceeds $670,000, but does not exceed  6 percent
       $750,000.

      (b) Limitations on Employee and Dependent Disqualification.--
              (1) In general.--Subject to paragraph (2), the term
            ``affordable credit eligible individual'' does not include a
            full-time employee of an employer if the employer offers the
            employee coverage (for the employee and dependents) as a full-
            time employee under a group health plan if the coverage and
            employer contribution under the plan meet the requirements of
            section 312.
              (2) Exceptions.--
                      (A) For certain family circumstances.--The
                    Commissioner shall establish such exceptions and
                    special rules in the case described in paragraph (1) as
                    may be appropriate in the case of a divorced or
                    separated individual or such a dependent of an employee
                    who would otherwise be an affordable credit eligible
                    individual.
                      (B) For unaffordable employer coverage.--Beginning in
                    Y2, in the case of full-time employees for which the
                    cost of the employee premium for coverage under a group
                    health plan would exceed 12 percent of current family
                    income (determined by the Commissioner on the basis of
                    verifiable documentation and without regard to section
                    245), paragraph (1) shall not apply.
      (c) Income Defined.--
              (1) In general.--In this title, the term ``income'' means
            modified adjusted gross income (as defined in section 59B of
            the Internal Revenue Code of 1986).
              (2) Study of income disregards.--The Commissioner shall
            conduct a study that examines the application of income
            disregards for purposes of this subtitle. Not later than the
            first day of Y2, the Commissioner shall submit to Congress a
            report on such study and shall include such recommendations as
            the Commissioner determines appropriate.
      (d) Clarification of Treatment of Affordability Credits.--
    Affordability credits under this subtitle shall not be treated, for
    purposes of title IV of the Personal Responsibility and Work
    Opportunity Reconciliation Act of 1996, to be a benefit provided under
    section 403 of such title.

    SEC. 243. AFFORDABLE PREMIUM CREDIT.

      (a) In General.--The affordability premium credit under this section
    for an affordable credit eligible individual enrolled in an Exchange-
    participating health benefits plan is in an amount equal to the amount
    (if any) by which the premium for the plan (or, if less, the reference
    premium amount specified in subsection (c)), exceeds the affordable
    premium amount specified in subsection (b) for the individual.
      (b) Affordable Premium Amount.--
              (1) In general.--The affordable premium amount specified in
            this subsection for an individual for monthly premium in a plan
            year shall be equal to \1/12\ of the product of--
                      (A) the premium percentage limit specified in
                    paragraph (2) for the individual based upon the
                    individual's family income for the plan year; and
                      (B) the individual's family income for such plan
                    year.
              (2) Premium percentage limits based on table.--The
            Commissioner shall establish premium percentage limits so that
            for individuals whose family income is within an income tier
            specified in the table in subsection (d) such percentage limits
            shall increase, on a sliding scale in a linear manner, from the
            initial premium percentage to the final premium percentage
            specified in such table for such income tier.
      (c) Reference Premium Amount.--The reference premium amount specified
    in this subsection for a plan year for an individual in a premium
    rating area is equal to the average premium for the 3 basic plans in
    the area for the plan year with the lowest premium levels. In computing
    such amount the Commissioner may exclude plans with extremely limited
    enrollments.
      (d) Table of Premium Percentage Limits and Actuarial Value
    Percentages Based on Income Tier.--
              (1) In general.--For purposes of this subtitle, subject to
            paragraphs (3) and (4), the table specified in this subsection
            is as follows:

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

    133% through 150%                  1.5%                       3.0%                      97%
    150% through 200%                  3.0%                       5.5%                      93%
    200% through 250%                  5.5%                       8%                        85%
    250% through 300%                  8%                         10%                       78%
    300% through 350%                  10%                        11%                       72%
    350% through 400%                  11%                        12%                       70%

              (2) Special rules.--For purposes of applying the table under
            paragraph (1)--
                      (A) For lowest level of income.--In the case of an
                    individual with income that does not exceed 133 percent
                    of FPL, the individual shall be considered to have
                    income that is 133% of FPL.
                      (B) Application of higher actuarial value percentage
                    at tier transition points.--If two actuarial value
                    percentages may be determined with respect to an
                    individual, the actuarial value percentage shall be the
                    higher of such percentages.
              (3) Indexing.--For years after Y1, the Commissioner shall
            adjust the initial and final premium percentages to maintain
            the ratio of governmental to enrollee shares of premiums over
            time, for each income tier identified in the table in paragraph
            (1).
              (4) Contingent adjustment for additional savings.--
                      (A) In general.--Before the beginning of each year
                    beginning with Y2--
                              (i) the Chief Actuary of the Centers of
                            Medicare & Medicaid Services shall estimate the
                            amount of savings in the previous year under
                            this division resulting from the application of
                            the provisions described in subparagraph (B)
                            and shall report such estimate to the
                            Commissioner; and
                              (ii) the Commissioner, based upon such
                            estimate, shall provide for an appropriate
                            increase in the initial and final premium
                            percentages in the table specified in paragraph
                            (1) in a manner that is designed to result in
                            an increase in aggregate affordability credits
                            equivalent to the amount so estimated.
                      (B) Provisions described.--The provisions described
                    in this subparagraph are as follows:
                              (i) Formulary under public option.--Section
                            223(a)(4).
                              (ii) PBM transparency.--Section 133(d).
                              (iii) ACO in medicaid.--Section 1730.
                              (iv) Administrative simplification.--
                                      (I) Section 1173A of the Social
                                    Security Act, as added by section
                                    163(a)(1).
                                      (II) Section 163(c).
                                      (III) Section 164.
                              (v) Limitation on premium increases in
                            exchange-participating plans.--Section 209.
                              (vi) Negotiation of lower part d drug
                            prices.--Section 1186.

    SEC. 244. AFFORDABILITY COST-SHARING CREDIT.

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

    SEC. 245. INCOME DETERMINATIONS.

      (a) In General.--In applying this subtitle for an affordability
    credit for an individual for a plan year, the individual's income shall
    be the income (as defined in section 242(c)) for the individual for the
    most recent taxable year (as determined in accordance with rules of the
    Commissioner). The Federal poverty level applied shall be such level in
    effect as of the date of the application.
      (b) Program Integrity; Income Verification Procedures.--
              (1) Program integrity.--The Commissioner shall take such
            steps as may be appropriate to ensure the accuracy of
            determinations and redeterminations under this subtitle.
              (2) Income verification.--
                      (A) In general.--Upon an initial application of an
                    individual for an affordability credit under this
                    subtitle (or in applying section 242(b)) or upon an
                    application for a change in the affordability credit
                    based upon a significant change in family income
                    described in subparagraph (A)--
                              (i) the Commissioner shall request from the
                            Secretary of the Treasury the disclosure to the
                            Commissioner of such information as may be
                            permitted to verify the information contained
                            in such application; and
                              (ii) the Commissioner shall use the
                            information so disclosed to verify such
                            information.
                      (B) Alternative procedures.--The Commissioner shall
                    establish procedures for the verification of income for
                    purposes of this subtitle if no income tax return is
                    available for the most recent completed tax year.
      (c) Special Rules.--
              (1) Changes in income as a percent of fpl.--In the case that
            an individual's income (expressed as a percentage of the
            Federal poverty level for a family of the size involved) for a
            plan year is expected (in a manner specified by the
            Commissioner) to be significantly different from the income (as
            so expressed) used under subsection (a), the Commissioner shall
            establish rules requiring an individual to report, consistent
            with the mechanism established under paragraph (2), significant
            changes in such income (including a significant change in
            family composition) to the Commissioner and requiring the
            substitution of such income for the income otherwise
            applicable.
              (2) Reporting of significant changes in income.--The
            Commissioner shall establish rules under which an individual
            determined to be an affordable credit eligible individual would
            be required to inform the Commissioner when there is a
            significant change in the family income of the individual
            (expressed as a percentage of the FPL for a family of the size
            involved) and of the information regarding such change. Such
            mechanism shall provide for guidelines that specify the
            circumstances that qualify as a significant change, the
            verifiable information required to document such a change, and
            the process for submission of such information. If the
            Commissioner receives new information from an individual
            regarding the family income of the individual, the Commissioner
            shall provide for a redetermination of the individual's
            eligibility to be an affordable credit eligible individual.
              (3) Transition for chip.--In the case of a child described in
            section 205(d)(2), the Commissioner shall establish rules under
            which the family income of the child is deemed to be no greater
            than the family income of the child as most recently determined
            before Y1 by the State under title XXI of the Social Security
            Act.
              (4) Study of geographic variation in application of fpl.--
                      (A) In general.--The Commissioner shall examine the
                    feasibility and implication of adjusting the
                    application of the Federal poverty level under this
                    subtitle for different geographic areas so as to
                    reflect the variations in cost-of-living among
                    different areas within the United States. If the
                    Commissioner determines that an adjustment is feasible,
                    the study should include a methodology to make such an
                    adjustment. Not later than the first day of Y2, the
                    Commissioner shall submit to Congress a report on such
                    study and shall include such recommendations as the
                    Commissioner determines appropriate.
                      (B) Inclusion of territories.--
                              (i) In general.--The Commissioner shall
                            ensure that the study under subparagraph (A)
                            covers the territories of the United States and
                            that special attention is paid to the disparity
                            that exists among poverty levels and the cost
                            of living in such territories and to the impact
                            of such disparity on efforts to expand health
                            coverage and ensure health care.
                              (ii) Territories defined.-- In this
                            subparagraph, the term ``territories of the
                            United States'' includes the Commonwealth of
                            Puerto Rico, the United States Virgin Islands,
                            Guam, the Northern Mariana Islands, and any
                            other territory or possession of the United
                            States.
      (d) Penalties for Misrepresentation.--In the case of an individual
    intentionally misrepresents family income or the individual fails
    (without regard to intent) to disclose to the Commissioner a
    significant change in family income under subsection (c) in a manner
    that results in the individual becoming an affordable credit eligible
    individual when the individual is not or in the amount of the
    affordability credit exceeding the correct amount--
              (1) the individual is liable for repayment of the amount of
            the improper affordability credit; ;and
              (2) in the case of such an intentional misrepresentation or
            other egregious circumstances specified by the Commissioner,
            the Commissioner may impose an additional penalty.

    SEC. 246. NO FEDERAL PAYMENT FOR UNDOCUMENTED ALIENS.

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

                   Subtitle D--Health Insurance Cooperatives

    SEC. 251. ESTABLISHMENT.

      Not later than 6 months after the date of the enactment of this Act,
    the Commissioner, in consultation with the Secretary of the Treasury,
    shall establish a Consumer Operated and Oriented Plan program (in this
    subtitle referred to as the ``CO-OP program'') under which the
    Commissioner may make grants and loans for the establishment and
    initial operation of not-for-profit, member-run health insurance
    cooperatives (in this subtitle individually referred to as a
    ``cooperative'') that provide insurance through the Health Insurance
    Exchange or a State-based Health Insurance Exchange under section 208.
    Nothing in this subtitle shall be construed as requiring a State to
    establish such a cooperative.

    SEC. 252. START-UP AND SOLVENCY GRANTS AND LOANS.

      (a) In General.--Not later than 36 months after the date of the
    enactment of this Act, the Commissioner, acting through the CO-OP
    program, may make--
              (1) loans (of such period and with such terms as the
            Secretary may specify) to cooperatives to assist such
            cooperatives with start-up costs; and
              (2) grants to cooperatives to assist such cooperatives in
            meeting State solvency requirements in the States in which such
            cooperative offers or issues insurance coverage.
      (b)  Conditions.--A grant or loan may not be awarded under this
    section with respect to a cooperative unless the following conditions
    are met:
              (1) The cooperative is structured as a not-for-profit, member
            organization under the law of each State in which such
            cooperative offers, intends to offer, or issues insurance
            coverage, with the membership of the cooperative being made up
            entirely of beneficiaries of the insurance coverage offered by
            such cooperative.
              (2) The cooperative did not offer insurance on or before July
            16, 2009, and the cooperatives is not an affiliate or successor
            to an insurance company offering insurance on or before such
            date.
              (3) The governing documents of the cooperatives incorporate
            ethical and conflict of interest standards designed to protect
            against insurance industry involvement and interference in the
            governance of the cooperative.
              (4) The cooperative is not sponsored by a State government.
              (5) Substantially all of the activities of the cooperative
            consist of the issuance of qualified health benefit plans
            through the Health Insurance Exchange or a State-based health
            insurance exchange.
              (6) The cooperative is licenced to offer insurance in each
            State in which it offers insurance.
              (7) The governance of the cooperative must be subject to a
            majority vote of its members.
              (8) As provided in guidance issued by the Secretary of Health
            and Human Services, the cooperative operates with a strong
            consumer focus, including timeliness, responsiveness, and
            accountability to members.
              (9) Any profits made by the cooperative are used to lower
            premiums, improve benefits, or to otherwise improve the quality
            of health care delivered to members.
      (c) Priority.--The Commissioner, in making grants and loans under
    this section, shall give priority to cooperatives that--
              (1) operate on a Statewide basis;
              (2) use an integrated delivery system; or
              (3) have a significant level of financial support from non-
            governmental sources.
      (d) Rules of Construction.--Nothing in this subtitle shall be
    construed to prevent a cooperative established in one State from
    integrating with a cooperative established in another State the
    administration, issuance of coverage, or other activities related to
    acting as a QHBP offering entity. Nothing in this subtitle shall be
    construed as preventing State governments from taking actions to permit
    such integration.
      (e) Repayment for Violations of Terms of Program.--If a cooperative
    violates the terms of the CO-OP program and fails to correct the
    violation within a reasonable period of time, as determined by the
    Commissioner, the cooperative shall repay the total amount of any loan
    or grant received by such cooperative under this section, plus interest
    (at a rate determined by the Secretary).
      (f) Authorization of Appropriations.--There are authorized to be
    appropriated $5,000,000,000 for the period of fiscal years 2010 through
    2014 to provide for grants and loans under this section.

    SEC. 253. DEFINITIONS.

      For purposes of this subtitle:
              (1) State.--The term ``State'' means each of the 50 States
            and the District of Columbia.
              (2) Member.--The term ``member'', with respect to a
            cooperative, means an individual who, after the cooperative
            offers health insurance coverage, is enrolled in such coverage.

                        TITLE III--SHARED RESPONSIBILITY

                     Subtitle A--Individual Responsibility

    SEC. 301. INDIVIDUAL RESPONSIBILITY.

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

                      Subtitle B--Employer Responsibility

               PART 1--HEALTH COVERAGE PARTICIPATION REQUIREMENTS

    SEC. 311. HEALTH COVERAGE PARTICIPATION REQUIREMENTS.

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

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

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

    SEC. 313. EMPLOYER CONTRIBUTIONS IN LIEU OF COVERAGE.

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

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

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

    SEC. 314. AUTHORITY RELATED TO IMPROPER STEERING.

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

       PART 2--SATISFACTION OF HEALTH COVERAGE PARTICIPATION REQUIREMENTS

      [For sections 321 and 322, see text of bill as introduced on June 14,
    2009.]

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

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

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

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

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

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

            [TITLE IV--AMENDMENTS TO INTERNAL REVENUE CODE OF 1986]

      [For title IV, see text of bill as introduced on June 14, 2009.]

                 DIVISION B--MEDICARE AND MEDICAID IMPROVEMENTS

    SEC. 1001. TABLE OF CONTENTS OF DIVISION.

      The table of contents for this division is as follows:

                 DIVISION B--MEDICARE AND MEDICAID IMPROVEMENTS

    Sec. 1001. Table of contents of division.

                      TITLE I--IMPROVING HEALTH CARE VALUE

               Subtitle A--Provisions Related to Medicare Part A

                         Part 1--Market Basket Updates

    Sec. 1101. Skilled nursing facility payment update.
    Sec. 1102. Inpatient rehabilitation facility payment update.
    Sec. 1103. Incorporating productivity improvements into market basket
    updates that do not already incorporate such improvements.

                    Part 2--Other Medicare Part A Provisions

    Sec. 1111. Payments to skilled nursing facilities.
    Sec. 1112. Medicare DSH report and payment adjustments in response to
    coverage expansion.

               Subtitle B--Provisions Related to Medicare Part B

                          Part 1--Physicians' Services

    Sec. 1121. Sustainable growth rate reform.
    Sec. 1122. Misvalued codes under the physician fee schedule.
    Sec. 1123. Payments for efficient areas.
    Sec. 1124. Modifications to the Physician Quality Reporting Initiative
    (PQRI).
    Sec. 1125. Adjustment to Medicare payment localities.
    Sec. 1126. Resource-based feedback program for physicians in Medicare.

                         Part 2--Market Basket Updates

    Sec. 1131. Incorporating productivity improvements into market basket
    updates that do not already incorporate such improvements.

                            Part 3--Other Provisions

    Sec. 1141. Rental and purchase of power-driven wheelchairs.
    Sec. 1141A. Election to take ownership, or to decline ownership, of a
    certain item of complex durable medical equipment after the 13-month
    capped rental period ends.
    Sec. 1142. Extension of payment rule for brachytherapy.
    Sec. 1143. Home infusion therapy report to congress.
    Sec. 1144. Require ambulatory surgical centers (ASCs) to submit cost
    data and other data.
    Sec. 1145. Treatment of certain cancer hospitals.
    Sec. 1146. Medicare Improvement Fund.
    Sec. 1147. Payment for imaging services.
    Sec. 1148. Durable medical equipment program improvements.
    Sec. 1149. MedPAC study and report on bone mass measurement.
    Sec. 1149A. Exclusion of customary prompt pay discounts extended to
    wholesalers from manufacturer's average sales price for payments for
    drugs and biologicals under Medicare part B.
    Sec. 1149B. Timely access to postmastectomy items.
    Sec. 1149C. Moratorium on Medicare reductions in payment rates for
    certain interventional pain management procedures covered under the ASC
    fee schedule.
    Sec. 1149D. Medicare coverage of services of qualified respiratory
    therapists performed under the general supervision of a physician.

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

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

                     Subtitle D--Medicare Advantage Reforms

                       Part 1--Payment and Administration

    Sec. 1161. Phase-in of payment based on fee-for-service costs.
    Sec. 1162. Quality bonus payments.
    Sec. 1163. Extension of Secretarial coding intensity adjustment
    authority.
    Sec. 1164. Simplification of annual beneficiary election periods.
    Sec. 1165. Extension of reasonable cost contracts.
    Sec. 1166. Limitation of waiver authority for employer group plans.
    Sec. 1167. Improving risk adjustment for payments.
    Sec. 1168. Elimination of MA Regional Plan Stabilization Fund.
    Sec. 1169. Study regarding the effects of calculating Medicare
    Advantage payment rates on a regional average of Medicare fee for
    service rates.

                 Part 2--Beneficiary Protections and Anti-Fraud

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

                    Part 3--Treatment of Special Needs Plans

    Sec. 1176. Limitation on enrollment outside open enrollment period of
    individuals into chronic care specialized MA plans for special needs
    individuals.
    Sec. 1177. Extension of authority of special needs plans to restrict
    enrollment.

                  Subtitle E--Improvements to Medicare Part D

    Sec. 1181. Elimination of coverage gap.
    Sec. 1182. Discounts for certain part D drugs in original coverage gap.
    Sec. 1183. Repeal of provision relating to submission of claims by
    pharmacies located in or contracting with long-term care facilities.
    Sec. 1184. Including costs incurred by AIDS drug assistance programs
    and Indian Health Service in providing prescription drugs toward the
    annual out-of-pocket threshold under part D.
    Sec. 1185. Permitting mid-year changes in enrollment for formulary
    changes that adversely impact an enrollee.
    Sec. 1186. Negotiation of lower covered part D drug prices on behalf of
    Medicare beneficiaries.
    Sec. 1187. State certification prior to waiver of licensure
    requirements under Medicare prescription drug program.

                 Subtitle F--Medicare Rural Access Protections

    Sec. 1191. Telehealth expansion and enhancements.
    Sec. 1192. Extension of outpatient hold harmless provision.
    Sec. 1193. Extension of section 508 hospital reclassifications.
    Sec. 1194. Extension of geographic floor for work.
    Sec. 1195. Extension of payment for technical component of certain
    physician pathology services.
    Sec. 1196. Extension of ambulance add-ons.
    Sec. 1197. Ensuring proportional representation of interests of rural
    areas on MedPAC.

                  TITLE II--MEDICARE BENEFICIARY IMPROVEMENTS

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

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

                    Subtitle B--Reducing Health Disparities

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

                     Subtitle C--Miscellaneous Improvements

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

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

    Sec. 1301. Accountable Care Organization pilot program.
    Sec. 1302. Medical home pilot program.
    Sec. 1303. Independence at home pilot program.
    Sec. 1304. Payment incentive for selected primary care services.
    Sec. 1305. Increased reimbursement rate for certified nurse-midwives.
    Sec. 1306. Coverage and waiver of cost-sharing for preventive services.
    Sec. 1307. Waiver of deductible for colorectal cancer screening tests
    regardless of coding, subsequent diagnosis, or ancillary tissue
    removal.
    Sec. 1308. Excluding clinical social worker services from coverage
    under the Medicare skilled nursing facility prospective payment system
    and consolidated payment.
    Sec. 1309. Coverage of marriage and family therapist services and
    mental health counselor services.
    Sec. 1310. Extension of physician fee schedule mental health add-on.
    Sec. 1311. Expanding access to vaccines.
    Sec. 1312. Recognition of certified diabetes educators as certified
    providers for purposes of Medicare diabetes outpatient self-management
    training services.

                               TITLE IV--QUALITY

                 Subtitle A--Comparative Effectiveness Research

    Sec. 1401. Comparative effectiveness research.

                     Subtitle B--Nursing Home Transparency

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

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

                         Part 2--Targeting Enforcement

    Sec. 1421. Civil money penalties.
    Sec. 1422. National independent monitor pilot program.
    Sec. 1423. Notification of facility closure.

                        Part 3--Improving Staff Training

    Sec. 1431. Dementia and abuse prevention training.
    Sec. 1432. Study and report on training required for certified nurse
    aides and supervisory staff.
    Sec. 1433. Qualification of director of food services of a Medicaid
    nursing facility.

                        Subtitle C--Quality Measurements

    Sec. 1441. Establishment of national priorities for quality
    improvement.
    Sec. 1442. Development of new quality measures; GAO evaluation of data
    collection process for quality measurement.
    Sec. 1443. Multistakeholder prerulemaking input into selection of
    quality measures.
    Sec. 1444. Application of quality measures.
    Sec. 1445. Consensus-based entity funding.
    Sec. 1446. Quality indicators for care of people with Alzheimer's
    disease.
    Sec. 1447. Study on five star quality rating system.

               Subtitle D--Physician Payments Sunshine Provision

    Sec. 1451. Reports on financial relationships between manufacturers and
    distributors of covered drugs, devices, biologicals, or medical
    supplies under Medicare, Medicaid, or CHIP and physicians and other
    health care entities and between physicians and other health care
    entities.

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

    Sec. 1461. Requirement for public reporting by hospitals and ambulatory
    surgical centers on health care-associated infections.

                  TITLE V--MEDICARE GRADUATE MEDICAL EDUCATION

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

                          TITLE VI--PROGRAM INTEGRITY

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

    Sec. 1601. Increased funding and flexibility to fight fraud and abuse.

               Subtitle B--Enhanced Penalties for Fraud and Abuse

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

             Subtitle C--Enhanced Program and Provider Protections

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

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

    Sec. 1651. Access to information necessary to identify fraud, waste,
    and abuse.
    Sec. 1652. Elimination of duplication between the Healthcare Integrity
    and Protection Data Bank and the National Practitioner Data Bank.
    Sec. 1653. Compliance with HIPAA privacy and security standards.

                          TITLE VII--MEDICAID AND CHIP

                     Subtitle A--Medicaid and Health Reform

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

                             Subtitle B--Prevention

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

                               Subtitle C--Access

    Sec. 1721. Payments to primary care practitioners.
    Sec. 1722. Medical home pilot program.
    Sec. 1723. Translation or interpretation services.
    Sec. 1724. Optional coverage for freestanding birth center services.
    Sec. 1725. Inclusion of public health clinics under the vaccines for
    children program.
    Sec. 1726. Requiring coverage of services of podiatrists.
    Sec. 1726A. Requiring coverage of services of optometrists.
    Sec. 1727. Therapeutic foster care.
    Sec. 1728. Assuring adequate payment levels for services.
    Sec. 1729. Preserving Medicaid coverage for youths upon release from
    public institutions.
    Sec. 1730. Quality measures for maternity and adult health services
    under Medicaid and CHIP.
    Sec. 1730A. Accountable care organization pilot program.

                              Subtitle D--Coverage

    Sec. 1731. Optional Medicaid coverage of low-income HIV-infected
    individuals.
    Sec. 1732. Extending transitional Medicaid Assistance (TMA).
    Sec. 1733. Requirement of 12-month continuous coverage under certain
    CHIP programs.
    Sec. 1734. Preventing the application under CHIP of coverage waiting
    periods for certain children.
    Sec. 1735. Adult day health care services.
    Sec. 1736. Medicaid coverage for citizens of Freely Associated States.
    Sec. 1737. Continuing requirement of Medicaid coverage of nonemergency
    transportation to medically necessary services.
    Sec. 1738. State option to disregard certain income in providing
    continued Medicaid coverage for certain individuals with extremely high
    prescription costs.

                             Subtitle E--Financing

    Sec. 1741. Payments to pharmacists.
    Sec. 1742. Prescription drug rebates.
    Sec. 1743. Extension of prescription drug discounts to enrollees of
    Medicaid managed care organizations.
    Sec. 1744. Payments for graduate medical education.
    Sec. 1745. Report on Medicaid payments.
    Sec. 1746. Reviews of Medicaid.
    Sec. 1747. Extension of delay in managed care organization provider tax
    elimination.

                      Subtitle F--Waste, Fraud, and Abuse

    Sec. 1751. Health care acquired conditions.
    Sec. 1752. Evaluations and reports required under Medicaid Integrity
    Program.
    Sec. 1753. Require providers and suppliers to adopt programs to reduce
    waste, fraud, and abuse.
    Sec. 1754. Overpayments.
    Sec. 1755. Managed care organizations.
    Sec. 1756. Termination of provider participation under Medicaid and
    CHIP if terminated under Medicare or other State plan or child health
    plan.
    Sec. 1757.  Medicaid and CHIP exclusion from participation relating to
    certain ownership, control, and management affiliations.
    Sec. 1758.  Requirement to report expanded set of data elements under
    MMIS to detect fraud and abuse.
    Sec. 1759. Billing agents, clearinghouses, or other alternate payees
    required to register under Medicaid.
    Sec. 1760. Denial of payments for litigation-related misconduct.
    Sec. 1761. Mandatory State use of national correct coding initiative.

                    Subtitle G--Payments to the Territories

    Sec. 1771. Payment to territories.

                           Subtitle H--Miscellaneous

    Sec. 1781. Technical corrections.
    Sec. 1782. Extension of QI program.
    Sec. 1783. Outreach and enrollment of Medicaid and CHIP eligible
    individuals.
    Sec. 1784. Prohibitions on Federal Medicaid and CHIP payment for
    undocumented aliens.
    Sec. 1785. Demonstration project for stabilization of emergency medical
    conditions by nonpublicly owned or operated institutions for mental
    diseases.

                     TITLE VIII--REVENUE-RELATED PROVISIONS

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

                       TITLE IX--MISCELLANEOUS PROVISIONS

    Sec. 1901. Repeal of trigger provision.
    Sec. 1902. Repeal of comparative cost adjustment (CCA) program.
    Sec. 1903. Extension of gainsharing demonstration.
    Sec. 1904. Grants to States for quality home visitation programs for
    families with young children and families expecting children.
    Sec. 1905. Improved coordination and protection for dual eligibles.
    Sec. 1906. Standardized marketing requirements under the Medicare
    Advantage and Medicare prescription drug programs.
    Sec. 1907. NAIC recommendations on the establishment of standardized
    benefit packages for Medicare Advantage plans and prescription drug
    plans.
    Sec. 1908. Application of emergency services laws.
    Sec. 1909. Nationwide program for national and State background checks
    on direct patient access employees of long-term care facilities and
    providers.
    Sec. 1910. Establishment of Center for Medicare and Medicaid Payment
    Innovation within CMS.

                      TITLE I--IMPROVING HEALTH CARE VALUE

              [Subtitle A--Provisions Related to Medicare Part A]

      [For subtitle A of title I of division B, see text of bill as
    introduced on June 14, 2009.]

               Subtitle B--Provisions Related to Medicare Part B

                          PART 1--PHYSICIANS' SERVICES

    SEC. 1121. SUSTAINABLE GROWTH RATE REFORM.

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

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

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

    SEC. 1123. PAYMENTS FOR EFFICIENT AREAS.

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

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

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

    SEC. 1125. ADJUSTMENT TO MEDICARE PAYMENT LOCALITIES.

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

    SEC. 1126. RESOURCE-BASED FEEDBACK PROGRAM FOR PHYSICIANS IN MEDICARE.

      (a) In General.--The Secretary of Health and Human Services (in this
    section referred to as the ``Secretary'') shall provide for the
    measurement and confidential communication of reports (each in this
    section referred to as a ``feedback report'') to physicians and other
    practitioners regarding the utilization of services under the Medicare
    program under title XVIII of the Social Security Act. Such reports
    shall be based upon claims data and shall include quality data reported
    under section 1848(m)(5) of such Act (42 U.S.C. 1395w-4(m)(5)) and such
    other information as the Secretary determines appropriate.
      (b) Timeline for Feedback Program.--
              (1) Analysis tool.--Not later than December 31, 2010, the
            Secretary shall initially develop an episode grouper or other
            initial resource analysis tool described in subsection (c)(4).
              (2) Evaluation.--During 2011 the Secretary shall conduct the
            evaluation specified in subsection (e)(1).
              (3) Expansion.--The Secretary shall expand the program as
            specified in subsection (e)(2).
      (c) Feedback Reports.--
              (1) Comparison of resource use patterns.--Feedback reports
            shall include information allowing the comparison of a
            physician's resource use pattern to such pattern for peers.
            Such reports may include resource use data on--
                      (A) a per capita basis;
                      (B) a per episode basis; or
                      (C) both.
              (2) Peer comparison.--Reports under this section shall
            include information regarding nationwide groups of similarly
            situated physicians (taking into consideration specialty,
            practice setting, and such other criteria as the Secretary
            finds appropriate) and comparing the pattern of services of
            each physician in the group to the group average pattern of
            services.
              (3) Detailed information.--The Secretary shall include in
            feedback reports details about the services, procedures, and
            relevant clinical information to identify factors that may
            account for significant variation of a physician from national
            norms, such as high rates of elective surgeries, diagnostic
            services, or other utilization attributable to the judgment of
            the physician.
              (4) Development of episode grouper.--The Secretary shall, in
            consultation with physicians and others as the Secretary
            determines to be appropriate, develop an episode grouper or
            other resource analysis tool that could be used to measure
            physician resource use. The Secretary may update such grouper
            from time to time as appropriate.
      (d) Feedback Program.--The Secretary shall engage in efforts to
    disseminate feedback reports. In disseminating such reports, the
    Secretary shall seek to estalish their validity and credibility to
    physicians and shall experiment with communications methods such as the
    following:
              (1) Direct meetings between contracted physicians,
            facilitated by the Secretary, to discuss the contents of
            feedback reports, including any reasons for divergence from
            national averages.
              (2) Contracts with local, non-profit entities engaged in
            quality improvement efforts at the community level. Such
            entities shall use the feedback reports, or such equivalent
            tool as specified by the Secretary. Any exchange of data under
            this paragraph shall be protected by appropriate privacy
            safeguards.
              (3) Mailings or other methods of communication that
            facilitate large-scale dissemination.
              (4) Other methods specified by the Secretary.
      (e) Evaluation and Expansion.--
              (1) Evaluation.--The Secretary shall evaluate the methods
            specified in subsection (d) with regard to their efficacy in
            changing practice patterns to improve quality and decrease
            costs.
              (2) Expansion.--Taking into account the cost of each method,
            the Secretary shall develop a plan to disseminate such reports
            in a significant manner in the regions and cities of the
            country with the highest utilization of services under
            Medicare. The Secretary shall disseminate, to the extent
            practicable, feedback reports in a manner consistent with the
            following:
                      (A) During 2011, at least 1,000 reports.
                      (B) During 2012, at least 10,000 reports.
                      (C) During 2013, at least 25,000 reports.
                      (D) During 2014 and subsequent years, reports to the
                    physicians with utilization within the highest 5
                    percent of physicians, subject to the authority to
                    focus under subsection (f).
              (3) Opt out.--The Secretary shall establish a process by
            which a physician may opt not to receive feedback reports under
            this section.
      (f) Authority to Focus Program Application.--The secretary may focus
    the application of the program under this section and dissemination of
    feedback reports on physicians, as appropriate, such as on physicians
    who--
              (1) practice in geographic areas that account for unusually
            high rates of spending per capita;
              (2) treat conditions that have a high cost or volume under
            Medicare;
              (3) use a high amount of resources compared to other
            physicians; or
              (4) treat at least a minimum number of Medicare
            beneficiaries.
      (g) Inclusion of Certain Practitioners.--For purposes of this
    section, the term ``physician'' includes a practitioner who furnishes
    services for which payment is made under Medicare and for which such
    payment would be made if furnished by a physician.
      (h) Administration.--
              (1) Chapter 35 of title 44, United States Code shall not
            apply to this section.
              (2) Notwithstanding any other provision of law, the Secretary
            may implement the provisions of this section by program
            instruction or otherwise.

                         PART 2--MARKET BASKET UPDATES

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

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

                            PART 3--OTHER PROVISIONS

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

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

    SEC. 1141A. ELECTION TO TAKE OWNERSHIP, OR TO DECLINE OWNERSHIP, OF A
                        CERTAIN ITEM OF COMPLEX DURABLE MEDICAL EQUIPMENT
                        AFTER THE 13-MONTH CAPPED RENTAL PERIOD ENDS.

      (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 (ii)--
                      (A) by striking ``rental.--On'' and inserting
                    ``rental.--
                                      ``(I) In general.--Except as provided
                                    in subclause (II), on''; and
                      (B) by adding at the end the following new subclause:
                                      ``(II) Option to accept or reject
                                    transfer of title to group 3 support
                                    surface.--
                                              ``(aa) In general.--During
                                            the 10th continuous month
                                            during which payment is made
                                            for the rental of a Group 3
                                            Support Surface under clause
                                            (i), the supplier of such item
                                            shall offer the individual the
                                            option to accept or reject
                                            transfer of title to a Group 3
                                            Support Surface after the 13th
                                            continuous month during which
                                            payment is made for the rental
                                            of the Group 3 Support Surface
                                            under clause (i). Such title
                                            shall be transferred to the
                                            individual only if the
                                            individual notifies the
                                            supplier not later than 1 month
                                            after the supplier makes such
                                            offer that the individual
                                            agrees to accept transfer of
                                            the title to the Group 3
                                            Support Surface. Unless the
                                            individual accepts transfer of
                                            title to the Group 3 Support
                                            Surface in the manner set forth
                                            in this subclause, the
                                            individual shall be deemed to
                                            have rejected transfer of
                                            title. If the individual agrees
                                            to accept the transfer of the
                                            title to the Group 3 Support
                                            Surface, the supplier shall
                                            transfer such title to the
                                            individual on the first day
                                            that begins after the 13th
                                            continuous month during which
                                            payment is made for the rental
                                            of the Group 3 Support Surface
                                            under clause (i). If the
                                            supplier transfers title to the
                                            Group 3 Support Surface under
                                            this subclause, payments for
                                            maintenance and servicing after
                                            the transfer of title shall be
                                            made in accordance with clause
                                            (iv). If the individual rejects
                                            transfer of title under this
                                            subclause, payments for
                                            maintenance and servicing after
                                            the end of the period of
                                            medical need during which
                                            payment is made under clause
                                            (i) shall be made in accordance
                                            with clause (v).
                                              ``(bb) Special rule.--If, on
                                            the effective date of this
                                            subclause, an individual's
                                            rental period for a Group 3
                                            Support Surface has exceeded 10
                                            continuous months, but the
                                            first day that begins after the
                                            13th continuous month during
                                            which payment is made for the
                                            rental under clause (i) has not
                                            been reached, the supplier
                                            shall, within 1 month following
                                            such effective date, offer the
                                            individual the option to accept
                                            or reject transfer of title to
                                            a Group 3 Support Surface. Such
                                            title shall be transferred to
                                            the individual only if the
                                            individual notifies the
                                            supplier not later than 1 month
                                            after the supplier makes such
                                            offer that the individual
                                            agrees to accept transfer of
                                            title to the Group 3 Support
                                            Surface. Unless the individual
                                            accepts transfer of title to
                                            the Group 3 Support Surface in
                                            the manner set forth in this
                                            subclause, the individual shall
                                            be deemed to have rejected
                                            transfer of title. If the
                                            individual agrees to accept the
                                            transfer of the title to the
                                            Group 3 Support Surface, the
                                            supplier shall transfer such
                                            title to the individual on the
                                            first day that begins after the
                                            13th continuous month during
                                            which payment is made for the
                                            rental of the Group 3 Support
                                            Surface under clause (i) unless
                                            that day has passed, in which
                                            case the supplier shall
                                            transfer such title to the
                                            individual not later than 1
                                            month after notification that
                                            the individual accepts transfer
                                            of title. If the supplier
                                            transfers title to the Group 3
                                            Support Surface under this
                                            subclause, payments for
                                            maintenance and servicing after
                                            the transfer of title shall be
                                            made in accordance with clause
                                            (iv). If the individual rejects
                                            transfer of title under this
                                            subclause, payments for
                                            maintenance and servicing after
                                            the end of the period of
                                            medical need during which
                                            payment is made under clause
                                            (i) shall be made in accordance
                                            with clause (v).'';
              (2) in clause (iv), in the heading, by inserting ``after
            transfer of title'' after ``servicing''; and
              (3) by adding at the end the following new clause:
                              ``(v) Maintenance and servicing of group 3
                            support surface if individual rejects transfer
                            of title.--In the case of a Group 3 Support
                            Surface for which the individual has rejected
                            transfer of title under subclause (ii)(II)--
                                      ``(I) during the first 6-month period
                                    of medical need that follows the period
                                    of medical need during which payment is
                                    made under clause (i), no payment shall
                                    be made for rental or maintenance and
                                    servicing of the Group 3 Support
                                    Surface; and
                                      ``(II) during the first month of each
                                    succeeding 6-month period of medical
                                    need, a maintenance and servicing
                                    payment may be made (for parts and
                                    labor not covered by the supplier's or
                                    manufacturer's warranty, as determined
                                    by the Secretary to be appropriate for
                                    the Group 3 Support Surface) and the
                                    amount recognized for each such 6-month
                                    period is the lower of--
                                              ``(aa) a reasonable and
                                            necessary maintenance and
                                            servicing fee or fees
                                            established by the Secretary;
                                            or
                                              ``(bb) 10 percent of the
                                            total of the purchase price
                                            recognized under paragraph (8)
                                            with respect to the Group 3
                                            Support Surface.''.
      (b) Effective Date.--The amendments made by this section shall take
    effect on the date of enactment of this Act.

    SEC. 1142. EXTENSION OF PAYMENT RULE FOR BRACHYTHERAPY.

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

    SEC. 1143. HOME INFUSION THERAPY REPORT TO CONGRESS.

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

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

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

    SEC. 1145. TREATMENT OF CERTAIN CANCER HOSPITALS.

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

    SEC. 1146. MEDICARE IMPROVEMENT FUND.

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

    SEC. 1147. PAYMENT FOR IMAGING SERVICES.

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

    SEC. 1148. DURABLE MEDICAL EQUIPMENT PROGRAM IMPROVEMENTS.

      (a) Waiver of Surety Bond Requirement.--Section 1834(a)(16) of the
    Social Security Act (42 U.S.C. 1395m(a)(16)) is amended by adding at
    the end the following: ``The requirement for a surety bond described in
    subparagraph (B) shall not apply in the case of a pharmacy (i) that has
    been enrolled under section 1866(j) as a supplier of durable medical
    equipment, prosthetics, orthotics, and supplies and has been issued
    (which may include renewal of) a provider number (as described in the
    first sentence of this paragraph) for at least 5 years, and (ii) for
    which a final adverse action (as defined in section 424.57(a) of title
    42, Code of Federal Regulations) has never been imposed.''.
      (b) Ensuring Supply of Oxygen Equipment .--
              (1) In general.--Section 1834(a)(5)(F) of the Social Security
            Act (42 U.S.C. 1395m(a)(5)(F)) is amended--
                      (A) in clause (ii), by striking ``After the'' and
                    inserting ``Except as provided in clause (iii), after
                    the''; and
                      (B) by adding at the end the following new clause:
                              ``(iii) Continuation of supply.--In the case
                            of a supplier furnishing such equipment to an
                            individual under this subsection as of the 27th
                            month of the 36 months described in clause (i),
                            the supplier furnishing such equipment as of
                            such month shall continue to furnish such
                            equipment to such individual (either directly
                            or though arrangements with other suppliers of
                            such equipment) during any subsequent period of
                            medical need for the remainder of the
                            reasonable useful lifetime of the equipment, as
                            determined by the Secretary, regardless of the
                            location of the individual, unless another
                            supplier has accepted responsibility for
                            continuing to furnish such equipment during the
                            remainder of such period.''.
              (2) Effective date.--The amendments made by paragraph (1)
            shall take effect as of the date of the enactment of this Act
            and shall apply to the furnishing of equipment to individuals
            for whom the 27th month of a continuous period of use of oxygen
            equipment described in section 1834(a)(5)(F) of the Social
            Security Act occurs on or after July 1, 2010.
      (c) Treatment of Current Accreditation Applications.--Section
    1834(a)(20)(F) of such Act (42 U.S.C. 1395m(a)(20)(F)) is amended--
              (1) in clause (i)--
                      (A) by striking ``clause (ii)'' and inserting
                    ``clauses (ii) and (iii)''; and
                      (B) by striking ``and'' at the end;
              (2) by striking the period at the end of clause (ii)(II) and
            by inserting ``; and''; and
              (3) by adding at the end the following:
                              ``(iii) the requirement for accreditation
                            described in clause (i) shall not apply for
                            purposes of supplying diabetic testing
                            supplies, canes, and crutches in the case of a
                            pharmacy that is enrolled under section 1866(j)
                            as a supplier of durable medical equipment,
                            prosthetics, orthotics, and supplies.
                    Any supplier that has submitted an application for
                    accreditation before August 1, 2009, shall be deemed as
                    meeting applicable standards and accreditation
                    requirement under this subparagraph until such time as
                    the independent accreditation organization takes action
                    on the supplier's application.''.
      (d) Restoring 36-month Oxygen Rental Period in Case of Supplier
    Bankruptcy for Certain Individuals.--Section 1834(a)(5)(F) of such Act
    (42 U.S.C. 1395m(a)(5)(F)) is amended by adding at the end the
    following new clause:
                              ``(iv) Exception for bankruptcy.--If a
                            supplier of oxygen to an individual is declared
                            bankrupt and its assets are liquidated and at
                            the time of such declaration and liquidation
                            more than 24 months of rental payments have
                            been made, the individual may begin under this
                            subparagraph a new 36-month rental period with
                            another supplier of oxygen.''.
      (e) Payment Adjustment.--Section 1834(a)(14)(K) of such Act (42
    U.S.C. 1395m(a)(14)(K)), as amended by section 1131(e), is amended by
    inserting before the semicolon at the end the following: ``, -0.5
    percent''.

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

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

    SEC. 1149A. EXCLUSION OF CUSTOMARY PROMPT PAY DISCOUNTS EXTENDED TO
                        WHOLESALERS FROM MANUFACTURER'S AVERAGE SALES PRICE
                        FOR PAYMENTS FOR DRUGS AND BIOLOGICALS UNDER
                        MEDICARE PART B.

      Section 1847A(c)(3) of the Social Security Act (42 U.S.C. 1395w-
    3a(c)(3)) is amended--
              (1) in the first sentence, by inserting after ``prompt pay
            discounts'' the following: ``(other than, for drugs and
            biologicals that are sold on or after January 1, 2011, and
            before January 1, 2016, customary prompt pay discounts extended
            to wholesalers, but only to the extent such discounts do not
            exceed 2 percent of the wholesale acquisition cost)''; and
              (2) in the second sentence, by inserting after ``other price
            concessions'' the following: ``(other than, for drugs and
            biologicals that are sold on or after January 1, 2011, and
            before January 1, 2016, customary prompt pay discounts extended
            to wholesalers, but only to the extent such discounts do not
            exceed 2 percent of the wholesale acquisition cost)''.

    SEC. 1149B. TIMELY ACCESS TO POSTMASTECTOMY ITEMS.

      (a) In General.--Section 1834(h)(1) of the Social Security Act (42
    U.S.C. 1395m(h)(1)) is amended--
              (1) by redesignating subparagraph (H) as subparagraph (I);
            and
              (2) by inserting after subparagraph (G) the following new
            subparagraph:
                      ``(H) Special payment rule for postmastectomy
                    external breast prosthesis garments.--Payment for
                    postmastectomy external breast prosthesis garments
                    shall be made regardless of whether such items are
                    supplied to the beneficiary prior to or after the
                    mastectomy procedure or other breast cancer surgical
                    procedure. The Secretary shall develop policies to
                    ensure appropriate beneficiary access and utilization
                    safeguards for such items supplied to a beneficiary
                    prior to the mastectomy or other breast cancer surgical
                    procedure.''
      (b) Effective Date.--The amendment made by subsection (a) shall take
    effect the date of the enactment of this Act.

    SEC. 1149C. MORATORIUM ON MEDICARE REDUCTIONS IN PAYMENT RATES FOR
                        CERTAIN INTERVENTIONAL PAIN MANAGEMENT PROCEDURES
                        COVERED UNDER THE ASC FEE SCHEDULE.

      (a) In General.--Notwithstanding any other provision of law, the
    payment rate applied under section 1833(i)(2) of the Social Security
    Act (42 U.S.C. 13951(i)(2)) for interventional pain management
    procedures specified in subsection (b) which are furnished on or after
    January 1, 2010, and before January 1, 2012, shall not be less than the
    payment rate applied under such section for such procedures in effect
    as of January 1, 2007.
      (b) Procedures Specified.--For purposes of this section, the
    interventional pain management procedures specified in this subsection
    are the following:
              (1) Epidural injections (CPT 62310, 62311, 64483, 64484).
              (2) Facet joint injections (CPT 64470, 64472, 64475, 64476).
              (3) Sacroiliac joint injection (CPT 27096).

    SEC. 1149D. MEDICARE COVERAGE OF SERVICES OF QUALIFIED RESPIRATORY
                        THERAPISTS PERFORMED UNDER THE GENERAL SUPERVISION
                        OF A PHYSICIAN.

      (a) In General.--Section 1861 of the Social Security Act (42 U.S.C.
    1395x), as amended by sections 1233(a) and 1309, is amended--
              (1) in subsection (s)(2)--
                      (A) by striking ``and'' at the end of subparagraph
                    (GG);
                      (B) by adding ``and'' at the end of subparagraph
                    (HH); and
                      (C) by adding at the end the following new
                    subparagraph:
              ``(II) respiratory therapy services which would be
            physicians' services if furnished by a physician (as defined in
            subsection (r)(1)) for the diagnosis and treatment of
            respiratory illnesses and which are performed by a respiratory
            therapist (as defined in subsection (mmm)) under the general
            supervision of a physician and which the respiratory therapist
            is legally authorized to perform by the State in which the
            services are performed, but only if no facility or other
            provider charges or is paid any amounts with respect to the
            furnishing of such services;''; and
              (2) by adding after subsection (lll) the following new
            subsection:

                            ``Respiratory Therapist

      ``(mmm) For purposes of subsection (s)(2)(II) and section
    1833(a)(1)(X) only, the term `respiratory therapist' means an
    individual who--
              ``(1) is credentialed by a national credentialing board
            recognized by the Secretary;
              ``(2)(A) is licensed to practice respiratory therapy in the
            State in which the respiratory therapy services are performed,
            or
              ``(B) in the case of an individual in a State which does not
            provide for such licensure, is legally authorized to perform
            respiratory therapy services (in the State in which the
            individual performed such services) under State law (or the
            State regulatory mechanism provided by State law);
              ``(3) is a registered respiratory therapist; and
              ``(4) holds a bachelor's degree.''.
      (b) Payment.--Section 1833(a)(1) of such Act (42 U.S.C. 1395l(a)(1)),
    as amended by sections 1309(a)(4) and 1309(b)(4), is amended--
              (1) by striking ``and'' before ``(Y)''; and
              (2) by inserting before the semicolon at the end the
            following: ``, and (Z) with respect to services described in
            section 1861(s)(2)(II) (relating to services furnished by a
            respiratory therapist) that are furnished by a respiratory
            therapist (as defined in section 1861(mmm)), the amount paid
            shall be equal to 80 percent of the lesser of the actual charge
            for the services or 85 percent of the fee schedule amount
            provided under section 1848 for the same services if furnished
            by a physician''.
      (c) Effective Date.--The amendments made by this section shall apply
    to services furnished on or after January 1, 2010.

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

    SEC. 1151. REDUCING POTENTIALLY PREVENTABLE HOSPITAL READMISSIONS.

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

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

      (a) Plan.--
              (1) In general.--The Secretary of Health and Human Services
            (in this section referred to as the ``Secretary'') shall
            develop a detailed plan to reform payment for post acute care
            (PAC) services under the Medicare program under title XVIII of
            the Social Security Act (in this section referred to as the
            ``Medicare program)''. The goals of such payment reform are
            to--
                      (A) improve the coordination, quality, and efficiency
                    of such services; and
                      (B) improve outcomes for individuals such as reducing
                    the need for readmission to hospitals from providers of
                    such services.
              (2) Bundling post acute services.--The plan described in
            paragraph (1) shall include detailed specifications for a
            bundled payment for post acute services (in this section
            referred to as the ``post acute care bundle''), and may include
            other approaches determined appropriate by the Secretary.
              (3) Post acute services.--For purposes of this section, the
            term ``post acute services'' means services for which payment
            may be made under the Medicare program that are furnished by
            skilled nursing facilities, inpatient rehabilitation
            facilities, long term care hospitals, hospital based outpatient
            rehabilitation facilities and home health agencies to an
            individual after discharge of such individual from a hospital,
            and such other services determined appropriate by the
            Secretary.
      (b) Details.--The plan described in subsection (a)(1) shall include
    consideration of the following issues:
              (1) The nature of payments under a post acute care bundle,
            including the type of provider or entity to whom payment should
            be made, the scope of activities and services included in the
            bundle, whether payment for physicians' services should be
            included in the bundle, and the period covered by the bundle.
              (2) Whether the payment should be consolidated with the
            payment under the inpatient prospective system under section
            1886 of the Social Security Act (in this section referred to as
            MS-DRGs) or a separate payment should be established for such
            bundle, and if a separate payment is established, whether it
            should be made only upon use of post acute care services or for
            every discharge.
              (3) Whether the bundle should be applied across all
            categories of providers of inpatient services (including
            critical access hospitals) and post acute care services or
            whether it should be limited to certain categories of
            providers, services, or discharges, such as high volume or high
            cost MS-DRGs.
              (4) The extent to which payment rates could be established to
            achieve offsets for efficiencies that could be expected to be
            achieved with a bundle payment, whether such rates should be
            established on a national basis or for different geographic
            areas, should vary according to discharge, case mix, outliers,
            and geographic differences in wages or other appropriate
            adjustments, and how to update such rates.
              (5) The nature of protections needed for individuals under a
            system of bundled payments to ensure that individuals receive
            quality care, are furnished the level and amount of services
            needed as determined by an appropriate assessment instrument,
            are offered choice of provider, and the extent to which
            transitional care services would improve quality of care for
            individuals and the functioning of a bundled post-acute system.
              (6) The nature of relationships that may be required between
            hospitals and providers of post acute care services to
            facilitate bundled payments, including the application of
            gainsharing, anti-referral, anti-kickback, and anti-trust laws.
              (7) Quality measures that would be appropriate for reporting
            by hospitals and post acute providers (such as measures that
            assess changes in functional status and quality measures
            appropriate for each type of post acute services provider
            including how the reporting of such quality measures could be
            coordinated with other reporting of such quality measures by
            such providers otherwise required).
              (8) How cost-sharing for a post acute care bundle should be
            treated relative to current rules for cost-sharing for
            inpatient hospital, home health, skilled nursing facility, and
            other services.
              (9) How other programmatic issues should be treated in a post
            acute care bundle, including rules specific to various types of
            post-acute providers such as the post-acute transfer policy,
            three-day hospital stay to qualify for services furnished by
            skilled nursing facilities, and the coordination of payments
            and care under the Medicare program and the Medicaid program.
              (10) Such other issues as the Secretary deems appropriate.
      (c) Consultations and Analysis.--
              (1) Consultation with stakeholders.--In developing the plan
            under subsection (a)(1), the Secretary shall consult with
            relevant stakeholders and shall consider experience with such
            research studies and demonstrations that the Secretary
            determines appropriate.
              (2) Analysis and data collection.--In developing such plan,
            the Secretary shall--
                      (A) analyze the issues described in subsection (b)
                    and other issues that the Secretary determines
                    appropriate;
                      (B) analyze the impacts (including geographic
                    impacts) of post acute service reform approaches,
                    including bundling of such services on individuals,
                    hospitals, post acute care providers, and physicians;
                      (C) use existing data (such as data submitted on
                    claims) and collect such data as the Secretary
                    determines are appropriate to develop such plan
                    required in this section; and
                      (D) if patient functional status measures are
                    appropriate for the analysis, to the extent practical,
                    build upon the CARE tool being developed pursuant to
                    section 5008 of the Deficit Reduction Act of 2005.
      (d) Administration.--
              (1) Funding.--For purposes of carrying out the provisions of
            this section, in addition to funds otherwise available, out of
            any funds in the Treasury not otherwise appropriated, there are
            appropriated to the Secretary for the Center for Medicare &
            Medicaid Services Program Management Account $15,000,000 for
            each of the fiscal years 2010 through 2012. Amounts
            appropriated under this paragraph for a fiscal year shall be
            available until expended.
              (2) Expedited data collection.--Chapter 35 of title 44,
            United States Code shall not apply to this section.
      (e) Public Reports.--
              (1) Interim reports.--The Secretary shall issue interim
            public reports on a periodic basis on the plan described in
            subsection (a)(1), the issues described in subsection (b), and
            impact analyses as the Secretary determines appropriate.
              (2) Final report.--Not later than the date that is 3 years
            after the date of the enactment of this Act, the Secretary
            shall issue a final public report on such plan, including
            analysis of issues described in subsection (b) and impact
            analyses.
      (f) Conversion of Acute Care Episode Demonstration to Pilot Program
    and Expansion to Include Post Acute Services.--
              (1) In general.--Part E of title XVIII of the Social Security
            Act is amended by inserting after section 1866C the following
            new section:
     ``conversion of acute care episode demonstration to pilot program and
                    expansion to include post acute services
      ``Sec. 1866D.  (a) In General.--By not later than January 1, 2011,
    the Secretary shall, for the purpose of promoting the use of bundled
    payments to promote efficient and high quality delivery of care--
              ``(1) convert the acute care episode demonstration program
            conducted under section 1866C to a pilot program; and
              ``(2) subject to subsection (c), expand such program as so
            converted to include post acute services and such other
            services the Secretary determines to be appropriate, which may
            include transitional services.
      ``(b) Scope.--The Secretary shall set specific goals for the number
    of acute and post-acute bundling test sites under the pilot program to
    ensure that the pilot program is of sufficient size and scope to--
              ``(1) test the approaches under the pilot program in a
            variety of settings, including urban, rural, and underserved
            areas;
              ``(2) include geographic areas and additional conditions that
            account for significant program spending, as defined by the
            Secretary; and
              ``(3) subject to subsection (d), disseminate the pilot
            program rapidly on a national basis.
    To the extent that the Secretary finds inpatient and post-acute care
    bundling to be successful in improving quality and reducing costs, the
    Secretary shall implement such mechanisms and reforms under the pilot
    program on as large a geographic scale as practical and economical,
    consistent with subsection (e).
      ``(c) Limitation.--The Secretary shall only expand the pilot program
    under subsection (a)(2) if the Secretary finds that--
              ``(1) the demonstration program under section 1866C and pilot
            program under this section maintain or increase the quality of
            care received by individuals enrolled under this title; and
              ``(2) such demonstration program and pilot program reduce
            program expenditures and, based on the certification under
            subsection (d), that the expansion of such pilot program would
            result in estimated spending that would be less than what
            spending would otherwise be in the absence of this section.
      ``(d) Certification.--For purposes of subsection (c), the Chief
    Actuary of the Centers for Medicare & Medicaid Services shall certify
    whether expansion of the pilot program under this section would result
    in estimated spending that would be less than what spending would
    otherwise be in the absence of this section.
      ``(e) Voluntary Participation.--Nothing in this paragraph shall be
    construed as requiring the participation of an entity in the pilot
    program under this section.''.
              (2) Conforming amendment.--Section 1866C(b) of the Social
            Security Act (42 U.S.C. 1395cc-3(b)) is amended by striking
            ``The Secretary'' and inserting ``Subject to section 1866D, the
            Secretary''.

    SEC. 1153. HOME HEALTH PAYMENT UPDATE FOR 2010.

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

    SEC. 1154. PAYMENT ADJUSTMENTS FOR HOME HEALTH CARE.

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

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

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

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

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

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

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

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

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

                     Subtitle D--Medicare Advantage Reforms

                       PART 1--PAYMENT AND ADMINISTRATION

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

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

    SEC. 1162. QUALITY BONUS PAYMENTS.

      (a) In General.--Section 1853 of the Social Security Act (42 U.S.C.
    1395w-23), as amended by section 1161, is amended--
              (1) in subsection (j), by inserting ``subject to subsection
            (o),'' after ``For purposes of this part,''; and
              (2) by adding at the end the following new subsection:
      ``(o) Quality Based Payment Adjustment.--
              ``(1) High quality plan adjustment.--For years beginning with
            2011, in the case of a Medicare Advantage plan that is
            identified (under paragraph (3)(E)(ii)) as a high quality MA
            plan with respect to the year, the blended benchmark amount
            under subsection (n)(1) shall be increased--
                      ``(A) for 2011, by 1.0 percent;
                      ``(B) for 2012, by 2.0 percent; and
                      ``(C) for a subsequent year, by 3.0 percent.
              ``(2) Improved quality plan adjustment.--For years beginning
            with 2011, in the case of a Medicare Advantage plan that is
            identified (under paragraph (3)(E)(iii)) as an improved quality
            MA plan with respect to the year, blended benchmark amount
            under subsection (n)(1) shall be increased--
                      ``(A) for 2011, by 0.33 percent;
                      ``(B) for 2012, by 0.66 percent; and
                      ``(C) for a subsequent year, by 1.0 percent.
              ``(3) Determinations of quality.--
                      ``(A) Quality performance.--The Secretary shall
                    provide for the computation of a quality performance
                    score for each Medicare Advantage plan to be applied
                    for each year beginning with 2010.
                      ``(B) Computation of score.--
                              ``(i) For years before 2014.--For years
                            before 2014, the quality performance score for
                            a Medicare Advantage plan shall be computed
                            based on a blend (as designated by the
                            Secretary) of the plan's performance on--
                                      ``(I) HEDIS effectiveness of care
                                    quality measures;
                                      ``(II) CAHPS quality measures; and
                                      ``(III) such other measures of
                                    clinical quality as the Secretary may
                                    specify.
                            Such measures shall be risk-adjusted as the
                            Secretary deems appropriate.
                              ``(ii) Establishment of outcome-based
                            measures.--By not later than for 2013 the
                            Secretary shall implement reporting
                            requirements for quality under this section on
                            measures selected under clause (iii) that
                            reflect the outcomes of care experienced by
                            individuals enrolled in Medicare Advantage
                            plans (in addition to measures described in
                            clause (i)). Such measures may include--
                                      ``(I) measures of rates of admission
                                    and readmission to a hospital;
                                      ``(II) measures of prevention
                                    quality, such as those established by
                                    the Agency for Healthcare Research and
                                    Quality (that include hospital
                                    admission rates for specified
                                    conditions);
                                      ``(III) measures of patient mortality
                                    and morbidity following surgery;
                                      ``(IV) measures of health functioning
                                    (such as limitations on activities of
                                    daily living) and survival for patients
                                    with chronic diseases;
                                      ``(V) measures of patient safety; and
                                      ``(VI) other measure of outcomes and
                                    patient quality of life as determined
                                    by the Secretary.
                            Such measures shall be risk-adjusted as the
                            Secretary deems appropriate. In determining the
                            quality measures to be used under this clause,
                            the Secretary shall take into consideration the
                            recommendations of the Medicare Payment
                            Advisory Commission in its report to Congress
                            under section 168 of the Medicare Improvements
                            for Patients and Providers Act of 2008 (Public
                            Law 110-275) and shall provide preference to
                            measures collected on and comparable to
                            measures used in measuring quality under parts
                            A and B.
                              ``(iii) Rules for selection of measures.--The
                            Secretary shall select measures for purposes of
                            clause (ii) consistent with the following:
                                      ``(I) The Secretary shall provide
                                    preference to clinical quality measures
                                    that have been endorsed by the entity
                                    with a contract with the Secretary
                                    under section 1890(a).
                                      ``(II) Prior to any measure being
                                    selected under this clause, the
                                    Secretary shall publish in the Federal
                                    Register such measure and provide for a
                                    period of public comment on such
                                    measure.
                              ``(iv) Transitional use of blend.--For
                            payments for 2014 and 2015, the Secretary may
                            compute the quality performance score for a
                            Medicare Advantage plan based on a blend of the
                            measures specified in clause (i) and the
                            measures described in clause (ii) and selected
                            under clause (iii).
                              ``(v) Use of quality outcomes measures.--For
                            payments beginning with 2016, the preponderance
                            of measures used under this paragraph shall be
                            quality outcomes measures described in clause
                            (ii) and selected under clause (iii).
                      ``(C) Data used in computing score.--Such score for
                    application for--
                              ``(i) payments in 2011 shall be based on
                            quality performance data for plans for 2009;
                            and
                              ``(ii) payments in 2012 and a subsequent year
                            shall be based on quality performance data for
                            plans for the second preceding year.
                      ``(D) Reporting of data.--Each Medicare Advantage
                    organization shall provide for the reporting to the
                    Secretary of quality performance data described in
                    subparagraph (B) (in order to determine a quality
                    performance score under this paragraph) in such time
                    and manner as the Secretary shall specify.
                      ``(E) Ranking of plans.--
                              ``(i) Initial ranking.--Based on the quality
                            performance score described in subparagraph (B)
                            achieved with respect to a year, the Secretary
                            shall rank plan performance--
                                      ``(I) from highest to lowest based on
                                    absolute scores; and
                                      ``(II) from highest to lowest based
                                    on percentage improvement in the score
                                    for the plan from the previous year.
                            A plan which does not report quality
                            performance data under subparagraph (D) shall
                            be counted, for purposes of such ranking, as
                            having the lowest plan performance and lowest
                            percentage improvement.
                              ``(ii) Identification of high quality plans
                            in top quintile based on projected
                            enrollment.--The Secretary shall, based on the
                            scores for each plan under clause (i)(I) and
                            the Secretary's projected enrollment for each
                            plan and subject to clause (iv), identify those
                            Medicare Advantage plans with the highest score
                            that, based upon projected enrollment, are
                            projected to include in the aggregate 20
                            percent of the total projected enrollment for
                            the year. For purposes of this subsection, a
                            plan so identified shall be referred to in this
                            subsection as a `high quality MA plan'.
                              ``(iii) Identification of improved quality
                            plans in top quintile based on projected
                            enrollment.--The Secretary shall, based on the
                            percentage improvement score for each plan
                            under clause (i)(II) and the Secretary's
                            projected enrollment for each plan and subject
                            to clause (iv), identify those Medicare
                            Advantage plans with the greatest percentage
                            improvement score that, based upon projected
                            enrollment, are projected to include in the
                            aggregate 20 percent of the total projected
                            enrollment for the year. For purposes of this
                            subsection, a plan so identified that is not a
                            high quality plan for the year shall be
                            referred to in this subsection as an `improved
                            quality MA plan'.
                              ``(iv) Authority to disqualify certain
                            plans.--In applying clauses (ii) and (iii), the
                            Secretary may determine not to identify a
                            Medicare Advantage plan if the Secretary has
                            identified deficiencies in the plan's
                            compliance with rules for such plans under this
                            part.
                      ``(F) Notification.--The Secretary, in the annual
                    announcement required under subsection (b)(1)(B) in
                    2011 and each succeeding year, shall notify the
                    Medicare Advantage organization that is offering a high
                    quality plan or an improved quality plan of such
                    identification for the year and the quality performance
                    payment adjustment for such plan for the year. The
                    Secretary shall provide for publication on the website
                    for the Medicare program of the information described
                    in the previous sentence.''.

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

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

    SEC. 1164. SIMPLIFICATION OF ANNUAL BENEFICIARY ELECTION PERIODS.

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

    SEC. 1165. EXTENSION OF REASONABLE COST CONTRACTS.

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

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

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

    SEC. 1167. IMPROVING RISK ADJUSTMENT FOR PAYMENTS.

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

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

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

    SEC. 1169. STUDY REGARDING THE EFFECTS OF CALCULATING MEDICARE
                        ADVANTAGE PAYMENT RATES ON A REGIONAL AVERAGE OF
                        MEDICARE FEE FOR SERVICE RATES.

      (a) In General.--The Administrator of the Centers for Medicare and
    Medicaid Services shall conduct a study to determine the potential
    effects of calculating Medicare Advantage payment rates on a more
    aggregated geographic basis (such as metropolitan statistical areas or
    other regional delineations) rather than using county boundaries. In
    conducting such study, the Administrator shall consider whether such
    alternative geographic basis would result in the following:
              (1) Improvements in the quality of care.
              (2) Greater equity among providers.
              (3) More predictable benchmark amounts for Medicare advantage
            plans.
      (b) Consultations.--In conducting the study, the Administrator shall
    consult with the following:
              (1) Experts in health care financing.
              (2) Representatives of foundations and other nonprofit
            entities that have conducted or supported research on Medicare
            financing issues.
              (3) Representatives from Medicare Advantage plans.
              (4) Such other entities or people as determined by the
            Secretary.
      (c) Report.--Not later than one year after the date of the enactment
    of this Act, the Administrator shall transmit a report to the Congress
    on the study conducted under this section. The report shall contain a
    detailed statement of findings and conclusions of the study, together
    with its recommendations for such legislation and administrative
    actions as the Administrator considers appropriate.

                 PART 2--BENEFICIARY PROTECTIONS AND ANTI-FRAUD

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

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

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

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

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

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

    SEC. 1174. STRENGTHENING AUDIT AUTHORITY.

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

    SEC. 1175. AUTHORITY TO DENY PLAN BIDS.

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

                    PART 3--TREATMENT OF SPECIAL NEEDS PLANS

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

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

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

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

                  Subtitle E--Improvements to Medicare Part D

    SEC. 1181. ELIMINATION OF COVERAGE GAP.

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

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

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

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

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

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

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

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

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

    SEC. 1186. NEGOTIATION OF LOWER COVERED PART D DRUG PRICES ON BEHALF OF
                        MEDICARE BENEFICIARIES.

      (a) Negotiation by Secretary.--Section 1860D-11 of the Social
    Security Act (42 U.S.C. 1395w-111) is amended by striking subsection
    (i) (relating to noninterference) and inserting the following:
      ``(i) Negotiation of Lower Drug Prices.--
              ``(1) In general.--Notwithstanding any other provision of
            law, the Secretary shall negotiate with pharmaceutical
            manufacturers the prices (including discounts, rebates, and
            other price concessions) that may be charged to PDP sponsors
            and MA organizations for covered part D drugs for part D
            eligible individuals who are enrolled under a prescription drug
            plan or under an MA-PD plan.
              ``(2) No change in rules for formularies.--
                      ``(A) In general.--Nothing in paragraph (1) shall be
                    construed to authorize the Secretary to establish or
                    require a particular formulary.
                      ``(B) Construction.--Subparagraph (A) shall not be
                    construed as affecting the Secretary's authority to
                    ensure appropriate and adequate access to covered part
                    D drugs under prescription drug plans and under MA-PD
                    plans, including compliance of such plans with
                    formulary requirements under section 1860D-4(b)(3).
              ``(3) Construction.--Nothing in this subsection shall be
            construed as preventing the sponsor of a prescription drug
            plan, or an organization offering an MA-PD plan, from obtaining
            a discount or reduction of the price for a covered part D drug
            below the price negotiated under paragraph (1).
              ``(4) Semi-annual reports to congress.--Not later than June
            1, 2011, and every six months thereafter, the Secretary shall
            submit to the Committees on Ways and Means, Energy and
            Commerce, and Oversight and Government Reform of the House of
            Representatives and the Committee on Finance of the Senate a
            report on negotiations conducted by the Secretary to achieve
            lower prices for Medicare beneficiaries, and the prices and
            price discounts achieved by the Secretary as a result of such
            negotiations.''.
      (b) Effective Date.--The amendment made by subsection (a) shall take
    effect on the date of the enactment of this Act and shall first apply
    to negotiations and prices for plan years beginning on January 1, 2011.

    SEC. 1187. STATE CERTIFICATION PRIOR TO WAIVER OF LICENSURE
                        REQUIREMENTS UNDER MEDICARE PRESCRIPTION DRUG
                        PROGRAM.

      (a) In General.--Section 1860D-12(c) of the Social Security Act (42
    U.S.C. 1395w-112(c)) is amended--
              (1) in paragraph (1)(A), by striking ``In the case'' and
            inserting ``Subject to paragraph (5), in the case''; and
              (2) by adding at the end the following new paragraph:
              ``(5) State certification required.--
                      ``(A) In general.--The Secretary may only grant a
                    waiver under paragraph (1)(A) if the Secretary has
                    received a certification from the State insurance
                    commissioner that the prescription drug plan has a
                    substantially complete application pending in the
                    State.
                      ``(B) Revocation of waiver upon finding of fraud and
                    abuse.--The Secretary shall revoke a waiver granted
                    under paragraph (1)(A) if the State insurance
                    commissioner submits a certification to the Secretary
                    that the recipient of such a waiver--
                              ``(i) has committed fraud or abuse with
                            respect to such waiver;
                              ``(ii) has failed to make a good faith effort
                            to satisfy State licensing requirements; or
                              ``(iii) was determined ineligible for
                            licensure by the State.''.
      (b) Effective Date.--The amendments made by subsection (a) shall
    apply with respect to plan years beginning on or after January 1, 2010.

                 Subtitle F--Medicare Rural Access Protections

    SEC. 1191. TELEHEALTH EXPANSION AND ENHANCEMENTS. .

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

    SEC. 1192. EXTENSION OF OUTPATIENT HOLD HARMLESS PROVISION.

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

    SEC. 1193. EXTENSION OF SECTION 508 HOSPITAL RECLASSIFICATIONS.

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

    SEC. 1194. EXTENSION OF GEOGRAPHIC FLOOR FOR WORK.

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

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

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

    SEC. 1196. EXTENSION OF AMBULANCE ADD-ONS.

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

    SEC. 1197. ENSURING PROPORTIONAL REPRESENTATION OF INTERESTS OF RURAL
                        AREAS ON MEDPAC.

      (a) In General.--Section 1805(c)(2) of the Social Security Act (42
    U.S.C. 1395b-6(c)(2)) is amended--
              (1) in subparagraph (A), by inserting ``consistent with
            subparagraph (E)'' after ``rural representatives''; and
              (2) by adding at the end the following new subparagraph:
                      ``(E) Proportional representation of interests of
                    rural areas.--In order to provide a balance between
                    urban and rural representatives under subparagraph (A),
                    the proportion of members of the Commission who
                    represent the interests of health care providers and
                    Medicare beneficiaries located in rural areas shall be
                    no less than the proportion of the total number of
                    Medicare beneficiaries who reside in rural areas.''.
      (b) Effective Date.--The amendments made by subsection (a) shall
    apply to appointments to the Medicare Payment Advisory Commission made
    after the date of the enactment of this Act.

                  TITLE II--MEDICARE BENEFICIARY IMPROVEMENTS

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

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

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

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

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

    SEC. 1203. ELIMINATING BARRIERS TO ENROLLMENT.

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

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

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

    SEC. 1205. INTELLIGENT ASSIGNMENT IN ENROLLMENT.

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

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

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

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

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

                    Subtitle B--Reducing Health Disparities

    SEC. 1221. ENSURING EFFECTIVE COMMUNICATION IN MEDICARE.

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

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

      (a) In General.--Not later than 6 months after the date of the
    completion of the study described in section 1221(a), the Secretary,
    acting through the Centers for Medicare & Medicaid Services and the
    Center for Medicare and Medicaid Payment Innovation established under
    section 1115A of the Social Security Act (as added by section 1910) and
    consistent with the applicable provisions of such section, shall carry
    out a demonstration program under which the Secretary shall award not
    fewer than 24 3-year grants to eligible Medicare service providers (as
    described in subsection (b)(1)) to improve effective communication
    between such providers and Medicare beneficiaries who are living in
    communities where racial and ethnic minorities, including populations
    that face language barriers, are underserved with respect to such
    services. In designing and carrying out the demonstration the Secretary
    shall take into consideration the results of the study conducted under
    section 1221(a) and adjust, as appropriate, the distribution of grants
    so as to better target Medicare beneficiaries who are in the greatest
    need of language services. The Secretary shall not authorize a grant
    larger than $500,000 over three years for any grantee.
      (b) Eligibility; Priority.--
              (1) Eligibility.--To be eligible to receive a grant under
            subsection (a) an entity shall--
                      (A) be--
                              (i) a provider of services under part A of
                            title XVIII of the Social Security Act;
                              (ii) a service provider under part B of such
                            title;
                              (iii) a part C organization offering a
                            Medicare part C plan under part C of such
                            title; or
                              (iv) a PDP sponsor of a prescription drug
                            plan under part D of such title; and
                      (B) prepare and submit to the Secretary an
                    application, at such time, in such manner, and
                    accompanied by such additional information as the
                    Secretary may require.
              (2) Priority.--
                      (A) Distribution.--To the extent feasible, in
                    awarding grants under this section, the Secretary shall
                    award--
                              (i) at least 6 grants to providers of
                            services described in paragraph (1)(A)(i);
                              (ii) at least 6 grants to service providers
                            described in paragraph (1)(A)(ii);
                              (iii) at least 6 grants to organizations
                            described in paragraph (1)(A)(iii); and
                              (iv) at least 6 grants to sponsors described
                            in paragraph (1)(A)(iv).
                      (B) For community organizations.--The Secretary shall
                    give priority to applicants that have developed
                    partnerships with community organizations or with
                    agencies with experience in language access.
                      (C) Variation in grantees.--The Secretary shall also
                    ensure that the grantees under this section represent,
                    among other factors, variations in--
                              (i) different types of language services
                            provided and of service providers and
                            organizations under parts A through D of title
                            XVIII of the Social Security Act;
                              (ii) languages needed and their frequency of
                            use;
                              (iii) urban and rural settings;
                              (iv) at least two geographic regions, as
                            defined by the Secretary; and
                              (v) at least two large metropolitan
                            statistical areas with diverse populations.
      (c) Use of Funds.--
              (1) In general.--A grantee shall use grant funds received
            under this section to pay for the provision of competent
            language services to Medicare beneficiaries who are limited-
            English proficient. Competent interpreter services may be
            provided through on-site interpretation, telephonic
            interpretation, or video interpretation or direct provision of
            health care or health care related services by a bilingual
            health care provider. A grantee may use bilingual providers,
            staff, or contract interpreters. A grantee may use grant funds
            to pay for competent translation services. A grantee may use up
            to 10 percent of the grant funds to pay for administrative
            costs associated with the provision of competent language
            services and for reporting required under subsection (e).
              (2) Organizations.--Grantees that are part C organizations or
            PDP sponsors must ensure that their network providers receive
            at least 50 percent of the grant funds to pay for the provision
            of competent language services to Medicare beneficiaries who
            are limited-English proficient, including physicians and
            pharmacies.
              (3) Determination of payments for language services.--
            Payments to grantees shall be calculated based on the estimated
            numbers of limited-English proficient Medicare beneficiaries in
            a grantee's service area utilizing--
                      (A) data on the numbers of limited-English proficient
                    individuals who speak English less than ``very well''
                    from the most recently available data from the Bureau
                    of the Census or other State-based study the Secretary
                    determines likely to yield accurate data regarding the
                    number of such individuals served by the grantee; or
                      (B) the grantee's own data if the grantee routinely
                    collects data on Medicare beneficiaries' primary
                    language in a manner determined by the Secretary to
                    yield accurate data and such data shows greater numbers
                    of limited-English proficient individuals than the data
                    listed in subparagraph (A).
              (4) Limitations.--
                      (A) Reporting.--Payments shall only be provided under
                    this section to grantees that report their costs of
                    providing language services as required under
                    subsection (e) and may be modified annually at the
                    discretion of the Secretary. If a grantee fails to
                    provide the reports under such section for the first
                    year of a grant, the Secretary may terminate the grant
                    and solicit applications from new grantees to
                    participate in the subsequent two years of the
                    demonstration program.
                      (B) Type of services.--
                              (i) In general.--Subject to clause (ii),
                            payments shall be provided under this section
                            only to grantees that utilize competent
                            bilingual staff or competent interpreter or
                            translation services which--
                                      (I) if the grantee operates in a
                                    State that has statewide health care
                                    interpreter standards, meet the State
                                    standards currently in effect; or
                                      (II) if the grantee operates in a
                                    State that does not have statewide
                                    health care interpreter standards,
                                    utilizes competent interpreters who
                                    follow the National Council on
                                    Interpreting in Health Care's Code of
                                    Ethics and Standards of Practice.
                              (ii) Exemptions.--The requirements of clause
                            (i) shall not apply--
                                      (I) in the case of a Medicare
                                    beneficiary who is limited-English
                                    proficient (who has been informed in
                                    the beneficiary's primary language of
                                    the availability of free interpreter
                                    and translation services) and who
                                    requests the use of family, friends, or
                                    other persons untrained in
                                    interpretation or translation and the
                                    grantee documents the request in the
                                    beneficiary's record; and
                                      (II) in the case of a medical
                                    emergency where the delay directly
                                    associated with obtaining a competent
                                    interpreter or translation services
                                    would jeopardize the health of the
                                    patient.
                            Nothing in clause (ii)(II) shall be construed
                            to exempt emergency rooms or similar entities
                            that regularly provide health care services in
                            medical emergencies from having in place
                            systems to provide competent interpreter and
                            translation services without undue delay.
      (d) Assurances.--Grantees under this section shall--
              (1) ensure that appropriate clinical and support staff
            receive ongoing education and training in linguistically
            appropriate service delivery;
              (2) ensure the linguistic competence of bilingual providers;
              (3) offer and provide appropriate language services at no
            additional charge to each patient with limited-English
            proficiency at all points of contact, in a timely manner during
            all hours of operation;
              (4) notify Medicare beneficiaries of their right to receive
            language services in their primary language;
              (5) post signage in the languages of the commonly encountered
            group or groups present in the service area of the
            organization; and
              (6) ensure that--
                      (A) primary language data are collected for
                    recipients of language services; and
                      (B) consistent with the privacy protections provided
                    under the regulations promulgated pursuant to section
                    264(c) of the Health Insurance Portability and
                    Accountability Act of 1996 (42 U.S.C. 1320d-2 note), if
                    the recipient of language services is a minor or is
                    incapacitated, the primary language of the parent or
                    legal guardian is collected and utilized.
      (e) Reporting Requirements.--Grantees under this section shall
    provide the Secretary with reports at the conclusion of the each year
    of a grant under this section. Each report shall include at least the
    following information:
              (1) The number of Medicare beneficiaries to whom language
            services are provided.
              (2) The languages of those Medicare beneficiaries.
              (3) The types of language services provided (such as
            provision of services directly in non-English language by a
            bilingual health care provider or use of an interpreter).
              (4) Type of interpretation (such as in-person, telephonic, or
            video interpretation).
              (5) The methods of providing language services (such as staff
            or contract with external independent contractors or agencies).
              (6) The length of time for each interpretation encounter.
              (7) The costs of providing language services (which may be
            actual or estimated, as determined by the Secretary).
      (f) No Cost Sharing.--Limited-English proficient Medicare
    beneficiaries shall not have to pay cost-sharing or co-pays for
    language services provided through this demonstration program.
      (g) Evaluation and Report.--The Secretary shall conduct an evaluation
    of the demonstration program under this section and shall submit to the
    appropriate committees of Congress a report not later than 1 year after
    the completion of the program. The report shall include the following:
              (1) An analysis of the patient outcomes and costs of
            furnishing care to the limited-English proficient Medicare
            beneficiaries participating in the project as compared to such
            outcomes and costs for limited-English proficient Medicare
            beneficiaries not participating.
              (2) The effect of delivering culturally and linguistically
            appropriate services on beneficiary access to care, utilization
            of services, efficiency and cost-effectiveness of health care
            delivery, patient satisfaction, and select health outcomes.
              (3) Recommendations, if any, regarding the extension of such
            project to the entire Medicare program.
      (h) General Provisions.--Nothing in this section shall be construed
    to limit otherwise existing obligations of recipients of Federal
    financial assistance under title VI of the Civil Rights Act of 1964 (42
    U.S.C. 2000(d) et seq.) or any other statute.
      (i) Authorization of Appropriations.--There are authorized to be
    appropriated to carry out this section $16,000,000 for each fiscal year
    of the demonstration program.

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

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

    SEC. 1224. DEFINITIONS.

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

                     Subtitle C--Miscellaneous Improvements

    SEC. 1231. EXTENSION OF THERAPY CAPS EXCEPTIONS PROCESS.

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

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

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

    SEC. 1233. ADVANCE CARE PLANNING CONSULTATION.

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

                      ``Advance Care Planning Consultation

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

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

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

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

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

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

      (a) In General.--The Secretary of Health and Human Services, acting
    through the Center for Medicare and Medicaid Payment Innovation
    established under section 1115A of the Social Security Act (as added by
    section 1910) and consistent with the applicable provisions of such
    section, shall establish a shared decision making demonstration program
    (in this subsection referred to as the ``program'') under the Medicare
    program using patient decision aids to meet the objective of improving
    the understanding by Medicare beneficiaries of their medical treatment
    options, as compared to comparable Medicare beneficiaries who do not
    participate in a shared decision making process using patient decision
    aids.
      (b) Sites.--
              (1) Enrollment.--The Secretary shall enroll in the program
            not more than 30 eligible providers who have experience in
            implementing, and have invested in the necessary infrastructure
            to implement, shared decision making using patient decision
            aids.
              (2) Application.--An eligible provider seeking to participate
            in the program shall submit to the Secretary an application at
            such time and containing such information as the Secretary may
            require.
              (3) Preference.--In enrolling eligible providers in the
            program, the Secretary shall give preference to eligible
            providers that--
                      (A) have documented experience in using patient
                    decision aids for the conditions identified by the
                    Secretary and in using shared decision making;
                      (B) have the necessary information technology
                    infrastructure to collect the information required by
                    the Secretary for reporting purposes; and
                      (C) are trained in how to use patient decision aids
                    and shared decision making.
      (c) Follow-up Counseling Visit.--
              (1) In general.--An eligible provider participating in the
            program shall routinely schedule Medicare beneficiaries for a
            counseling visit after the viewing of such a patient decision
            aid to answer any questions the beneficiary may have with
            respect to the medical care of the condition involved and to
            assist the beneficiary in thinking through how their
            preferences and concerns relate to their medical care.
              (2) Payment for follow-up counseling visit.--The Secretary
            shall establish procedures for making payments for such
            counseling visits provided to Medicare beneficiaries under the
            program. Such procedures shall provide for the establishment--
                      (A) of a code (or codes) to represent such services;
                    and
                      (B) of a single payment amount for such service that
                    includes the professional time of the health care
                    provider and a portion of the reasonable costs of the
                    infrastructure of the eligible provider such as would
                    be made under the applicable payment systems to that
                    provider for similar covered services.
      (d) Costs of Aids.--An eligible provider participating in the program
    shall be responsible for the costs of selecting, purchasing, and
    incorporating such patient decision aids into the provider's practice,
    and reporting data on quality and outcome measures under the program.
      (e) Funding.--The Secretary shall provide for the transfer from the
    Federal Supplementary Medical Insurance Trust Fund established under
    section 1841 of the Social Security Act (42 U.S.C. 1395t) of such funds
    as are necessary for the costs of carrying out the program.
      (f) Waiver Authority.--The Secretary may waive such requirements of
    titles XI and XVIII of the Social Security Act (42 U.S.C. 1301 et seq.
    and 1395 et seq.) as may be necessary for the purpose of carrying out
    the program.
      (g) Report.--Not later than 12 months after the date of completion of
    the program, the Secretary shall submit to Congress a report on such
    program, together with recommendations for such legislation and
    administrative action as the Secretary determines to be appropriate.
    The final report shall include an evaluation of the impact of the use
    of the program on health quality, utilization of health care services,
    and on improving the quality of life of such beneficiaries.
      (h) Definitions.--In this section:
              (1) Eligible provider.--The term ``eligible provider'' means
            the following:
                      (A) A primary care practice.
                      (B) A specialty practice.
                      (C) A multispecialty group practice.
                      (D) A hospital.
                      (E) A rural health clinic.
                      (F) A Federally qualified health center (as defined
                    in section 1861(aa)(4) of the Social Security Act (42
                    U.S.C. 1395x(aa)(4)).
                      (G) An integrated delivery system.
                      (H) A State cooperative entity that includes the
                    State government and at least one other health care
                    provider which is set up for the purpose of testing
                    shared decision making and patient decision aids.
              (2) Patient decision aid.--The term ``patient decision aid''
            means an educational tool (such as the Internet, a video, or a
            pamphlet) that helps patients (or, if appropriate, the family
            caregiver of the patient) understand and communicate their
            beliefs and preferences related to their treatment options, and
            to decide with their health care provider what treatments are
            best for them based on their treatment options, scientific
            evidence, circumstances, beliefs, and preferences.
              (3) Shared decision making.--The term ``shared decision
            making'' means a collaborative process between patient and
            clinician that engages the patient in decision making, provides
            patients with information about trade-offs among treatment
            options, and facilitates the incorporation of patient
            preferences and values into the medical plan.

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

    SEC. 1301. ACCOUNTABLE CARE ORGANIZATION PILOT PROGRAM.

      Title XVIII of the Social Security Act is amended by inserting after
    section 1866D, as added by section 1152(f) of this Act, the following
    new section:
                 ``accountable care organization pilot program
      ``Sec. 1866E.  (a) Establishment.--
              ``(1) In general.--The Secretary shall conduct a pilot
            program (in this section referred to as the `pilot program') to
            test different payment incentive models, including (to the
            extent practicable) the specific payment incentive models
            described in subsection (c), designed to reduce the growth of
            expenditures and improve health outcomes in the provision of
            items and services under this title to applicable beneficiaries
            (as defined in subsection (d)) by qualifying accountable care
            organizations (as defined in subsection (b)(1)) in order to--
                      ``(A) promote accountability for a patient population
                    and coordinate items and services under parts A and B;
                      ``(B) encourage investment in infrastructure and
                    redesigned care processes for high quality and
                    efficient service delivery; and
                      ``(C) reward physician practices and other physician
                    organizational models for the provision of high quality
                    and efficient health care services.
              ``(2) Scope.--The Secretary shall set specific goals for the
            number of accountable care organizations, participating
            practitioners, and patients served in the initial tests under
            the pilot program to ensure that the pilot program is of
            sufficient size and scope to--
                      ``(A) test the approach involved in a variety of
                    settings, including urban, rural, and underserved
                    areas; and
                      ``(B) subject to subsection (f)(1), disseminate such
                    approach rapidly on a national basis.
            To the extent that the Secretary finds a qualifying accountable
            care organization model to be successful in improving quality
            and reducing costs, the Secretary shall attempt to attract at
            least 10 percent of all eligible providers to act as
            accountable care organizations and implement such mechanisms
            and reforms within 5 years after the date of the enactment of
            this section. If the Secretary further finds such accountable
            care organization models to be successful, the Secretary shall
            seek to implement such mechanisms and reforms on as large a
            geographic scale as practical and economical.
      ``(b) Qualifying Accountable Care Organizations (ACOs).--
              ``(1) Qualifying aco defined.--In this section:
                      ``(A) In general.--The terms `qualifying accountable
                    care organization' and `qualifying ACO' mean a group of
                    physicians or other physician organizational model (as
                    defined in subparagraph (D)) that--
                              ``(i) is organized at least in part for the
                            purpose of providing physicians' services; and
                              ``(ii) meets such criteria as the Secretary
                            determines to be appropriate to participate in
                            the pilot program, including the criteria
                            specified in paragraph (2).
                      ``(B) Inclusion of other providers.--Nothing in this
                    subsection shall be construed as preventing a
                    qualifying ACO from including a hospital or any other
                    provider of services or supplier furnishing items or
                    services for which payment may be made under this title
                    that is affiliated with the ACO under an arrangement
                    structured so that such provider or supplier
                    participates in the pilot program and shares in any
                    incentive payments under the pilot program.
                      ``(C) Physician.--The term `physician' includes,
                    except as the Secretary may otherwise provide, any
                    individual who furnishes services for which payment may
                    be made as physicians' services.
                      ``(D) Other physician organizational model.--The term
                    `other physician organization model' means, with
                    respect to a qualifying ACO any model of organization
                    under which physicians enter into agreements with other
                    providers for the purposes of participation in the
                    pilot program in order to provide high quality and
                    efficient health care services and share in any
                    incentive payments under such program
                      ``(E) Other services.--Nothing in this paragraph
                    shall be construed as preventing a qualifying ACO from
                    furnishing items or services, for which payment may not
                    be made under this title, for purposes of achieving
                    performance goals under the pilot program.
              ``(2) Qualifying criteria.--The following are criteria
            described in this paragraph for an organized group of
            physicians to be a qualifying ACO:
                      ``(A) The group has a legal structure that would
                    allow the group to receive and distribute incentive
                    payments under this section.
                      ``(B) The group includes a sufficient number of
                    primary care physicians (regardless of specialty) for
                    the applicable beneficiaries for whose care the group
                    is accountable (as determined by the Secretary).
                      ``(C) The group reports on quality measures in such
                    form, manner, and frequency as specified by the
                    Secretary (which may be for the group, for providers of
                    services and suppliers, or both).
                      ``(D) The group reports to the Secretary (in a form,
                    manner and frequency as specified by the Secretary)
                    such data as the Secretary determines appropriate to
                    monitor and evaluate the pilot program.
                      ``(E) The group provides notice to applicable
                    beneficiaries regarding the pilot program (as
                    determined appropriate by the Secretary).
                      ``(F) The group contributes to a best practices
                    network or website, that shall be maintained by the
                    Secretary for the purpose of sharing strategies on
                    quality improvement, care coordination, and efficiency
                    that the groups believe are effective.
                      ``(G) The group utilizes patient-centered processes
                    of care, including those that emphasize patient and
                    caregiver involvement in planning and monitoring of
                    ongoing care management plan.
                      ``(H) The group meets other criteria determined to be
                    appropriate by the Secretary.
      ``(c) Specific Payment Incentive Models.--The specific payment
    incentive models described in this subsection are the following:
              ``(1) Performance target model.--Under the performance target
            model under this paragraph (in this paragraph referred to as
            the `performance target model'):
                      ``(A) In general.--A qualifying ACO qualifies to
                    receive an incentive payment if expenditures for
                    applicable beneficiaries are less than a target
                    spending level or a target rate of growth. The
                    incentive payment shall be made only if savings are
                    greater than would result from normal variation in
                    expenditures for items and services covered under parts
                    A and B.
                      ``(B) Computation of performance target.--
                              ``(i) In general.--The Secretary shall
                            establish a performance target for each
                            qualifying ACO comprised of a base amount
                            (described in clause (ii)) increased to the
                            current year by an adjustment factor (described
                            in clause (iii)). Such a target may be
                            established on a per capita basis, as the
                            Secretary determines to be appropriate.
                              ``(ii) Base amount.--For purposes of clause
                            (i), the base amount in this subparagraph is
                            equal to the average total payments (or allowed
                            charges) under parts A and B (and may include
                            part D, if the Secretary determines
                            appropriate) for applicable beneficiaries for
                            whom the qualifying ACO furnishes items and
                            services in a base period determined by the
                            Secretary. Such base amount may be determined
                            on a per capita basis.
                              ``(iii) Adjustment factor.--For purposes of
                            clause (i), the adjustment factor in this
                            clause may equal an annual per capita amount
                            that reflects changes in expenditures from the
                            period of the base amount to the current year
                            that would represent an appropriate performance
                            target for applicable beneficiaries (as
                            determined by the Secretary). Such adjustment
                            factor may be determined as an amount or rate,
                            may be determined on a national, regional,
                            local, or organization-specific basis, and may
                            be determined on a per capita basis. Such
                            adjustment factor also may be adjusted for risk
                            as determined appropriate by the Secretary.
                              ``(iv) Rebasing.--Under this model the
                            Secretary shall periodically rebase the base
                            expenditure amount described in clause (ii).
                      ``(C) Meeting target.--
                              ``(i) In general.--Subject to clause (ii), a
                            qualifying ACO that meet or exceeds annual
                            quality and performance targets for a year
                            shall receive an incentive payment for such
                            year equal to a portion (as determined
                            appropriate by the Secretary) of the amount by
                            which payments under this title for such year
                            relative are estimated to be below the
                            performance target for such year, as determined
                            by the Secretary. The Secretary may establish a
                            cap on incentive payments for a year for a
                            qualifying ACO.
                              ``(ii) Limitation.--The Secretary shall limit
                            incentive payments to each qualifying ACO under
                            this paragraph as necessary to ensure that the
                            aggregate expenditures with respect to
                            applicable beneficiaries for such ACOs under
                            this title (inclusive of incentive payments
                            described in this subparagraph) do not exceed
                            the amount that the Secretary estimates would
                            be expended for such ACO for such beneficiaries
                            if the pilot program under this section were
                            not implemented.
                      ``(D) Reporting and other requirements.--In carrying
                    out such model, the Secretary may (as the Secretary
                    determines to be appropriate) incorporate reporting
                    requirements, incentive payments, and penalties related
                    to the physician quality reporting initiative (PQRI),
                    electronic prescribing, electronic health records, and
                    other similar initiatives under section 1848, and may
                    use alternative criteria than would otherwise apply
                    under such section for determining whether to make such
                    payments. The incentive payments described in this
                    subparagraph shall not be included in the limit
                    described in subparagraph (C)(ii) or in the performance
                    target model described in this paragraph.
              ``(2) Partial capitation model.--
                      ``(A) In general.--Subject to subparagraph (B), a
                    partial capitation model described in this paragraph
                    (in this paragraph referred to as a `partial capitation
                    model') is a model in which a qualifying ACO would be
                    at financial risk for some, but not all, of the items
                    and services covered under parts A and B, such as at
                    risk for some or all physicians' services or all items
                    and services under part B. The Secretary may limit a
                    partial capitation model to ACOs that are highly
                    integrated systems of care and to ACOs capable of
                    bearing risk, as determined to be appropriate by the
                    Secretary.
                      ``(B) No additional program expenditures.--Payments
                    to a qualifying ACO for applicable beneficiaries for a
                    year under the partial capitation model shall be
                    established in a manner that does not result in
                    spending more for such ACO for such beneficiaries than
                    would otherwise be expended for such ACO for such
                    beneficiaries for such year if the pilot program were
                    not implemented, as estimated by the Secretary.
              ``(3) Other payment models.--
                      ``(A) In general.--Subject to subparagraph (B), the
                    Secretary may develop other payment models that meet
                    the goals of this pilot program to improve quality and
                    efficiency.
                      ``(B) No additional program expenditures.--
                    Subparagraph (B) of paragraph (2) shall apply to a
                    payment model under subparagraph (A) in a similar
                    manner as such subparagraph (B) applies to the payment
                    model under paragraph (2).
      ``(d) Applicable Beneficiaries.--
              ``(1) In general.--In this section, the term `applicable
            beneficiary' means, with respect to a qualifying ACO, an
            individual who--
                      ``(A) is enrolled under part B and entitled to
                    benefits under part A;
                      ``(B) is not enrolled in a Medicare Advantage plan
                    under part C or a PACE program under section 1894; and
                      ``(C) meets such other criteria as the Secretary
                    determines appropriate, which may include criteria
                    relating to frequency of contact with physicians in the
                    ACO
              ``(2) Following applicable beneficiaries.--The Secretary may
            monitor data on expenditures and quality of services under this
            title after an applicable beneficiary discontinues receiving
            services under this title through a qualifying ACO.
      ``(e) Implementation.--
              ``(1) Starting date.--The pilot program shall begin no later
            than January 1, 2012. An agreement with a qualifying ACO under
            the pilot program may cover a multi-year period of between 3
            and 5 years.
              ``(2) Waiver.--The Secretary may waive such provisions of
            this title (including section 1877) and title XI in the manner
            the Secretary determines necessary in order implement the pilot
            program.
              ``(3) Performance results reports.--The Secretary shall
            report performance results to qualifying ACOs under the pilot
            program at least annually.
              ``(4) Limitations on review.--There shall be no
            administrative or judicial review under section 1869, section
            1878, or otherwise of--
                      ``(A) the elements, parameters, scope, and duration
                    of the pilot program;
                      ``(B) the selection of qualifying ACOs for the pilot
                    program;
                      ``(C) the establishment of targets, measurement of
                    performance, determinations with respect to whether
                    savings have been achieved and the amount of savings;
                      ``(D) determinations regarding whether, to whom, and
                    in what amounts incentive payments are paid; and
                      ``(E) decisions about the extension of the program
                    under subsection (g), expansion of the program under
                    subsection (h) or extensions under subsection (i).
              ``(5) Administration.--Chapter 35 of title 44, United States
            Code shall not apply to this section.
      ``(f) Evaluation; Monitoring.--
              ``(1) In general.--The Secretary shall evaluate the payment
            incentive model for each qualifying ACO under the pilot program
            to assess impacts on beneficiaries, providers of services,
            suppliers and the program under this title. The Secretary shall
            make such evaluation publicly available within 60 days of the
            date of completion of such report.
              ``(2) Monitoring.--The Inspector General of the Department of
            Health and Human Services shall provide for monitoring of the
            operation of ACOs under the pilot program with regard to
            violations of section 1877 (popularly known as the `Stark
            law').
      ``(g) Extension of Pilot Agreement With Successful Organizations.--
              ``(1) Reports to congress.--Not later than 2 years after the
            date the first agreement is entered into under this section,
            and biennially thereafter for six years, the Secretary shall
            submit to Congress and make publicly available a report on the
            use of authorities under the pilot program. Each report shall
            address the impact of the use of those authorities on
            expenditures, access, and quality under this title.
              ``(2) Extension.--Subject to the report provided under
            paragraph (1), with respect to a qualifying ACO, the Secretary
            may extend the duration of the agreement for such ACO under the
            pilot program as the Secretary determines appropriate if--
                      ``(A) the ACO receives incentive payments with
                    respect to any of the first 4 years of the pilot
                    agreement and is consistently meeting quality standards
                    or
                      ``(B) the ACO is consistently exceeding quality
                    standards and is not increasing spending under the
                    program.
              ``(3) Termination.--The Secretary may terminate an agreement
            with a qualifying ACO under the pilot program if such ACO did
            not receive incentive payments or consistently failed to meet
            quality standards in any of the first 3 years under the
            program.
      ``(h) Expansion to Additional ACOs.--
              ``(1) Testing and refinement of payment incentive models.--
            Subject to the evaluation described in subsection (f), the
            Secretary may enter into agreements under the pilot program
            with additional qualifying ACOs to further test and refine
            payment incentive models with respect to qualifying ACOs.
              ``(2) Expanding use of successful models to program
            implementation.--
                      ``(A) In general.--Subject to subparagraph (B), the
                    Secretary may issue regulations to implement, on a
                    permanent basis, 1 or more models if, and to the extent
                    that, such models are beneficial to the program under
                    this title, as determined by the Secretary.
                      ``(B) Certification.--The Chief Actuary of the
                    Centers for Medicare & Medicaid Services shall certify
                    that 1 or more of such models described in subparagraph
                    (A) would result in estimated spending that would be
                    less than what spending would otherwise be estimated to
                    be in the absence of such expansion.
      ``(i) Treatment of Physician Group Practice Demonstration.--
              ``(1) Extension.--The Secretary may enter in to an agreement
            with a qualifying ACO under the demonstration under section
            1866A, subject to rebasing and other modifications deemed
            appropriate by the Secretary, until the pilot program under
            this section is operational.
              ``(2) Transition.--For purposes of extension of an agreement
            with a qualifying ACO under subsection (g)(2), the Secretary
            shall treat receipt of an incentive payment for a year by an
            organization under the physician group practice demonstration
            pursuant to section 1866A as a year for which an incentive
            payment is made under such subsection, as long as such practice
            group practice organization meets the criteria under subsection
            (b)(2).
      ``(j) Additional Provisions.--
              ``(1) Authority for separate incentive arrangements.--The
            Secretary may create separate incentive arrangements (including
            using multiple years of data, varying thresholds, varying
            shared savings amounts, and varying shared savings limits) for
            different categories of qualifying ACOs to reflect natural
            variations in data availability, variation in average annual
            attributable expenditures, program integrity, and other matters
            the Secretary deems appropriate.
              ``(2) Encouragement of participation of smaller
            organizations.--In order to encourage the participation of
            smaller accountable care organizations under the pilot program,
            the Secretary may limit a qualifying ACO's exposure to high
            cost patients under the program.
              ``(3) Treatment of high-cost beneficiaries with chronic
            diseases.--Nothing in this section shall be construed as
            preventing a qualifying ACO from entering into an arrangement
            with an Independence at Home Medical Practice or from providing
            home based services for the treatment of beneficiaries who are
            eligible for that program.
              ``(4) Involvement in private payer arrangements.--Nothing in
            this section shall be construed as preventing qualifying ACOs
            participating in the pilot program from negotiating similar
            contracts with private payers.
              ``(5) Antidiscrimination limitation.--The Secretary shall not
            enter into an agreement with an entity to provide health care
            items or services under the pilot program, or with an entity to
            administer the program, unless such entity guarantees that it
            will not deny, limit, or condition the coverage or provision of
            benefits under the program, for individuals eligible to be
            enrolled under such program, based on any health status-related
            factor described in section 2702(a)(1) of the Public Health
            Service Act.
              ``(6) Construction.--Nothing in this section shall be
            construed to compel or require an organization to use an
            organization-specific target growth rate for an accountable
            care organization under this section for purposes of section
            1848.
              ``(7) Funding.--For purposes of administering and carrying
            out the pilot program, other than for payments for items and
            services furnished under this title and incentive payments
            under subsection (c)(1), in addition to funds otherwise
            appropriated, there are appropriated to the Secretary for the
            Center for Medicare & Medicaid Services Program Management
            Account $25,000,000 for each of fiscal years 2010 through 2014
            and $20,000,000 for fiscal year 2015. Amounts appropriated
            under this paragraph for a fiscal year shall be available until
            expended.''.

    SEC. 1302. MEDICAL HOME PILOT PROGRAM.

      (a) In General.--Title XVIII of the Social Security Act is amended by
    inserting after section 1866E, as inserted by section 1301, the
    following new section:
                          ``medical home pilot program
      ``Sec. 1866F.  (a) Establishment and Medical Home Models.--
              ``(1) Establishment of pilot program.--The Secretary shall
            establish a medical home pilot program (in this section
            referred to as the `pilot program') for the purpose of
            evaluating the feasibility and advisability of reimbursing
            qualified patient-centered medical homes for furnishing medical
            home services (as defined under subsection (b)(1)) to high need
            beneficiaries (as defined in subsection (d)(1)(C)) and to
            targeted high need beneficiaries (as defined in subsection
            (c)(1)(C)).
              ``(2) Scope.--Subject to subsection (g), the Secretary shall
            set specific goals for the number of practices and communities,
            and the number of patients served, under the pilot program in
            the initial tests to ensure that the pilot program is of
            sufficient size and scope to--
                      ``(A) test the approach involved in a variety of
                    settings, including urban, rural, and underserved
                    areas; and
                      ``(B) subject to subsection (e)(1), disseminate such
                    approach rapidly on a national basis.
            To the extent that the Secretary finds a medical home model to
            be successful in improving quality and reducing costs, the
            Secretary shall implement such mechanisms and reforms on as
            large a geographic scale as practical and economical.
              ``(3) Models of medical homes in the pilot program.--The
            pilot program shall evaluate each of the following medical home
            models:
                      ``(A) Independent patient-centered medical home
                    model.--Independent patient-centered medical home model
                    under subsection (c).
                      ``(B) Community-based medical home model.--Community-
                    based medical home model under subsection (d).
              ``(4) Participation of nurse practitioners and physician
            assistants.--
                      ``(A) Nothing in this section shall be construed as
                    preventing a nurse practitioner from leading a patient
                    centered medical home so long as--
                              ``(i) all the requirements of this section
                            are met; and
                              ``(ii) the nurse practitioner is acting
                            consistently with State law.
                      ``(B) Nothing in this section shall be construed as
                    preventing a physician assistant from participating in
                    a patient centered medical home so long as--
                              ``(i) all the requirements of this section
                            are met; and
                              ``(ii) the physician assistant is acting
                            consistently with State law.
      ``(b) Definitions.--For purposes of this section:
              ``(1) Patient-centered medical home services.--The term
            `patient-centered medical home services' means services that--
                      ``(A) provide beneficiaries with direct and ongoing
                    access to a primary care or principal care by a
                    physician or nurse practitioner who accepts
                    responsibility for providing first contact, continuous
                    and comprehensive care to such beneficiary;
                      ``(B) coordinate the care provided to a beneficiary
                    by a team of individuals at the practice level across
                    office, institutional and home settings led by a
                    primary care or principal care physician or nurse
                    practitioner, as needed and appropriate;
                      ``(C) provide for all the patient's health care needs
                    or take responsibility for appropriately arranging care
                    with other qualified providers for all stages of life;
                      ``(D) provide continuous access to care and
                    communication with participating beneficiaries;
                      ``(E) provide support for patient self-management,
                    proactive and regular patient monitoring, support for
                    family caregivers, use patient-centered processes, and
                    coordination with community resources;
                      ``(F) integrate readily accessible, clinically useful
                    information on participating patients that enables the
                    practice to treat such patients comprehensively and
                    systematically; and
                      ``(G) implement evidence-based guidelines and apply
                    such guidelines to the identified needs of
                    beneficiaries over time and with the intensity needed
                    by such beneficiaries.
              ``(2) Primary care.--The term `primary care' means health
            care that is provided by a physician, nurse practitioner, or
            physician assistant who practices in the field of family
            medicine, general internal medicine, geriatric medicine, or
            pediatric medicine.
              ``(3) Principal care.--The term `principal care' means
            integrated, accessible health care that is provided by a
            physician who is a medical subspecialist that addresses the
            majority of the personal health care needs of patients with
            chronic conditions requiring the subspecialist's expertise, and
            for whom the subspecialist assumes care management.
      ``(c) Independent Patient-centered Medical Home Model.--
              ``(1) In general.--
                      ``(A) Payment authority.--Under the independent
                    patient-centered medical home model under this
                    subsection, the Secretary shall make payments for
                    medical home services furnished by an independent
                    patient-centered medical home (as defined in
                    subparagraph (B)) pursuant to paragraph (3)(B) for a
                    targeted high need beneficiaries (as defined in
                    subparagraph (C)).
                      ``(B) Independent patient-centered medical home
                    defined.--In this section, the term `independent
                    patient-centered medical home' means a physician-
                    directed or nurse-practitioner-directed practice that
                    is qualified under paragraph (2) as--
                              ``(i) providing beneficiaries with patient-
                            centered medical home services; and
                              ``(ii) meets such other requirements as the
                            Secretary may specify.
                      ``(C) Targeted high need beneficiary defined.--For
                    purposes of this subsection, the term `targeted high
                    need beneficiary' means a high need beneficiary who,
                    based on a risk score as specified by the Secretary, is
                    generally within the upper 50th percentile of Medicare
                    beneficiaries.
                      ``(D) Beneficiary election to participate.--The
                    Secretary shall determine an appropriate method of
                    ensuring that beneficiaries have agreed to participate
                    in the pilot program.
                      ``(E) Implementation.--The pilot program under this
                    subsection shall begin no later than 6 months after the
                    date of the enactment of this section.
              ``(2) Standard setting and qualification process for patient-
            centered medical homes.--The Secretary shall review alternative
            models for standard setting and qualification, and shall
            establish a process--
                      ``(A) to establish standards to enable medical
                    practices to qualify as patient-centered medical homes;
                    and
                      ``(B) to initially provide for the review and
                    certification of medical practices as meeting such
                    standards.
              ``(3)  Payment.--
                      ``(A) Establishment of methodology.--The Secretary
                    shall establish a methodology for the payment for
                    medical home services furnished by independent patient-
                    centered medical homes. Under such methodology, the
                    Secretary shall adjust payments to medical homes based
                    on beneficiary risk scores to ensure that higher
                    payments are made for higher risk beneficiaries.
                      ``(B) Per beneficiary per month payments.--Under such
                    payment methodology, the Secretary shall pay
                    independent patient-centered medical homes a monthly
                    fee for each targeted high need beneficiary who
                    consents to receive medical home services through such
                    medical home.
                      ``(C) Prospective payment.--The fee under
                    subparagraph (B) shall be paid on a prospective basis.
                      ``(D) Amount of payment.--In determining the amount
                    of such fee, the Secretary shall consider the
                    following:
                              ``(i) The clinical work and practice expenses
                            involved in providing the medical home services
                            provided by the independent patient-centered
                            medical home (such as providing increased
                            access, care coordination, population disease
                            management, and teaching self-care skills for
                            managing chronic illnesses) for which payment
                            is not made under this title as of the date of
                            the enactment of this section.
                              ``(ii) Allow for differential payments based
                            on capabilities of the independent patient-
                            centered medical home.
                              ``(iii) Use appropriate risk-adjustment in
                            determining the amount of the per beneficiary
                            per month payment under this paragraph in a
                            manner that ensures that higher payments are
                            made for higher risk beneficiaries.
              ``(4) Encouraging participation of variety of practices.--The
            pilot program under this subsection shall be designed to
            include the participation of physicians in practices with fewer
            than 10 full-time equivalent physicians, as well as physicians
            in larger practices, particularly in underserved and rural
            areas, as well as federally qualified community health centers,
            and rural health centers.
              ``(5) No duplication in pilot participation.--A physician in
            a group practice that participates in the accountable care
            organization pilot program under section 1866D shall not be
            eligible to participate in the pilot program under this
            subsection, unless the pilot program under this section has
            been implemented on a permanent basis under subsection (e)(3).
      ``(d) Community-based Medical Home Model.--
              ``(1) In general.--
                      ``(A) Authority for payments.--Under the community-
                    based medical home model under this subsection (in this
                    section referred to as the `CBMH model'), the Secretary
                    shall make payments for the furnishing of medical home
                    services by a community-based medical home (as defined
                    in subparagraph (B)) pursuant to paragraph (5)(B) for
                    high need beneficiaries.
                      ``(B) Community-based medical home defined.--In this
                    section, the term `community-based medical home' means
                    a nonprofit community-based or State-based organization
                    that is certified under paragraph (2) as meeting the
                    following requirements:
                              ``(i) The organization provides beneficiaries
                            with medical home services.
                              ``(ii) The organization provides medical home
                            services under the supervision of and in close
                            collaboration with the primary care or
                            principal care physician, nurse practitioner,
                            or physician assistant designated by the
                            beneficiary as his or her community-based
                            medical home provider.
                              ``(iii) The organization employs community
                            health workers, including nurses or other non-
                            physician practitioners, lay health workers, or
                            other persons as determined appropriate by the
                            Secretary, that assist the primary or principal
                            care physician, nurse practitioner, or
                            physician assistant in chronic care management
                            activities such as teaching self-care skills
                            for managing chronic illnesses, transitional
                            care services, care plan setting, medication
                            therapy management services for patients with
                            multiple chronic diseases, or help
                            beneficiaries access the health care and
                            community-based resources in their local
                            geographic area.
                              ``(iv) The organization meets such other
                            requirements as the Secretary may specify.
                      ``(C) High need beneficiary.--In this section, the
                    term `high need beneficiary' means an individual who
                    requires regular medical monitoring, advising, or
                    treatment, including such an individual with cognitive
                    impairment that leads to functional impairment.
              ``(2) Qualification process for community-based medical
            homes.--The Secretary shall establish a process--
                      ``(A) for the initial qualification of community-
                    based or State-based organizations as community-based
                    medical homes; and
                      ``(B) to provide for the review and qualification of
                    such community-based and State-based organizations
                    pursuant to criteria established by the Secretary.
              ``(3) Duration.--The pilot program for community-based
            medical homes under this subsection shall start no later than 2
            years after the date of the enactment of this section. Each
            demonstration site under the pilot program shall operate for a
            period of up to 5 years after the initial implementation phase,
            without regard to the receipt of a initial implementation
            funding under subsection (i).
              ``(4) Preference.--In selecting sites for the CBMH model, the
            Secretary shall seek to eliminate racial, ethnic, gender, and
            geographic health disparities and may give preference to--
                      ``(A) applications from geographic areas that propose
                    to coordinate health care services for chronically ill
                    beneficiaries across a variety of health care settings,
                    such as primary care physician practices with fewer
                    than 10 physicians, specialty physicians, nurse
                    practitioner practices, Federally qualified health
                    centers, rural health clinics, and other settings;
                      ``(B) applications that include other payors that
                    furnish medical home services for chronically ill
                    patients covered by such payors; and
                      ``(C) applications from States that propose to use
                    the medical home model to coordinate health care
                    services for individuals enrolled under this title,
                    individuals enrolled under title XIX, and full-benefit
                    dual eligible individuals (as defined in section
                    1935(c)(6)) with chronic diseases across a variety of
                    health care settings.
              ``(5)  Payments.--
                      ``(A) Establishment of methodology.--The Secretary
                    shall establish a methodology for the payment for
                    medical home services furnished under the CBMH model.
                      ``(B) Per beneficiary per month payments.--Under such
                    payment methodology, the Secretary shall make two
                    separate monthly payments for each high need
                    beneficiary who consents to receive medical home
                    services through such medical home, as follows:
                              ``(i) Payment to community-based
                            organization.--One monthly payment to a
                            community-based or State-based organization.
                              ``(ii) Payment to primary or principal care
                            practice.--One monthly payment to the primary
                            or principal care practice for such
                            beneficiary.
                      ``(C) Prospective payment.--The payments under
                    subparagraph (B) shall be paid on a prospective basis.
                      ``(D) Amount of payment.--In determining the amount
                    of such payment, the Secretary shall consider the
                    following:
                              ``(i) The clinical work and practice expenses
                            involved in providing the medical home services
                            provided by the community-based medical home
                            (such as providing increased access, care
                            coordination, care plan setting, population
                            disease management, and teaching self-care
                            skills for managing chronic illnesses) for
                            which payment is not made under this title as
                            of the date of the enactment of this section.
                              ``(ii) Use appropriate risk-adjustment in
                            determining the amount of the per beneficiary
                            per month payment under this paragraph.
              ``(6) Initial implementation funding.--The Secretary may make
            available initial implementation funding to a community based
            or State-based organization or a State that is participating in
            the pilot program under this subsection. Such organization
            shall provide the Secretary with a detailed implementation plan
            that includes how such funds will be used. The Secretary shall
            select a territory of the United States as one of the locations
            in which to implement the pilot program under this subsection.
      ``(e) Expansion of Program.--
              ``(1) Evaluation of cost and quality.--The Secretary shall
            evaluate the pilot program to determine--
                      ``(A) the extent to which medical homes result in--
                              ``(i) improvement in the quality and
                            coordination of health care services,
                            particularly with regard to the care of complex
                            patients;
                              ``(ii) improvement in reducing health
                            disparities;
                              ``(iii) reductions in preventable
                            hospitalizations;
                              ``(iv) prevention of readmissions;
                              ``(v) reductions in emergency room visits;
                              ``(vi) improvement in health outcomes,
                            including patient functional status where
                            applicable;
                              ``(vii) improvement in patient satisfaction;
                              ``(viii) improved efficiency of care such as
                            reducing duplicative diagnostic tests and
                            laboratory tests; and
                              ``(ix) reductions in health care
                            expenditures; and
                      ``(B) the feasability and advisability of reimbursing
                    medical homes for medical home services under this
                    title on a permanent basis.
              ``(2) Report.--Not later than 60 days after the date of
            completion of the evaluation under paragraph (1), the Secretary
            shall submit to Congress and make available to the public a
            report on the findings of the evaluation under paragraph (1).
              ``(3) Expansion of program.--
                      ``(A) In general.--Subject to the results of the
                    evaluation under paragraph (1) and subparagraph (B),
                    the Secretary may issue regulations to implement, on a
                    permanent basis, one or more models, if, and to the
                    extent that such model or models, are beneficial to the
                    program under this title, including that such
                    implementation will improve quality of care, as
                    determined by the Secretary.
                      ``(B) Certification requirement.--The Secretary may
                    not issue such regulations unless the Chief Actuary of
                    the Centers for Medicare & Medicaid Services certifies
                    that the expansion of the components of the pilot
                    program described in subparagraph (A) would result in
                    estimated spending under this title that would be no
                    more than the level of spending that the Secretary
                    estimates would otherwise be spent under this title in
                    the absence of such expansion.
      ``(f) Administrative Provisions.--
              ``(1) No duplication in payments.--During any month, the
            Secretary may not make payments under this section under more
            than one model or through more than one medical home under any
            model for the furnishing of medical home services to an
            individual.
              ``(2) No effect on payment for evaluation and management
            services.--Payments made under this section are in addition to,
            and have no effect on the amount of, payment for evaluation and
            management services made under this title
              ``(3) Administration.--Chapter 35 of title 44, United States
            Code shall not apply to this section.
      ``(g) Funding.--
              ``(1) Operational costs.--For purposes of administering and
            carrying out the pilot program (including the design,
            implementation, technical assistance for and evaluation of such
            program), in addition to funds otherwise available, there shall
            be transferred from the Federal Supplementary Medical Insurance
            Trust Fund under section 1841 to the Secretary for the Centers
            for Medicare & Medicaid Services Program Management Account
            $6,000,000 for each of fiscal years 2010 through 2014. Amounts
            appropriated under this paragraph for a fiscal year shall be
            available until expended.
              ``(2) Patient-centered medical home services.--In addition to
            funds otherwise available, there shall be available to the
            Secretary for the Centers for Medicare & Medicaid Services,
            from the Federal Supplementary Medical Insurance Trust Fund
            under section 1841--
                      ``(A) $200,000,000 for each of fiscal years 2010
                    through 2014 for payments for medical home services
                    under subsection (c)(3); and
                      ``(B) $125,000,000 for each of fiscal years 2012
                    through 2016, for payments under subsection (d)(5).
            Amounts available under this paragraph for a fiscal year shall
            be available until expended.
              ``(3) Initial implementation.--In addition to funds otherwise
            available, there shall be available to the Secretary for the
            Centers for Medicare & Medicaid Services, from the Federal
            Supplementary Medical Insurance Trust Fund under section 1841,
            $2,500,000 for each of fiscal years 2010 through 2012, under
            subsection (d)(6). Amounts available under this paragraph for a
            fiscal year shall be available until expended.
      ``(h) Treatment of TRHCA Medicare Medical Home Demonstration
    Funding.--
              ``(1) In addition to funds otherwise available for payment of
            medical home services under subsection (c)(3), there shall also
            be available the amount provided in subsection (g) of section
            204 of division B of the Tax Relief and Health Care Act of 2006
            (42 U.S.C. 1395b-1 note).
              ``(2) Notwithstanding section 1302(c) of the America's
            Affordable Health Choices Act of 2009, in addition to funds
            provided in paragraph (1) and subsection (g)(2)(A), the funding
            for medical home services that would otherwise have been
            available if such section 204 medical home demonstration had
            been implemented (without regard to subsection (g) of such
            section) shall be available to the independent patient-centered
            medical home model described in subsection (c).''.
      (b) Effective Date.--The amendment made by this section shall apply
    to services furnished on or after the date of the enactment of this
    Act.
      (c) Conforming Repeal.--Section 204 of division B of the Tax Relief
    and Health Care Act of 2006 (42 U.S.C. 1395b-1 note), as amended by
    section 133(a)(2) of the Medicare Improvements for Patients and
    Providers Act of 2008 (Public Law 110-275), is repealed.

    SEC. 1303. INDEPENDENCE AT HOME PILOT PROGRAM.

      Title XVIII of the Social Security Act is amended by inserting after
    section 1866F, as inserted by section 1302, the following new section:
             ``independence at home medical practice pilot program
      ``Sec. 1866G.  (a) In General.--The Secretary shall conduct a pilot
    program (in this section referred to as the `pilot 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)). The pilot program tests whether such a
    model, 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--
              ``(1) reducing preventable hospitalizations;
              ``(2) preventing hospital readmissions;
              ``(3) reducing emergency room visits;
              ``(4) improving health outcomes;
              ``(5) improving the efficiency of care, such as by reducing
            duplicative diagnostic and laboratory tests;
              ``(6) reducing the cost of health care services covered under
            this title; and
              ``(7) achieving beneficiary and family caregiver
            satisfaction.
      ``(b) Qualifying Independence at Home Medical Practice.--
              ``(1) Definition.--In this section, the term `qualifying
            independence at home medical practice' means a legal entity
            comprised of an individual physician or nurse practitioner or
            group of physicians and nurse practitioners who are certified
            or have experience and training in providing home-based primary
            care services to high cost chronically ill beneficiaries as
            determined appropriate by the Secretary and which has entered
            into an agreement with the Secretary. Care is provided by a
            team, including physicians, nurses, physician assistants,
            pharmacists, and other health and social services staff as
            appropriate who are certified or have experience providing
            home-based primary care to applicable beneficiaries, make in-
            home visits and carry out plans of care that are tailored to
            the individual beneficiary's chronic conditions and designed to
            achieve the results in subsection (a) and report the clinical
            and quality of care outcomes as determined by the Secretary.
            The pilot program shall be designed to include the
            participation of physician and nurse practitioner practices
            with fewer than 10 full-time equivalent physicians, as well as
            physicians in larger practices, particularly in underserved
            rural areas.
              ``(2) Participation of nurse practitioners and physician
            assistants.--Nothing in this section shall be construed to
            prevent a nurse practitioner or physician assistant from
            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;
                    and
                      ``(B) the nurse practitioner or physician assistant,
                    as the case may be, is acting consistently with State
                    law.
              ``(3) Inclusion of providers and practitioners.--Nothing in
            this subsection shall be construed as preventing a qualifying
            Independence at Home Medical Practice from including a provider
            or participating practitioner that is affiliated with the
            medical practice under an arrangement structured so that such
            provider or practitioner participates in the pilot program and
            shares in any savings under the pilot program.
      ``(c) Payment.--
              ``(1) Shared savings.--A qualifying Independence at Home
            Medical Practice may receive 80 percent of savings in excess of
            5 percent if expenditures under this title for applicable
            beneficiaries participating in the pilot program are at least 5
            percent less than a target spending level or a target rate of
            growth. The shared savings payment shall be made only if
            savings are at a minimum 5 percent greater than would result
            from normal variation in expenditures for items and services
            covered under parts A and B (and part D to the extent the
            Secretary decides to include such costs).
              ``(2) Establishment of levels, thresholds, and limits.--The
            Secretary may establish target spending levels, savings
            thresholds, and limits on shared savings amounts for each
            participating Independence at Home Medical Practice based upon
            the size of the practice, characteristics of the enrolled
            individuals, and such other factors as the Secretary determines
            appropriate.
              ``(3) Interim payments.--A qualifying Independence at Home
            Medical Practice may receive payments for geriatric assessments
            and monthly care coordination services as determined by the
            Secretary but in the event that an Independence at Home Medical
            Practice does not achieve the required savings in this
            subsection, those payments or a fraction of them, as
            appropriate, are at risk of being recouped by the Secretary to
            ensure that no Independence at Home Medical Practice receives
            Medicare payments in excess of what Medicare otherwise would
            have paid for the services provided to the beneficiaries
            receiving medical care from the Independence at Home Medical
            Practice in the absence of the pilot program.
              ``(4) Assurance of financial solvency.--In order to receive
            payments under paragraph (3), a qualifying Independence at Home
            Medical Practice shall demonstrate to the satisfaction of the
            Secretary that the organization is able to assume financial
            risk for the 5 percent savings requirements through available
            reserves, reinsurance, or withholding of funding provided under
            this title, or such other means as the Secretary determines
            appropriate.
              ``(5) No additional program expenditures.--The Secretary
            shall limit shared savings payments to each qualifying
            Independence at Home Medical Practice under this subsection as
            necessary to ensure that the aggregate expenditures with
            respect to applicable beneficiaries for such Independence at
            Home Medical Practice under this title (inclusive of shared
            savings payments described in this paragraph) do not exceed the
            amount that the Secretary estimates would be expended for such
            Independence at Home Medical Practice for such beneficiaries if
            the pilot program under this section were not implemented.
      ``(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--
                      ``(A) is enrolled under part B and entitled to
                    benefits under part A;
                      ``(B) is not enrolled in a Medicare Advantage plan
                    under part C or a PACE program under section 1894;
                      ``(C) is in the top 20 percent of Medicare patient
                    risk scores;
                      ``(D) has two or more chronic illnesses, including
                    congestive heart failure, diabetes, chronic obstructive
                    pulmonary disease, ischemic heart disease, stroke,
                    Alzheimer's Disease and other dementias designated by
                    the Secretary, pressure ulcers, hypertension,
                    neurodegenerative diseases designated by the Secretary
                    which result in high costs under this title including
                    amyotropic lateral sclerosis (ALS), multiple sclerosis,
                    and Parkinson's disease, and other chronic conditions
                    identified by the Secretary that result in high costs
                    when in combination with one or more of the diseases
                    listed in this subparagraph;
                      ``(E) had a nonelective hospital admission within the
                    past 12 months;
                      ``(F) has received acute or subacute rehabilitation
                    services;
                      ``(G) continues to have two or more functional
                    dependencies requiring the assistance of another person
                    (for example, bathing, dressing, toileting, walking, or
                    feeding); and
                      ``(H) fulfills such other criteria as the Secretary
                    determines appropriate.
              ``(2) Publication of requirements.--The Secretary shall
            publish eligibility requirements for beneficiaries that are
            sufficiently clear to be understood by beneficiaries and the
            individuals providing services to them as part of the pilot
            program.
              ``(3) Patient election to participate.--The Secretary shall
            determine an appropriate method of ensuring that applicable
            beneficiaries have agreed to participate in an Independence at
            Home Medical Practice. Participation shall be entirely
            voluntary.
              ``(4) Beneficiary access to services.--Except as provided in
            subsection (e)(2), nothing in this section shall be construed
            as encouraging physicians or nurse practitioners to limit
            beneficiary access to services covered under title XVIII and
            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 pilot program shall begin not later
            than January 1, 2012. An agreement with a qualifying
            Independence at Home Medical Practice under the pilot program
            may cover a 3 year period.
              ``(2) No duplication in pilot participation.--A physician or
            nurse practitioner who participates in the accountable care
            organization pilot program under section 1866D or the medical
            home pilot program under section 1866E shall not be eligible to
            participate in the pilot program under this subsection.
              ``(3) Preference.--In approving an Independence at Home
            Medical Practice, the Secretary shall give preference to
            medical 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.
              ``(4) Waiver.--The Secretary may waive such provisions of
            this title (including section 1877) and title XI in the manner
            the Secretary determines necessary in order implement the pilot
            program.
              ``(5) Administration.--Chapter 35 of title 44, United States
            Code shall not apply to this section.
      ``(f) Minimum Number of Sites.--To the extent practicable, at least
    two unaffiliated Independence at Home Medical Practices will be
    established in the 13 highest cost States and the District of Columbia
    and in 13 additional States that are representative of other regions of
    the United States and include medically underserved rural and urban
    areas as determined by the Secretary.
      ``(g) Evaluation and Monitoring.--The Secretary shall annually
    evaluate each qualifying Independence at Home Medical Practice under
    the pilot program to assess whether it achieved the minimum savings of
    5 percent and the results described in subsection (a). The Secretary
    shall have the discretion to terminate an agreement with an
    Independence at Home Medical Practice that fails to achieve a
    preponderance of those results. The Secretary shall make evaluations
    publicly available within 60 days of the date of completion of such
    report.
      ``(h) Reports to Congress.--Not later than 2 years after the date the
    first agreement is entered into under this section, and biennially
    thereafter until the pilot is completed, the Secretary shall submit to
    Congress and make publicly available a report on best practices under
    the pilot program. Each report shall address the impact of such best
    practices on expenditures, access, and quality under this title.
      ``(i) Expansion to Program Implementations.--
              ``(1) Testing and refinement of payment incentive and service
            delivery models.--Subject to the evaluation described in
            subsection (f), the Secretary may enter into agreements under
            the pilot program with additional qualifying Independence at
            Home Medical Practices to further test and refine models with
            respect to qualifying Independence at Home Medical Practices.
              ``(2) Expanding use of successful models to program
            implementation.--
                      ``(A) In general.--Subject to subparagraph (B), the
                    Secretary may issue regulations to implement, on a
                    permanent basis, the Independence at Home Medical
                    Practice Model if, and to the extent that, such models
                    are beneficial to the program under this title, as
                    determined by the Secretary.
                      ``(B) Certification.--The Chief Actuary of the
                    Centers for Medicare and Medicaid Services shall
                    certify that the Independence at Home Medical Model
                    described in subparagraph (A) would result in estimated
                    spending that would be less than what spending would
                    otherwise be estimated to be in the absence of such
                    expansion.
      ``(j) Funding.--For purposes of administering and carrying out the
    pilot program, other than for payments for items and services furnished
    under this title, shared savings and monthly fees, or other payments
    under subsection (c), in addition to funds otherwise appropriated,
    there are appropriated to the Secretary for the Center for Medicare and
    Medicaid Services Program Management Account $5,000,000 for each of
    fiscal years 2010 through 2014. Amounts appropriated under this
    paragraph for a fiscal year shall be available until expended.''.

    SEC. 1304. PAYMENT INCENTIVE FOR SELECTED PRIMARY CARE SERVICES.

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

    SEC. 1305. INCREASED REIMBURSEMENT RATE FOR CERTIFIED NURSE-MIDWIVES.

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

    SEC. 1306. COVERAGE AND WAIVER OF COST-SHARING FOR PREVENTIVE SERVICES.

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

                     ``Medicare Covered Preventive Services

      ``(iii)(1) Subject to the succeeding provisions of this subsection,
    the term `Medicare covered preventive services' means the following:
              ``(A) Prostate cancer screening tests (as defined in
            subsection (oo)).
              ``(B) Colorectal cancer screening tests (as defined in
            subsection (pp) and when applicable as described in section
            1305).
              ``(C) Diabetes outpatient self-management training services
            (as defined in subsection (qq)).
              ``(D) Screening for glaucoma for certain individuals (as
            described in subsection (s)(2)(U)).
              ``(E) Medical nutrition therapy services for certain
            individuals (as described in subsection (s)(2)(V)).
              ``(F) An initial preventive physical examination (as defined
            in subsection (ww)).
              ``(G) Cardiovascular screening blood tests (as defined in
            subsection (xx)(1)).
              ``(H) Diabetes screening tests (as defined in subsection
            (yy)).
              ``(I) Ultrasound screening for abdominal aortic aneurysm for
            certain individuals (as described in described in subsection
            (s)(2)(AA)).
              ``(J) Pneumococcal and influenza vaccines and their
            administration (as described in subsection (s)(10)(A)) and
            hepatitis B vaccine and its administration for certain
            individuals (as described in subsection (s)(10)(B)).
              ``(K) Screening mammography (as defined in subsection (jj)).
              ``(L) Screening pap smear and screening pelvic exam (as
            defined in subsection (nn)).
              ``(M) Bone mass measurement (as defined in subsection (rr)).
              ``(N) Kidney disease education services (as defined in
            subsection (ggg)).
              ``(O) Additional preventive services (as defined in
            subsection (ddd)).
      ``(2) With respect to specific Medicare covered preventive services,
    the limitations and conditions described in the provisions referenced
    in paragraph (1) with respect to such services shall apply.''.
      (b) Payment and Elimination of Cost-sharing.--
              (1) In general.--
                      (A) In general.--Section 1833(a) of the Social
                    Security Act (42 U.S.C. 1395l(a)) is amended by adding
                    after and below paragraph (9) the following:
    ``With respect to Medicare covered preventive services, in any case in
    which the payment rate otherwise provided under this part is computed
    as a percent of less than 100 percent of an actual charge, fee schedule
    rate, or other rate, such percentage shall be increased to 100
    percent.''.
                      (B) Application to sigmoidoscopies and
                    colonoscopies.--Section 1834(d) of such Act (42 U.S.C.
                    1395m(d)) is amended--
                              (i) in paragraph (2)(C), by amending clause
                            (ii) to read as follows:
                              ``(ii) No coinsurance.--In the case of a
                            beneficiary who receives services described in
                            clause (i), there shall be no coinsurance
                            applied.''; and
                              (ii) in paragraph (3)(C), by amending clause
                            (ii) to read as follows:
                              ``(ii) No coinsurance.--In the case of a
                            beneficiary who receives services described in
                            clause (i), there shall be no coinsurance
                            applied.''.
              (2) Elimination of coinsurance in outpatient hospital
            settings.--
                      (A) Exclusion from opd fee schedule.--Section
                    1833(t)(1)(B)(iv) of the Social Security Act (42 U.S.C.
                    1395l(t)(1)(B)(iv)) is amended by striking ``screening
                    mammography (as defined in section 1861(jj)) and
                    diagnostic mammography'' and inserting ``diagnostic
                    mammograms and Medicare covered preventive services (as
                    defined in section 1861(iii)(1))''.
                      (B) Conforming amendments.--Section 1833(a)(2) of the
                    Social Security Act (42 U.S.C. 1395l(a)(2)) is
                    amended--
                              (i) in subparagraph (F), by striking ``and''
                            after the semicolon at the end;
                              (ii) in subparagraph (G), by adding ``and''
                            at the end; and
                              (iii) by adding at the end the following new
                            subparagraph:
                      ``(H) with respect to additional preventive services
                    (as defined in section 1861(ddd)) furnished by an
                    outpatient department of a hospital, the amount
                    determined under paragraph (1)(W);''.
              (3) Waiver of application of deductible for all preventive
            services.--The first sentence of section 1833(b) of the Social
            Security Act (42 U.S.C. 1395l(b)) is amended--
                      (A) in clause (1), by striking ``items and services
                    described in section 1861(s)(10)(A)'' and inserting
                    ``Medicare covered preventive services (as defined in
                    section 1861(iii))''; and
                      (B) by striking clause (5) and all that follows
                    through ``(9)'' and inserting ``and (5)''.
              (4) Application to providers of services.--Section
            1866(a)(2)(A)(ii) of such Act (42 U.S.C. 1395cc(a)(2)(A)(ii))
            is amended by inserting ``other than for Medicare covered
            preventive services and'' after ``for such items and services
            (''.
      (c) Effective Date.--The amendments made by this section shall apply
    to services furnished on or after January 1, 2011.
      (d) Report to Congress on Barriers to Preventive Services.--Not later
    than 12 months after the date of the enactment of this Act, the
    Secretary of Health and Human Services shall report to Congress on
    Medicare beneficiary barriers, such as physician referral requirements
    or being a part of the Welcome to Medicare Physical Exam, to abdominal
    aortic aneurysm screening and other preventative services as approved
    by the U.S. Preventive Services Task Force. Furthermore, using existing
    educational resources, the Secretary shall make educating patients and
    physicians regarding the risk factors for an abdominal aortic aneurysm
    and when beneficiaries should be screened, a priority.

    SEC. 1307. WAIVER OF DEDUCTIBLE FOR COLORECTAL CANCER SCREENING TESTS
                        REGARDLESS OF CODING, SUBSEQUENT DIAGNOSIS, OR
                        ANCILLARY TISSUE REMOVAL.

      (a) In General.--Section 1833(b) of the Social Security Act (42
    U.S.C. 1395l(b)), as amended by section 1306(b)(3), is amended by
    adding at the end the following new sentence: ``Clause (1) of the first
    sentence of this subsection shall apply with respect to a colorectal
    cancer screening test regardless of the code that is billed for the
    establishment of a diagnosis as a result of the test, or for the
    removal of tissue or other matter or other procedure that is furnished
    in connection with, as a result of, and in the same clinical encounter
    as, the screening test.''.
      (b) Effective Date.--The amendment made by subsection (a) shall apply
    to items and services furnished on or after January 1, 2011.

    SEC. 1308. EXCLUDING CLINICAL SOCIAL WORKER SERVICES FROM COVERAGE
                        UNDER THE MEDICARE SKILLED NURSING FACILITY
                        PROSPECTIVE PAYMENT SYSTEM AND CONSOLIDATED
                        PAYMENT.

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

    SEC. 1309. COVERAGE OF MARRIAGE AND FAMILY THERAPIST SERVICES AND
                        MENTAL HEALTH COUNSELOR SERVICES.

      (a) Coverage of Marriage and Family Therapist Services.--
              (1) Coverage of services.--Section 1861(s)(2) of the Social
            Security Act (42 U.S.C. 1395x(s)(2)), as amended by section
            1233, is amended--
                      (A) in subparagraph (EE), by striking ``and'' at the
                    end;
                      (B) in subparagraph (FF), by adding ``and'' at the
                    end; and
                      (C) by adding at the end the following new
                    subparagraph:
              ``(GG) marriage and family therapist services (as defined in
            subsection (jjj));''.
              (2) Definition.--Section 1861 of the Social Security Act (42
            U.S.C. 1395x), as amended by sections 1233 and 1306, is amended
            by adding at the end the following new subsection:

                    ``Marriage and Family Therapist Services

      ``(jjj)(1) The term `marriage and family therapist services' means
    services performed by a marriage and family therapist (as defined in
    paragraph (2)) for the diagnosis and treatment of mental illnesses,
    which the marriage and family therapist is legally authorized to
    perform under State law (or the State regulatory mechanism provided by
    State law) of the State in which such services are performed, as would
    otherwise be covered if furnished by a physician or as incident to a
    physician's professional service, but only if no facility or other
    provider charges or is paid any amounts with respect to the furnishing
    of such services.
      ``(2) The term `marriage and family therapist' means an individual
    who--
              ``(A) possesses a master's or doctoral degree which qualifies
            for licensure or certification as a marriage and family
            therapist pursuant to State law;
              ``(B) after obtaining such degree has performed at least 2
            years of clinical supervised experience in marriage and family
            therapy; and
              ``(C) is licensed or certified as a marriage and family
            therapist in the State in which marriage and family therapist
            services are performed.''.
              (3) Provision for payment under part b.--Section
            1832(a)(2)(B) of the Social Security Act (42 U.S.C.
            1395k(a)(2)(B)) is amended by adding at the end the following
            new clause:
                              ``(v) marriage and family therapist
                            services;''.
              (4) Amount of payment.--
                      (A) In general.--Section 1833(a)(1) of the Social
                    Security Act (42 U.S.C. 1395l(a)(1)) is amended--
                              (i) by striking ``and'' before ``(W)''; and
                              (ii) by inserting before the semicolon at the
                            end the following: ``, and (X) with respect to
                            marriage and family therapist services under
                            section 1861(s)(2)(GG), the amounts paid shall
                            be 80 percent of the lesser of the actual
                            charge for the services or 75 percent of the
                            amount determined for payment of a psychologist
                            under clause (L)''.
                      (B) Development of criteria with respect to
                    consultation with a health care professional.--The
                    Secretary of Health and Human Services shall, taking
                    into consideration concerns for patient
                    confidentiality, develop criteria with respect to
                    payment for marriage and family therapist services for
                    which payment may be made directly to the marriage and
                    family therapist under part B of title XVIII of the
                    Social Security Act (42 U.S.C. 1395j et seq.) under
                    which such a therapist must agree to consult with a
                    patient's attending or primary care physician or nurse
                    practitioner in accordance with such criteria.
              (5) Exclusion of marriage and family therapist services from
            skilled nursing facility prospective payment system.--Section
            1888(e)(2)(A)(ii) of the Social Security Act (42 U.S.C.
            1395yy(e)(2)(A)(ii)), as amended by section 1308(a), is amended
            by inserting ``marriage and family therapist services (as
            defined in subsection (jjj)(1)),'' after ``clinical social
            worker services,''.
              (6) Coverage of marriage and family therapist services
            provided in rural health clinics and federally qualified health
            centers.--Section 1861(aa)(1)(B) of the Social Security Act (42
            U.S.C. 1395x(aa)(1)(B)) is amended by striking ``or by a
            clinical social worker (as defined in subsection (hh)(1)),''
            and inserting ``, by a clinical social worker (as defined in
            subsection (hh)(1)), or by a marriage and family therapist (as
            defined in subsection (jjj)(2)),''.
              (7) Inclusion of marriage and family therapists as
            practitioners for assignment of claims.--Section 1842(b)(18)(C)
            of the Social Security Act (42 U.S.C. 1395u(b)(18)(C)) is
            amended by adding at the end the following new clause:
              ``(vii) A marriage and family therapist (as defined in
            section 1861(jjj)(2)).''.
      (b) Coverage of Mental Health Counselor Services.--
              (1) Coverage of services.--Section 1861(s)(2) of the Social
            Security Act (42 U.S.C. 1395x(s)(2)), as previously amended, is
            further amended--
                      (A) in subparagraph (FF), by striking ``and'' at the
                    end;
                      (B) in subparagraph (GG), by inserting ``and'' at the
                    end; and
                      (C) by adding at the end the following new
                    subparagraph:
              ``(HH) mental health counselor services (as defined in
            subsection (kkk)(1));''.
              (2) Definition.--Section 1861 of the Social Security Act (42
            U.S.C. 1395x), as previously amended, is amended by adding at
            the end the following new subsection:

                       ``Mental Health Counselor Services

      ``(kkk)(1) The term `mental health counselor services' means services
    performed by a mental health counselor (as defined in paragraph (2))
    for the diagnosis and treatment of mental illnesses which the mental
    health counselor is legally authorized to perform under State law (or
    the State regulatory mechanism provided by the State law) of the State
    in which such services are performed, as would otherwise be covered if
    furnished by a physician or as incident to a physician's professional
    service, but only if no facility or other provider charges or is paid
    any amounts with respect to the furnishing of such services.
      ``(2) The term `mental health counselor' means an individual who--
              ``(A) possesses a master's or doctor's degree which qualifies
            the individual for licensure or certification for the practice
            of mental health counseling in the State in which the services
            are performed;
              ``(B) after obtaining such a degree has performed at least 2
            years of supervised mental health counselor practice; and
              ``(C) is licensed or certified as a mental health counselor
            or professional counselor by the State in which the services
            are performed.''.
              (3) Provision for payment under part b.--Section
            1832(a)(2)(B) of the Social Security Act (42 U.S.C.
            1395k(a)(2)(B)), as amended by subsection (a)(3), is further
            amended--
                      (A) by striking ``and'' at the end of clause (iv);
                      (B) by adding ``and'' at the end of clause (v); and
                      (C) by adding at the end the following new clause:
                              ``(vi) mental health counselor services;
                            and''.
              (4) Amount of payment.--
                      (A) In general.--Section 1833(a)(1) of the Social
                    Security Act (42 U.S.C. 1395l(a)(1)), as amended by
                    subsection (a), is further amended--
                              (i) by striking ``and'' before ``(X)''; and
                              (ii) by inserting before the semicolon at the
                            end the following: ``, and (Y) with respect to
                            mental health counselor services under section
                            1861(s)(2)(HH), the amounts paid shall be 80
                            percent of the lesser of the actual charge for
                            the services or 75 percent of the amount
                            determined for payment of a psychologist under
                            clause (L)''.
                      (B) Development of criteria with respect to
                    consultation with a physician.--The Secretary of Health
                    and Human Services shall, taking into consideration
                    concerns for patient confidentiality, develop criteria
                    with respect to payment for mental health counselor
                    services for which payment may be made directly to the
                    mental health counselor under part B of title XVIII of
                    the Social Security Act (42 U.S.C. 1395j et seq.) under
                    which such a counselor must agree to consult with a
                    patient's attending or primary care physician in
                    accordance with such criteria.
              (5) Exclusion of mental health counselor services from
            skilled nursing facility prospective payment system.--Section
            1888(e)(2)(A)(ii) of the Social Security Act (42 U.S.C.
            1395yy(e)(2)(A)(ii)), as amended by section 1308(a) and
            subsection (a), is amended by inserting ``mental health
            counselor services (as defined in section 1861(kkk)(1)),''
            after ``marriage and family therapist services (as defined in
            subsection (jjj)(1)),''.
              (6) Coverage of mental health counselor services provided in
            rural health clinics and federally qualified health centers.--
            Section 1861(aa)(1)(B) of the Social Security Act (42 U.S.C.
            1395x(aa)(1)(B)), as amended by subsection (a), is amended by
            striking ``or by a marriage and family therapist (as defined in
            subsection (jjj)(2)),'' and inserting ``by a marriage and
            family therapist (as defined in subsection (jjj)(2)), or a
            mental health counselor (as defined in subsection (kkk)(2)),''.
              (7) Inclusion of mental health counselors as practitioners
            for assignment of claims.--Section 1842(b)(18)(C) of the Social
            Security Act (42 U.S.C. 1395u(b)(18)(C)), as amended by
            subsection (a)(7), is amended by adding at the end the
            following new clause:
              ``(viii) A mental health counselor (as defined in section
            1861(kkk)(2)).''.
      (c) Effective Date.--The amendments made by this section shall apply
    to items and services furnished on or after January 1, 2011.

    SEC. 1310. EXTENSION OF PHYSICIAN FEE SCHEDULE MENTAL HEALTH ADD-ON.

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

    SEC. 1311. EXPANDING ACCESS TO VACCINES.

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

                        ``Federally Recommended Vaccines

      ``(lll) The term `federally recommended vaccine' means an approved
    vaccine recommended by the Advisory Committee on Immunization Practices
    (an advisory committee established by the Secretary, acting through the
    Director of the Centers for Disease Control and Prevention).''.
      (c) Conforming Amendments.--
              (1) Section 1833 of such Act (42 U.S.C. 1395l) is amended, in
            each of subsections (a)(1)(B), (a)(2)(G), (a)(3)(A), by
            striking ``1861(s)(10)(A)'' and inserting ``1861(s)(10)'' each
            place it appears.
              (2) Section 1842(o)(1)(A)(iv) of such Act (42 U.S.C.
            1395u(o)(1)(A)(iv)) is amended--
                      (A) by striking ``subparagraph (A) or (B) of''; and
                      (B) by inserting before the period the following:
                    ``and before January 1, 2011, and influenza vaccines
                    furnished on or after January 1, 2011''.
              (3) Section 1847A(c)(6) of such Act (42 U.S.C. 1395w-
            3a(c)(6)) is amended by striking subparagraph (G) and inserting
            the following:
                      ``(G) Implementation.--Chapter 35 of title 44, United
                    States Code shall not apply to manufacturer provision
                    of information pursuant to section 1927(b)(3)(A)(iii)
                    for purposes of implementation of this section.''.
              (4) Section 1860D-2(e)(1) of such Act (42 U.S.C. 1395w-
            102(e)(1)) is amended by striking ``such term includes a
            vaccine'' and all that follows through ``its administration)
            and''.
              (5) Section 1861(ww)(2)(A) of such Act (42 U.S.C.
            1395x(ww)(2)(A))) is amended by striking ``Pneumococcal,
            influenza, and hepatitis B vaccine and administration'' and
            inserting ``Federally recommended vaccines (as defined in
            subsection (lll)) and their respective administration''.
              (6) Section 1861(iii)(1) of such Act, as added by section
            1306(a), is amended by amending subparagraph (J) to read as
            follows:
              ``(J) Federally recommended vaccines (as defined in
            subsection (lll)) and their respective administration.''.
              (7) Section 1927(b)(3)(A)(iii) of such Act (42 U.S.C. 1396r-
            8(b)(3)(A)(iii)) is amended, in the matter following subclause
            (III), by inserting ``(A)(iv) (including influenza vaccines
            furnished on or after January 1, 2011),'' after ``described in
            subparagraph''
      (d) Effective Dates.--The amendments made by--
              (1) this section (other than by subsection (c)(7)) shall
            apply to vaccines administered on or after January 1, 2011; and
              (2) by subsection (c)(7) shall apply to calendar quarters
            beginning on or after January 1, 2010.

    SEC. 1312. RECOGNITION OF CERTIFIED DIABETES EDUCATORS AS CERTIFIED
                        PROVIDERS FOR PURPOSES OF MEDICARE DIABETES
                        OUTPATIENT SELF-MANAGEMENT TRAINING SERVICES.

      (a) In General.--Section 1861(qq) of the Social Security Act (42
    U.S.C. 1395x(qq)) is amended--
              (1) in paragraph (1), by inserting ``or by a certified
            diabetes educator (as defined in paragraph (3))'' after
            ``paragraph (2)(B)''; and
              (2) by adding at the end the following new paragraphs:
              ``(3) For purposes of paragraph (1), the term `certified
            diabetes educator' means an individual who--
                      ``(A) is licensed or registered by the State in which
                    the services are performed as a health care
                    professional;
                      ``(B) specializes in teaching individuals with
                    diabetes to develop the necessary skills and knowledge
                    to manage the individual's diabetic condition; and
                      ``(C) is certified as a diabetes educator by a
                    recognized certifying body (as defined in paragraph
                    (4)).
              ``(4)(A) For purposes of paragraph (3)(C), the term
            `recognized certifying body' means--
                      ``(i) the National Certification Board for Diabetes
                    Educators, or
                      ``(ii) a certifying body for diabetes educators,
                    which is recognized by the Secretary as authorized to
                    grant certification of diabetes educators for purposes
                    of this subsection pursuant to standards established by
                    the Secretary, if the Secretary determines such Board
                    or body, respectively, meets the requirement of
                    subparagraph (B).
              ``(B) The National Certification Board for Diabetes Educators
            or a certifying body for diabetes educators meets the
            requirement of this subparagraph, with respect to the
            certification of an individual, if the Board or body,
            respectively, is incorporated and registered to do business in
            the United States and requires as a condition of such
            certification each of the following:
                      ``(i) The individual has a qualifying credential in a
                    specified health care profession.
                      ``(ii) The individual has professional practice
                    experience in diabetes self-management training that
                    includes a minimum number of hours and years of
                    experience in such training.
                      ``(iii) The individual has successfully completed a
                    national certification examination offered by such
                    entity.
                      ``(iv) The individual periodically renews
                    certification status following initial
                    certification.''.
      (b) Effective Date.--The amendments made by subsection (a) shall
    apply to diabetes outpatient self-management training services
    furnished on or after the first day of the first calendar year that is
    at least 6 months after the date of the enactment of this Act.

                               TITLE IV--QUALITY

                 Subtitle A--Comparative Effectiveness Research

    SEC. 1401. COMPARATIVE EFFECTIVENESS RESEARCH.

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

                  ``Part D--Comparative Effectiveness Research

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

                     Subtitle B--Nursing Home Transparency

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

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

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

    SEC. 1412. ACCOUNTABILITY REQUIREMENTS.

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

    SEC. 1413. NURSING HOME COMPARE MEDICARE WEBSITE.

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

    SEC. 1414. REPORTING OF EXPENDITURES.

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

    SEC. 1415. STANDARDIZED COMPLAINT FORM.

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

    SEC. 1416. ENSURING STAFFING ACCOUNTABILITY.

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

                         PART 2--TARGETING ENFORCEMENT

    SEC. 1421. CIVIL MONEY PENALTIES.

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

    SEC. 1422. NATIONAL INDEPENDENT MONITOR PILOT PROGRAM.

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

    SEC. 1423. NOTIFICATION OF FACILITY CLOSURE.

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

                        PART 3--IMPROVING STAFF TRAINING

    SEC. 1431. DEMENTIA AND ABUSE PREVENTION TRAINING.

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

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

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

    SEC. 1433. QUALIFICATION OF DIRECTOR OF FOOD SERVICES OF A MEDICAID
                        NURSING FACILITY.

      (a) In General.--Section 1919(b)(4)(A) of the Social Security Act (42
    U.S.C. 1396r(b)(4)(A)) is amended by adding at the end the following:
    ``With respect to meeting the staffing requirement imposed by the
    Secretary to carry out clause (iv), the full-time director of food
    services of the facility, if not a qualified dietitian (as defined in
    section 483.35(a)(2) of title 42, Code of Federal Regulations, as in
    effect as of the date of the enactment of this section), shall be a
    Certified Dietary Manager meeting the requirements of the Certifying
    Board for Dietary Managers, or a Dietetic Technician, Registered
    meeting the requirements of the Commission on Dietetic Registration or
    have equivalent military or academic qualifications (as specified by
    the Secretary).''.
      (b) Effective Date.--The amendment made by subsection (a) shall take
    effect on the date that is 180 days after the date of enactment of this
    Act.

                        Subtitle C--Quality Measurements

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

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

                         ``Part E--Quality Improvement

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

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

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

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

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

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

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

    SEC. 1443. MULTISTAKEHOLDER PRERULEMAKING INPUT INTO SELECTION OF
                        QUALITY MEASURES.

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

    SEC. 1444. APPLICATION OF QUALITY MEASURES.

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

    SEC. 1445. CONSENSUS-BASED ENTITY FUNDING.

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

    SEC. 1446. QUALITY INDICATORS FOR CARE OF PEOPLE WITH ALZHEIMER'S
                        DISEASE.

      (a) Quality Indicators.--The Secretary of Health and Human Services,
    acting through the Agency for Healthcare Research and Quality (AHRQ),
    shall develop, either directly or with commissioned projects, a core
    set of quality indicators for the provision of medical services to
    people with Alzheimer's disease and other dementias and a plan for
    implementing the indicators to measure the quality of care provided for
    people with these conditions by physicians, hospitals, and other
    medical, residential and home care agencies and providers.
      (b) Report.--The Secretary shall submit a report to the Committees on
    Energy and Commerce and Ways and Means of the United States House of
    Representatives and to the Committees on Finance and Health, Education,
    and Pensions of the United States Senate not later than 12 months after
    the date of the enactment of this Act setting forth the status of their
    efforts to implement the requirements of subsection (a).

    SEC. 1447. STUDY ON FIVE STAR QUALITY RATING SYSTEM.

      (a) Study.--The Comptroller General of the United States shall
    conduct a study on the Five-Star Quality Rating System  (or a
    successor program)  established by the Centers for Medicare & Medicaid
    Services.   The study shall--
              (1) determine whether the composite star rating should be
            eliminated in favor of a multi-dimensional system under which a
            star rating is assigned to each individual domain;
              (2) determine whether an appeals process should be
            implemented for the Five Star Rating System to address
            situations in which questionable, inaccurate, or incomplete
            data has been identified;
              (3) evaluate the appropriateness of any weighting methodology
            used to adjust quality measures, including an assessment of
            whether such methodology is validated, whether it takes into
            account resident characteristics, the appropriateness of the
            weighting of individual quality measures, and whether the
            accuracy of information to consumers would be enhanced if the
            standard survey were weighted more heavily than the complaint
            survey;
              (4) assess the appropriateness of the case-mix adjustment
            methodology used to evaluate staffing levels, along with the
            appropriateness of the staffing levels established by the
            Centers for Medicare & Medicaid Services to achieve a 5-star
            rating given  the absence of any existing Federal nursing home
            staffing  guidelines or Medicare funding to support these
            staffing levels;
              (5)   if the Comptroller General determines that such target
            staffing levels are appropriate, evaluate, in consultation with
            the Secretary of Health and Human Services,  the cost of
            modifying the Medicare Skilled Nursing Facility Resource
            Utilization Groups to reflect the costs to facilities of
            providing staffing at these target levels;
              (6) evaluate how best to represent resident/consumer
            satisfaction under the rating system, and review approaches to
            report other facility-specific characteristics to enable
            consumers to better identify facilities that will meet their
            individual needs;
              (7) evaluate the impact of the rating system on  Medicare
            skilled nursing facilities and Medicaid nursing facilities,
            including a review of potential problems associated with
            inaccurate or incomplete data and other unanticipated
            consequences reported by facilities; and
              (8) assess whether the national program should be suspended
            and replaced with a pilot program testing potential nursing
            home quality rating systems in a limited number of States.
      (b) Report.--Not later than 1 year after the date of the enactment of
    this Act, the Comptroller General of the United States shall submit to
    Congress and the Secretary of Health and Human Services a report
    containing the results of the study conducted under subsection (a),
    together with recommendations for such modifications to the Five-Star
    Quality Rating System as the Comptroller General determines
    appropriate.

               Subtitle D--Physician Payments Sunshine Provision

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

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

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

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

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

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

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

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

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

                  TITLE V--MEDICARE GRADUATE MEDICAL EDUCATION

    SEC. 1501. DISTRIBUTION OF UNUSED RESIDENCY POSITIONS.

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

    SEC. 1502. INCREASING TRAINING IN NONPROVIDER SETTINGS.

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

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

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

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

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

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

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

                          TITLE VI--PROGRAM INTEGRITY

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

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

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

               Subtitle B--Enhanced Penalties for Fraud and Abuse

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

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

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

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

    SEC. 1613. ENHANCED PENALTIES FOR DELAYING INSPECTIONS.

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

    SEC. 1614. ENHANCED HOSPICE PROGRAM SAFEGUARDS.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

             Subtitle C--Enhanced Program and Provider Protections

    SEC. 1631. ENHANCED CMS PROGRAM PROTECTION AUTHORITY.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

                          TITLE VII--MEDICAID AND CHIP

                     Subtitle A--Medicaid and Health Reform

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

      (a) Eligibility for Non-traditional Individuals With Income Below
    133\1/3\ Percent of the Federal Poverty Level.--
              (1) In general.--Section 1902(a)(10)(A)(i) of the Social
            Security Act (42 U.S.C. 1396b(a)(10)(A)(i) is amended--
                      (A) by striking ``or'' at the end of subclause (VI);
                      (B) by adding ``or'' at the end of subclause (VII);
                    and
                      (C) by adding at the end the following new subclause:
                                      ``(VIII) who are under 65 years of
                                    age, who are not described in a
                                    previous subclause of this clause, and
                                    who are in families whose income
                                    (determined using methodologies and
                                    procedures specified by the Secretary
                                    in consultation with the Health Choices
                                    Commissioner) does not exceed 133\1/3\
                                    percent of the income official poverty
                                    line (as defined by the Office of
                                    Management and Budget, and revised
                                    annually in accordance with section
                                    673(2) of the Omnibus Budget
                                    Reconciliation Act of 1981) applicable
                                    to a family of the size involved;''.
              (2) Increased fmap for non-traditional medicaid eligible
            individuals.--Section 1905 of such Act (42 U.S.C. 1396d) is
            amended--
                      (A) in the first sentence of subsection (b), by
                    striking ``and'' before ``(4)'' and by inserting before
                    the period at the end the following: ``, and (5) 100
                    percent (or 90 percent for periods beginning with 2015)
                    with respect to amounts described in subsection (y)'';
                    and
                      (B) by adding at the end the following new
                    subsection:
      ``(y) Additional Expenditures Subject to Increased FMAP.--For
    purposes of section 1905(b)(5), the amounts described in this
    subsection are the following:
              ``(1) Amounts expended for medical assistance for individuals
            described in subclause (VIII) of section 1902(a)(10)(A)(i).''.
              (3) Construction.--Nothing in this subsection shall be
            construed as not providing for coverage under subclause (VIII)
            of section 1902(a)(10)(A)(i) of the Social Security Act, as
            added by paragraph (1) of, and an increased FMAP under the
            amendment made by paragraph (2) for, an individual who has been
            provided medical assistance under title XIX of the Act under a
            demonstration waiver approved under section 1115 of such Act or
            with State funds.
              (4) Conforming amendments.--
                      (A) Section 1903(f)(4) of the Social Security Act (42
                    U.S.C. 1396b(f)(4)) is amended by inserting
                    ``1902(a)(10)(A)(i)(VIII),'' after
                    ``1902(a)(10)(A)(i)(VII),''.
                      (B) Section 1905(a) of such Act (42 U.S.C. 1396d(a)),
                    as amended by sections 1714(a)(4) and 1731(c), is
                    further amended, in the matter preceding paragraph
                    (1)--
                              (i) by striking ``or'' at the end of clause
                            (xiv);
                              (ii) by adding ``or'' at the end of clause
                            (xv); and
                              (iii) by inserting after clause (xv) the
                            following:
                              ``(xvi) individuals described in section
                            1902(a)(10)(A)(i)(VIII),''.
      (b) Eligibility for Traditional Medicaid Eligible Individuals With
    Income Not Exceeding 133\1/3\ Percent of the Federal Poverty Level .--
              (1) In general.--Section 1902(a)(10)(A)(i) of the Social
            Security Act (42 U.S.C. 1396b(a)(10)(A)(i)), as amended by
            subsection (a), is amended--
                      (A) by striking ``or'' at the end of subclause (VII);
                      (B) by adding ``or'' at the end of subclause (VIII);
                    and
                      (C) by adding at the end the following new subclause:
                                      ``(IX) who are under 65 years of age,
                                    who would be eligible for medical
                                    assistance under the State plan under
                                    one of subclauses (I) through (VII)
                                    (based on the income standards,
                                    methodologies, and procedures in effect
                                    as of June 16, 2009) but for income and
                                    who are in families whose income does
                                    not exceed 133\1/3\ percent of the
                                    income official poverty line (as
                                    defined by the Office of Management and
                                    Budget, and revised annually in
                                    accordance with section 673(2) of the
                                    Omnibus Budget Reconciliation Act of
                                    1981) applicable to a family of the
                                    size involved;''.
              (2) Increased fmap for certain traditional medicaid eligible
            individuals.--Section 1905(y) of such Act (42 U.S.C. 1396d(b)),
            as added by subsection (a)(2)(B), is amended by inserting ``or
            (IX)'' after ``(VIII)''.
              (3) Construction.--Nothing in this subsection shall be
            construed as not providing for coverage under subclause (IX) of
            section 1902(a)(10)(A)(i) of the Social Security Act, as added
            by paragraph (1) of, and an increased FMAP under the amendment
            made by paragraph (2) for, an individual who has been provided
            medical assistance under title XIX of the Act under a
            demonstration waiver approved under section 1115 of such Act or
            with State funds.
              (4) Conforming amendment.--Section 1903(f)(4) of the Social
            Security Act (42 U.S.C. 1396b(f)(4)), as amended by subsection
            (a)(4), is amended by inserting ``1902(a)(10)(A)(i)(IX),''
            after ``1902(a)(10)(A)(i)(VIII),''.
      (c) Increased Matching Rate for Temporary Coverage of Certain
    Newborns.--Section 1905(y) of such Act, as added by subsection
    (a)(2)(B), is amended--
              (1) in paragraph (1), by inserting before the period at the
            end the following: ``, and who is not provided medical
            assistance under section 1943(b)(2) of this title or section
            205(d)(1)(B) of the America's Affordable Health Choices Act of
            2009''; and
              (2) by adding at the end the following:
              ``(2) Amounts expended for medical assistance for children
            described in section 203(d)(1)(A) of the America's Affordable
            Health Choices Act of 2009 during the time period specified in
            such section.''.
      (d) Network Adequacy.--Section 1932(a)(2) of the Social Security Act
    (42 U.S.C. 1396u-2(a)(2)) is amended by adding at the end the following
    new subparagraph:
                      ``(D) Enrollment of non-traditional medicaid
                    eligibles.--A State may not require under paragraph (1)
                    the enrollment in a managed care entity of an
                    individual described in section 1902(a)(10)(A)(i)(VIII)
                    unless the State demonstrates, to the satisfaction of
                    the Secretary, that the entity, through its provider
                    network and other arrangements, has the capacity to
                    meet the health, mental health, and substance abuse
                    needs of such individuals.''.
      (e) Effective Date.--The amendments made by this section shall take
    effect on the first day of Y1, and shall apply with respect to items
    and services furnished on or after such date.

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

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

    SEC. 1703. CHIP AND MEDICAID MAINTENANCE OF ELIGIBILITY.

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

    SEC. 1704. REDUCTION IN MEDICAID DSH.

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

    SEC. 1705. EXPANDED OUTSTATIONING.

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

                             Subtitle B--Prevention

    SEC. 1711. REQUIRED COVERAGE OF PREVENTIVE SERVICES.

      (a) Coverage.--Section 1905 of the Social Security Act (42 U.S.C.
    1396d), as amended by section 1701(a)(2)(B), is amended--
              (1) in subsection (a)(4)--
                      (A) by striking ``and'' before ``(C)''; and
                      (B) by inserting before the semicolon at the end the
                    following: ``; and (D) preventive services described in
                    subsection (z)''; and
              (2) by adding at the end the following new subsection:
      ``(z) Preventive Services.--The preventive services described in this
    subsection are services not otherwise described in subsection (a) or
    (r) that the Secretary determines are--
              ``(1)(A) recommended with a grade of A or B by the Task Force
            for Clinical Preventive Services; or
              ``(B) vaccines recommended for use as appropriate by the
            Director of the Centers for Disease Control and Prevention; and
              ``(2) appropriate for individuals entitled to medical
            assistance under this title.''.
      (b) Elimination of Cost-sharing.--
              (1) Subsections (a)(2)(D) and (b)(2)(D) of section 1916 of
            such Act (42 U.S.C. 1396o) are each amended by inserting
            ``preventive services described in section 1905(z),'' after
            ``emergency services (as defined by the Secretary),''.
              (2) Section 1916A(a)(1) of such Act (42 U.S.C. 1396o-1
            (a)(1)) is amended by inserting ``, preventive services
            described in section 1905(z),'' after ``subsection (c)''.
      (c) Conforming Amendment.--Section 1928 of such Act (42 U.S.C. 1396s)
    is amended--
              (1) in subsection (c)(2)(B)(i), by striking ``the advisory
            committee referred to in subsection (e)'' and inserting ``the
            Director of the Centers for Disease Control and Prevention'';
              (2) in subsection (e), by striking ``Advisory Committee'' and
            all that follows and inserting ``Director of the Centers for
            Disease Control and Prevention.''; and
              (3) by striking subsection (g).
      (d) Effective Date.--
              (1) Except as provided in paragraph (2), the amendments made
            by this section shall apply to services furnished on or after
            July 1, 2010, without regard to whether or not final
            regulations to carry out such amendments have been promulgated
            by such date.
              (2) In the case of a State plan for medical assistance under
            title XIX of the Social Security Act which the Secretary of
            Health and Human Services determines requires State legislation
            (other than legislation appropriating funds) in order for the
            plan to meet the additional requirements imposed by the
            amendments made by this section, the State plan shall not be
            regarded as failing to comply with the requirements of such
            title solely on the basis of its failure to meet these
            additional requirements before the first day of the first
            calendar quarter beginning after the close of the first regular
            session of the State legislature that begins after the date of
            the enactment of this Act. For purposes of the previous
            sentence, in the case of a State that has a 2-year legislative
            session, each year of such session shall be deemed to be a
            separate regular session of the State legislature.

    SEC. 1712. TOBACCO CESSATION.

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

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

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

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

      (a) Coverage as Optional Categorically Needy Group.--
              (1) In general.--Section 1902(a)(10)(A)(ii) of the Social
            Security Act (42 U.S.C. 1396a(a)(10)(A)(ii)) is amended--
                      (A) in subclause (XVIII), by striking ``or'' at the
                    end;
                      (B) in subclause (XIX), by adding ``or'' at the end;
                    and
                      (C) by adding at the end the following new subclause:
                                      ``(XX) who are described in
                                    subsection (hh) (relating to
                                    individuals who meet certain income
                                    standards);''.
              (2) Group described.--Section 1902 of such Act (42 U.S.C.
            1396a), as amended by section 1703, is amended by adding at the
            end the following new subsection:
      ``(hh)(1) Individuals described in this subsection are individuals--
                      ``(A) whose income does not exceed an income
                    eligibility level established by the State that does
                    not exceed the highest income eligibility level
                    established under the State plan under this title (or
                    under its State child health plan under title XXI) for
                    pregnant women; and
                      ``(B) who are not pregnant.
      ``(2) At the option of a State, individuals described in this
    subsection may include individuals who, had individuals applied on or
    before January 1, 2007, would have been made eligible pursuant to the
    standards and processes imposed by that State for benefits described in
    clause (XV) of the matter following subparagraph (G) of section
    subsection (a)(10) pursuant to a waiver granted under section 1115.
      ``(3) At the option of a State, for purposes of subsection
    (a)(17)(B), in determining eligibility for services under this
    subsection, the State may consider only the income of the applicant or
    recipient.''.
              (3) Limitation on benefits.--Section 1902(a)(10) of such Act
            (42 U.S.C. 1396a(a)(10)) is amended in the matter following
            subparagraph (G)--
                      (A) by striking ``and (XIV)'' and inserting
                    ``(XIV)''; and
                      (B) by inserting ``, and (XV) the medical assistance
                    made available to an individual described in subsection
                    (hh) shall be limited to family planning services and
                    supplies described in section 1905(a)(4)(C) including
                    medical diagnosis and treatment services that are
                    provided pursuant to a family planning service in a
                    family planning setting'' after ``cervical cancer''.
              (4) Conforming amendments.--Section 1905(a) of such Act (42
            U.S.C. 1396d(a)), as amended by section 1731(c), is amended in
            the matter preceding paragraph (1)--
                      (A) in clause (xiii), by striking ``or'' at the end;
                      (B) in clause (xiv), by adding ``or'' at the end; and
                      (C) by inserting after clause (xiv) the following:
              ``(xv) individuals described in section 1902(hh),''.
      (b) Presumptive Eligibility.--
              (1) In general.--Title XIX of the Social Security Act (42
            U.S.C. 1396 et seq.) is amended by inserting after section
            1920B the following:
             ``presumptive eligibility for family planning services
      ``Sec. 1920C.  (a) State Option.--State plan approved under section
    1902 may provide for making medical assistance available to an
    individual described in section 1902(hh) (relating to individuals who
    meet certain income eligibility standard) during a presumptive
    eligibility period. In the case of an individual described in section
    1902(hh), such medical assistance shall be limited to family planning
    services and supplies described in 1905(a)(4)(C) and, at the State's
    option, medical diagnosis and treatment services that are provided in
    conjunction with a family planning service in a family planning
    setting.
      ``(b) Definitions.--For purposes of this section:
              ``(1) Presumptive eligibility period.--The term `presumptive
            eligibility period' means, with respect to an individual
            described in subsection (a), the period that--
                      ``(A) begins with the date on which a qualified
                    entity determines, on the basis of preliminary
                    information, that the individual is described in
                    section 1902(hh); and
                      ``(B) ends with (and includes) the earlier of--
                              ``(i) the day on which a determination is
                            made with respect to the eligibility of such
                            individual for services under the State plan;
                            or
                              ``(ii) in the case of such an individual who
                            does not file an application by the last day of
                            the month following the month during which the
                            entity makes the determination referred to in
                            subparagraph (A), such last day.
              ``(2) Qualified entity.--
                      ``(A) In general.--Subject to subparagraph (B), the
                    term `qualified entity' means any entity that--
                              ``(i) is eligible for payments under a State
                            plan approved under this title; and
                              ``(ii) is determined by the State agency to
                            be capable of making determinations of the type
                            described in paragraph (1)(A).
                      ``(B) Rule of construction.--Nothing in this
                    paragraph shall be construed as preventing a State from
                    limiting the classes of entities that may become
                    qualified entities in order to prevent fraud and abuse.
      ``(c) Administration.--
              ``(1) In general.--The State agency shall provide qualified
            entities with--
                      ``(A) such forms as are necessary for an application
                    to be made by an individual described in subsection (a)
                    for medical assistance under the State plan; and
                      ``(B) information on how to assist such individuals
                    in completing and filing such forms.
              ``(2) Notification requirements.--A qualified entity that
            determines under subsection (b)(1)(A) that an individual
            described in subsection (a) is presumptively eligible for
            medical assistance under a State plan shall--
                      ``(A) notify the State agency of the determination
                    within 5 working days after the date on which
                    determination is made; and
                      ``(B) inform such individual at the time the
                    determination is made that an application for medical
                    assistance is required to be made by not later than the
                    last day of the month following the month during which
                    the determination is made.
              ``(3) Application for medical assistance.--In the case of an
            individual described in subsection (a) who is determined by a
            qualified entity to be presumptively eligible for medical
            assistance under a State plan, the individual shall apply for
            medical assistance by not later than the last day of the month
            following the month during which the determination is made.
      ``(d) Payment.--Notwithstanding any other provision of law, medical
    assistance that--
              ``(1) is furnished to an individual described in subsection
            (a)--
                      ``(A) during a presumptive eligibility period;
                      ``(B) by a entity that is eligible for payments under
                    the State plan; and
              ``(2) is included in the care and services covered by the
            State plan,
    shall be treated as medical assistance provided by such plan for
    purposes of clause (4) of the first sentence of section 1905(b).''.
              (2) Conforming amendments.--
                      (A) Section 1902(a)(47) of the Social Security Act
                    (42 U.S.C. 1396a(a)(47)) is amended by inserting before
                    the semicolon at the end the following: ``and provide
                    for making medical assistance available to individuals
                    described in subsection (a) of section 1920C during a
                    presumptive eligibility period in accordance with such
                    section''.
                      (B) Section 1903(u)(1)(D)(v) of such Act (42 U.S.C.
                    1396b(u)(1)(D)(v)) is amended--
                              (i) by striking ``or for'' and inserting
                            ``for''; and
                              (ii) by inserting before the period the
                            following: ``, or for medical assistance
                            provided to an individual described in
                            subsection (a) of section 1920C during a
                            presumptive eligibility period under such
                            section''.
      (c) Clarification of Coverage of Family Planning Services and
    Supplies.--Section 1937(b) of the Social Security Act (42 U.S.C. 1396u-
    7(b)), as amended by section 1703(c)(2), is amended by adding at the
    end the following:
              ``(6) Coverage of family planning services and supplies.--
            Notwithstanding the previous provisions of this section, a
            State may not provide for medical assistance through enrollment
            of an individual with benchmark coverage or benchmark-
            equivalent coverage under this section unless such coverage
            includes for any individual described in section 1905(a)(4)(C),
            medical assistance for family planning services and supplies in
            accordance with such section.''.
      (d) Effective Date.--The amendments made by this section take effect
    on the date of the enactment of this Act and shall apply to items and
    services furnished on or after such date.

                               Subtitle C--Access

    SEC. 1721. PAYMENTS TO PRIMARY CARE PRACTITIONERS.

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

    SEC. 1722. MEDICAL HOME PILOT PROGRAM.

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

    SEC. 1723. TRANSLATION OR INTERPRETATION SERVICES.

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

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

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

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

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

    SEC. 1726. REQUIRING COVERAGE OF SERVICES OF PODIATRISTS.

      (a) In General.--Section 1905(a)(5)(A) of the Social Security Act (42
    U.S.C. 1396d(a)(5)(A)) is amended by striking ``section 1861(r)(1)''
    and inserting ``paragraphs (1) and (3) of section 1861(r)''.
      (b) Effective Date.--
              (1) In general.--Except as provided in paragraph (2), the
            amendment made by subsection (a) shall apply to services
            furnished on or after January 1, 2010.
              (2) Extension of effective date for state law amendment.--In
            the case of a State plan under title XIX of the Social Security
            Act (42 U.S.C. 1396 et seq.) which the Secretary of Health and
            Human Services determines requires State legislation in order
            for the plan to meet the additional requirement imposed by the
            amendment made by subsection (a), the State plan shall not be
            regarded as failing to comply with the requirements of such
            title solely on the basis of its failure to meet these
            additional requirements before the first day of the first
            calendar quarter beginning after the close of the first regular
            session of the State legislature that begins after the date of
            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 the session is considered to be a separate regular
            session of the State legislature.

    SEC. 1726A. REQUIRING COVERAGE OF SERVICES OF OPTOMETRISTS.

      (a) In General.--Section 1905(a)(5) of the Social Security Act (42
    U.S.C. 1396d(a)(5)) is amended--
              (1) by striking ``and'' before ``(B)''; and
              (2) by inserting before the semicolon at the end the
            following: ``, and (C) medical and other health services (as
            defined in section 1861(s)) as authorized by State law,
            furnished by an optometrist (described in section 1861(r)(4))
            to the extent such services may be performed under State law''.
      (b) Effective Date.--
              (1) In general.--Except as provided in paragraph (2), the
            amendments made by subsection (a) shall take effect 90 days
            after the date of the enactment of this Act and shall apply to
            services furnished or other actions required 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 requirements made by the amendments made by
            subsection (a), the State plan shall not be regarded as failing
            to comply with the requirements of such title solely on the
            basis of its failure to meet these additional requirements
            before the first day of the first calendar quarter beginning
            after the close of the first regular session of the State
            legislature that begins after the date of 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. 1727. THERAPEUTIC FOSTER CARE.

      (a) Rule of Construction.--Nothing in this title shall prevent or
    limit a State from covering therapeutic foster care for eligible
    children in out-of-home placements under section 1905(a) of the Social
    Security Act (42 U.S.C. 1396d(a)).
      (b) Therapeutic Foster Care Defined.--For purposes of this section,
    the term ``therapeutic foster care'' means a foster care program that
    provides--
              (1) to the child--
                      (A) structured daily activities that develop,
                    improve, monitor, and reinforce age-appropriate social,
                    communications, and behavioral skills;
                      (B) crisis intervention and crisis support services;
                      (C) medication monitoring;
                      (D) counseling; and
                      (E) case management services; and
              (2) specialized training for the foster parent and
            consultation with the foster parent on the management of
            children with mental illnesses and related health and
            developmental conditions.

    SEC. 1728. ASSURING ADEQUATE PAYMENT LEVELS FOR SERVICES.

      (a) In General.--Title XIX of the Social Security Act is amended by
    inserting after section 1925 the following new section:
                ``assuring adequate payment levels for services
      ``Sec. 1926.  (a) In General.--A State plan under this title shall
    not be considered to meet the requirement of section 1902(a)(30)(A) for
    a year (beginning with 2011) unless, by not later than April 1 before
    the beginning of such year, the State submits to the Secretary an
    amendment to the plan that specifies the payment rates to be used for
    such services under the plan in such year and includes in such
    submission such additional data as will assist the Secretary in
    evaluating the State's compliance with such requirement, including data
    relating to how rates established for payments to medicaid managed care
    organizations under sections 1903(m) and 1932 take into account such
    payment rates.
      ``(b) Secretarial Review.--The Secretary, by not later than 90 days
    after the date of submission of a plan amendment under subsection (a),
    shall--
              ``(1) review each such amendment for compliance with the
            requirement of section 1902(a)(30)(A); and
              ``(2) approve or disapprove each such amendment.
    If the Secretary disapproves such an amendment, the State shall
    immediately submit a revised amendment that meets such requirement.''.
      (b) Effective Date.--The amendment made by subsection (a) shall take
    effect on the date of the enactment of this Act.

    SEC. 1729. PRESERVING MEDICAID COVERAGE FOR YOUTHS UPON RELEASE FROM
                        PUBLIC INSTITUTIONS.

      Section 1902(a) of the Social Security Act (42 U.S.C. 1396a), as
    amended by section 1631(b) and 1703(a), is amended--
              (1) by striking ``and'' at the end of paragraph (74);
              (2) by striking the period at the end of paragraph (75) and
            inserting ``; and''; and
              (3) by inserting after paragraph (75) the following new
            paragraph:
              ``(76) provide that in the case of any youth who is 18 years
            of age or younger, was enrolled for medical assistance under
            the State plan immediately before becoming an inmate of a
            public institution, is 18 years of age or younger upon release
            from such institution, and is eligible for such medical
            assistance under the State plan at the time of release from
            such institution--
                      ``(A) during the period such youth is incarcerated in
                    a public institution, the State shall not terminate
                    eligibility for medical assistance under the State plan
                    for such youth;
                      ``(B) during the period such youth is incarcerated in
                    a public institution, the State shall establish a
                    process that ensures--
                              ``(i) that the State does not claim federal
                            financial participation for services that are
                            provided to such youth and that are excluded
                            under subsection 1905(a)(28)(A); and
                              ``(ii) that the youth receives medical
                            assistance for which federal participation is
                            available under this title;
                      ``(C) on or before the date such youth is released
                    from such institution, the State shall ensure that such
                    youth is enrolled for medical assistance under this
                    title, unless and until there is a determination that
                    the individual is no longer eligible to be so enrolled;
                    and
                      ``(D) the State shall ensure that enrollment under
                    subparagraph (C) will be completed before such date so
                    that the youth can access medical assistance under this
                    title immediately upon leaving the institution.''

    SEC. 1730. QUALITY MEASURES FOR MATERNITY AND ADULT HEALTH SERVICES
                        UNDER MEDICAID AND CHIP.

      Title XI of the Social Security Act (42 U.S.C. 1301 et seq.) is
    amended by inserting after section 1139A the following new section:

    ``SEC. 1139B. QUALITY MEASURES FOR MATERNITY AND ADULT HEALTH SERVICES
                        UNDER MEDICAID AND CHIP.

      ``(a) Maternity Care Quality Measures Under Medicaid and CHIP.--
              ``(1) Development of measures.--No later than January 1,
            2011, the Secretary shall develop and publish for comment a
            proposed set of measures that accurately describe the quality
            of maternity care provided under State plans under titles XIX
            and XXI. The Secretary shall publish a final recommended set of
            such measures no later than July 1, 2011.
              ``(2) Standardized reporting format.--No later than January
            1, 2012, the Secretary shall develop and publish a standardized
            reporting format for maternity care quality measures for use by
            State programs under titles XIX and XXI to collect data from
            managed care entities and providers and practitioners that
            participate in such programs and to report maternity care
            quality measures to the Secretary.
      ``(b) Other Adult Health Quality Measures Under Medicaid.--
              ``(1) Development of measures.--The Secretary shall develop
            quality measures that are not otherwise developed under section
            1192 for services received under State plans under title XIX by
            individuals who are 21 years of age or older but have not
            attained age 65. The Secretary shall publish such quality
            measures through notice and comment rulemaking.
              ``(2) Standardized reporting format.--The Secretary shall
            develop and publish a standardized reporting format for quality
            measures developed under paragraph (1) and section 1192 for
            services furnished under State plans under title XIX to
            individuals who are 21 years of age or older but have not
            attained age 65 for use under such plans and State plans under
            title XXI. The format shall enable State agencies administering
            such plans to collect data from managed care entities and
            providers and practitioners that participate in such plans and
            to report quality measures to the Secretary.
      ``(c) Development Process.--With respect to the development of
    quality measures under subsections (a) and (b)--
              ``(1) Use of qualified entities.--The Secretary may enter
            into agreements with public, nonprofit, or academic
            institutions with technical expertise in the area of health
            quality measurement to assist in such development. The
            Secretary may carry out these agreements by contract, grant, or
            otherwise.
              ``(2) Multi-stakeholder pre-rulemaking input.--The Secretary
            shall obtain the input of stakeholders with respect to such
            quality measures using a process similar to that described in
            section 1808(d).
              ``(3) Coordination.--The Secretary shall coordinate the
            development of such measures under such subsections and with
            the development of child health quality measures under section
            1139A.
      ``(d) Annual Report to Congress.--No later than January 1, 2013, and
    annually thereafter, the Secretary shall report to the Committee on
    Energy and Commerce of the House of Representatives the Committee on
    Finance of the Senate regarding--
              ``(1) the availability of reliable data relating to the
            quality of maternity care furnished under State plans under
            titles XIX and XXI;
              ``(2) the availability of reliable data relating to the
            quality of services furnished under State plans under title XIX
            to adults who are 21 years of age or older but have not
            attained age 65; and
              ``(3) recommendations for improving the quality of such care
            and services furnished under such State plans.
      ``(e) Rule of Construction.--Notwithstanding any other provision in
    this section, no quality measure developed, published, or used as a
    basis of measurement or reporting under this section may be used to
    establish an irrefutable presumption regarding either the medical
    necessity of care or the maximum permissible coverage for any
    individual who receives medical assistance under title XIX or child
    health assistance under title XXI.
      ``(f) Appropriation.--For purposes of carrying out this section, in
    addition to funds otherwise available, out of any funds in the Treasury
    not otherwise appropriated, there are appropriated $40,000,000 for the
    5-fiscal-year period beginning with fiscal year 2010. Funds
    appropriated under this subsection shall remain available until
    expended.''.

    SEC. 1730A. ACCOUNTABLE CARE ORGANIZATION PILOT PROGRAM.

      (a) In General.--The Secretary of Health and Human Services shall
    establish under this section an accountable care program under which a
    State may apply to the Secretary for approval of an accountable care
    organization pilot program described in subsection (b) (in this section
    referred to as a ``pilot program'') for the application of the
    accountable care organization concept under title XIX of the Social
    Security Act.
      (b) Pilot Program Described.--
              (1) In general.--The pilot program described in this
            subsection is a program that applies one or more of the
            accountable care organization models described in section 1866E
            of the Social Security Act, as added by section 1301 of this
            Act.
              (2) Limitation.--The pilot program shall operate for a period
            of not more than 5 years.
      (c) Additional Incentives.--In the case of the pilot program under
    this section, the Secretary may--
              (1) waive the requirements of--
                      (A) section 1902(a)(1) of the Social Security Act
                    (relating to statewideness);
                      (B) section 1902(a)(10)(B) of such Act (relating to
                    comparability); and
              (2) increase the matching percentage for administrative
            expenditures up to--
                      (A) 90 percent (for the first 2 years of the pilot
                    program); and
                      (B) 75 percent (for the next 3 years).
      (d) Evaluation; Report.--
              (1) Evaluation.--The Secretary, using the criteria described
            in section 1866D(f)(1) of the Social Security Act (as inserted
            by section 1301 of this Act), shall conduct an evaluation of
            the pilot program under this section.
              (2) Report.--Not later than 60 days after the date of
            completion of the evaluation under paragraph (1), the Secretary
            shall submit to Congress and make available to the public a
            report on the findings of the evaluation under such paragraph.

                              Subtitle D--Coverage

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

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

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

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

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

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

    SEC. 1734. PREVENTING THE APPLICATION UNDER CHIP OF COVERAGE WAITING
                        PERIODS FOR CERTAIN CHILDREN.

      (a) In General.--Section 2102(b)(1) of the Social Security Act (42
    U.S.C. 1397bb(b)(1)) is amended--
              (1) in subparagraph (B)--
                      (A) in clause (iii), by striking ``and'' at the end;
                      (B) in clause (iv), by striking the period at the end
                    and inserting ``; and''; and
                      (C) by adding at the end the following new clause:
                              ``(v) may not apply a waiting period
                            (including a waiting period to carry out
                            paragraph (3)(C)) in the case of a child
                            described in subparagraph (C).''; and
              (2) by adding at the end the following new subparagraph:
                      ``(C) Description of children not subject to waiting
                    period.--For purposes of this paragraph, a child
                    described in this subparagraph is a child who, on the
                    date an application is submitted for such child for
                    child health assistance under this title, meets any of
                    the following requirements:
                              ``(i) Infants and toddlers.--The child is
                            under two years of age.
                              ``(ii) Loss of group health plan coverage.--
                            The child previously had private health
                            insurance coverage through a group health plan
                            or health insurance coverage offered through an
                            employer and lost such coverage due to--
                                      ``(I) termination of an individual's
                                    employment;
                                      ``(II) a reduction in hours that an
                                    individual works for an employer;
                                      ``(III) elimination of an
                                    individual's retiree health benefits;
                                    or
                                      ``(IV) termination of an individual's
                                    group health plan or health insurance
                                    coverage offered through an employer.
                              ``(iii) Unaffordable private coverage.--
                                      ``(I) In general.--The family of the
                                    child demonstrates that the cost of
                                    health insurance coverage (including
                                    the cost of premiums, co-payments,
                                    deductibles, and other cost sharing)
                                    for such family exceeds 10 percent of
                                    the income of such family.
                                      ``(II) Determination of family
                                    income.--For purposes of subclause (I),
                                    family income shall be determined in
                                    the same manner specified by the State
                                    for purposes of determining a child's
                                    eligibility for child health assistance
                                    under this title.''.
      (b) Effective Date.--The amendments made by this section shall take
    effect as of the date that is 90 days after the date of the enactment
    of this Act.

    SEC. 1735. ADULT DAY HEALTH CARE SERVICES.

      (a) In General.--The Secretary of Health and Human Services shall
    not--
              (1) withhold, suspend, disallow, or otherwise deny Federal
            financial participation under section 1903(a) of the Social
            Security Act (42 U.S.C. 1396b(a)) for the provision of adult
            day health care services, day activity and health services, or
            adult medical day care services, as defined under a State
            Medicaid plan approved during or before 1994, during such
            period if such services are provided consistent with such
            definition and the requirements of such plan; or
              (2) withdraw Federal approval of any such State plan or part
            thereof regarding the provision of such services (by regulation
            or otherwise).
      (b) Effective Date.--Subsection (a) shall apply with respect to
    services provided on or after October 1, 2008.

    SEC. 1736. MEDICAID COVERAGE FOR CITIZENS OF FREELY ASSOCIATED STATES.

      (a) In General.--Section 402(b)(2) of the Personal Responsibility and
    Work Opportunity Reconciliation Act of 1996 (8 U.S.C. 1612(b)(2)) is
    amended by adding at the end the following:
                      ``(G) Medicaid exception for citizens of freely
                    associated states.--With respect to eligibility for
                    benefits for the designated Federal program defined in
                    paragraph (3)(C) (relating to the Medicaid program),
                    section 401(a) and paragraph (1) shall not apply to any
                    individual who lawfully resides in the United States
                    (including territories and possessions of the United
                    States) in accordance with the Compacts of Free
                    Association between the Government of the United States
                    and the Governments of the Federated States of
                    Micronesia, the Republic of the Marshall Islands, and
                    the Republic of Palau.''.
      (b) Exception to 5-year Limited Eligibility.--Section 403(d) of such
    Act (8 U.S.C. 1613(d)) is amended--
              (1) in paragraph (1), by striking ``or'' at the end;
              (2) in paragraph (2), by striking the period at the end and
            inserting ``; or''; and
              (3) by adding at the end the following:
              ``(3) an individual described in section 402(b)(2)(G), but
            only with respect to the designated Federal program defined in
            section 402(b)(3)(C).''.
      (c) Definition of Qualified Alien.--Section 431(b) of such Act (8
    U.S.C. 1641(b)) is amended--
              (1) in paragraph (6), by striking ``; or'' at the end and
            inserting a comma;
              (2) in paragraph (7), by striking the period at the end and
            inserting ``, or''; and
              (3) by adding at the end the following:
              ``(8) an individual who lawfully resides in the United States
            (including territories and possessions of the United States) in
            accordance with a Compact of Free Association referred to in
            section 402(b)(2)(G), but only with respect to the designated
            Federal program defined in section 402(b)(3)(C) (relating to
            the Medicaid program).''.

    SEC. 1737. CONTINUING REQUIREMENT OF MEDICAID COVERAGE OF NONEMERGENCY
                        TRANSPORTATION TO MEDICALLY NECESSARY SERVICES.

      (a) Requirement.--Section 1902(a)(10) of the Social Security Act (42
    U.S.C. 1396a(a)(10)) is amended--
              (1) in subparagraph (A), in the matter preceding clause (i),
            by striking ``and (21)'' and inserting ``, (21), and (28)'';
            and
              (2) in subparagraph (C)(iv), by striking ``and (17)'' and
            inserting ``, (17), and (28)''.
      (b) Description of Services.--Section 1905(a) of such Act (42 U.S.C.
    1395d(a)), as amended by sections 1713(a)(1) and 1724(a)(1), is
    amended--
              (1) in paragraph (29), by striking ``and'' at the end;
              (2) by redesignating paragraph (30) as pararaph (31) and by
            striking the comma at the end and inserting a semicolon; and
              (3) by inserting after paragraph (29) the following new
            paragraph:
              ``(30) nonemergency transportation to medically necessary
            services, consistent with the requirement of section 431.53 of
            title 42, Code of Federal Regulations, as in effect as of June
            1, 2008; and''.
      (c) Effective Date.--The amendments made by this section shall take
    effect on the date of the enactment of this Act and shall apply to
    transportation on or after such date.

    SEC. 1738. STATE OPTION TO DISREGARD CERTAIN INCOME IN PROVIDING
                        CONTINUED MEDICAID COVERAGE FOR CERTAIN INDIVIDUALS
                        WITH EXTREMELY HIGH PRESCRIPTION COSTS.

      Section 1902(e) of the Social Security Act (42 U.S.C. 1396b(e)), as
    amended by section 203(a) of the Children's Health Insurance Program
    Reauthorization Act of 2009 (Public Law 111-3), is amended by adding at
    the end the following new paragraph:
      ``(14)(A) At the option of the State, in the case of an individual
    with extremely high prescription drug costs described in subparagraph
    (B) who has been determined (without the application of this paragraph)
    to be eligible for medical assistance under this title, the State may,
    in redetermining the individual's eligibility for medical assistance
    under this title, disregard any family income of the individual to the
    extent such income is less than an amount that is specified by the
    State and does not exceed the amount specified in subparagraph (C), or,
    if greater, income equal to the cost of the orphan drugs described in
    subparagraph (B)(iii).
      ``(B) An individual with extremely high prescription drug costs
    described in this subparagraph for a 12-month period is an individual--
              ``(i) who is covered under health insurance or a health
            benefits plan that has a maximum lifetime limit of not less
            than $1,000,000 which includes all prescription drug coverage;
              ``(ii) who has exhausted all available prescription drug
            coverage under the plan as of the beginning of such period;
              ``(iii) who incurs (or is reasonably expected to incur) on an
            annual basis during the period costs for orphan drugs in excess
            of the amount specified in subparagraph (C) for the period; and
              ``(iv) whose annual family income (determined without regard
            to this paragraph) as of the beginning of the period does not
            exceed 75 percent of the amount incurred for such drugs (as
            described in clause (iii)).
      ``(C) The amount specified in this subparagraph for a 12-month period
    beginning in--
              ``(i) 2009 or 2010, is $200,000; or
              ``(ii) a subsequent year, is the amount specified in clause
            (i) (or this subparagraph) for the previous year increased by
            the annual rate of increase in the medical care component of
            the consumer price index (U.S. city average) for the 12-month
            period ending in August of the previous year.
    Any amount computed under clause (ii) that is not a multiple of $1,000
    shall be rounded to the nearest multiple of $1,000.
      ``(D) In applying this paragraph, amounts incurred for prescription
    drugs for cosmetic purposes shall not be taken into account.
      ``(E) With respect to an individual described in subparagraph (A),
    notwithstanding section 1916, the State plan--
              ``(i) shall provide for the application of cost-sharing that
            is at least nominal as determined under section 1916; and
              ``(ii) may provide, consistent with section 1916A, for such
            additional cost-sharing as does not exceed a maximum level of
            cost-sharing that is specified by the Secretary and is adjusted
            by the Secretary on an annual basis.
      ``(F) A State electing the option under this paragraph shall provide
    for a determination on an individual's application for continued
    medical assistance under this title within 30 days of the date the
    application if filed with the State.
      ``(G) In this paragraph:
              ``(i) The term `orphan drugs' means prescription drugs
            designated under section 526 of the Federal Food, Drug, and
            Cosmetic Act (21 U.S.C. 360bb) as a drug for a rare disease or
            condition.
              ``(ii) The term `health benefits plan' includes coverage
            under a plan offered under a State high risk pool.''.

                             Subtitle E--Financing

    SEC. 1741. PAYMENTS TO PHARMACISTS.

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

    SEC. 1742. PRESCRIPTION DRUG REBATES.

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

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

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

    SEC. 1744. PAYMENTS FOR GRADUATE MEDICAL EDUCATION.

      (a) In General.--Section 1905 of the Social Security Act (42 U.S.C.
    1396d), as amended by sections 1701(a)(2), 1711(a), and 1713(a), is
    amended by adding at the end the following new subsection:
      ``(bb) Payment for Graduate Medical Education.--
              ``(1) In general.--The term `medical assistance' includes
            payment for costs of graduate medical education consistent with
            this subsection, whether provided in or outside of a hospital.
              ``(2) Submission of information.--For purposes of paragraph
            (1) and section 1902(a)(13)(A)(v), payment for such costs is
            not consistent with this subsection unless--
                      ``(A) the State submits to the Secretary, in a timely
                    manner and on an annual basis specified by the
                    Secretary, information on total payments for graduate
                    medical education and how such payments are being used
                    for graduate medical education, including--
                              ``(i) the institutions and programs eligible
                            for receiving the funding;
                              ``(ii) the manner in which such payments are
                            calculated;
                              ``(iii) the types and fields of education
                            being supported;
                              ``(iv) the workforce or other goals to which
                            the funding is being applied;
                              ``(v) State progress in meeting such goals;
                            and
                              ``(vi) such other information as the
                            Secretary determines will assist in carrying
                            out paragraphs (3) and (4); and
                      ``(B) such expenditures are made consistent with such
                    goals and requirements as are established under
                    paragraph (4).
              ``(3) Review of information.--The Secretary shall make the
            information submitted under paragraph (2) available to the
            Advisory Committee on Health Workforce Evaluation and
            Assessment (established under section 2261 of the Public Health
            Service Act). The Secretary and the Advisory Committee shall
            independently review the information submitted under paragraph
            (2), taking into account State and local workforce needs.
              ``(4) Specification of goals and requirements.--The Secretary
            shall specify by rule, initially published by not later than
            December 31, 2011--
                      ``(A) program goals for the use of funds described in
                    paragraph (1), taking into account recommendations of
                    the such Advisory Committee and the goals for approved
                    medical residency training programs described in
                    section 1886(h)(1)(B); and
                      ``(B) requirements for use of such funds consistent
                    with such goals.
            Such rule may be effective on an interim basis pending revision
            after an opportunity for public comment.''.
      (b) Conforming Amendment.--Section 1902(a)(13)(A) of such Act (42
    U.S.C. 1396a(a)(13)(A)), as amended by section 1721(a)(1)(A), is
    amended--
              (1) by striking ``and'' at the end of clause (iii);
              (2) by striking the semicolon in clause (iv) and inserting
            ``, and''; and
              (3) by adding at the end the following new clause:
                              ``(v) in the case of hospitals and at the
                            option of a State, such rates may include, to
                            the extent consistent with section 1905(bb),
                            payment for graduate medical education; and''.
      (c) Effective Date.--The amendments made by this section shall take
    effect on the date of the enactment of this Act. Nothing in this
    section shall be construed as affecting payments made before such date
    under a State plan under title XIX of the Social Security Act for
    graduate medical education.

    SEC. 1745. REPORT ON MEDICAID PAYMENTS.

      Section 1902 of the Social Security Act (42 U.S.C. 1396), as amended
    by sections 1703(a), 1714(a), and 1731(a), is amended by adding at the
    end the following new subsection:
      ``(jj) Report on Medicaid Payments.--Each year, on or before a date
    determined by the Secretary, a State participating in the Medicaid
    program under this title shall submit to the Administrator of the
    Centers for Medicare & Medicaid Services--
              ``(1) information on the determination of rates of payment to
            providers for covered services under the State plan,
            including--
                      ``(A) the final rates;
                      ``(B) the methodologies used to determine such rates;
                    and
                      ``(C) justifications for the rates; and
              ``(2) an explanation of the process used by the State to
            allow providers, beneficiaries and their representatives, and
            other concerned State residents a reasonable opportunity to
            review and comment on such rates, methodologies, and
            justifications before the State made such rates final.''.

    SEC. 1746. REVIEWS OF MEDICAID.

      (a) GAO Study on FMAP.--.
              (1) Study.--The Comptroller General of the United States
            shall conduct a study regarding federal payments made to the
            State Medicaid programs under title XIX of the Social Security
            Act for the purposes of making recommendations to Congress.
              (2) Report.--Not later than February 15, 2011, the
            Comptroller General shall submit to the appropriate committees
            of Congress a report on the study conducted under paragraph (1)
            and the effect on the federal government, States, providers,
            and beneficiaries of--
                      (A) removing the 50 percent floor, or 83 percent
                    ceiling, or both, in the Federal medical assistance
                    percentage under section 1905(b)(1) of the Social
                    Security Act; and
                      (B) revising the current formula for such Federal
                    medical assistance percentage to better reflect State
                    fiscal capacity and State effort to pay for health and
                    long-term care services and to better adjust for
                    national or regional economic downturns.
      (b) GAO Study on Medicaid Administrative Costs..--
              (1) Study.--The Comptroller General of the United States
            shall conduct a study of the administration of the Medicaid
            program by the Department of Health and Human Services, State
            Medicaid agencies, and local government agencies. The report
            shall address the following issues:
                      (A) The extent to which federal funds for each
                    administrative function, such as survey and
                    certification and claims processing, are being used
                    effectively and efficiently.
                      (B) The administrative functions on which federal
                    Medicaid funds are expended and the amounts of such
                    expenditures (whether spent directly or by contract).
              (2) Report.--Not later than February 15, 2011, the
            Comptroller General shall submit to the appropriate committees
            of Congress a report on the study conducted under paragraph
            (1).

    SEC. 1747. EXTENSION OF DELAY IN MANAGED CARE ORGANIZATION PROVIDER TAX
                        ELIMINATION.

      Effective as if included in the enactment of section 6051 of the
    Deficit Reduction Act of 2005 (Public Law 109-171), subsection
    (b)(2)(A) of such section is amended by striking ``October 1, 2009''
    and inserting ``October 1, 2010''.

                      Subtitle F--Waste, Fraud, and Abuse

    SEC. 1751. HEALTH CARE ACQUIRED CONDITIONS.

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

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

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

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

      Section 1902(a) of such Act (42 U.S.C. 42 U.S.C. 1396a(a)), as
    amended by sections 1631(b)(1), 1703, and 1729, is further amended--
              (1) in paragraph (75), by striking at the end ``and'';
              (2) in paragraph (76), by striking at the end the period and
            inserting ``; and''; and
              (3) by inserting after paragraph (76) the following new
            paragraph:
              ``(77) provide that any provider or supplier (other than a
            physician or nursing facility) providing services under such
            plan shall, subject to paragraph (5) of section 1874(d),
            establish a compliance program described in paragraph (1) of
            such section in accordance with such section.''.

    SEC. 1754. OVERPAYMENTS.

      (a) In General.--Section 1903(d)(2)(C) of the Social Security Act (42
    U.S.C. 1396b(d)(2)(C)) is amended--
              (1) in the first sentence, by inserting ``(or of 1 year in
            the case of overpayments due to fraud)'' after ``60 days''; and
              (2) in the second sentence, by striking ``the 60 days'' and
            inserting ``such period''.
      (b) Effective Date.--The amendments made by subsection (a) shall
    apply in the case of overpayments discovered on or after the date of
    the enactment of this Act.

    SEC. 1755. MANAGED CARE ORGANIZATIONS.

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

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

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

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

      (a) State Plan Requirement.--Section 1902(a) of the Social Security
    Act (42 U.S.C. 1396a(a)), as amended by sections 1631(b)(1), 1703(a),
    1729, and 1753, is further amended--
              (1) in paragraph (76), by striking at the end ``and'';
              (2) in paragraph (77), by striking at the end the period and
            inserting ``; and''; and
              (3) by inserting after paragraph (77) the following new
            paragraph:
              ``(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 under this title during
                    such period determined by the Secretary or the State
                    agency to be delinquent;
                      ``(B) is suspended or excluded from participation
                    under or whose participation is terminated under this
                    title during such period; or
                      ``(C) is affiliated with an individual or entity that
                    has been suspended or excluded from participation under
                    this title or whose participation is terminated under
                    this title during such period.''.
      (b) Child Health Plan Requirement.--Section 2107(e)(1)(A) of such Act
    (42 U.S.C. 1397gg(e)(1)(A)), as amended by section 1756(b), is amended
    by striking ``section 1902(a)(39)'' and inserting ``sections
    1902(a)(39) and 1902(a)(78)''.
      (c) Effective Date.--
              (1) Except as provided in paragraph (2), the amendments made
            by this section shall apply to services furnished on or after
            January 1, 2011, without regard to whether or not final
            regulations to carry out such amendments have been promulgated
            by such date.
              (2) In the case of a State plan for medical assistance under
            title XIX of the Social Security Act or a child health plan
            under title XXI of such Act which the Secretary of Health and
            Human Services determines requires State legislation (other
            than legislation appropriating funds) in order for the plan to
            meet the additional requirement imposed by the amendments made
            by this section, the State plan or child health plan shall not
            be regarded as failing to comply with the requirements of such
            title solely on the basis of its failure to meet this
            additional requirement before the first day of the first
            calendar quarter beginning after the close of the first regular
            session of the State legislature that begins after the date of
            the enactment of this Act. For purposes of the previous
            sentence, in the case of a State that has a 2-year legislative
            session, each year of such session shall be deemed to be a
            separate regular session of the State legislature.

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

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

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

      (a) In General.--Section 1902(a) of the Social Security Act (42
    U.S.C. 42 U.S.C. 1396a(a)), as amended by sections 1631(b), 1703(a),
    1729, 1753, and 1757(a), is further amended--
              (1) in paragraph (77); by striking at the end ``and'';
              (2) in paragraph (78), by striking the period at the end and
            inserting ``and''; and
              (3) by inserting after paragraph (78) the following new
            paragraph:
              ``(79) provide that any agent, clearinghouse, or other
            alternate payee that submits claims on behalf of a health care
            provider must register with the State and the Secretary in a
            form and manner specified by the Secretary under section
            1866(j)(1)(D).''.
      (b) Denial of Payment.--Section 1903(i) of such Act (42 U.S.C.
    1396b(i)), as amended by section 1751, is amended--
              (1) by striking ``or'' at the end of paragraph (24);
              (2) by striking the period at the end of paragraph (25) and
            inserting ``; or''; and
              (3) by inserting after paragraph (25) the following new
            paragraph:
              ``(26) with respect to any amount paid to a billing agent,
            clearinghouse, or other alternate payee that is not registered
            with the State and the Secretary as required under section
            1902(a)(79).''.
      (c) Effective Date.--
              (1) Except as provided in paragraph (2), the amendments made
            by this section shall apply to claims submitted on or after
            January 1, 2012, without regard to whether or not final
            regulations to carry out such amendments have been promulgated
            by such date.
              (2) In the case of a State plan for medical assistance under
            title XIX of the Social Security Act which the Secretary of
            Health and Human Services determines requires State legislation
            (other than legislation appropriating funds) in order for the
            plan to meet the additional requirement imposed by the
            amendments made by this section, the State plan or child health
            plan shall not be regarded as failing to comply with the
            requirements of such title solely on the basis of its failure
            to meet this additional requirement before the first day of the
            first calendar quarter beginning after the close of the first
            regular session of the State legislature that begins after the
            date of the enactment of this Act. For purposes of the previous
            sentence, in the case of a State that has a 2-year legislative
            session, each year of such session shall be deemed to be a
            separate regular session of the State legislature.

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

      (a) In General.--Section 1903(i) of the Social Security Act (42
    U.S.C. 1396b(i)), as amended by sections 1751(a) and 1759(b), is
    amended--
              (1) by striking ``or'' at the end of paragraph (25);
              (2) by striking the period at the end of paragraph (26) and
            inserting ``; or''; and
              (3) by inserting after paragraph (26) the following new
            paragraph:
              ``(27) with respect to any amount expended--
                      ``(A) on litigation in which a court imposes
                    sanctions on the State, its employees, or its counsel
                    for litigation-related misconduct; or
                      ``(B) to reimburse (or otherwise compensate) a
                    managed care entity for payment of legal expenses
                    associated with any action in which a court imposes
                    sanctions on the managed care entity for litigation-
                    related misconduct.''.
      (b) Effective Date.--The amendments made by subsection (a) shall
    apply to amounts expended on or after January 1, 2010.

    SEC. 1761. MANDATORY STATE USE OF NATIONAL CORRECT CODING INITIATIVE.

      (a) In General.--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
                    semicolon; 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 (3);''; and
              (2) by adding at the end the following new paragraph:
      ``(3) Not later than September 1, 2010, the Secretary shall do the
    following:
              ``(A) 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.
              ``(B) 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.
              ``(C) 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.
              ``(D) Submit a report to Congress that includes the notice to
            States under subparagraph (C) and an analysis supporting the
            identification of the methodologies made under subparagraphs
            (A) and (B).''.
      (b) Extension for State Law Amendment.--In the case of a State plan
    under title XIX of the Social Security Act (42 U.S.C. 1396 et seq.)
    which the Secretary of Health and Human Services determines requires
    State legislation in order for the plan to meet the additional
    requirements imposed by the amendment made by subsection (a)(1)(C), the
    State plan shall not be regarded as failing to comply with the
    requirements of such title solely on the basis of its failure to meet
    these additional requirements before the first day of the first
    calendar quarter beginning after the close of the first regular session
    of the State legislature that begins after the date of 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 the session is
    considered to be a separate regular session of the State legislature.

                    Subtitle G--Payments to the Territories

    SEC. 1771. PAYMENT TO TERRITORIES.

      (a) Increase in Cap.--Section 1108 of the Social Security Act (42
    U.S.C. 1308) is amended--
              (1) in subsection (f), by striking ``subsection (g)'' and
            inserting ``subsections (g) and (h)'';
              (2) in subsection (g)(1), by striking ``With respect to'' and
            inserting ``Subject to subsection (h), with respect to''; and
              (3) by adding at the end the following new subsection:
      ``(h) Additional Increase for Fiscal Years 2011 Through 2019.--With
    respect to fiscal years 2011 through 2019, the amounts otherwise
    determined under subsections (f) and (g) for Puerto Rico, the Virgin
    Islands, Guam, the Northern Mariana Islands and American Samoa shall be
    increased by the following amounts:
              ``(1) For Puerto Rico, for fiscal year 2011, $727,600,000;
            for fiscal year 2012, $775,000,000; for fiscal year 2013,
            $850,000,000; for fiscal year 2014, $925,000,000; for fiscal
            year 2015, $1,000,000,000; for fiscal year 2016,
            $1,075,000,000; for fiscal year 2017, $1,150,000,000; for
            fiscal year 2018, $1,225,000,000; and for fiscal year 2019,
            $1,396,400,000.
              ``(2) For the Virgin Islands, for fiscal year 2011,
            $34,000,000; for fiscal year 2012, $37,000,000; for fiscal year
            2013, $40,000,000; for fiscal year 2014, $43,000,000; for
            fiscal year 2015, $46,000,000; for fiscal year 2016,
            $49,000,000; for fiscal year 2017, $52,000,000; for fiscal year
            2018, $55,000,000; and for fiscal year 2019, $58,000,000.
              ``(3) For Guam, for fiscal year 2011, $34,000,000; for fiscal
            year 2012, $37,000,000; for fiscal year 2013, $40,000,000; for
            fiscal year 2014, $43,000,000; for fiscal year 2015,
            $46,000,000; for fiscal year 2016, $49,000,000; for fiscal year
            2017, $52,000,000; for fiscal year 2018, $55,000,000; and for
            fiscal year 2019, $58,000,000.
              ``(4) For the Northern Mariana Islands, for fiscal year 2011,
            $13,500,000; fiscal year 2012, $14,500,000; for fiscal year
            2013, $15,500,000; for fiscal year 2014, $16,500,000; for
            fiscal year 2015, $17,500,000; for fiscal year 2016,
            $18,500,000; for fiscal year 2017, $19,500,000; for fiscal year
            2018, $21,000,000; and for fiscal year 2019, $22,000,000.
              ``(5) For American Samoa, fiscal year 2011, $22,000,000;
            fiscal year 2012, $23,687,500; for fiscal year 2013,
            $24,687,500; for fiscal year 2014, $25,687,500; for fiscal year
            2015, $26,687,500; for fiscal year 2016, $27,687,500; for
            fiscal year 2017, $28,687,500; for fiscal year 2018,
            $29,687,500; and for fiscal year 2019, $30,687,500.''.
      (b) Report on Achieving Medicaid Parity Payments Beginning With
    Fiscal Year 2020.--
              (1) In general.--Not later than October 1, 2013, the
            Secretary of Health and Human Services shall submit to Congress
            a report that details a plan for the transition of each
            territory to full parity in Medicaid with the 50 States and the
            District of Columbia in fiscal year 2020 by modifying their
            existing Medicaid programs and outlining actions the Secretary
            and the governments of each territory must take by fiscal year
            2020 to ensure parity in financing. Such report shall include
            what the Federal medical assistance percentages would be for
            each territory if the formula applicable to the 50 States were
            applied. Such report shall also include any recommendations
            that the Secretary may have as to whether the mandatory ceiling
            amounts for each territory provided for in section 1108 of the
            Social Security Act (42 U.S.C. 1308) should be increased any
            time before fiscal year 2020 due to any factors that the
            Secretary deems relevant.
              (2) Per capita data.--As part of such report the Secretary
            shall include information about per capita income data that
            could be used to calculate Federal medical assistance
            percentages under section 1905(b) of the Social Security Act,
            under section 1108(a)(8)(B) of such Act, for each territory on
            how such data differ from the per capita income data used to
            promulgate Federal medical assistance percentages for the 50
            States. The report under this subsection shall include
            recommendations on how the Federal medical assistance
            percentages can be calculated for the territories beginning in
            fiscal year 2020 to ensure parity with the 50 States.
              (3) Subsequent reports.--The Secretary shall submit
            subsequent reports to Congress in 2015, 2017, and 2019
            detailing the progress that the Secretary and the governments
            of each territory have made in fulfilling the actions outlined
            in the plan submitted under paragraph (1).
      (c) Application of FMAP for Additional Funds.--Section 1905(b) of
    such Act (42 U.S.C. 1396d(b)) is amended by adding at the end the
    following sentence: ``Notwithstanding the first sentence of this
    subsection and any other provision of law, for fiscal years 2011
    through 2019, the Federal medical assistance percentage for Puerto
    Rico, the Virgin Islands, Guam, the Northern Mariana Islands, and
    American Samoa shall be the highest Federal medical assistance
    percentage applicable to any of the 50 States or the District of
    Columbia for the fiscal year involved, taking into account the
    application of subsections (a) and (b)(1) of section 5001 of division B
    of the American Recovery and Reinvestment Act of 2009 (Public Law 111-
    5) to such States and the District for calendar quarters during such
    fiscal years for which such subsections apply.''.
      (d) Waivers.--
              (1) In general.--Section 1902(j) of the Social Security Act
            (42 U.S.C. 1396a(j)) is amended--
                      (A) by striking ``American Samoa and the Northern
                    Mariana Islands'' and inserting ``Puerto Rico, the
                    Virgin Islands, Guam, the Northern Mariana Islands, and
                    American Samoa''; and
                      (B) by striking ``American Samoa or the Northern
                    Mariana Islands'' and inserting ``Puerto Rico, the
                    Virgin Islands, Guam, the Northern Mariana Islands, or
                    American Samoa''.
              (2) Effective date.--The amendments made by paragraph (1)
            shall apply beginning with fiscal year 2011.
      (e) Technical Assistance.--The Secretary shall provide technical
    assistance to the governments of Puerto Rico, the Virgin Islands, Guam,
    the Northern Mariana Islands, and American Samoa in upgrading their
    existing computer systems in order to anticipate meeting reporting
    requirements necessary to implement the plan contained in the report
    under subsection (b)(1). The provision of such technical assistance
    shall not be counted against any limitation on payment to the
    territories under section 1108 of the Social Security Act.

                           Subtitle H--Miscellaneous

    SEC. 1781. TECHNICAL CORRECTIONS.

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

    SEC. 1782. EXTENSION OF QI PROGRAM.

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

    SEC. 1783. OUTREACH AND ENROLLMENT OF MEDICAID AND CHIP ELIGIBLE
                        INDIVIDUALS.

      (a) In General.--Not later than 12 months after date of enactment of
    this Act, the Secretary of Health and Human Services shall issue
    guidance regarding standards and best practices for conducting outreach
    to inform eligible individuals about healthcare coverage under Medicaid
    under title XIX of the Social Security Act or for child health
    assistance under CHIP under title XXI of such Act, providing assistance
    to such individuals for enrollment in applicable programs, and
    establishing methods or procedures for eliminating application and
    enrollment barriers. Such guidance shall include provisions to ensure
    that outreach, enrollment assistance, and administrative simplification
    efforts are targeted specifically to vulnerable populations such as
    children, unaccompanied homeless youth, victims of abuse or trauma,
    individuals with mental health or substance related disorders, and
    individuals with HIV/AIDS. Guidance issued pursuant to this section
    relating to methods to increase outreach and enrollment provided for
    under titles XIX and XXI of the Social Security Act shall specifically
    target such vulnerable and underserved populations and shall include,
    but not be limited to, guidance on outstationing of eligibility
    workers, express lane eligibility, residence requirements,
    documentation of income and assets, presumptive eligibility, continuous
    eligibility, and automatic renewal.
      (b) Implementation.--In implementing the requirements under
    subsection (a), the Secretary may use such authorities as are available
    under law and may work with such entities as the Secretary deems
    appropriate to facilitate effective implementation of such programs.
    Not later than 2 years after the enactment of this Act and annually
    thereafter, the Secretary shall review and report to Congress on
    progress in implementing targeted outreach, application and enrollment
    assistance, and administrative simplification methods for such
    vulnerable and underserved populations as are specified in subsection
    (a).

    SEC. 1784. PROHIBITIONS ON FEDERAL MEDICAID AND CHIP PAYMENT FOR
                        UNDOCUMENTED ALIENS.

      Nothing in this title shall change current prohibitions against
    Federal Medicaid and CHIP payments under titles XIX and XXI of the
    Social Security Act on behalf of individuals who are not lawfully
    present in the United States.

    SEC. 1785. DEMONSTRATION PROJECT FOR STABILIZATION OF EMERGENCY MEDICAL
                        CONDITIONS BY NONPUBLICLY OWNED OR OPERATED
                        INSTITUTIONS FOR MENTAL DISEASES.

      (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
    reimbursement 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 an
    individual who--
              (1) has attained age 21, but has not attained age 65;
              (2) is eligible for medical assistance under such plan; and
              (3) requires such medical assistance to stabilize an
            emergency medical condition.
      (b) In-stay Review.--The Secretary shall establish a mechanism for
    in-stay review to determine whether or not the patient has 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
    these benefits under the project 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) Application.--Upon approval of an application submitted
            by a State described in paragraph (2), the State shall be an
            eligible State for purposes of conducting a demonstration
            project under this section.
              (2) State described.--States shall be selected by the
            Secretary in a manner so as to provide geographic diversity on
            the basis of the application to conduct a demonstration project
            under this section submitted by such States.
      (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 2010.
                      (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) 3-year availability.--Funds appropriated under paragraph
            (1) shall remain available for obligation through December 31,
            2012.
              (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, 2012.
              (4) Funds allocated to states.--The Secretary shall allocate
            funds to eligible States based on their applications and the
            availability of funds.
              (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).
      (f) Reports.--
              (1) Annual progress reports.--The Secretary shall submit
            annual reports to Congress on the progress of the demonstration
            project conducted under this section.
              (2) Final report and recommendation.--An evaluation shall be
            conducted of the demonstration project's impact on the
            functioning of the health and mental health service system and
            on individuals enrolled in the Medicaid program. This
            evaluation shall include collection of baseline data for one-
            year prior to the initiation of the demonstration project as
            well as collection of data from matched comparison states not
            participating in the demonstration. The evaluation measures
            shall include the following:
                      (A) A determination, by State, as to whether the
                    demonstration project resulted in increased access to
                    inpatient mental health services under the Medicaid
                    program and whether average length of stays were longer
                    (or shorter) for individuals admitted under the
                    demonstration project compared with individuals
                    otherwise admitted in comparison sites.
                      (B) An analysis, by State, regarding whether the
                    demonstration project produced a significant reduction
                    in emergency room visits for individuals eligible for
                    assistance under the Medicaid program or in the
                    duration of emergency room lengths of stay.
                      (C) An assessment of discharge planning by
                    participating hospitals that ensures access to further
                    (non-emergency) inpatient or residential care as well
                    as continuity of care for those discharged to
                    outpatient care.
                      (D) 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) under the plan as contrasted with the comparison
                    areas.
                      (E) Data on 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.
                      (F) A recommendation regarding whether the
                    demonstration project should be continued after
                    December 31, 2012, and expanded on a national basis.
      (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.
      (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 to 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.).

                    [TITLE VIII--REVENUE-RELATED PROVISIONS]

      [For title VIII, see text of bill as introduced on July 14, 2009.]

                       TITLE IX--MISCELLANEOUS PROVISIONS

    SEC. 1901. REPEAL OF TRIGGER PROVISION.

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

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

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

    SEC. 1903. EXTENSION OF GAINSHARING DEMONSTRATION.

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

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

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

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

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

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

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

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

    SEC. 1906. STANDARDIZED MARKETING REQUIREMENTS UNDER THE MEDICARE
                        ADVANTAGE AND MEDICARE PRESCRIPTION DRUG PROGRAMS.

      (a) Medicare Advantage Program.--
              (1) In general.--Section 1856 of the Social Security Act (42
            U.S.C. 1395w-26) is amended--
                      (A) in subsection (b)(1), by inserting ``or
                    subsection (c)'' after ``subsection (a)''; and
                      (B) by adding at the end the following new
                    subsection:
      ``(c) Standardized Marketing Requirements.--
              ``(1) Development by the naic.--
                      ``(A) Requirements.--The Secretary shall request the
                    National Association of Insurance Commissioners (in
                    this subsection referred to as the `NAIC') to--
                              ``(i) develop standardized marketing
                            requirements for Medicare Advantage
                            organizations with respect to Medicare
                            Advantage plans and PDP sponsors with respect
                            to prescription drug plans under part D; and
                              ``(ii) submit a report containing such
                            requirements to the Secretary by not later than
                            the date that is 9 months after the date of the
                            enactment of this subsection.
                      ``(B) Prohibited activities.--Such requirements shall
                    include prohibitions on the prohibited activities
                    described in section 1851(j)(1).
                      ``(C) Limitations.--Such requirements shall establish
                    limitations that include at least the limitations
                    described in section 1851(j)(2), except for those
                    relating to compensation.
                      ``(D) Election form.--Such requirements may prohibit
                    a Medicare Advantage organization or a PDP sponsor (or
                    an agent of such an organization or sponsor) from
                    completing any portion of any election form used to
                    carry out elections under section 1851 or 1860D-1 on
                    behalf of any individual.
                      ``(E) Agent and broker commissions and
                    compensation.--Such requirements shall establish
                    standards--
                              ``(i) for fair and appropriate commissions
                            for agents and brokers of Medicare Advantage
                            organizations and PDP sponsors, including a
                            prohibition on extra bonuses or incentives;
                              ``(ii) for the disclosure of such
                            commissions; and
                              ``(iii) for the use of compensation for
                            agents and brokers other than such commissions.
                    Such standards shall ensure that the use of
                    compensation creates incentives for agents and brokers
                    to enroll individuals in the Medicare Advantage plan
                    that is intended to best meet their health care needs.
                      ``(F) Certain conduct of agents.--Such requirements
                    shall address the conduct of agents engaged in on-site
                    promotion at a facility of an organization with which
                    the Medicare Advantage organization or PDP sponsor has
                    a co-branding relationship.
                      ``(G) Other standards.--Such requirements may
                    establish such other standards relating to unfair trade
                    practices and marketing under Medicare Advantage plans
                    and prescription drug plans under part D as the NAIC
                    determines appropriate.
              ``(2) Implementation of requirements.--
                      ``(A) Adoption of naic developed requirements.--If
                    the NAIC develops standardized marketing requirements
                    and submits the report pursuant to paragraph (1), the
                    Secretary shall promulgate regulations for the adoption
                    of such requirements. The Secretary shall ensure that
                    such regulations take effect beginning with the first
                    open enrollment period beginning 12 months after the
                    date of the enactment of this subsection.
                      ``(B) Requirements if naic does not submit report.--
                    If the NAIC does not develop standardized marketing
                    requirements and submit the report pursuant to
                    paragraph (1), the Secretary shall promulgate
                    regulations for standardized marketing requirements for
                    Medicare Advantage organizations with respect to
                    Medicare Advantage plans and PDP sponsors with respect
                    to prescription drug plans under part D. Such
                    regulations shall meet the requirements of
                    subparagraphs (B) through (F) of paragraph (1), and may
                    establish such other standards relating to marketing
                    under Medicare Advantage plans and prescription drug
                    plans as the Secretary determines appropriate. The
                    Secretary shall ensure that such regulations take
                    effect beginning with the first open enrollment period
                    beginning 12 months after the date of the enactment of
                    this subsection.
                      ``(C) Consultation.--In establishing requirements
                    under this subsection, the NAIC or Secretary (as the
                    case may be) shall consult with a working group
                    composed of representatives of Medicare Advantage
                    organizations and PDP sponsors, consumer groups, and
                    other qualified individuals. Such representatives shall
                    be selected in a manner so as to insure balanced
                    representation among the interested groups.
              ``(3) State reporting of violations of standardized marketing
            requirements.--The Secretary shall request that States report
            any violations of the standardized marketing requirements under
            the regulations under subparagraph (A) or (B) of paragraph (2)
            to national and regional offices of the Centers for Medicare &
            Medicaid Services.
              ``(4) Report.--The Secretary shall submit an annual report to
            Congress on the enforcement of the standardized marketing
            requirements under the regulations under subparagraph (A) or
            (B) of paragraph (2), together with such recommendations as the
            Secretary determines appropriate. Such report shall include--
                      ``(A) a list of any alleged violations of such
                    requirements reported to the Secretary by a State, a
                    Medicare Advantage organization, or a PDP sponsor; and
                      ``(B) the disposition of such reported violations.''.
              (2) State authority to enforce standardized marketing
            requirements.--
                      (A) In general.--Section 1856(b)(3) of the Social
                    Security Act (42 U.S.C. 1395w-26(b)(3)) is amended--
                              (i) by striking ``or State'' and inserting
                            ``, State''; and
                              (ii) by inserting ``, or State laws or
                            regulations enacting the standardized marketing
                            requirements under subsection (c)'' after
                            ``plan solvency''.
                      (B) No preemption of state sanctions.--Nothing in
                    title XVIII of the Social Security Act or the
                    provisions of, or amendments made by, this Act, shall
                    be construed to prohibit a State from conducting a
                    market conduct examination or from imposing sanctions
                    against Medicare Advantage organizations, PDP sponsors,
                    or agents or brokers of such organizations or sponsors
                    for violations of the standardized marketing
                    requirements under subsection (c) of section 1856 of
                    the Social Security Act (as added by paragraph (1)) as
                    enacted by that State.
              (3) Conforming amendment.--Section 1851(h)(4) of the Social
            Security Act (42 U.S.C. 1395w-21(h)(4)) is amended by adding at
            the end the following flush sentence:
            ``Beginning on the effective date of the implementation of the
            regulations under subparagraph (A) or (B) of section
            1856(c)(2), each Medicare Advantage organization with respect
            to a Medicare Advantage plan offered by the organization (and
            agents of such organization) shall comply with the standardized
            marketing requirements under section 1856(c).''.
      (b) Medicare Prescription Drug Program.--Section 1860D-4 of the
    Social Security Act (42 U.S.C. 1395w-104) is amended by adding at the
    end the following new subsection:
      ``(m) Standardized Marketing Requirements.--A PDP sponsor with
    respect to a prescription drug plan offered by the sponsor (and agents
    of such sponsor) shall comply with the standardized marketing
    requirements under section 1856(c).''.

    SEC. 1907. NAIC RECOMMENDATIONS ON THE ESTABLISHMENT OF STANDARDIZED
                        BENEFIT PACKAGES FOR MEDICARE ADVANTAGE PLANS AND
                        PRESCRIPTION DRUG PLANS.

      Not later than 30 days after the date of the enactment of this Act,
    the Secretary of Health and Human Services shall request the National
    Association of Insurance Commissioners to establish a committee to
    study and make recommendations to the Secretary and Congress on--
              (1) the establishment of standardized benefit packages for
            Medicare Advantage plans under part C of title XVIII of the
            Social Security Act and for prescription drug plans under part
            D of such Act; and
              (2) the regulation of such plans.

    SEC. 1908. 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. 1909. 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 subsections (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 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; and
                      (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.
              (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 30 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
                            (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) 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.
                      (B) 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.
              (7) Evaluation and report.--
                      (A) Evaluation.--The Inspector General of the
                    Department of Health and Human Services shall conduct
                    an evaluation of the nationwide program.
                      (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.--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.

    SEC. 1910. ESTABLISHMENT OF CENTER FOR MEDICARE AND MEDICAID PAYMENT
                        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 payment innovation
      ``Sec. 1115A.  (a) Center for Medicare and Medicaid Payment
    Innovation Established.--
              ``(1) In general.--There is created within the Centers for
            Medicare & Medicaid Services a Center for Medicare and Medicaid
            Payment Innovation (in this section referred to as the `CMPI')
            to carry out the duties described in paragraph (4).
              ``(2) Director.--The CMPI shall be headed by a Director who
            shall report directly to the Administrator of the Centers for
            Medicare & Medicaid Services.
              ``(3) Deadline.--The Secretary shall ensure that the CMPI is
            carrying out the duties described in paragraph (4) by not later
            than January 1, 2011.
              ``(4) Duties.--The duties described in this paragraph are the
            following:
                      ``(A) To carry out the duties described in this
                    section.
                      ``(B) Such other duties as the Secretary may specify.
              ``(5) Consultation.--In carrying out the duties under
            paragraph (4), the CMPI shall consult representatives of
            relevant Federal agencies and outside clinical and analytical
            experts with expertise in medicine and health care management.
            The CMPI shall use open door forums or other mechanisms to seek
            input from interested parties.
      ``(b) Testing of Models (Phase I).--
              ``(1) In general.--The CMPI shall test payment models in
            accordance with selection criteria under paragraph (2) to
            determine the effect of applying such models under title XVIII,
            title XIX, or both titles on program expenditures under such
            titles and the quality of care received by individuals
            receiving benefits under such titles.
              ``(2) Selection of models to be tested.--
                      ``(A) In general.--The Secretary shall give
                    preference to testing models for which, as determined
                    by the professional staff at the Centers for Medicare &
                    Medicaid Services and using such input from outside the
                    Centers as the Secretary determines appropriate, 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 Secretary shall focus on models
                    expected to reduce program costs under title XVIII,
                    title XIX, or both titles while preserving or enhancing
                    the quality of care received by individuals receiving
                    benefits under such titles.
                      ``(B) Application to other demonstrations.--The
                    Secretary shall operate the demonstration programs
                    under sections 1222 and 1236 of the America's
                    Affordable Health Choices Act of 2009 through the CMPI
                    in accordance with the rules applicable under this
                    section, including those relating to evaluations,
                    terminations, and expansions.
              ``(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 the model ensure that
                    the model is budget neutral initially with respect to
                    expenditures under titles XVIII and XIX.
                      ``(B) Termination.--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 spending under such titles, certifies), after
                    testing has begun, that the model is expected to--
                              ``(i) improve the quality of patient care (as
                            determined by the Administrator of the Centers
                            for Medicare & Medicaid Services) without
                            increasing spending under such titles;
                              ``(ii) reduce spending under such titles
                            without reducing the quality of patient care;
                            or
                              ``(iii) do both.
                    Such termination may occur at any time after such
                    testing has begun and before completion of the testing.
              ``(4) Evaluation.--The Secretary shall conduct an evaluation
            of each model tested under this subsection. Such evaluation
            shall include an analysis of--
                      ``(A) the quality of patient care furnished under the
                    model, including through the use of patient-level
                    outcomes measures; and
                      ``(B) the changes in spending under titles XVIII and
                    XIX by reason of the model.
            The Secretary shall make the results of each evaluation under
            this paragraph available to the public in a timely fashion.
      ``(c) Expansion of Models (Phase II).--The Secretary may expand the
    duration and the scope of a model that is being tested under subsection
    (b) (including implementation on a nationwide basis), to the extent
    determined appropriate by the Secretary, if--
              ``(1) the Secretary determines that such expansion is
            expected--
                      ``(A) to improve the quality of patient care without
                    increasing spending under titles XVIII and XIX;
                      ``(B) to reduce spending under such titles without
                    reducing the quality of patient care; or
                      ``(C) to do both; and
              ``(2) the Chief Actuary of the Centers for Medicare &
            Medicaid Services certifies that such expansion would reduce
            (or not result in any increase in) net program spending under
            such titles.
      ``(d) Implementation.--
              ``(1) Waiver authority.--The Secretary may waive such
            requirements of title 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 elements, parameters, scope, and duration
                    of such models for testing or dissemination;
                      ``(C) the termination or modification of the design
                    and implementation of a model under subsection
                    (b)(3)(B); and
                      ``(D) 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 paragraphs (1) or (2) of such
                    subsection.
              ``(3) Administration.--Chapter 35 of title 44, United States
            Code shall not apply to this section and testing and evaluation
            of models or expansion of such models under this section.
              ``(4) Funding for testing items and services and
            administrative costs.--There shall be available from the
            Federal Supplementary Medical Insurance Trust Fund for payments
            for designing, conducting, and evaluating payment models, as
            well as for additional benefits for items and services under
            models tested under subsection (b) not otherwise covered under
            this title and the evaluation of such models, $350,000,000 for
            fiscal year 2010 and, for a subsequent fiscal year, the amount
            determined under this sentence for the preceding fiscal year
            increased by the annual percentage rate of increase in total
            expenditures under this title for the previous fiscal year.
            There are also appropriated, from any amounts in the Treasury
            not otherwise appropriated, $25,000,000 for each fiscal year
            (beginning with fiscal year 2010) for administrative costs of
            administering this section with respect to the Medicaid program
            under title XIX of the Social Security Act.
      ``(e) 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 payment models tested under subsection (b), 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 believes 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 sections 1631(b),
    1703(a), 1729, 1753, 1757(a), and 1759(a), is amended--
              (1) in paragraph (78), by striking ``and'' at the end;
              (2) in paragraph (79), by striking the period at the end and
            inserting ``; and''; and
              (3) by inserting after paragraph (79) the following new
            paragraph:
              ``(80) 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.''.

              DIVISION C--PUBLIC HEALTH AND WORKFORCE DEVELOPMENT

    SEC. 2001. TABLE OF CONTENTS; REFERENCES.

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

    Sec. 2001. Table of contents; references.
    Sec. 2002. Public Health Investment Fund.

                       TITLE I--COMMUNITY HEALTH CENTERS

    Sec. 2101. Increased funding.

                              TITLE II--WORKFORCE

                       Subtitle A--Primary Care Workforce

                     Part 1--National Health Service Corps

    Sec. 2201. National Health Service Corps.
    Sec. 2202. Authorizations of appropriations.

                Part 2--Promotion of Primary Care and Dentistry

    Sec. 2211. Frontline health providers.
    Sec. 2212. Primary care student loan funds.
    Sec. 2213. Training in family medicine, general internal medicine,
    general pediatrics, geriatrics, and physician assistants.
    Sec. 2214. Training of medical residents in community-based settings.
    Sec. 2215. Training for general, pediatric, and public health dentists
    and dental hygienists.
    Sec. 2216. Authorization of appropriations.
    Sec. 2217. Study on effectiveness of scholarships and loan repayments.

                         Subtitle B--Nursing Workforce

    Sec. 2221. Amendments to Public Health Service Act.

                      Subtitle C--Public Health Workforce

    Sec. 2231. Public Health Workforce Corps.
    Sec. 2232. Enhancing the public health workforce.
    Sec. 2233. Public health training centers.
    Sec. 2234. Preventive medicine and public health training grant
    program.
    Sec. 2235. Authorization of appropriations.

         Subtitle D--Adapting Workforce to Evolving Health System Needs

               Part 1--Health Professions Training for Diversity

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

                  Part 2--Interdisciplinary Training Programs

    Sec. 2251. Cultural and linguistic competency training for health
    professionals.
    Sec. 2252. Innovations in interdisciplinary care training.

         Part 3--Advisory Committee on Health Workforce Evaluation and
                                   Assessment

    Sec. 2261. Health workforce evaluation and assessment.

                      Part 4--Health Workforce Assessment

    Sec. 2271. Health workforce assessment.

                    Part 5--Authorization of Appropriations

    Sec. 2281. Authorization of appropriations.

                       TITLE III--PREVENTION AND WELLNESS

    Sec. 2301. Prevention and wellness.

                     ``TITLE XXXI--PREVENTION AND WELLNESS

                  ``Subtitle A--Prevention and Wellness Trust

            ``Sec. 3111. Prevention and Wellness Trust.

            ``Subtitle B--National Prevention and Wellness Strategy

            ``Sec. 3121. National Prevention and Wellness Strategy.

                      ``Subtitle C--Prevention Task Forces

            ``Sec. 3131. Task Force on Clinical Preventive Services.
            ``Sec. 3132. Task Force on Community Preventive Services.

                 ``Subtitle D--Prevention and Wellness Research

            ``Sec. 3141. Prevention and wellness research activity
                            coordination.
            ``Sec. 3142. Community prevention and wellness research grants.

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

            ``Sec. 3151. Community prevention and wellness services grants.

                ``Subtitle F--Core Public Health Infrastructure

            ``Sec. 3161. Core public health infrastructure for State,
                            local, and tribal health departments.
            ``Sec. 3162. Core public health infrastructure and activities
                            for CDC.

                        ``Subtitle G--General Provisions

            ``Sec. 3171. Definitions.

                       TITLE IV--QUALITY AND SURVEILLANCE

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

                           TITLE V--OTHER PROVISIONS

            Subtitle A--Drug Discount for Rural and Other Hospitals

    Sec. 2501. Expanded participation in 340B program.
    Sec. 2502. Extension of discounts to inpatient drugs.
    Sec. 2503. Effective date.

                              Subtitle B--Programs

                     Part 1--Grants for Clinics and Centers

    Sec. 2511. School-based health clinics.
    Sec. 2512. Nurse-managed health centers.
    Sec. 2513. Federally qualified behavioral health centers.

                          Part 2--Other Grant Programs

    Sec. 2521. Comprehensive programs to provide education to nurses and
    create a pipeline to nursing.
    Sec. 2522. Mental and behavioral health training.
    Sec. 2523. Programs to increase awareness of advance care planning
    issues.
    Sec. 2524. Reauthorization of telehealth and telemedicine grant
    programs.
    Sec. 2525. No child left unimmunized against influenza: demonstration
    program using elementary and secondary schools as influenza vaccination
    centers.
    Sec. 2526. Extension of Wisewoman Program.
    Sec. 2527. Healthy teen initiative to prevent teen pregnancy.
    Sec. 2528. National training initiative on autism supplemental grants
    and technical assistance.
    Sec. 2529. Implementation of medication management services in
    treatment of chronic diseases.
    Sec. 2530. Postpartum depression.
    Sec. 2531. Grants to promote positive health behaviors and outcomes.

                    Part 3--Emergency Care-related Programs

    Sec. 2541. Trauma care centers.
    Sec. 2542. Emergency care coordination.
    Sec. 2543. Pilot programs to improve emergency medical care.
    Sec. 2544. Assisting veterans with military emergency medical training
    to become State-licensed or certified emergency medical technicians
    (EMTs).
    Sec. 2545. Dental emergency responders: public health and medical
    response.
    Sec. 2546. Dental emergency responders: homeland security.

                   Part 4--Pain Care and Management Programs

    Sec. 2551. Institute of Medicine Conference on Pain.
    Sec. 2552. Pain research at National Institutes of Health.
    Sec. 2553. Public awareness campaign on pain management.

                    Subtitle C--Food and Drug Administration

                               Part 1--In General

    Sec. 2561. National medical device registry.
    Sec. 2562. Nutrition labeling of standard menu items at chain
    restaurants and of articles of food sold from vending machines.
    Sec. 2563. Protecting consumer access to generic drugs.

                              Part 2--Biosimilars

    Sec. 2565. Licensure pathway for biosimilar biological products.
    Sec. 2566. Fees relating to biosimilar biological products.

         Subtitle D--Community Living Assistance Services and Supports

    Sec. 2571. Establishment of national voluntary insurance program for
    purchasing community living assistance services and supports.

                           Subtitle E--Miscellaneous

    Sec. 2581. States failing to adhere to certain employment obligations.
    Sec. 2582. Study, report, and termination of duplicative grant
    programs.
    Sec. 2583. Health centers under Public Health Service Act; liability
    protections for volunteer practitioners.
    Sec. 2584. Report to Congress on the current state of parasitic
    diseases that have been overlooked among the poorest Americans.
    Sec. 2585. Study of impact of optometrists on access to health care and
    on availability of support under Federal health programs for optometry.
      (b) References.--Except as otherwise specified, whenever in this
    division an amendment is expressed in terms of an amendment to a
    section or other provision, the reference shall be considered to be
    made to a section or other provision of the Public Health Service Act
    (42 U.S.C. 201 et seq.).

    SEC. 2002. PUBLIC HEALTH INVESTMENT FUND.

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

                       TITLE I--COMMUNITY HEALTH CENTERS

    SEC. 2101. INCREASED FUNDING.

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

                              TITLE II--WORKFORCE

                       Subtitle A--Primary Care Workforce

                     PART 1--NATIONAL HEALTH SERVICE CORPS

    SEC. 2201. NATIONAL HEALTH SERVICE CORPS.

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

    SEC. 2202. AUTHORIZATIONS OF APPROPRIATIONS.

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

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

      ``For the purpose of carrying out this subpart, in addition to any
    other amounts authorized to be appropriated for such purpose, there are
    authorized to be appropriated, out of any monies in the Public Health
    Investment Fund, the following:
              ``(1) $254,000,000 for fiscal year 2010.
              ``(2) $266,000,000 for fiscal year 2011.
              ``(3) $278,000,000 for fiscal year 2012.
              ``(4) $292,000,000 for fiscal year 2013.
              ``(5) $306,000,000 for fiscal year 2014.''.

                PART 2--PROMOTION OF PRIMARY CARE AND DENTISTRY

    SEC. 2211. FRONTLINE HEALTH PROVIDERS.

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

                 ``Subpart XI--Health Professional Needs Areas

    ``SEC. 340H. IN GENERAL.

      ``(a) Program.--The Secretary, acting through the Administrator of
    the Health Resources and Services Administration, shall establish a
    program, to be known as the Frontline Health Providers Loan Repayment
    Program, to address unmet health care needs in health professional
    needs areas through loan repayments under section 340I.
      ``(b) Designation of Health Professional Needs Areas.--
              ``(1) In general.--In this subpart, the term `health
            professional needs area' means an area, population, or facility
            that is designated by the Secretary in accordance with
            paragraph (2).
              ``(2) Designation.--To be designated by the Secretary as a
            health professional needs area under this subpart:
                      ``(A) In the case of an area, the area must be a
                    rational area for the delivery of health services.
                      ``(B) The area, population, or facility must have, in
                    one or more health disciplines, specialties, or
                    subspecialties for the population served, as determined
                    by the Secretary--
                              ``(i) insufficient capacity of health
                            professionals; or
                              ``(ii) high needs for health services,
                            including services to address health
                            disparities.
                      ``(C) With respect to the delivery of primary health
                    services, the area, population, or facility must not
                    include a health professional shortage area (as
                    designated under section 332), except that the area,
                    population, or facility may include such a health
                    professional shortage area in which there is an unmet
                    need for such services.
      ``(c) Eligibility.--To be eligible to participate in the Program, an
    individual shall--
              ``(1) hold a degree in a course of study or program (approved
            by the Secretary) from a school defined in section 799B(1)(A)
            (other than a school of public health);
              ``(2) hold a degree in a course of study or program (approved
            by the Secretary) from a school or program defined in
            subparagraph (C), (D), or (E)(4) of section 799B(1), as
            designated by the Secretary;
              ``(3) be enrolled as a full-time student--
                      ``(A) in a school or program defined in subparagraph
                    (C), (D), or (E)(4) of section 799B(1), as designated
                    by the Secretary, or a school described in paragraph
                    (1); and
                      ``(B) in the final year of a course of study or
                    program, offered by such school or program and approved
                    by the Secretary, leading to a degree in a discipline
                    referred to in subparagraph (A) (other than a graduate
                    degree in public health), (C), (D), or (E)(4) of
                    section 799B(1);
              ``(4) be a practitioner described in section 1842(b)(18)(C)
            or 1848(k)(3)(B)(iii) or (iv) of the Social Security Act; or
              ``(5) be a practitioner in the field of respiratory therapy,
            medical technology, or radiologic technology.
      ``(d) Definitions.--In this subpart:
              ``(1) The term `health disparities' has the meaning given to
            the term in section 3171.
              ``(2) The term `primary health services' has the meaning
            given to such term in section 331(a)(3)(D).

    ``SEC. 340I. LOAN REPAYMENTS.

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

    ``SEC. 340J. REPORT.

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

    ``SEC. 340K. ALLOCATION.

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

    SEC. 2212. PRIMARY CARE STUDENT LOAN FUNDS.

      (a) In General.--Section 735 (42 U.S.C. 292y) is amended--
              (1) by redesignating subsection (f) as subsection (g); and
              (2) by inserting after subsection (e) the following:
      ``(f) Determination of Financial Need.--The Secretary--
              ``(1) may require, or authorize a school or other entity to
            require, the submission of financial information to determine
            the financial resources available to any individual seeking
            assistance under this subpart; and
              ``(2) shall take into account the extent to which such
            individual is financially independent in determining whether to
            require or authorize the submission of such information
            regarding such individual's family members.''.
      (b) Revised Guidelines.--The Secretary of Health and Human Services
    shall--
              (1) strike the second sentence of section 57.206(b) of title
            42, Code of Federal Regulations; and
              (2) make such other revisions to guidelines and regulations
            in effect as of the date of the enactment of this Act as may be
            necessary for consistency with the amendments made by paragraph
            (1).

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

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

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

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

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

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

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

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

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

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

    SEC. 2216. AUTHORIZATION OF APPROPRIATIONS.

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

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

      ``(a) Promotion of Primary Care and Dentistry.--For the purpose of
    carrying out subpart XI of part D of title III and sections 747, 748,
    and 749, in addition to any other amounts authorized to be appropriated
    for such purpose, there are authorized to be appropriated, out of any
    monies in the Public Health Investment Fund, the following:
              ``(1) $240,000,000 for fiscal year 2010.
              ``(2) $253,000,000 for fiscal year 2011.
              ``(3) $265,000,000 for fiscal year 2012.
              ``(4) $278,000,000 for fiscal year 2013.
              ``(5) $292,000,000 for fiscal year 2014.''.
      (b) Existing Authorization of Appropriations.--Subsection (g), as so
    redesignated, of section 747 (42 U.S.C. 293k) is amended by striking
    ``2002'' and inserting ``2014''.

    SEC. 2217. STUDY ON EFFECTIVENESS OF SCHOLARSHIPS AND LOAN REPAYMENTS.

      Not later than 18 months after the date of the enactment of this Act,
    the Comptroller General of the United States shall conduct a study to
    determine the effectiveness of scholarship and loan repayment programs
    under subparts III and XI of part D of title III of the Public Health
    Service Act, as amended or added by sections 2201 and 2211, including
    whether scholarships or loan repayments are more effective in--
              (1) incentivizing physicians, and other providers, to pursue
            careers in primary care specialties;
              (2) retaining such primary care providers; and
              (3) encouraging such primary care providers to practice in
            underserved areas.

                         Subtitle B--Nursing Workforce

    SEC. 2221. AMENDMENTS TO PUBLIC HEALTH SERVICE ACT.

      (a) Definitions.--Section 801 (42 U.S.C. 296 et seq.) is amended--
              (1) in paragraph (1), by inserting ``nurse-managed health
            centers,'' after ``nursing centers,''; and
              (2) by adding at the end the following:
              ``(16) Nurse-managed health center.--The term `nurse-managed
            health center' means a nurse-practice arrangement, managed by
            advanced practice nurses, that provides primary care or
            wellness services to underserved or vulnerable populations and
            is associated with an accredited school of nursing, Federally
            qualified health center, or independent nonprofit health or
            social services agency.''.
      (b) Grants for Health Professions Education.--Title VIII (42 U.S.C.
    296 et seq.) is amended by striking section 807.
      (c) Reports.--Part A of title VIII (42 U.S.C. 296 et seq.) is amended
    by adding at the end the following:

    ``SEC. 809. REPORTS.

      ``The Secretary shall submit to the Congress a separate annual report
    on the activities carried out under each of sections 811, 821, 836,
    846A, and 861.''.
      (d) Advanced Education Nursing Grants.--Section 811(f) (42 U.S.C.
    296j(f)) is amended--
              (1) by striking paragraph (2);
              (2) by redesignating paragraph (3) as paragraph (2); and
              (3) in paragraph (2), as so redesignated, by striking ``that
            agrees'' and all that follows through the end and inserting:
            ``that agrees to expend the award--
                      ``(A) to train advanced education nurses who will
                    practice in health professional shortage areas
                    designated under section 332; or
                      ``(B) to increase diversity among advanced education
                    nurses.''.
      (e) Nurse Education, Practice, and Retention Grants.--Section 831 (42
    U.S.C. 296p) is amended--
              (1) in subsection (b), by amending paragraph (3) to read as
            follows:
              ``(3) providing coordinated care, quality care, and other
            skills needed to practice nursing; or''; and
              (2) by striking subsection (e) and redesignating subsections
            (f) through (h) as subsections (e) through (g), respectively.
      (f) Student Loans.--Subsection (a) of section 836 (42 U.S.C. 297b) is
    amended--
              (1) by striking ``$2,500'' and inserting ``$3,300'';
              (2) by striking ``$4,000'' and inserting ``$5,200'';
              (3) by striking ``$13,000'' and inserting ``$17,000''; and
              (4) by adding at the end the following: ``Beginning with
            fiscal year 2012, the dollar amounts specified in this
            subsection shall be adjusted by an amount determined by the
            Secretary on an annual basis to reflect inflation.''.
      (g) Loan Repayment.--Section 846 (42 U.S.C. 297n) is amended--
              (1) in subsection (a), by amending paragraph (3) to read as
            follows:
              ``(3) who enters into an agreement with the Secretary to
            serve for a period of not less than 2 years--
                      ``(A) as a nurse at a health care facility with a
                    critical shortage of nurses; or
                      ``(B) as a faculty member at an accredited school of
                    nursing;''; and
              (2) in subsection (g)(1), by striking ``to provide health
            services'' each place it appears and inserting ``to provide
            health services or serve as a faculty member''.
      (h) Nurse Faculty Loan Program.--Paragraph (2) of section 846A(c) (42
    U.S.C. 297n-1(c)) is amended by striking ``$30,000'' and all that
    follows through the semicolon and inserting ``$35,000, plus, beginning
    with fiscal year 2012, an amount determined by the Secretary on an
    annual basis to reflect inflation;''.
      (i) Public Service Announcements.--Title VIII (42 U.S.C. 296 et seq.)
    is amended by striking part H.
      (j) Technical and Conforming Amendments.--Title VIII (42 U.S.C. 296
    et seq.) is amended--
              (1) by moving section 810 (relating to prohibition against
            discrimination by schools on the basis of sex) so that it
            follows section 809, as added by subsection (c);
              (2) in sections 835, 836, 838, 840, and 842, by striking the
            term ``this subpart'' each place it appears and inserting
            ``this part'';
              (3) in section 836(h), by striking the last sentence;
              (4) in section 836, by redesignating subsection (l) as
            subsection (k);
              (5) in section 839, by striking ``839'' and all that follows
            through ``(a)'' and inserting ``839. (a)'';
              (6) in section 835(b), by striking ``841'' each place it
            appears and inserting ``871'';
              (7) by redesignating section 841 as section 871, moving part
            F to the end of the title, and redesignating such part as part
            H;
              (8) in part G--
                      (A) by redesignating section 845 as section 851; and
                      (B) by redesignating part G as part F; and
              (9) in part I--
                      (A) by redesignating section 855 as section 861; and
                      (B) by redesignating part I as part G.
      (k) Funding.--
              (1) In general.--Part H, as redesignated, of title VIII is
            amended by adding at the end the following:

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

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

    ``SEC. 871. FUNDING.

      ``For the purpose of carrying out parts B, C, and D (subject to
    section 845(g)), there are authorized to be appropriated such sums as
    may be necessary for each fiscal year through fiscal year 2014.''.

                      Subtitle C--Public Health Workforce

    SEC. 2231. PUBLIC HEALTH WORKFORCE CORPS.

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

                     ``Subpart XII--Public Health Workforce

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

      ``(a) Establishment.--There is established, within the Service, the
    Public Health Workforce Corps (in this subpart referred to as the
    `Corps'), for the purpose of ensuring an adequate supply of public
    health professionals throughout the Nation. The Corps shall consist
    of--
              ``(1) such officers of the Regular and Reserve Corps of the
            Service as the Secretary may designate;
              ``(2) such civilian employees of the United States as the
            Secretary may appoint; and
              ``(3) such other individuals who are not employees of the
            United States.
      ``(b) Administration.--Except as provided in subsection (c), the
    Secretary shall carry out this subpart acting through the Administrator
    of the Health Resources and Services Administration.
      ``(c) Placement and Assignment.--The Secretary, acting through the
    Director of the Centers for Disease Control and Prevention, shall
    develop a methodology for placing and assigning Corps participants as
    public health professionals. Such methodology may allow for placing and
    assigning such participants in State, local, and tribal health
    departments and Federally qualified health centers (as defined in
    section 1861(aa)(4) of the Social Security Act).
      ``(d) Application of Certain Provisions.--The provisions of subpart
    II shall, except as inconsistent with this subpart, apply to the Public
    Health Workforce Corps in the same manner and to the same extent as
    such provisions apply to the National Health Service Corps established
    under section 331.
      ``(e) Report.--The Secretary shall submit to the Congress an annual
    report on the programs carried out under this subpart.

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

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

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

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

    SEC. 2232. ENHANCING THE PUBLIC HEALTH WORKFORCE.

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

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

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

    SEC. 2233. PUBLIC HEALTH TRAINING CENTERS.

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

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

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

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

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

    SEC. 2235. AUTHORIZATION OF APPROPRIATIONS.

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

         Subtitle D--Adapting Workforce to Evolving Health System Needs

               PART 1--HEALTH PROFESSIONS TRAINING FOR DIVERSITY

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

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

    SEC. 2242. NURSING WORKFORCE DIVERSITY GRANTS.

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

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

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

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

      ``The Secretary shall, to the extent practicable, coordinate the
    activities carried out under this part and section 821 in order to
    enhance the effectiveness of such activities and avoid duplication of
    effort.''.
      (b) Report.--Section 736 (42 U.S.C. 293) is amended--
              (1) by redesignating subsection (h) as subsection (i); and
              (2) by inserting after subsection (g) the following:
      ``(h) Report.--The Secretary shall submit to the Congress an annual
    report on the activities carried out under this section.''.

                  PART 2--INTERDISCIPLINARY TRAINING PROGRAMS

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

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

    SEC. 2252. INNOVATIONS IN INTERDISCIPLINARY CARE TRAINING.

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

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

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

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

    SEC. 2261. HEALTH WORKFORCE EVALUATION AND ASSESSMENT.

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

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

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

                      PART 4--HEALTH WORKFORCE ASSESSMENT

    SEC. 2271. HEALTH WORKFORCE ASSESSMENT.

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

                    PART 5--AUTHORIZATION OF APPROPRIATIONS

    SEC. 2281. AUTHORIZATION OF APPROPRIATIONS.

      (a) In General.--Section 799C, as added and amended, is further
    amended by adding at the end the following:
      ``(c) Health Professions Training for Diversity.--For the purpose of
    carrying out sections 736, 737, 738, 739, and 739A, in addition to any
    other amounts authorized to be appropriated for such purpose, there are
    authorized to be appropriated, out of any monies in the Public Health
    Investment Fund, the following:
              ``(1) $90,000,000 for fiscal year 2010.
              ``(2) $97,000,000 for fiscal year 2011.
              ``(3) $100,000,000 for fiscal year 2012.
              ``(4) $104,000,000 for fiscal year 2013.
              ``(5) $110,000,000 for fiscal year 2014.
      ``(d) Interdisciplinary Training Programs, Advisory Committee on
    Health Workforce Evaluation and Assessment, and Health Workforce
    Assessment.--For the purpose of carrying out sections 741, 759, 761,
    and 764, in addition to any other amounts authorized to be appropriated
    for such purpose, there are authorized to be appropriated, out of any
    monies in the Public Health Investment Fund, the following:
              ``(1) $87,000,000 for fiscal year 2010.
              ``(2) $97,000,000 for fiscal year 2011.
              ``(3) $103,000,000 for fiscal year 2012.
              ``(4) $105,000,000 for fiscal year 2013.
              ``(5) $113,000,000 for fiscal year 2014.''.
      (b) Existing Authorizations of Appropriations.--
              (1) Section 736.--Paragraph (1) of section 736(i) (42 U.S.C.
            293(h)), as redesignated, is amended by striking ``2002'' and
            inserting ``2014''.
              (2) Sections 737, 738, and 739.--Subsections (a), (b), and
            (c) of section 740 are amended by striking ``2002'' each place
            it appears and inserting ``2014''.
              (3) Section 741.--Subsection (h), as so redesignated, of
            section 741 is amended--
                      (A) by striking ``and'' after ``fiscal year 2003,'';
                    and
                      (B) by inserting ``, and such sums as may be
                    necessary for subsequent fiscal years through the end
                    of fiscal year 2014'' before the period at the end.
              (4) Section 761.--Subsection (e)(1), as so redesignated, of
            section 761 is amended by striking ``2002'' and inserting
            ``2014''.

                       TITLE III--PREVENTION AND WELLNESS

    SEC. 2301. PREVENTION AND WELLNESS.

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

                     ``TITLE XXXI--PREVENTION AND WELLNESS

                  ``Subtitle A--Prevention and Wellness Trust

    ``SEC. 3111. PREVENTION AND WELLNESS TRUST.

      ``(a) Deposits Into Trust.--There is established a Prevention and
    Wellness Trust. There are authorized to be appropriated to the Trust--
              ``(1) amounts described in section 2002(b)(2)(A)(ii) of the
            America's Affordable Health Choices Act of 2009 for each fiscal
            year; and
              ``(2) in addition, out of any monies in the Public Health
            Investment Fund--
                      ``(A) for fiscal year 2010, $2,400,000,000;
                      ``(B) for fiscal year 2011, $2,845,000,000;
                      ``(C) for fiscal year 2012, $3,100,000,000;
                      ``(D) for fiscal year 2013, $3,455,000,000; and
                      ``(E) for fiscal year 2014, $3,600,000,000.
      ``(b) Availability of Funds.--Amounts in the Prevention and Wellness
    Trust shall be available, as provided in advance in appropriation Acts,
    for carrying out this title.
      ``(c) Allocation.--Of the amounts authorized to be appropriated in
    subsection (a)(2), there are authorized to be appropriated--
              ``(1) for carrying out subtitle C (Prevention Task Forces),
            $30,000,000 for each of fiscal years 2010 through 2014;
              ``(2) for carrying out subtitle D (Prevention and Wellness
            Research)--
                      ``(A) for fiscal year 2010, $100,000,000;
                      ``(B) for fiscal year 2011, $150,000,000;
                      ``(C) for fiscal year 2012, $200,000,000;
                      ``(D) for fiscal year 2013, $250,000,000; and
                      ``(E) for fiscal year 2014, $300,000,000;
              ``(3) for carrying out subtitle E (Delivery of Community
            Preventive and Wellness Services)--
                      ``(A) for fiscal year 2010, $1,065,000,000;
                      ``(B) for fiscal year 2011, $1,260,000,000;
                      ``(C) for fiscal year 2012, $1,365,000,000;
                      ``(D) for fiscal year 2013, $1,570,000,000; and
                      ``(E) for fiscal year 2014, $1,600,000,000;
              ``(4) for carrying out section 3161 (Core Public Health
            Infrastructure for State, Local, and Tribal Health
            Departments)--
                      ``(A) for fiscal year 2010, $800,000,000;
                      ``(B) for fiscal year 2011, $1,000,000,000;
                      ``(C) for fiscal year 2012, $1,100,000,000;
                      ``(D) for fiscal year 2013, $1,200,000,000; and
                      ``(E) for fiscal year 2014, $1,265,000,000; and
              ``(5) for carrying out section 3162 (Core Public Health
            Infrastructure and Activities for CDC), $350,000,000 for each
            of fiscal years 2010 through 2014.

            ``Subtitle B--National Prevention and Wellness Strategy

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

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

                      ``Subtitle C--Prevention Task Forces

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

      ``(a) In General.--The Secretary, acting through the Director of the
    Agency for Healthcare Research and Quality, shall establish a permanent
    task force to be known as the Task Force on Clinical Preventive
    Services (in this section referred to as the `Task Force').
      ``(b) Responsibilities.--The Task Force shall--
              ``(1) identify clinical preventive services for review;
              ``(2) review the scientific evidence related to the benefits,
            effectiveness, appropriateness, and costs of clinical
            preventive services identified under paragraph (1) for the
            purpose of developing, updating, publishing, and disseminating
            evidence-based recommendations on the use of such services;
              ``(3) as appropriate, take into account health disparities in
            developing, updating, publishing, and disseminating evidence-
            based recommendations on the use of such services;
              ``(4) identify gaps in clinical preventive services research
            and evaluation and recommend priority areas for such research
            and evaluation;
              ``(5) as appropriate, consult with the clinical prevention
            stakeholders board in accordance with subsection (f);
              ``(6) consult with the Task Force on Community Preventive
            Services established under section 3132; and
              ``(7) as appropriate, in carrying out this section, consider
            the national strategy under section 3121.
      ``(c) Role of Agency.--The Secretary shall provide ongoing
    administrative, research, and technical support for the operations of
    the Task Force, including coordinating and supporting the dissemination
    of the recommendations of the Task Force.
      ``(d) Membership.--
              ``(1) Number; appointment.--The Task Force shall be composed
            of 30 members, appointed by the Secretary.
              ``(2) Terms.--
                      ``(A) In general.--The Secretary shall appoint
                    members of the Task Force for a term of 6 years and may
                    reappoint such members, but the Secretary may not
                    appoint any member to serve more than a total of 12
                    years.
                      ``(B) Staggered terms.--Notwithstanding subparagraph
                    (A), of the members first appointed to serve on the
                    Task Force after the enactment of this title--
                              ``(i) 10 shall be appointed for a term of 2
                            years;
                              ``(ii) 10 shall be appointed for a term of 4
                            years; and
                              ``(iii) 10 shall be appointed for a term of 6
                            years.
              ``(3) Qualifications.--Members of the Task Force shall be
            appointed from among individuals who possess expertise in at
            least one of the following areas:
                      ``(A) Health promotion and disease prevention.
                      ``(B) Evaluation of research and systematic evidence
                    reviews.
                      ``(C) Application of systematic evidence reviews to
                    clinical decisionmaking or health policy.
                      ``(D) Clinical primary care in child and adolescent
                    health.
                      ``(E) Clinical primary care in adult health,
                    including women's health.
                      ``(F) Clinical primary care in geriatrics.
                      ``(G) Clinical counseling and behavioral services for
                    primary care patients.
              ``(4) Representation.--In appointing members of the Task
            Force, the Secretary shall ensure that--
                      ``(A) all areas of expertise described in paragraph
                    (3) are represented; and
                      ``(B) the members of the Task Force include
                    individuals with expertise in health disparities.
      ``(e) Subgroups.--As appropriate to maximize efficiency, the Task
    Force may delegate authority for conducting reviews and making
    recommendations to subgroups consisting of Task Force members, subject
    to final approval by the Task Force.
      ``(f) Clinical Prevention Stakeholders Board.--
              ``(1) In general.--The Task Force shall convene a clinical
            prevention stakeholders board composed of representatives of
            appropriate public and private entities with an interest in
            clinical preventive services to advise the Task Force on
            developing, updating, publishing, and disseminating evidence-
            based recommendations on the use of clinical preventive
            services.
              ``(2) Membership.--The members of the clinical prevention
            stakeholders board shall include representatives of the
            following:
                      ``(A) Health care consumers and patient groups.
                      ``(B) Providers of clinical preventive services,
                    including community-based providers.
                      ``(C) Federal departments and agencies, including--
                              ``(i) appropriate health agencies and offices
                            in the Department, including the Office of the
                            Surgeon General of the Public Health Service,
                            the Office of Minority Health, the National
                            Center on Minority Health and Health
                            Disparities, and the Office on Women's Health;
                            and
                              ``(ii) as appropriate, other Federal
                            departments and agencies whose programs have a
                            significant impact upon health (as determined
                            by the Secretary).
                      ``(D) Private health care payors.
              ``(3) Responsibilities.--In accordance with subsection
            (b)(5), the clinical prevention stakeholders board shall--
                      ``(A) recommend clinical preventive services for
                    review by the Task Force;
                      ``(B) suggest scientific evidence for consideration
                    by the Task Force related to reviews undertaken by the
                    Task Force;
                      ``(C) provide feedback regarding draft
                    recommendations by the Task Force; and
                      ``(D) assist with efforts regarding dissemination of
                    recommendations by the Director of the Agency for
                    Healthcare Research and Quality.
      ``(g) Disclosure and Conflicts of Interest.--Members of the Task
    Force or the clinical prevention stakeholders board shall not be
    considered employees of the Federal Government by reason of service on
    the Task Force or the clinical prevention stakeholders board, except
    members of the Task Force or the clinical prevention stakeholders board
    shall be considered to be special Government employees within the
    meaning of section 107 of the Ethics in Government Act of 1978 (5
    U.S.C. App.) and section 208 of title 18, United States Code, for the
    purposes of disclosure and management of conflicts of interest under
    those sections.
      ``(h) No Pay; Receipt of Travel Expenses.--Members of the Task Force
    or the clinical prevention stakeholders board shall not receive any pay
    for service on the Task Force, but may receive travel expenses,
    including a per diem, in accordance with applicable provisions of
    subchapter I of chapter 57 of title 5, United States Code.
      ``(i) Application of FACA.--The Federal Advisory Committee Act (5
    U.S.C. App.) except for section 14 of such Act shall apply to the Task
    Force to the extent that the provisions of such Act do not conflict
    with the provisions of this title.
      ``(j) Report.--The Secretary shall submit to the Congress an annual
    report on the Task Force, including with respect to gaps identified and
    recommendations made under subsection (b)(4).
      ``(k) Definition.--In this section, the term `health disparities' has
    the meaning given the term in section 3171.

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

      ``(a) In General.--The Secretary, acting through the Director of the
    Centers for Disease Control and Prevention, shall establish a permanent
    task force to be known as the Task Force on Community Preventive
    Services (in this section referred to as the `Task Force').
      ``(b) Responsibilities.--The Task Force shall--
              ``(1) identify community preventive services for review;
              ``(2) review the scientific evidence related to the benefits,
            effectiveness, appropriateness, and costs of community
            preventive services identified under paragraph (1) for the
            purpose of developing, updating, publishing, and disseminating
            evidence-based recommendations on the use of such services;
              ``(3) as appropriate, take into account health disparities in
            developing, updating, publishing, and disseminating evidence-
            based recommendations on the use of such services;
              ``(4) identify gaps in community preventive services research
            and evaluation and recommend priority areas for such research
            and evaluation;
              ``(5) as appropriate, consult with the community prevention
            stakeholders board in accordance with subsection (f);
              ``(6) consult with the Task Force on Clinical Preventive
            Services established under section 3131; and
              ``(7) as appropriate, in carrying out this section, consider
            the national strategy under section 3121.
      ``(c) Role of Agency.--The Secretary shall provide ongoing
    administrative, research, and technical support for the operations of
    the Task Force, including coordinating and supporting the dissemination
    of the recommendations of the Task Force.
      ``(d) Membership.--
              ``(1) Number; appointment.--The Task Force shall be composed
            of 30 members, appointed by the Secretary.
              ``(2) Terms.--
                      ``(A) In general.--The Secretary shall appoint
                    members of the Task Force for a term of 6 years and may
                    reappoint such members, but the Secretary may not
                    appoint any member to serve more than a total of 12
                    years.
                      ``(B) Staggered terms.--Notwithstanding subparagraph
                    (A), of the members first appointed to serve on the
                    Task Force after the enactment of this section--
                              ``(i) 10 shall be appointed for a term of 2
                            years;
                              ``(ii) 10 shall be appointed for a term of 4
                            years; and
                              ``(iii) 10 shall be appointed for a term of 6
                            years.
              ``(3) Qualifications.--Members of the Task Force shall be
            appointed from among individuals who possess expertise in at
            least one of the following areas:
                      ``(A) Public health.
                      ``(B) Evaluation of research and systematic evidence
                    reviews.
                      ``(C) Disciplines relevant to community preventive
                    services, including health promotion; disease
                    prevention; chronic disease; worksite health;
                    qualitative and quantitative analysis; and health
                    economics, policy, law, and statistics.
              ``(4) Representation.--In appointing members of the Task
            Force, the Secretary--
                      ``(A) shall ensure that all areas of expertise
                    described in paragraph (3) are represented;
                      ``(B) shall ensure that such members include
                    sufficient representatives of each of--
                              ``(i) State health officers;
                              ``(ii) local health officers;
                              ``(iii) health care practitioners; and
                              ``(iv) public health practitioners; and
                      ``(C) shall appoint individuals who have expertise in
                    health disparities.
      ``(e) Subgroups.--As appropriate to maximize efficiency, the Task
    Force may delegate authority for conducting reviews and making
    recommendations to subgroups consisting of Task Force members, subject
    to final approval by the Task Force.
      ``(f) Community Prevention Stakeholders Board.--
              ``(1) In general.--The Task Force shall convene a community
            prevention stakeholders board composed of representatives of
            appropriate public and private entities with an interest in
            community preventive services to advise the Task Force on
            developing, updating, publishing, and disseminating evidence-
            based recommendations on the use of community preventive
            services.
              ``(2) Membership.--The members of the community prevention
            stakeholders board shall include representatives of the
            following:
                      ``(A) Health care consumers and patient groups.
                      ``(B) Providers of community preventive services,
                    including community-based providers.
                      ``(C) Federal departments and agencies, including--
                              ``(i) appropriate health agencies and offices
                            in the Department, including the Office of the
                            Surgeon General of the Public Health Service,
                            the Office of Minority Health, the National
                            Center on Minority Health and Health
                            Disparities, and the Office on Women's Health;
                            and
                              ``(ii) as appropriate, other Federal
                            departments and agencies whose programs have a
                            significant impact upon health (as determined
                            by the Secretary).
                      ``(D) Private health care payors.
              ``(3) Responsibilities.--In accordance with subsection
            (b)(5), the community prevention stakeholders board shall--
                      ``(A) recommend community preventive services for
                    review by the Task Force;
                      ``(B) suggest scientific evidence for consideration
                    by the Task Force related to reviews undertaken by the
                    Task Force;
                      ``(C) provide feedback regarding draft
                    recommendations by the Task Force; and
                      ``(D) assist with efforts regarding dissemination of
                    recommendations by the Director of the Centers for
                    Disease Control and Prevention.
      ``(g) Disclosure and Conflicts of Interest.--Members of the Task
    Force or the community prevention stakeholders board shall not be
    considered employees of the Federal Government by reason of service on
    the Task Force or the community prevention stakeholders board, except
    members of the Task Force or the community prevention stakeholders
    board shall be considered to be special Government employees within the
    meaning of section 107 of the Ethics in Government Act of 1978 (5
    U.S.C. App.) and section 208 of title 18, United States Code, for the
    purposes of disclosure and management of conflicts of interest under
    those sections.
      ``(h) No Pay; Receipt of Travel Expenses.--Members of the Task Force
    or the community prevention stakeholders board shall not receive any
    pay for service on the Task Force, but may receive travel expenses,
    including a per diem, in accordance with applicable provisions of
    subchapter I of chapter 57 of title 5, United States Code.
      ``(i) Application of FACA.--The Federal Advisory Committee Act (5
    U.S.C. App.) except for section 14 of such Act shall apply to the Task
    Force to the extent that the provisions of such Act do not conflict
    with the provisions of this title.
      ``(j) Report.--The Secretary shall submit to the Congress an annual
    report on the Task Force, including with respect to gaps identified and
    recommendations made under subsection (b)(4).
      ``(k) Definition.--In this section, the term `health disparities' has
    the meaning given the term in section 3171.

                 ``Subtitle D--Prevention and Wellness Research

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

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

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

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

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

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

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

                ``Subtitle F--Core Public Health Infrastructure

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

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

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

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

                        ``Subtitle G--General Provisions

    ``SEC. 3171. DEFINITIONS.

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

                       TITLE IV--QUALITY AND SURVEILLANCE

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

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

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

    ``SEC. 931. CENTER FOR QUALITY IMPROVEMENT.

      ``(a) In General.--There is established the Center for Quality
    Improvement (referred to in this part as the `Center'), to be headed by
    the Director.
      ``(b) Prioritization.--
              ``(1) In general.--The Director shall prioritize areas for
            the identification, development, evaluation, and implementation
            of best practices (including innovative methodologies and
            strategies) for quality improvement activities in the delivery
            of health care services (in this section referred to as `best
            practices').
              ``(2) Considerations.--In prioritizing areas under paragraph
            (1), the Director shall consider--
                      ``(A) the priorities established under section 1191
                    of the Social Security Act; and
                      ``(B) the key health indicators identified by the
                    Assistant Secretary for Health Information under
                    section 1709.
              ``(3) Limitations.--In conducting its duties under this
            subsection, the Center for Quality Improvement shall not
            develop quality-adjusted life year measures or any other
            methodologies that can be used to deny benefits to a
            beneficiary against the beneficiary's wishes on the basis of
            the beneficiary's age, life expectancy, present or predicted
            disability, or expected quality of life.
      ``(c) Other Responsibilities.--The Director, acting directly or by
    awarding a grant or contract to an eligible entity, shall--
              ``(1) identify existing best practices under subsection (e);
              ``(2) develop new best practices under subsection (f);
              ``(3) evaluate best practices under subsection (g);
              ``(4) implement best practices under subsection (h);
              ``(5) ensure that best practices are identified, developed,
            evaluated, and implemented under this section consistent with
            standards adopted by the Secretary under section 3004 for
            health information technology used in the collection and
            reporting of quality information (including for purposes of the
            demonstration of meaningful use of certified electronic health
            record (EHR) technology by physicians and hospitals under the
            Medicare program (under sections 1848(o)(2) and 1886(n)(3),
            respectively, of the Social Security Act)); and
              ``(6) provide for dissemination of information and reporting
            under subsections (i) and (j).
      ``(d) Eligibility.--To be eligible for a grant or contract under
    subsection (c), an entity shall--
              ``(1) be a nonprofit entity;
              ``(2) agree to work with a variety of institutional health
            care providers, physicians, nurses, and other health care
            practitioners; and
              ``(3) if the entity is not the organization holding a
            contract under section 1153 of the Social Security Act for the
            area to be served, agree to cooperate with and avoid
            duplication of the activities of such organization.
      ``(e) Identifying Existing Best Practices.--The Secretary shall
    identify best practices that are--
              ``(1) currently utilized by health care providers (including
            hospitals, physician and other clinician practices, community
            cooperatives, and other health care entities) that deliver
            consistently high-quality, efficient health care services; and
              ``(2) easily adapted for use by other health care providers
            and for use across a variety of health care settings.
      ``(f) Developing New Best Practices.--The Secretary shall develop
    best practices that are--
              ``(1) based on a review of existing scientific evidence;
              ``(2) sufficiently detailed for implementation and
            incorporation into the workflow of health care providers; and
              ``(3) designed to be easily adapted for use by health care
            providers across a variety of health care settings.
      ``(g) Evaluation of Best Practices.--The Director shall evaluate best
    practices identified or developed under this section. Such evaluation--
              ``(1) shall include determinations of which best practices--
                      ``(A) most reliably and effectively achieve
                    significant progress in improving the quality of
                    patient care; and
                      ``(B) are easily adapted for use by health care
                    providers across a variety of health care settings;
              ``(2) shall include regular review, updating, and improvement
            of such best practices; and
              ``(3) may include in-depth case studies or empirical
            assessments of health care providers (including hospitals,
            physician and other clinician practices, community
            cooperatives, and other health care entities) and simulations
            of such best practices for determinations under paragraph (1).
      ``(h) Implementation of Best Practices.--
              ``(1) In general.--The Director shall enter into arrangements
            with entities in a State or region to implement best practices
            identified or developed under this section. Such
            implementation--
                      ``(A) may include forming collaborative multi-
                    institutional teams; and
                      ``(B) shall include an evaluation of the best
                    practices being implemented, including the measurement
                    of patient outcomes before, during, and after
                    implementation of such best practices.
              ``(2) Preferences.--In carrying out this subsection, the
            Director shall give priority to health care providers
            implementing best practices that--
                      ``(A) have the greatest impact on patient outcomes
                    and satisfaction;
                      ``(B) are the most easily adapted for use by health
                    care providers across a variety of health care
                    settings;
                      ``(C) promote coordination of health care
                    practitioners across the continuum of care; and
                      ``(D) engage patients and their families in improving
                    patient care and outcomes.
      ``(i) Public Dissemination of Information.--The Director shall
    provide for the public dissemination of information with respect to
    best practices and activities under this section. Such information
    shall be made available in appropriate formats and languages to reflect
    the varying needs of consumers and diverse levels of health literacy.
      ``(j) Report.--
              ``(1) In general.--The Director shall submit an annual report
            to the Congress and the Secretary on activities under this
            section.
              ``(2) Content.--Each report under paragraph (1) shall
            include--
                      ``(A) information on activities conducted pursuant to
                    grants and contracts awarded;
                      ``(B) summary data on patient outcomes before,
                    during, and after implementation of best practices; and
                      ``(C) recommendations on the adaptability of best
                    practices for use by health providers.''.
      (b) Initial Quality Improvement Activities and Initiatives To Be
    Implemented.--Until the Director of the Agency for Healthcare Research
    and Quality has established initial priorities under section 931(b) of
    the Public Health Service Act, as added by subsection (a), the Director
    shall, for purposes of such section, prioritize the following:
              (1) Health care-associated infections.--Reducing health care-
            associated infections, including infections in nursing homes
            and outpatient settings.
              (2) Surgery.--Increasing hospital and outpatient
            perioperative patient safety, including reducing surgical-site
            infections and surgical errors (such as wrong-site surgery and
            retained foreign bodies).
              (3) Emergency room.--Improving care in hospital emergency
            rooms, including through the use of principles of efficiency of
            design and delivery to improve patient flow.
              (4) Obstetrics.--Improving the provision of obstetrical and
            neonatal care, including the identification of interventions
            that are effective in reducing the risk of preterm and
            premature labor and the implementation of best practices for
            labor and delivery care.
              (5) Pediatrics.--Improving the provision of preventive and
            developmental child health services, including interventions
            that can reduce child health disparities and reduce the risk of
            developing chronic health-threatening conditions that affect an
            individual's life course development.
      (c) Report.--Not later than 18 months after the date of the enactment
    of this Act, the Director of the Agency for Healthcare Research and
    Quality shall submit a report to the Congress on the impact of the
    nurse-to-patient ratio on the quality of care and patient outcomes,
    including recommendations for further integration into quality
    measurement and quality improvement activities.

    SEC. 2402. ASSISTANT SECRETARY FOR HEALTH INFORMATION.

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

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

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

    SEC. 2403. AUTHORIZATION OF APPROPRIATIONS.

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

                           TITLE V--OTHER PROVISIONS

            Subtitle A--Drug Discount for Rural and Other Hospitals

    SEC. 2501. EXPANDED PARTICIPATION IN 340B PROGRAM.

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

    SEC. 2502. EXTENSION OF DISCOUNTS TO INPATIENT DRUGS.

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

    SEC. 2503. EFFECTIVE DATE.

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

                              Subtitle B--Programs

                     PART 1--GRANTS FOR CLINICS AND CENTERS

    SEC. 2511. SCHOOL-BASED HEALTH CLINICS.

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

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

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

    SEC. 2512. NURSE-MANAGED HEALTH CENTERS.

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

                     ``PART S--NURSE-MANAGED HEALTH CENTERS

    ``SEC. 399GG. NURSE-MANAGED HEALTH CENTERS.

      ``(a) Program.--The Secretary, acting through the Administrator of
    the Health Resources and Services Administration, shall establish a
    nurse-managed health center program consisting of awarding grants to
    entities under subsection (b).
      ``(b) Grant.--The Secretary shall award grants to entities--
              ``(1) to plan and develop a nurse-managed health center; or
              ``(2) to operate a nurse-managed health center.
      ``(c) Use of Funds.--Amounts received as a grant under subsection (b)
    may be used for activities including the following:
              ``(1) Purchasing or leasing equipment.
              ``(2) Training and technical assistance related to the
            provision of comprehensive primary care services and wellness
            services.
              ``(3) Other activities for planning, developing, or
            operating, as applicable, a nurse-managed health center.
      ``(d) Assurances Applicable to Both Planning and Operation Grants.--
              ``(1) In general.--The Secretary may award a grant under this
            section to an entity only if the entity demonstrates to the
            Secretary's satisfaction that--
                      ``(A) nurses, in addition to managing the center,
                    will be adequately represented as providers at the
                    center; and
                      ``(B) not later than 90 days after receiving the
                    grant, the entity will establish a community advisory
                    committee composed of individuals, a majority of whom
                    are being served by the center, to provide input into
                    the nurse-managed health center's operations.
              ``(2) Matching requirement.--The Secretary may award a grant
            under this section to an entity only if the entity agrees to
            provide, from non-Federal sources, an amount equal to 20
            percent of the amount of the grant (which may be provided in
            cash or in kind) to carry out the activities supported by the
            grant.
              ``(3) Payor of last resort.--The Secretary may award a grant
            under this section to an entity only if the entity demonstrates
            to the satisfaction of the Secretary that funds received
            through the grant will not be expended for any activity to the
            extent that payment has been made, or can reasonably be
            expected to be made--
                      ``(A) under any insurance policy;
                      ``(B) under any Federal or State health benefits
                    program (including titles XIX and XXI of the Social
                    Security Act); or
                      ``(C) by an entity which provides health services on
                    a prepaid basis.
              ``(4) Maintenance of effort.--The Secretary may award a grant
            under this section to an entity only if the entity demonstrates
            to the satisfaction of the Secretary that--
                      ``(A) funds received through the grant will be
                    expended only to supplement, and not supplant, non-
                    Federal and Federal funds otherwise available to the
                    entity for the activities to be funded through the
                    grant; and
                      ``(B) with respect to such activities, the entity
                    will maintain expenditures of non-Federal amounts for
                    such activities at a level not less than the lesser of
                    such expenditures maintained by the entity for the
                    fiscal year preceding the fiscal year for which the
                    entity receives the grant.
      ``(e) Additional Assurance for Planning Grants.--The Secretary may
    award a grant under subsection (b)(1) to an entity only if the entity
    agrees--
              ``(1) to assess the needs of the medically underserved
            populations proposed to be served by the nurse-managed health
            center; and
              ``(2) to design services and operations of the nurse-managed
            health center for such populations based on such assessment.
      ``(f) Additional Assurances for Operation Grants.--The Secretary may
    award a grant under subsection (b)(2) to an entity only if the entity
    assures that the nurse-managed health center will provide--
              ``(1) comprehensive primary care services, wellness services,
            and other health care services deemed appropriate by the
            Secretary;
              ``(2) care without respect to insurance status or income of
            the patient; and
              ``(3) direct access to client-centered services offered by
            advanced practice nurses, other nurses, physicians, physician
            assistants, or other qualified health professionals.
      ``(g) Technical Assistance.--The Secretary shall provide (either
    directly or by grant or contract) technical and other assistance to
    nurse-managed health centers to assist such centers in meeting the
    requirements of this section. Such assistance may include fiscal and
    program management assistance, training in fiscal and program
    management, operational and administrative support, and the provision
    of information to nurse-managed health centers regarding the various
    resources available under this section and how those resources can best
    be used to meet the health needs of the communities served by nurse-
    managed health centers.
      ``(h) Report.--The Secretary shall submit to the Congress an annual
    report on the program under this section.
      ``(i) Definitions.--
              ``(1) Comprehensive primary care services.--The term
            `comprehensive primary care services' has the meaning given to
            the term `required primary health services' in section
            330(b)(1).
              ``(2) Medically underserved population.--The term `medically
            underserved population' has the meaning given to such term in
            section 330(b)(3).
              ``(3) Nurse-managed health center.--The term `nurse-managed
            health center' has the meaning given to such term in section
            801.
              ``(4) Wellness services.--The term `wellness services' means
            any health-related service or intervention, not including
            primary care, which is designed to reduce identifiable health
            risks and increase healthy behaviors intended to prevent the
            onset of disease or lessen the impact of existing chronic
            conditions by teaching more effective management techniques
            that focus on individual self-care and patient-driven
            decisionmaking.''.

    SEC. 2513. FEDERALLY QUALIFIED BEHAVIORAL HEALTH CENTERS.

      (a) Block Grants Regarding Mental Health and Substance Abuse.--
    Section 1913 (42 U.S.C. 300x-3) is amended--
              (1) in subsection (a)(2)(A), by striking ``community mental
            health services'' and inserting ``behavioral health services'';
              (2) in subsection (b)--
                      (A) by striking paragraph (1) and inserting the
                    following:
              ``(1) services under the plan will be provided only through
            appropriate, qualified community programs (which may include
            federally qualified behavioral health centers, child mental
            health programs, psychosocial rehabilitation programs, mental
            health peer-support programs, and mental health primary
            consumer-directed programs); and''; and
                      (B) in paragraph (2), by striking ``community mental
                    health centers'' and inserting ``federally qualified
                    behavioral health centers''; and
              (3) by striking subsection (c) and inserting the following:
      ``(c) Criteria for Federally Qualified Behavioral Health Centers.--
              ``(1) In general.--The Administrator shall certify, and
            recertify at least every 5 years, federally qualified
            behavioral health centers as meeting the criteria specified in
            this subsection.
              ``(2) Regulations.--Not later than 18 months after the date
            of the enactment of the America's Affordable Health Choices Act
            of 2009, the Administrator shall issue final regulations for
            certifying centers under paragraph (1).
              ``(3) Criteria.--The criteria referred to in subsection
            (b)(2) are that the center performs each of the following:
                      ``(A) Provide services in locations that ensure
                    services will be available and accessible promptly and
                    in a manner which preserves human dignity and assures
                    continuity of care.
                      ``(B) Provide services in a mode of service delivery
                    appropriate for the target population.
                      ``(C) Provide individuals with a choice of service
                    options where there is more than one efficacious
                    treatment.
                      ``(D) Employ a core staff of clinical staff that is
                    multidisciplinary and culturally and linguistically
                    competent.
                      ``(E) Provide services, within the limits of the
                    capacities of the center, to any individual residing or
                    employed in the service area of the center.
                      ``(F) Provide, directly or through contract, to the
                    extent covered for adults in the State Medicaid plan
                    and for children in accordance with section 1905(r) of
                    the Social Security Act regarding early and periodic
                    screening, diagnosis, and treatment, each of the
                    following services:
                              ``(i) Screening, assessment, and diagnosis,
                            including risk assessment.
                              ``(ii) Person-centered treatment planning or
                            similar processes, including risk assessment
                            and crisis planning.
                              ``(iii) Outpatient clinic mental health
                            services, including screening, assessment,
                            diagnosis, psychotherapy, substance abuse
                            counseling, medication management, and
                            integrated treatment for mental illness and
                            substance abuse which shall be evidence-based
                            (including cognitive behavioral therapy,
                            dialectical behavioral therapy, motivational
                            interviewing, and other such therapies which
                            are evidence-based).
                              ``(iv) Outpatient clinic primary care
                            services, including screening and monitoring of
                            key health indicators and health risk
                            (including screening for diabetes,
                            hypertension, and cardiovascular disease and
                            monitoring of weight, height, body mass index
                            (BMI), blood pressure, blood glucose or HbA1C,
                            and lipid profile).
                              ``(v) Crisis mental health services,
                            including 24-hour mobile crisis teams,
                            emergency crisis intervention services, and
                            crisis stabilization.
                              ``(vi) Targeted case management (services to
                            assist individuals gaining access to needed
                            medical, social, educational, and other
                            services and applying for income security and
                            other benefits to which they may be entitled).
                              ``(vii) Psychiatric rehabilitation services
                            including skills training, assertive community
                            treatment, family psychoeducation, disability
                            self-management, supported employment,
                            supported housing services, therapeutic foster
                            care services, multisystemic therapy, and such
                            other evidence-based practices as the Secretary
                            may require.
                              ``(viii) Peer support and counselor services
                            and family supports.
                      ``(G) Maintain linkages, and where possible enter
                    into formal contracts with, inpatient psychiatric
                    facilities and substance abuse detoxification and
                    residential programs.
                      ``(H) Make available to individuals served by the
                    center, directly, through contract, or through linkages
                    with other programs, each of the following:
                              ``(i) Adult and youth peer support and
                            counselor services.
                              ``(ii) Family support services for families
                            of children with serious mental disorders.
                              ``(iii) Other community or regional services,
                            supports, and providers, including schools,
                            child welfare agencies, juvenile and criminal
                            justice agencies and facilities, housing
                            agencies and programs, employers, and other
                            social services.
                              ``(iv) Onsite or offsite access to primary
                            care services.
                              ``(v) Enabling services, including outreach,
                            transportation, and translation.
                              ``(vi) Health and wellness services,
                            including services for tobacco cessation.''.
      (b) Conforming Amendments.--
              (1) Block grants for behavioral health services.--Subpart I
            of part B of title XIX (42 U.S.C. 300x-1 et seq.) is amended--
                      (A) in the subpart heading, by striking ``Community
                    Mental Health Services'' and inserting ``Behavioral
                    Mental Health Services'';
                      (B) in the heading of section 1912, by striking
                    ``COMMUNITY MENTAL HEALTH SERVICES'' and inserting
                    ``BEHAVIORAL MENTAL HEALTH SERVICES''; and
                      (C) in sections 1912(a)(1), 1912(b), 1915(b)(1), and
                    1918(a)(8), by striking the term ``community mental
                    health services'' each place it appears and inserting
                    ``behavioral mental health services''.
              (2) Center for mental health services.--Paragraph (13) of
            section 520(b) (42 U.S.C. 290bb-31) is amended by striking
            ``community mental health centers'' and inserting ``federally
            qualified behavioral health centers''.
              (3) Grants for emergency mental health centers.--Subsection
            (b) of section 520F (42 U.S.C. 290bb-37) is amended by striking
            ``community mental health centers'' and inserting ``federally
            qualified behavioral health centers''.

                          PART 2--OTHER GRANT PROGRAMS

    SEC. 2521. COMPREHENSIVE PROGRAMS TO PROVIDE EDUCATION TO NURSES AND
                        CREATE A PIPELINE TO NURSING.

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

    SEC. 2522. MENTAL AND BEHAVIORAL HEALTH TRAINING.

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

               ``Subpart 3--Mental and Behavioral Health Training

    ``SEC. 775. MENTAL AND BEHAVIORAL HEALTH TRAINING PROGRAM.

      ``(a) Program.--The Secretary shall establish an interdisciplinary
    mental and behavioral health training program consisting of awarding
    grants and contracts under subsection (b).
      ``(b) Support and Development of Mental and Behavioral Health
    Training Programs.--The Secretary shall make grants to, or enter into
    contracts with, eligible entities--
              ``(1) to plan, develop, operate, or participate in an
            accredited professional training program for mental and
            behavioral health professionals to promote--
                      ``(A) interdisciplinary training; and
                      ``(B) coordination of the delivery of health care
                    within and across settings, including health care
                    institutions, community-based settings, and the
                    patient's home;
              ``(2) to provide financial assistance to mental and
            behavioral health professionals, who are participants in any
            such program, and who plan to work in the field of mental and
            behavioral health;
              ``(3) to plan, develop, operate, or participate in an
            accredited program for the training of mental and behavioral
            health professionals who plan to teach in the field of mental
            and behavioral health; and
              ``(4) to provide financial assistance in the form of
            traineeships and fellowships to mental and behavioral health
            professionals who are participants in any such program and who
            plan to teach in the field of mental and behavioral health.
      ``(c) Eligibility.--To be eligible for a grant or contract under
    subsection (b), an entity shall be--
              ``(1) an accredited health professions school, including an
            accredited school or program of psychology, psychiatry, social
            work, marriage and family therapy, professional mental health
            and substance abuse counseling, or addiction medicine;
              ``(2) an accredited public or nonprofit private hospital;
              ``(3) a public or private nonprofit entity; or
              ``(4) a consortium of 2 or more entities described in
            paragraphs (1) through (3).
      ``(d) Preference.--In awarding grants or contracts under this
    section, the Secretary shall give preference to entities that have a
    demonstrated record of the following:
              ``(1) Training the greatest percentage, or significantly
            improving the percentage, of health professionals who serve in
            underserved communities.
              ``(2) Supporting teaching programs that address the health
            care needs of vulnerable populations.
              ``(3) Training individuals who are from underrepresented
            minority groups or disadvantaged backgrounds.
              ``(4) Training individuals who serve geriatric populations
            with an emphasis on underserved elderly.
              ``(5) Training individuals who serve pediatric populations
            with an emphasis on underserved children.
      ``(e) Report.--The Secretary shall submit to the Congress an annual
    report on the program under this section.
      ``(f) Definition.--In this section:
              ``(1) The term `health disparities' has the meaning given the
            term in section 3171.
              ``(2) The term `mental and behavioral health professional'
            means an individual training or practicing--
                      ``(A) in psychology; general, geriatric, child or
                    adolescent psychiatry; social work; marriage and family
                    therapy; professional mental health and substance abuse
                    counseling; or addiction medicine; or
                      ``(B) another mental and behavioral health specialty,
                    as deemed appropriate by the Secretary.
              ``(3) The term `interdisciplinary' means collaboration across
            health professions, specialties, and subspecialties, which may
            include public health, nursing, allied health, and appropriate
            medical specialties.
      ``(g) Authorization of Appropriations.--To carry out this section,
    there is authorized to be appropriated $60,000,000 for each of fiscal
    years 2010 through 2014. Of the amounts appropriated to carry out this
    section for a fiscal year, not less than 15 percent shall be used for
    training programs in psychology.''.

    SEC. 2523. PROGRAMS TO INCREASE AWARENESS OF ADVANCE CARE PLANNING
                        ISSUES.

      Title III (42 U.S.C. 241 et seq.), as amended, is amended by adding
    at the end the following:

       ``PART T--PROGRAMS TO INCREASE AWARENESS OF ADVANCE CARE PLANNING
                                     ISSUES

    ``SEC. 399HH. ADVANCE CARE PLANNING EDUCATION CAMPAIGNS AND INFORMATION
                        PHONE LINE AND CLEARINGHOUSE.

      ``(a) Advance Care Planning Education Campaign.--The Secretary shall,
    directly or through grants awarded under subsection (c), conduct a
    national public education campaign--
              ``(1) to raise public awareness of the importance of planning
            for care near the end of life;
              ``(2) to improve the public's understanding of the various
            situations in which individuals may find themselves if they
            become unable to express their health care wishes;
              ``(3) to explain the need for readily available legal
            documents that express an individual's wishes through--
                      ``(A) advance directives (including living wills,
                    comfort care orders, and durable powers of attorney for
                    health care); and
                      ``(B) other planning tools, such as a physician's
                    orders for life-sustaining treatment (POLST); and
              ``(4) to educate the public about the availability of hospice
            care and palliative care.
      ``(b) Information Phone Line and Clearinghouse.--The Secretary,
    directly or through grants awarded under subsection (c), shall provide
    for the establishment of a national, toll-free, information telephone
    line and a clearinghouse that the public and health professionals may
    access to find out about State-specific and other information regarding
    advance directive and end-of-life decisions.
      ``(c) Grants.--
              ``(1) In general.--The Secretary shall use funds appropriated
            under subsection (d) for the purpose of awarding grants to
            public or nonprofit private entities (including States or
            political subdivisions of a State), or a consortium of any of
            such entities, for the purpose of conducting education
            campaigns under subsection (a).
              ``(2) Limitation on eligibility.--Any grant awarded under
            this Act shall not go to any governmental or nongovernmental
            organization that promotes suicide, assisted suicide, or the
            active hastening of death. Nothing in the previous clause shall
            be construed to prohibit palliative or hospice care.
              ``(3) Period.--Any grant awarded under paragraph (1) shall be
            for a period of 3 years.
      ``(d) Authorization of Appropriations.--There are authorized to be
    appropriated--
              ``(1) for purposes of carrying out subsection (b), $5,000,000
            for fiscal year 2010 and each subsequent year; and
              ``(2) for purposes of making grants under subsection (c),
            $10,000,000 for fiscal year 2010, to remain available until
            expended.''.

    SEC. 2524. REAUTHORIZATION OF TELEHEALTH AND TELEMEDICINE GRANT
                        PROGRAMS.

      (a) Telehealth Network and Telehealth Resource Centers Grant
    Programs.--Section 330I (42 U.S.C. 254c-14) is amended--
              (1) in subsection (a)--
                      (A) by striking paragraph (3) (relating to frontier
                    communities); and
                      (B) by inserting after paragraph (2) the following:
              ``(3) Health disparities.--The term `health disparities' has
            the meaning given such term in section 3171.'';
              (2) in subsection (d)(1)--
                      (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:
                      ``(D) reduce health disparities.'';
              (3) in subsection (f)(1)(B)(iii)--
                      (A) in subclause (VII), by inserting ``, including
                    skilled nursing facilities'' before the period at the
                    end;
                      (B) in subclause (IX), by inserting ``, including
                    county mental health and public mental health
                    facilities'' before the period at the end; and
                      (C) by adding at the end the following:
                                      ``(XIII) Renal dialysis
                                    facilities.'';
              (4) by amending subsection (i) to read as follows:
      ``(i) Preferences.--
              ``(1) Telehealth networks.--In awarding grants under
            subsection (d)(1) for projects involving telehealth networks,
            the Secretary shall give preference to eligible entities
            meeting the following:
                      ``(A) Network.--The eligible entity is a health care
                    provider in, or proposing to form, a health care
                    network that furnishes services in a medically
                    underserved area or a health professional shortage
                    area.
                      ``(B) Broad geographic coverage.--The eligible entity
                    demonstrates broad geographic coverage in the rural or
                    medically underserved areas of the State or States in
                    which the entity is located.
                      ``(C) Health disparities.--The eligible entity
                    demonstrates how the project to be funded through the
                    grant will address health disparities.
                      ``(D) Linkages.--The eligible entity agrees to use
                    the grant to establish or develop plans for telehealth
                    systems that will link rural hospitals and rural health
                    care providers to other hospitals, health care
                    providers, and patients.
                      ``(E) Efficiency.--The eligible entity agrees to use
                    the grant to promote greater efficiency in the use of
                    health care resources.
                      ``(F) Viability.--The eligible entity demonstrates
                    the long-term viability of projects through--
                              ``(i) availability of non-Federal funding
                            sources; or
                              ``(ii) institutional and community support
                            for the telehealth network.
                      ``(G) Services.--The eligible entity provides a plan
                    for coordinating system use by eligible entities and
                    prioritizes use of grant funds for health care services
                    over nonclinical uses.
              ``(2) Telehealth resource centers.--In awarding grants under
            subsection (d)(2) for projects involving telehealth resource
            centers, the Secretary shall give preference to eligible
            entities meeting the following:
                      ``(A) Provision of a broad range of services.--The
                    eligible entity has a record of success in the
                    provision of a broad range of telehealth services to
                    medically underserved areas or populations.
                      ``(B) Provision of telehealth technical assistance.--
                    The eligible entity has a record of success in the
                    provision of technical assistance to providers serving
                    medically underserved communities or populations in the
                    establishment and implementation of telehealth
                    services.
                      ``(C) Collaboration and sharing of expertise.--The
                    eligible entity has a demonstrated record of
                    collaborating and sharing expertise with providers of
                    telehealth services at the national, regional, State,
                    and local levels.'';
              (5) in subsection (j)(2)(B), by striking ``such projects for
            fiscal year 2001'' and all that follows through the period and
            inserting ``such project for fiscal year 2009.'';
              (6) in subsection (k)(1)--
                      (A) in subparagraph (E)(i), by striking
                    ``transmission of medical data'' and inserting
                    ``transmission and electronic archival of medical
                    data''; and
                      (B) by amending subparagraph (F) to read as follows:
                      ``(F) developing projects to use telehealth
                    technology--
                              ``(i) to facilitate collaboration between
                            health care providers;
                              ``(ii) to promote telenursing services; or
                              ``(iii) to promote patient understanding and
                            adherence to national guidelines for chronic
                            disease and self-management of such
                            conditions;'';
              (7) in subsection (q), by striking ``Not later than September
            30, 2005'' and inserting ``Not later than 1 year after the date
            of the enactment of the America's Affordable Health Choices Act
            of 2009, and annually thereafter'';
              (8) by striking subsection (r);
              (9) by redesignating subsection (s) as subsection (r); and
              (10) in subsection (r) (as so redesignated)--
                      (A) in paragraph (1)--
                              (i) by striking ``and'' before ``such sums'';
                            and
                              (ii) by inserting ``, $10,000,000 for fiscal
                            year 2010, and such sums as may be necessary
                            for each of fiscal years 2011 through 2014''
                            before the semicolon; and
                      (B) in paragraph (2)--
                              (i) by striking ``and'' before ``such sums'';
                            and
                              (ii) by inserting ``, $10,000,000 for fiscal
                            year 2010, and such sums as may be necessary
                            for each of fiscal years 2011 through 2014''
                            before the period.
      (b) Telemedicine; Incentive Grants Regarding Coordination Among
    States.--Subsection (b) of section 330L (42 U.S.C. 254c-18) is amended
    by inserting ``, $10,000,000 for fiscal year 2010, and such sums as may
    be necessary for each of fiscal years 2011 through 2014'' before the
    period at the end.

    SEC. 2525. NO CHILD LEFT UNIMMUNIZED AGAINST INFLUENZA: DEMONSTRATION
                        PROGRAM USING ELEMENTARY AND SECONDARY SCHOOLS AS
                        INFLUENZA VACCINATION CENTERS.

      (a) Purpose.--The Secretary of Health and Human Services, in
    consultation with the Secretary of Education and the Secretary of
    Labor, shall award grants to eligible partnerships to carry out
    demonstration programs designed to test the feasibility of using the
    Nation's elementary schools and secondary schools as influenza
    vaccination centers.
      (b) In General.--The Secretary shall coordinate with the Secretary of
    Labor, the Secretary of Education, State Medicaid agencies, State
    insurance agencies, and private insurers to carry out a program
    consisting of awarding grants under subsection (c) to ensure that
    children have coverage for all reasonable and customary expenses
    related to influenza vaccinations, including the costs of purchasing
    and administering the vaccine incurred when influenza vaccine is
    administered outside of the physician's office in a school or other
    related setting.
      (c) Program Description.--
              (1) Grants.--From amounts appropriated pursuant to subsection
            (l), the Secretary shall award grants to eligible partnerships
            to be used to provide influenza vaccinations to children in
            elementary and secondary schools, in coordination with school
            nurses, school health care programs, community health care
            providers, State insurance agencies, or private insurers.
              (2) ACIP recommendations.--The program under this section
            shall be designed to administer vaccines consistent with the
            recommendations of the Centers for Disease Control and
            Prevention's Advisory Committee on Immunization Practices
            (ACIP) for the annual vaccination of all children 5 through 19
            years of age.
              (3) Participation voluntary.--Participation by a school or an
            individual shall be voluntary.
      (d) Use of Funds.--Eligible partnerships receiving a grant under this
    section shall ensure the maximum number of children access influenza
    vaccinations as follows:
              (1) Covered children.--To the extent to which payment of the
            costs of purchasing and administering the influenza vaccine for
            children is not covered through other federally funded programs
            or through private insurance, eligible partnerships receiving a
            grant shall use funds to purchase and administer influenza
            vaccinations.
              (2) Children covered by other federal programs.--For children
            who are eligible under other federally funded programs for
            payment of the costs of purchasing and administering the
            influenza vaccine, eligible partnerships receiving a grant
            shall not use funds provided under this section for such costs.
              (3) Children covered by private health insurance.--For
            children who have private insurance, eligible partnerships
            receiving a grant shall offer assistance in accessing coverage
            for vaccinations administered through the program under this
            section.
      (e) Privacy.--The Secretary shall ensure that the program under this
    section adheres to confidentiality and privacy requirements of section
    264 of the Health Insurance Portability and Accountability Act of 1996
    (42 U.S.C. 1320d-2 note) and section 444 of the General Education
    Provisions Act (20 U.S.C. 1232g; commonly referred to as the ``Family
    Educational Rights and Privacy Act of 1974'').
      (f) Application.--An eligible partnership desiring 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.
      (g) Duration.--Eligible partnerships receiving a grant shall
    administer a demonstration program funded through this section over a
    period of 2 consecutive school years.
      (h) Choice of Vaccine.--The program under this section shall not
    restrict the discretion of a health care provider to administer any
    influenza vaccine approved by the Food and Drug Administration for use
    in pediatric populations.
      (i) Awards.--The Secretary shall award--
              (1) a minimum of 10 grants in 10 different States to eligible
            partnerships that each include one or more public schools
            serving primarily low-income students; and
              (2) a minimum of 5 grants in 5 different States to eligible
            partnerships that each include one or more public schools
            located in a rural local education agency.
      (j) Report.--Not later than 90 days following the completion of the
    program under this section, the Secretary shall submit to the
    Committees on Education and Labor, Energy and Commerce, and
    Appropriations of the House of Representatives and to the Committees on
    Health, Education, Labor, and Pensions and Appropriations of the Senate
    a report on the results of the program. The report shall include--
              (1) an assessment of the influenza vaccination rates of
            school-age children in localities where the program is
            implemented, compared to the national average influenza
            vaccination rates for school-aged children, including whether
            school-based vaccination assists in achieving the
            recommendations of the Advisory Committee on Immunization
            Practices for annual influenza vaccination of all children 6
            months to 18 years of age;
              (2) an assessment of the utility of employing elementary
            schools and secondary schools as a part of a multistate,
            community-based pandemic response program that is consistent
            with existing Federal and State pandemic response plans;
              (3) an assessment of the feasibility of using existing
            Federal and private insurance funding in establishing a
            multistate, school-based vaccination program for seasonal
            influenza vaccination;
              (4) an assessment of the number of education days gained by
            students as a result of seasonal vaccinations based on
            absenteeism rates;
              (5) a determination of whether the program under this
            section--
                      (A) increased vaccination rates in the participating
                    localities; and
                      (B) was implemented for sufficient time for gathering
                    enough valid data; and
              (6) a recommendation on whether the program should be
            continued, expanded, or terminated.
      (k) Definitions.--In this section:
              (1) Eligible partnership.--The term ``eligible partnership''
            means a local public health department, or another health
            organization defined by the Secretary as eligible to submit an
            application, and one or more elementary and secondary schools.
              (2) Elementary school.--The terms ``elementary school''' and
            ``secondary school'' have the meanings given such terms in
            section 9101 of the Elementary and Secondary Education Act of
            1965 (20 U.S.C. 7801).
              (3) Low-income.--The term ``low-income'' means a student, age
            5 through 19, eligible for free or reduced-price lunch under
            the National School Lunch Act (42 U.S.C. 1751 et seq.).
              (4) Rural local educational agency.--The term ``rural local
            educational agency'' means an eligible local educational agency
            described in section 6211(b)(1) of the Elementary and Secondary
            Education Act of 1965 (20 U.S.C. 7345(b)(1)).
              (5) Secretary.--Except as otherwise specified, the term
            ``Secretary'' means the Secretary of Health and Human Services.
      (l) Authorization of Appropriations.--To carry out this section,
    there are authorized to be appropriated such sums as may be necessary.

    SEC. 2526. EXTENSION OF WISEWOMAN PROGRAM.

      Section 1509 of the Public Health Service Act (42 U.S.C. 300n-4a) is
    amended--
              (1) in subsection (a)--
                      (A) by striking the heading and inserting ``In
                    General.--''; and
                      (B) in the matter preceding paragraph (1), by
                    striking ``may make grants'' and all that follows
                    through ``purpose'' and inserting the following: ``may
                    make grants to such States for the purpose''; and
              (2) in subsection (d)(1), by striking ``there are
            authorized'' and all that follows through the period and
            inserting ``there are authorized to be appropriated $70,000,000
            for fiscal year 2010, $73,500,000 for fiscal year 2011,
            $77,000,000 for fiscal year 2012, $81,000,000 for fiscal year
            2013, and $85,000,000 for fiscal year 2014.''.

    SEC. 2527. HEALTHY TEEN INITIATIVE TO PREVENT TEEN PREGNANCY.

      Part B of title III (42 U.S.C. 243 et seq.) is amended by inserting
    after section 317T the following:

    ``SEC. 317U. HEALTHY TEEN INITIATIVE TO PREVENT TEEN PREGNANCY.

      ``(a) Program.--To the extent and in the amount of appropriations
    made in advance in appropriations Acts, the Secretary, acting through
    the Director of the Centers for Disease Control and Prevention, shall
    establish a program consisting of making grants, in amounts determined
    under subsection (c), to each State that submits an application in
    accordance with subsection (d) for an evidence-based education program
    described in subsection (b).
      ``(b) Use of Funds.--Amounts received by a State under this section
    shall be used to conduct or support evidence-based education programs
    (directly or through grants or contracts to public or private nonprofit
    entities, including schools and community-based and faith-based
    organizations) to reduce teen pregnancy or sexually transmitted
    diseases.
      ``(c) Distribution of Funds.--The Director shall, for fiscal year
    2010 and each subsequent fiscal year, make a grant to each State
    described in subsection (a) in an amount equal to the product of--
              ``(1) the amount appropriated to carry out this section for
            the fiscal year; and
              ``(2) the percentage determined for the State under section
            502(c)(1)(B)(ii) of the Social Security Act.
      ``(d) Application.--To seek a grant under this section, a State shall
    submit an application at such time, in such manner, and containing such
    information and assurance of compliance with this section as the
    Secretary may require. At a minimum, an application shall to the
    satisfaction of the Secretary--
              ``(1) describe how the State's proposal will address the
            needs of at-risk teens in the State;
              ``(2) identify the evidence-based education program or
            programs selected from the registry developed under subsection
            (g) that will be used to address risks in priority populations;
              ``(3) describe how the program or programs will be
            implemented and any adaptations to the evidence-based model
            that will be made;
              ``(4) list any private and public entities with whom the
            State proposes to work, including schools and community-based
            and faith-based organizations, and demonstrate their capacity
            to implement the proposed program or programs; and
              ``(5) identify an independent entity that will evaluate the
            impact of the program or programs.
      ``(e) Evaluation.--
              ``(1) Requirement.--As a condition on receipt of a grant
            under this section, a State shall agree--
                      ``(A) to arrange for an independent evaluation of the
                    impact of the programs to be conducted or supported
                    through the grant; and
                      ``(B) submit reports to the Secretary on such
                    programs and the results of evaluation of such
                    programs.
              ``(2) Funding limitation.--Of the amounts made available to a
            State through a grant under this section for any fiscal year,
            not more than 10 percent may be used for such evaluation.
      ``(f) Rule of Construction.--This section shall not be construed to
    preempt or limit any State law regarding parental involvement and
    decisionmaking in children's education.
      ``(g) Registry of Eligible Programs.--The Secretary shall develop not
    later than 180 days after the date of the enactment of the America's
    Affordable Health Choices Act of 2009, and periodically update
    thereafter, a publicly available registry of programs described in
    subsection (b) that, as determined by the Secretary--
              ``(1) meet the definition of the term `evidence-based' in
            subsection (i);
              ``(2) are medically and scientifically accurate; and
              ``(3) provide age-appropriate information.
      ``(h) Matching Funds.--The Secretary may award a grant to a State
    under this section for a fiscal year only if the State agrees to
    provide, from non-Federal sources, an amount equal to $1 (in cash or in
    kind) for each $4 provided through the grant to carry out the
    activities supported by the grant.
      ``(i) Definition.--In this section, the term `evidence-based' means
    based on a model that has been found, in methodologically sound
    research--
              ``(1) to delay initiation of sex;
              ``(2) to decrease number of partners;
              ``(3) to reduce teen pregnancy;
              ``(4) to reduce sexually transmitted infection rates; or
              ``(5) to improve rates of contraceptive use.
      ``(j) Appropriations.--To carry out this section, there is authorized
    to be appropriated $50,000,000 for each of the fiscal years 2010
    through 2014.''.

    SEC. 2528. NATIONAL TRAINING INITIATIVE ON AUTISM SUPPLEMENTAL GRANTS
                        AND TECHNICAL ASSISTANCE.

      Part R of title III (42 U.S.C. 280i et seq.) is amended--
              (1) by inserting after the header for part R the following:

       ``Subpart 1--Surveillance and Research Program; Education, Early
                 Detection, and Intervention; and Reporting'';

              (2) in section 399AA(d), by striking ``part'' and inserting
            ``subpart''; and
              (3) by adding at the end the following:

                   ``Subpart 2--National Training Initiative

    ``SEC. 399FF. NATIONAL TRAINING INITIATIVE.

      ``(a) National Training Initiative Supplemental Grants and Technical
    Assistance.--
              ``(1) Supplemental grants.--
                      ``(A) In general.--The Secretary shall award, in
                    consultation with the Interagency Autism Coordinating
                    Committee, multiyear national training initiative
                    supplemental grants to University Centers for
                    Excellence in Developmental Disabilities authorized by
                    the Developmental Disabilities Assistance and Bill of
                    Rights Act of 2000, public or private nonprofit
                    entities, and other comparable interdisciplinary
                    service, training, and academic entities to provide
                    interdisciplinary training, continuing education
                    initiatives, technical assistance, dissemination, and
                    services to address the unmet needs of children and
                    adults with autism spectrum disorders and related
                    developmental disabilities, and their families.
                      ``(B) Requirements.--A University Center for
                    Excellence in Developmental Disabilities that desires
                    to receive a grant under this paragraph shall submit to
                    the Secretary an application containing such agreements
                    and information as the Secretary may require, including
                    agreements that the training program shall--
                              ``(i) provide trainees with an appropriate
                            balance of interdisciplinary academic and
                            community-based experiences;
                              ``(ii) have a demonstrated capacity to
                            provide training and technical assistance in
                            evidence-based practices to evaluate, and
                            provide effective interventions, treatment,
                            services, and supports to children and adults
                            with autism and related developmental
                            disabilities, and their families;
                              ``(iii) have a demonstrated capacity to
                            include persons with autism spectrum disorders,
                            parents, and family members as part of the
                            training program to ensure that a person and
                            family-centered approach is used;
                              ``(iv) provide to the Secretary, in the
                            manner prescribed by the Secretary, data
                            regarding the number of persons who have
                            benefitted and outcomes of the provision of
                            training and technical assistance;
                              ``(v) demonstrate a capacity to share and
                            disseminate materials and practices that are
                            developed and evaluated to be effective in the
                            provision of training and technical assistance;
                              ``(vi) provide assurances that training,
                            technical assistance, dissemination, and
                            services performed under grants made pursuant
                            to this paragraph shall be consistent with the
                            goals of the Developmental Disabilities Act of
                            1984, the Americans with Disabilities Act of
                            1990, the Individuals with Disabilities
                            Education Act, and the No Child Left Behind Act
                            of 2001 and conducted in coordination with
                            other relevant State agencies, other
                            institutions of higher education, and service
                            providers; and
                              ``(vii) have a demonstrated capacity to
                            provide training, technical assistance,
                            supports, and services under this section
                            statewide.
                      ``(C) Activities.--A University Center for Excellence
                    in Developmental Disabilities, or other eligible entity
                    that receives a grant under this paragraph shall expand
                    and develop interdisciplinary training and continuing
                    education initiatives for parents, health, allied
                    health, vocational, educational, and other
                    professionals and develop model services and supports
                    that demonstrate evidence-based practices, by engaging
                    in the following activities:
                              ``(i) Training health, allied health,
                            vocational, and educational professionals to
                            identify, evaluate the needs, and develop
                            treatments, interventions, services, and
                            supports for children and adults with, autism
                            spectrum disorder and related developmental
                            disabilities.
                              ``(ii) Developing systems and products that
                            allow for the interventions, services and
                            supports to be evaluated for fidelity of
                            implementation.
                              ``(iii) Working to expand the availability of
                            evidence-based, lifelong interventions,
                            educational, employment, and transition
                            services, and community supports.
                              ``(iv) Providing statewide technical
                            assistance in collaboration with relevant State
                            agencies, other institutions of higher
                            education, autism spectrum disorder advocacy
                            groups, and community-based service providers.
                              ``(v) Working to develop comprehensive
                            systems of supports and services for
                            individuals with autism and related
                            developmental disabilities and their families,
                            including seamless transitions between
                            educational and health systems across the
                            lifespan.
                              ``(vi) Promoting training, technical
                            assistance, dissemination, supports, and
                            services.
                              ``(vii) Developing mechanisms to provide
                            training and technical assistance, including
                            for-credit courses, intensive summer
                            institutes, continuing education programs,
                            distance based programs, and Web-based
                            information dissemination strategies.
                              ``(viii) Promoting activities that support
                            community-based family and individual services
                            and enable individuals with autism and related
                            developmental disabilities to fully participate
                            in society and achieve good quality of life
                            outcomes.
                              ``(ix) Collecting data on the outcomes of
                            training and technical assistance programs to
                            meet statewide needs for the expansion of
                            services to children and adults with autism
                            spectrum disorders and related developmental
                            disabilities.
              ``(2) Technical assistance.--The Secretary shall reserve 2
            percent of the appropriated funds to make a grant to a national
            organization with demonstrated capacity for proving training
            and technical assistance to University Centers for Excellence
            in Developmental Disabilities to--
                      ``(A) assist in national dissemination of specific
                    information, including evidence-based best practices,
                    from interdisciplinary training programs, and when
                    appropriate, other entities whose findings would inform
                    the work performed by entities awarded grants;
                      ``(B) compile and disseminate strategies and
                    materials that prove to be effective in the provision
                    of training and technical assistance so that the entire
                    network can benefit from the models, materials, and
                    practices developed in individual centers;
                      ``(C) assist in the coordination of activities of
                    grantees under this section;
                      ``(D) develop a Web portal that will provide linkages
                    to each of the individual training initiatives and
                    provide access to training modules, promising training,
                    and technical assistance practices and other materials
                    developed by grantees;
                      ``(E) serve as a research-based resource for Federal
                    and State policymakers on information concerning the
                    provision of training and technical assistance for the
                    assessment, and provision of supports and services for
                    children and adults with autism spectrum disorders and
                    related developmental disabilities;
                      ``(F) convene experts from multiple interdisciplinary
                    training programs, individuals with autism spectrum
                    disorders, and their families to discuss and make
                    recommendations with regard to training issues related
                    to the assessment, and treatment, interventions,
                    supports, and services for children and adults with
                    autism spectrum disorders and related developmental
                    disorders; and
                      ``(G) undertake any other functions that the
                    Secretary determines to be appropriate.
              ``(3) Authorization of appropriations.--
                      ``(A) In general.--Subject to subparagraph (B), there
                    is authorized to be appropriated to carry out this
                    subsection $17,000,000 for fiscal year 2011 to be
                    equally divided among existing University Centers for
                    Excellence in Developmental Disabilities and such sums
                    for fiscal years 2012 through 2015 in the case of
                    University Centers for Excellence in Developmental
                    Disabilities located in American Samoa or the
                    Commonwealth of the Northern Mariana Islands,
                    supplemental grants of not less than $100,000.
                      ``(B) Appropriations less than $17,000,000.--With
                    respect to any fiscal year in which the amount
                    appropriated under subsection (A) to carry out this
                    section is less than $17,000,000, the Secretary shall
                    make competitive grants from such amount to individual
                    University Centers for Excellence in Developmental
                    Disabilities but would not be less than $250,000 per
                    individual grant, in the case of University Centers for
                    Excellence for Developmental Disabilities located in
                    American Samoa or the Commonwealth of the Northern
                    Mariana Islands, supplemental grants of not less than
                    $100,000.
                      ``(C) Reservation.--Not more than 2 percent of the
                    amount appropriated under subparagraphs (A) or (B)
                    shall be reserved to carry out paragraph (2).
      ``(b) Expansion of the Number of University Centers for Excellence in
    Developmental Disabilities Research, Education, and Services.--
              ``(1) Purpose.--The Secretary shall award up to four
            additional grants for the University Centers for Excellence in
            Developmental Disabilities for the purpose of expanding the
            capacity of existing national network and enhance the number of
            training facilities serving minority institutions with a
            primary focus on autism spectrum disorder and related
            developmental disabilities. Such centers shall--
                      ``(A) train health, allied health, and educational
                    professionals to identify, diagnose, treat, and provide
                    services for individuals with autism spectrum
                    disorders;
                      ``(B) provide services, including early
                    identification, diagnosis, and intervention for
                    individuals with autism spectrum disorders; and
                      ``(C) provide other training and technical
                    assistance, as necessary.
              ``(2) Priority.--The Secretary shall give priority to
            establishing such centers in--
                      ``(A) minority-serving institutions that have
                    demonstrated capacity to meet the requirements to
                    qualify as a University Center for Excellence in
                    Developmental Disabilities and provide services to
                    individuals with autism spectrum disorders; or
                      ``(B) States with underserved populations.
              ``(3) Authorization of appropriations.--There is authorized
            to be appropriated to carry out this subsection $2,000,000 for
            each of the fiscal years 2011 through 2015.''.

    SEC. 2529. IMPLEMENTATION OF MEDICATION MANAGEMENT SERVICES IN
                        TREATMENT OF CHRONIC DISEASES.

      (a) In General.--The Secretary of Health and Human Services (referred
    to in this section as the ``Secretary''), acting through the Director
    of the Agency for Health Care Research and Quality, shall establish a
    program to provide grants to eligible entities to implement medication
    management services (referred to in this section as ``MTM services'')
    provided by licensed pharmacists, as a part of a collaborative,
    multidisciplinary, interprofessional 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 grant program not later than May 1, 2010.
      (b) Eligible Entities.--To be eligible to receive a grant 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 with other local providers and where applicable,
            through or in collaboration with the Medicare Medical Home
            Pilot program as established by section 1866F of the Social
            Security Act, as added by section 1302(a) of this Act;
              (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 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 follow-up
            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 as are allowed under
            the scopes of practice for pharmacists for purposes of other
            Federal programs.
      (d) Targeted Individuals.--MTM services provided by licensed
    pharmacists under a grant awarded under subsection (a) shall be offered
    to targeted individuals who--
              (1) take 4 or more prescribed medications (including over-
            the-counter 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 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
    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, as
    determined by the Secretary.
      (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 of
            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) Grant To Fund Development of Performance Measures.--The Secretary
    may 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. 2530. POSTPARTUM DEPRESSION.

      (a) Expansion and Intensification of Activities.--
              (1) Continuation of activities.--The Secretary is encouraged
            to expand and intensify activities on postpartum conditions.
              (2) Programs for postpartum conditions.--In carrying out
            paragraph (1), the Secretary is encouraged to continue research
            to expand the understanding of the causes of, and treatments
            for, postpartum conditions, including 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
                    professionals and the public, which may include a
                    coordinated national campaign that--
                              (i) is designed to increase the awareness and
                            knowledge of postpartum conditions;
                              (ii) may include public service announcements
                            through television, radio, and other means; and
                              (iii) may 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.
      (b) Report by the Secretary.--
              (1) Study.--The Secretary shall conduct a study on the
            benefits of screening for postpartum conditions.
              (2) Report.--Not later than 2 years after the date of the
            enactment of this Act, the Secretary shall complete the study
            required by paragraph (1) and submit a report to the Congress
            on the results of such study.
      (c) Sense of Congress Regarding Longitudinal Study of Relative Mental
    Health Consequences for Women of Resolving a Pregnancy.--
              (1) Sense of congress.--It is the sense of the Congress that
            the Director of the National Institute of Mental Health may
            conduct a nationally representative longitudinal study (during
            the period of fiscal years 2009 through 2018) on 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.
              (2) Report.--Beginning not later than 3 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.
      (d) Definitions.--In this section:
              (1) The term ``postpartum condition'' means postpartum
            depression or postpartum psychosis.
              (2) The term ``Secretary'' means the Secretary of Health and
            Human Services.
      (e) Authorization of Appropriations.--For the purpose of carrying out
    this section, in addition to any other amounts authorized to be
    appropriated for such purpose, there are authorized to be appropriated
    such sums as may be necessary for fiscal years 2010 through 2012.

    SEC. 2531. GRANTS TO PROMOTE POSITIVE HEALTH BEHAVIORS AND OUTCOMES.

      Part P of title III (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 Secretary, in collaboration with the
    Director of the Centers for Disease Control and Prevention and other
    Federal officials determined appropriate by the Secretary, is
    authorized to award grants to eligible entities to promote positive
    health behaviors 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, especially racial and ethnic minority
            populations;
              ``(2) to educate, guide, and provide experiential learning
            opportunities that target behavioral risk factors including--
                      ``(A) poor nutrition;
                      ``(B) physical inactivity;
                      ``(C) being overweight or obese;
                      ``(D) tobacco use;
                      ``(E) alcohol and substance use;
                      ``(F) injury and violence;
                      ``(G) risky sexual behavior;
                      ``(H) untreated mental health problems;
                      ``(I) untreated dental and oral health problems; and
                      ``(J) understanding informed consent;
              ``(3) to educate and provide guidance regarding effective
            strategies to promote positive health behaviors within the
            family;
              ``(4) to educate and provide outreach regarding enrollment in
            health insurance including the State 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;
              ``(5) to educate and refer underserved populations to
            appropriate health care agencies and community-based programs
            and organizations in order to increase access to quality health
            care services, including preventive health services, and to
            eliminate duplicative care; or
              ``(6) to educate, guide, and provide home visitation services
            regarding maternal health and prenatal care.
      ``(c) Application.--
              ``(1) In general.--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.
              ``(2) Contents.--Each application submitted pursuant to
            paragraph (1) shall--
                      ``(A) describe the activities for which assistance is
                    sought under this section;
                      ``(B) contain an assurance that, with respect to each
                    community health worker program receiving funds under
                    the grant, such program will provide training and
                    supervision to community health workers to enable such
                    workers to provide authorized program services;
                      ``(C) contain an assurance that the applicant will
                    evaluate the effectiveness of community health worker
                    programs receiving funds under the grant;
                      ``(D) contain an assurance that each community health
                    worker program receiving funds under the grant will
                    provide services in the cultural context most
                    appropriate for the individuals served by the program;
                      ``(E) contain a plan to document and disseminate
                    project descriptions and results to other States and
                    organizations as identified by the Secretary; and
                      ``(F) describe plans to enhance the capacity of
                    individuals to utilize health services and health-
                    related social services under Federal, State, and local
                    programs by--
                              ``(i) assisting individuals in establishing
                            eligibility under the programs and in receiving
                            the services or other benefits of the programs;
                            and
                              ``(ii) providing other services as the
                            Secretary determines to be appropriate, that
                            may include transportation and translation
                            services.
      ``(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 including pulmonary conditions,
                    hypertension, heart disease, mental disorders,
                    diabetes, and asthma; and
                      ``(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.--The Secretary shall
    encourage community health worker programs receiving funds under this
    section to collaborate with academic institutions, especially those
    that graduate a disproportionate number of health and health care
    students from underrepresented racial and ethnic minority backgrounds.
    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 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 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) Report to Congress.--
              ``(1) In general.--Not later than 4 years after the date on
            which the Secretary first awards grants under subsection (a),
            the Secretary shall submit to Congress a report regarding the
            grant project.
              ``(2) Contents.--The report required under paragraph (1)
            shall include the following:
                      ``(A) A description of the programs for which grant
                    funds were used.
                      ``(B) The number of individuals served under such
                    programs.
                      ``(C) An evaluation of--
                              ``(i) the effectiveness of such programs;
                              ``(ii) the cost of such programs; and
                              ``(iii) the impact of the programs on the
                            health outcomes of the community residents.
                      ``(D) Recommendations for sustaining the community
                    health worker programs developed or assisted under this
                    section.
                      ``(E) Recommendations regarding training to enhance
                    career opportunities for community health workers.
      ``(k) Definitions.--In this section:
              ``(1) Community health worker.--The term `community health
            worker' 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
                    health care agencies;
                      ``(B) by providing guidance and social assistance to
                    community residents;
                      ``(C) by enhancing community residents' ability to
                    effectively communicate with health care providers;
                      ``(D) by providing culturally and linguistically
                    appropriate health or nutrition education;
                      ``(E) by advocating for individual and community
                    health, including oral and mental, or nutrition needs;
                    and
                      ``(F) by providing referral and followup services or
                    otherwise coordinating care.
              ``(2) Community setting.--The term `community setting' means
            a home or a community organization located in the neighborhood
            in which a participant resides.
              ``(3) Medically underserved community.--The term `medically
            underserved community' means a community identified by a State,
            United States territory or possession, or federally recognized
            Indian tribe--
                      ``(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.
              ``(4) Support.--The term `support' means the provision of
            training, supervision, and materials needed to effectively
            deliver the services described in subsection (b), reimbursement
            for services, and other benefits.
              ``(5) 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, or a
            federally qualified health center), or a consortium of any of
            such entities, located in the United States or territory
            thereof.
      ``(l) Authorization of Appropriations.--There is authorized to be
    appropriated to carry out this section $30,000,000 for each of fiscal
    years 2010, 2011, 2012, 2013, and 2014.''.

                    PART 3--EMERGENCY CARE-RELATED PROGRAMS

    SEC. 2541. TRAUMA CARE CENTERS.

      (a) Grants for Trauma Care Centers.--Section 1241 (42 U.S.C. 300d-41)
    is amended to read as follows:

    ``SEC. 1241. GRANTS FOR CERTAIN TRAUMA CENTERS.

      ``(a) In General.--The Secretary shall establish a trauma center
    program consisting of awarding grants under section (b).
      ``(b) Grants.--The Secretary shall award grants as follows:
              ``(1) Existing centers.--Grants to public, private nonprofit,
            Indian Health Service, Indian tribal, and urban Indian trauma
            centers--
                      ``(A) to further the core missions of such centers;
                    or
                      ``(B) to provide emergency relief to ensure the
                    continued and future availability of trauma services by
                    trauma centers--
                              ``(i) at risk of closing or operating in an
                            area where a closing has occurred within their
                            primary service area; or
                              ``(ii) in need of financial assistance
                            following a natural disaster or other
                            catastrophic event, such as a terrorist attack.
              ``(2) New centers.--Grants to local governments and public or
            private nonprofit entities to establish new trauma centers in
            urban areas with a substantial degree of trauma resulting from
            violent crimes.
      ``(c) Minimum Qualifications of Trauma Centers.--
              ``(1) Participation in trauma care system operating under
            certain professional guidelines.--
                      ``(A) Limitation.--Subject to subparagraph (B), the
                    Secretary may not award a grant to an existing trauma
                    center under this section unless the center is a
                    participant in a trauma care system that substantially
                    complies with section 1213.
                      ``(B) Exemption.--Subparagraph (A) shall not apply to
                    trauma centers that are located in States with no
                    existing trauma care system.
              ``(2) Designation.--The Secretary may not award a grant under
            this section to an existing trauma center unless the center
            is--
                      ``(A) verified as a trauma center by the American
                    College of Surgeons; or
                      ``(B) designated as a trauma center by the applicable
                    State health or emergency medical services
                    authority.''.
      (b) Considerations in Making Grants.--Section 1242 (42 U.S.C. 300d-
    42) is amended to read as follows:

    ``SEC. 1242. CONSIDERATIONS IN MAKING GRANTS.

      ``(a) Core Mission Awards.--
              ``(1) In general.--In awarding grants under section
            1241(b)(1)(A), the Secretary shall--
                      ``(A) reserve a minimum of 25 percent of the amount
                    allocated for such grants for level III and level IV
                    trauma centers in rural or underserved areas;
                      ``(B) reserve a minimum of 25 percent of the amount
                    allocated for such grants for level I and level II
                    trauma centers in urban areas; and
                      ``(C) give preference to any application made by a
                    trauma center--
                              ``(i) in a geographic area where growth in
                            demand for trauma services exceeds capacity;
                              ``(ii) that demonstrates the financial
                            support of the State or political subdivision
                            involved;
                              ``(iii) that has at least 1 graduate medical
                            education fellowship in trauma or trauma-
                            related specialties, including neurological
                            surgery, surgical critical care, vascular
                            surgery, and spinal cord injury, for which
                            demand is exceeding supply; or
                              ``(iv) that demonstrates a substantial
                            commitment to serving vulnerable populations.
              ``(2) Financial support.--For purposes of paragraph
            (1)(C)(ii), financial support may be demonstrated by State or
            political subdivision funding for the trauma center's capital
            or operating expenses (including through State trauma regional
            advisory coordination activities, Medicaid funding designated
            for trauma services, or other governmental funding). State
            funding derived from Federal support shall not constitute State
            or local financial support for purposes of preferential
            treatment under this subsection.
              ``(3) Use of funds.--The recipient of a grant under section
            1241(b)(1)(A) shall carry out, consistent with furthering the
            core missions of the center, one or more of the following
            activities:
                      ``(A) Providing 24-hour-a-day, 7-day-a-week trauma
                    care availability.
                      ``(B) Reducing overcrowding related to throughput of
                    trauma patients.
                      ``(C) Enhancing trauma surge capacity.
                      ``(D) Ensuring physician and essential personnel
                    availability.
                      ``(E) Trauma education and outreach.
                      ``(F) Coordination with local and regional trauma
                    care systems.
                      ``(G) Such other activities as the Secretary may deem
                    appropriate.
      ``(b) Emergency Awards; New Centers.--In awarding grants under
    paragraphs (1)(B) and (2) of section 1241(b), the Secretary shall--
              ``(1) give preference to any application submitted by an
            applicant that demonstrates the financial support (in
            accordance with subsection (a)(2)) of the State or political
            subdivision involved for the activities to be funded through
            the grant for each fiscal year during which payments are made
            to the center under the grant; and
              ``(2) give preference to any application submitted for a
            trauma center that--
                      ``(A) is providing or will provide trauma care in a
                    geographic area in which the availability of trauma
                    care has either significantly decreased as a result of
                    a trauma center in the area permanently ceasing
                    participation in a system described in section
                    1241(c)(1) as of a date occurring during the 2-year
                    period preceding the fiscal year for which the trauma
                    center is applying to receive a grant, or in geographic
                    areas where growth in demand for trauma services
                    exceeds capacity;
                      ``(B) will, in providing trauma care during the 1-
                    year period beginning on the date on which the
                    application for the grant is submitted, incur
                    substantial uncompensated care costs in an amount that
                    renders the center unable to continue participation in
                    such system and results in a significant decrease in
                    the availability of trauma care in the geographic area;
                      ``(C) operates or will operate in rural areas where
                    trauma care availability will significantly decrease if
                    the center is forced to close or downgrade service and
                    substantial costs are contributing to a likelihood of
                    such closure or downgradation;
                      ``(D) is in a geographic location substantially
                    affected by a natural disaster or other catastrophic
                    event such as a terrorist attack; or
                      ``(E) will establish a new trauma service in an urban
                    area with a substantial degree of trauma resulting from
                    violent crimes.
      ``(c) Designations of Levels of Trauma Centers in Certain States.--In
    the case of a State which has not designated 4 levels of trauma
    centers, any reference in this section to--
              ``(1) a level I or level II trauma center is deemed to be a
            reference to a trauma center within the highest 2 levels of
            trauma centers designated under State guidelines; and
              ``(2) a level III or IV trauma center is deemed to be a
            reference to a trauma center not within such highest 2
            levels.''.
      (c) Certain Agreements.--Section 1243 (42 U.S.C. 300d-43) is amended
    to read as follows:

    ``SEC. 1243. CERTAIN AGREEMENTS.

      ``(a) Commitment Regarding Continued Participation in Trauma Care
    System.--The Secretary may not award a grant to an applicant under
    section 1241(b) unless the applicant agrees that--
              ``(1) the trauma center involved will continue participation,
            or in the case of a new center will participate, in the system
            described in section 1241(c)(1), except as provided in section
            1241(c)(1)(B), throughout the grant period beginning on the
            date that the center first receives payments under the grant;
            and
              ``(2) if the agreement made pursuant to paragraph (1) is
            violated by the center, the center will be liable to the United
            States for an amount equal to the sum of--
                      ``(A) the amount of assistance provided to the center
                    under section 1241; and
                      ``(B) an amount representing interest on the amount
                    specified in subparagraph (A).
      ``(b) Maintenance of Financial Support.--With respect to activities
    for which funds awarded through a grant under section 1241 are
    authorized to be expended, the Secretary may not award such a grant
    unless the applicant agrees that, during the period in which the trauma
    center involved is receiving payments under the grant, the center will
    maintain access to trauma services at levels not less than the levels
    for the prior year, taking into account--
              ``(1) reasonable volume fluctuation that is not caused by
            intentional trauma boundary reduction;
              ``(2) downgrading of the level of services; and
              ``(3) whether such center diverts its incoming patients away
            from such center 5 percent or more of the time during which the
            center is in operation over the course of the year.
      ``(c) Trauma Care Registry.--The Secretary may not award a grant to a
    trauma center under section 1241(b)(1) unless the center agrees that--
              ``(1) not later than 6 months after the date on which the
            center submits a grant application to the Secretary, the center
            will establish and operate a registry of trauma cases in
            accordance with guidelines developed by the American College of
            Surgeons; and
              ``(2) in carrying out paragraph (1), the center will maintain
            information on the number of trauma cases treated by the center
            and, for each such case, the extent to which the center incurs
            uncompensated costs in providing trauma care.''.
      (d) General Provisions.--Section 1244 (42 U.S.C. 300d-44) is amended
    to read as follows:

    ``SEC. 1244. GENERAL PROVISIONS.

      ``(a) Limitation on Duration of Support.--The period during which a
    trauma center receives payments under a grant under section 1241(b)(1)
    shall be for 3 fiscal years, except that the Secretary may waive such
    requirement for the center and authorize the center to receive such
    payments for 1 additional fiscal year.
      ``(b) Eligibility.--The acquisition of, or eligibility for, a grant
    under section 1241(b) shall not preclude a trauma center's eligibility
    for another grant described in such section.
      ``(c) Funding Distribution.--Of the total amount appropriated for a
    fiscal year under section 1245--
              ``(1) 90 percent shall be used for grants under paragraph
            (1)(A) of section 1241(b); and
              ``(2) 10 percent shall be used for grants under paragraphs
            (1)(B) and (2) of section 1241(b).
      ``(d) Report.--Beginning 2 years after the date of the enactment of
    the America's Affordable Health Choices Act of 2009, and every 2 years
    thereafter, the Secretary shall biennially--
              ``(1) report to Congress on the status of the grants made
            pursuant to section 1241;
              ``(2) evaluate and report to Congress on the overall
            financial stability of trauma centers in the United States;
              ``(3) report on the populations using trauma care centers and
            include aggregate patient data on income, race, ethnicity, and
            geography; and
              ``(4) evaluate the effectiveness and efficiency of trauma
            care center activities using standard public health measures
            and evaluation methodologies.''.
      (e) Authorization of Appropriations.--Section 1245 (42 U.S.C. 300d-
    45) is amended to read as follows:

    ``SEC. 1245. AUTHORIZATION OF APPROPRIATIONS.

      ``(a) In General.--For the purpose of carrying out this part, there
    are authorized to be appropriated $100,000,000 for fiscal year 2010,
    and such sums as may be necessary for each of fiscal years 2011 through
    2015. Such authorization of appropriations is in addition to any other
    authorization of appropriations or amounts that are available for such
    purpose.
      ``(b) Reallocation.--The Secretary shall reallocate for grants under
    section 1241(b)(1)(A) any funds appropriated for grants under paragraph
    (1)(B) or (2) of section 1241(b), but not obligated due to insufficient
    applications eligible for funding.''.

    SEC. 2542. EMERGENCY CARE COORDINATION.

      (a) In General.--Subtitle B of title XXVIII (42 U.S.C. 300hh-10 et
    seq.) is amended by adding at the end the following:

    ``SEC. 2816. EMERGENCY CARE COORDINATION.

      ``(a) Emergency Care Coordination Center.--
              ``(1) Establishment.--The Secretary shall establish, within
            the Office of the Assistant Secretary for Preparedness and
            Response, an Emergency Care Coordination Center (in this
            section referred to as the `Center'), to be headed by a
            director.
              ``(2) Duties.--The Secretary, acting through the Director of
            the Center, in coordination with the Federal Interagency
            Committee on Emergency Medical Services, shall--
                      ``(A) promote and fund research in emergency medicine
                    and trauma health care;
                      ``(B) promote regional partnerships and more
                    effective emergency medical systems in order to enhance
                    appropriate triage, distribution, and care of routine
                    community patients; and
                      ``(C) promote local, regional, and State emergency
                    medical systems' preparedness for and response to
                    public health events.
      ``(b) Council of Emergency Care.--
              ``(1) Establishment.--The Secretary, acting through the
            Director of the Center, shall establish a Council of Emergency
            Care to provide advice and recommendations to the Director on
            carrying out this section.
              ``(2) Composition.--The Council shall be comprised of
            employees of the departments and agencies of the Federal
            Government who are experts in emergency care and management.
      ``(c) Report.--
              ``(1) Submission.--Not later than 12 months after the date of
            the enactment of the America's Affordable Health Choices Act of
            2009, the Secretary shall submit to the Congress an annual
            report on the activities carried out under this section.
              ``(2) Considerations.--In preparing a report under paragraph
            (1), the Secretary shall consider factors including--
                      ``(A) emergency department crowding and boarding; and
                      ``(B) delays in care following presentation.
      ``(d) 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.''.
      (b) Functions, Personnel, Assets, Liabilities, and Administrative
    Actions.--All functions, personnel, assets, and liabilities of, and
    administrative actions applicable to, the Emergency Care Coordination
    Center, as in existence on the day before the date of the enactment of
    this Act, shall be transferred to the Emergency Care Coordination
    Center established under section 2816(a) of the Public Health Service
    Act, as added by subsection (a).

    SEC. 2543. PILOT PROGRAMS TO IMPROVE EMERGENCY MEDICAL CARE.

      Part B of title III (42 U.S.C. 243 et seq.) is amended by inserting
    after section 314 the following:

    ``SEC. 315. REGIONALIZED COMMUNICATION 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 demonstration programs that design, implement, and evaluate
    innovative models of regionalized, comprehensive, and accountable
    emergency care systems.
      ``(b) Eligible Entity; Region.--
              ``(1) Eligible entity.--In this section, the term `eligible
            entity' means a State or a partnership of 1 or more States and
            1 or more local governments.
              ``(2) Region.--In this section, 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.
      ``(c) Demonstration Program.--The Secretary shall award a contract or
    grant under subsection (a) to an eligible entity that proposes a
    demonstration program to design, implement, and evaluate an emergency
    medical system that--
              ``(1) coordinates with public safety services, public health
            services, emergency medical services, medical facilities, and
            other entities within a region;
              ``(2) coordinates an approach to emergency medical system
            access throughout the region, including 9-1-1 public safety
            answering points and emergency medical dispatch;
              ``(3) includes a mechanism, such as a regional medical
            direction or transport communications system, that operates
            throughout the region to ensure that the correct patient is
            taken to the medically appropriate facility (whether an initial
            facility or a higher level facility) in a timely fashion;
              ``(4) allows for the tracking of prehospital and hospital
            resources, including inpatient bed capacity, emergency
            department capacity, on-call specialist coverage, ambulance
            diversion status, and the coordination of such tracking with
            regional communications and hospital destination decisions; and
              ``(5) includes a consistent regionwide prehospital, hospital,
            and interfacility data management system that--
                      ``(A) complies with 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 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) is compatible with the applicable
                            State emergency medical services system;
                              ``(iii) includes consistent indirect and
                            direct medical oversight of prehospital,
                            hospital, and interfacility transport
                            throughout the region;
                              ``(iv) coordinates prehospital treatment and
                            triage, hospital destination, and interfacility
                            transport throughout the region;
                              ``(v) includes a categorization or
                            designation system for special medical
                            facilities throughout the region that is--
                                      ``(I) consistent with State laws and
                                    regulations; and
                                      ``(II) integrated with the protocols
                                    for transport and destination
                                    throughout the region; and
                              ``(vi) includes a regional medical direction
                            system, a patient tracking system, and a
                            resource allocation system that--
                                      ``(I) support day-to-day emergency
                                    care system operation;
                                      ``(II) can manage surge capacity
                                    during a major event or disaster; and
                                      ``(III) are integrated with other
                                    components of the national and State
                                    emergency preparedness system;
                      ``(B) an agreement to make available non-Federal
                    contributions in accordance with subsection (e); and
                      ``(C) such other information as the Secretary may
                    require.
      ``(e) Matching Funds.--
              ``(1) In general.--With respect to the costs of the
            activities to be carried out each year with a contract or grant
            under subsection (a), a condition for the receipt of the
            contract or grant is that the eligible entity involved agrees
            to make available (directly or through donations from public or
            private entities) non-Federal contributions toward such costs
            in an amount that is not less than 25 percent of such costs.
              ``(2) Determination of amount contributed.--Non-Federal
            contributions required in paragraph (1) may be in cash or in
            kind, fairly evaluated, including plant, 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 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 medically underserved population (as defined in
    section 330(b)(3)).
      ``(g) Report.--Not later than 90 days after the completion of a
    demonstration program under subsection (a), the recipient of such
    contract or grant described in such subsection 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
            system on patient outcomes for various critical care
            categories, such as trauma, stroke, cardiac 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 system;
              ``(4) the State and local legislation necessary to implement
            and to maintain the system; and
              ``(5) the barriers to developing regionalized, accountable
            emergency care systems, as well as the methods to overcome such
            barriers.
      ``(h) Evaluation.--The Secretary, acting through the Assistant
    Secretary for Preparedness and Response, shall enter into a contract
    with an academic institution or other entity to conduct an independent
    evaluation of the demonstration programs funded under subsection (a),
    including an evaluation of--
              ``(1) the performance of the eligible entities receiving the
            funds; and
              ``(2) the impact of the demonstration programs.
      ``(i) 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 (h).
      ``(j) Authorization of Appropriations.--
              ``(1) In general.--There is authorized to be appropriated to
            carry out this section $12,000,000 for each of fiscal years
            2010 through 2015.
              ``(2) Reservation.--Of the amount appropriated to carry out
            this section for a fiscal year, the Secretary shall reserve 3
            percent of such amount to carry out subsection (h) (relating to
            an independent evaluation).''.

    SEC. 2544. ASSISTING VETERANS WITH MILITARY EMERGENCY MEDICAL TRAINING
                        TO BECOME STATE-LICENSED OR CERTIFIED EMERGENCY
                        MEDICAL TECHNICIANS (EMTS).

      (a) In General.--Part B of title III (42 U.S.C. 243 et seq.), as
    amended, is amended by inserting after section 315 the following:

    ``SEC. 315A. ASSISTING VETERANS WITH MILITARY EMERGENCY MEDICAL
                        TRAINING TO BECOME STATE-LICENSED OR CERTIFIED
                        EMERGENCY MEDICAL TECHNICIANS (EMTS).

      ``(a) Program.--The Secretary shall establish a program consisting of
    awarding grants to States to assist veterans who received and completed
    military emergency medical training while serving in the Armed Forces
    of the United States to become, upon their discharge or release from
    active duty service, State-licensed or certified emergency medical
    technicians.
      ``(b) Use of Funds.--Amounts received as a grant under this section
    may be used to assist veterans described in subsection (a) to become
    State-licensed or certified emergency medical technicians as follows:
              ``(1) Providing training.
              ``(2) Providing reimbursement for costs associated with--
                      ``(A) training; or
                      ``(B) applying for licensure or certification.
              ``(3) Expediting the licensing or certification process.
      ``(c) Eligibility.--To be eligible for a grant under this section, a
    State shall demonstrate to the Secretary's satisfaction that the State
    has a shortage of emergency medical technicians.
      ``(d) Report.--The Secretary shall submit to the Congress an annual
    report on the program under this section.
      ``(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.''.
      (b) GAO Study and Report.--The Comptroller General of the United
    States shall--
              (1) conduct a study on the barriers experienced by veterans
            who received training as medical personnel while serving in the
            Armed Forces of the United States and, upon their discharge or
            release from active duty service, seek to become licensed or
            certified in a State as civilian health professionals; and
              (2) not later than 2 years after the date of the enactment of
            this Act, submit to the Congress a report on the results of
            such study, including recommendations on whether the program
            established under section 315A of the Public Health Service
            Act, as added by subsection (a), should be expanded to assist
            veterans seeking to become licensed or certified in a State as
            health providers other than emergency medical technicians.

    SEC. 2545. DENTAL EMERGENCY RESPONDERS: PUBLIC HEALTH AND MEDICAL
                        RESPONSE.

      (a) National Health Security Strategy.--Section 2802(b)(3) (42 U.S.C.
    300hh-1(b)(3)) is amended--
              (1) in the matter preceding subparagraph (A), by inserting
            ``dental and'' before ``mental health facilities''; and
              (2) in subparagraph (D), by inserting ``and dental'' after
            ``medical''.
      (b) All-hazards Public Health and Medical Response Curricula and
    Training.--Section 319F(a)(5)(B) (42 U.S.C. 247d-6(a)(5)(B)) is amended
    by striking ``public health or medical'' and inserting ``public health,
    medical, or dental''.

    SEC. 2546. DENTAL EMERGENCY RESPONDERS: HOMELAND SECURITY.

      (a) National Response Framework.--Paragraph (6) of section 2 of the
    Homeland Security Act of 2002 (6 U.S.C. 101) is amended by inserting
    ``and dental'' after ``emergency medical''.
      (b) National Preparedness System.--Subparagraph (B) of section
    653(b)(4) of the Post-Katrina Emergency Management Reform Act of 2006
    (6 U.S.C. 753(b)(4)) is amended by striking ``public health and
    medical'' and inserting ``public health, medical, and dental''.
      (c) Chief Medical Officer.--Paragraph (5) of section 516(c) of the
    Homeland Security Act of 2002 (6 U.S.C. 321e(c)) is amended by striking
    ``medical community'' and inserting ``medical and dental communities''.

                   PART 4--PAIN CARE AND MANAGEMENT PROGRAMS

    SEC. 2551. INSTITUTE OF MEDICINE CONFERENCE ON PAIN.

      (a) Convening.--Not later than June 30, 2010, 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 section referred to as ``the Conference'').
      (b) Purposes.--The purposes of the Conference shall be to--
              (1) increase the recognition of pain as a significant public
            health problem in the United States;
              (2) 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;
              (3) identify barriers to appropriate pain care, including--
                      (A) lack of understanding and education among
                    employers, patients, health care providers, regulators,
                    and third-party payors;
                      (B) barriers to access to care at the primary,
                    specialty, and tertiary care levels, including
                    barriers--
                              (i) specific to those populations that are
                            disproportionately undertreated for pain;
                              (ii) related to physician concerns over
                            regulatory and law enforcement policies
                            applicable to some pain therapies; and
                              (iii) attributable to benefit, coverage, and
                            payment policies in both the public and private
                            sectors; and
                      (C) gaps in basic and clinical research on the
                    symptoms and causes of pain, and potential assessment
                    methods and new treatments to improve pain care; and
              (4) 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.
      (c) Other Appropriate Entity.--If the Institute of Medicine declines
    to enter into an agreement under subsection (a), the Secretary of
    Health and Human Services may enter into such agreement with another
    appropriate entity.
      (d) Report.--A report summarizing the Conference's findings and
    recommendations shall be submitted to the Congress not later than June
    30, 2011.
      (e) Authorization of Appropriations.--For the purpose of carrying out
    this section, there is authorized to be appropriated $500,000 for each
    of fiscal years 2010 and 2011.

    SEC. 2552. PAIN RESEARCH AT NATIONAL INSTITUTES OF HEALTH.

      Part B of title IV (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 as follows:
                                      ``(I) The Director of the Centers for
                                    Disease Control and Prevention.
                                      ``(II) The Director of the National
                                    Institutes of Health and the directors
                                    of such national research institutes
                                    and national centers as the Secretary
                                    determines appropriate.
                                      ``(III) The heads of such other
                                    agencies of the Department of Health
                                    and Human Services as the Secretary
                                    determines appropriate.
                                      ``(IV) Representatives of other
                                    Federal agencies that conduct or
                                    support pain care research and
                                    treatment, including the Department of
                                    Defense and the Department of Veterans
                                    Affairs.
                              ``(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 members shall be appointed from among
                            scientists, physicians, and other health
                            professionals, who--
                                      ``(I) are not officers or employees
                                    of the United States;
                                      ``(II) represent multiple
                                    disciplines, including clinical, basic,
                                    and public health sciences;
                                      ``(III) represent different
                                    geographical regions of the United
                                    States; and
                                      ``(IV) are from practice settings,
                                    academia, manufacturers, or other
                                    research settings; and
                              ``(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, including the Department of
                    Defense and the Department of Veteran Affairs, 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, including Federal
                    agencies, 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.''.

    SEC. 2553. PUBLIC AWARENESS CAMPAIGN ON PAIN MANAGEMENT.

      Part B of title II (42 U.S.C. 238 et seq.) is amended by adding at
    the end the following:

    ``SEC. 249. NATIONAL EDUCATION OUTREACH AND AWARENESS CAMPAIGN ON PAIN
                        MANAGEMENT.

      ``(a) Establishment.--Not later than June 30, 2010, the Secretary
    shall establish and implement a national pain care education outreach
    and awareness campaign described in subsection (b).
      ``(b) Requirements.--The Secretary shall design the public awareness
    campaign under this section to educate consumers, patients, their
    families, and other caregivers with respect to--
              ``(1) the incidence and importance of pain as a national
            public health problem;
              ``(2) the adverse physical, psychological, emotional,
            societal, and financial consequences that can result if pain is
            not appropriately assessed, diagnosed, treated, or managed;
              ``(3) the availability, benefits, and risks of all pain
            treatment and management options;
              ``(4) having pain promptly assessed, appropriately diagnosed,
            treated, and managed, and regularly reassessed with treatment
            adjusted as needed;
              ``(5) the role of credentialed pain management specialists
            and subspecialists, and of comprehensive interdisciplinary
            centers of treatment expertise;
              ``(6) the availability in the public, nonprofit, and private
            sectors of pain management-related information, services, and
            resources for consumers, employers, third-party payors,
            patients, their families, and caregivers, including information
            on--
                      ``(A) appropriate assessment, diagnosis, treatment,
                    and management options for all types of pain and pain-
                    related symptoms; and
                      ``(B) conditions for which no treatment options are
                    yet recognized; and
              ``(7) other issues the Secretary deems appropriate.
      ``(c) Consultation.--In designing and implementing the public
    awareness campaign required by this section, the Secretary shall
    consult with organizations representing patients in pain and other
    consumers, employers, physicians including physicians specializing in
    pain care, other pain management professionals, medical device
    manufacturers, and pharmaceutical companies.
      ``(d) Coordination.--
              ``(1) Lead official.--The Secretary shall designate one
            official in the Department of Health and Human Services to
            oversee the campaign established under this section.
              ``(2) Agency coordination.--The Secretary shall ensure the
            involvement in the public awareness campaign under this section
            of the Surgeon General of the Public Health Service, the
            Director of the Centers for Disease Control and Prevention, and
            such other representatives of offices and agencies of the
            Department of Health and Human Services as the Secretary
            determines appropriate.
      ``(e) Underserved Areas and Populations.--In designing the public
    awareness campaign under this section, the Secretary shall--
              ``(1) take into account the special needs of geographic areas
            and racial, ethnic, gender, age, and other demographic groups
            that are currently underserved; and
              ``(2) provide resources that will reduce disparities in
            access to appropriate diagnosis, assessment, and treatment.
      ``(f) Grants and Contracts.--The Secretary may make awards of grants,
    cooperative agreements, and contracts to public agencies and private
    nonprofit organizations to assist with the development and
    implementation of the public awareness campaign under this section.
      ``(g) Evaluation and Report.--Not later than the end of fiscal year
    2012, the Secretary shall prepare and submit to the Congress a report
    evaluating the effectiveness of the public awareness campaign under
    this section in educating the general public with respect to the
    matters described in subsection (b).
      ``(h) Authorization of Appropriations.--For purposes of carrying out
    this section, there are authorized to be appropriated $2,000,000 for
    fiscal year 2010 and $4,000,000 for each of fiscal years 2011 and
    2012.''.

                    Subtitle C--Food and Drug Administration

                               PART 1--IN GENERAL

    SEC. 2561. NATIONAL MEDICAL DEVICE REGISTRY.

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

                       ``National Medical Device Registry

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

    SEC. 2562. NUTRITION LABELING OF STANDARD MENU ITEMS AT CHAIN
                        RESTAURANTS AND OF ARTICLES OF FOOD SOLD FROM
                        VENDING MACHINES.

      (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 subclause (i), by inserting ``except as provided in
            clause (H)(ii)(III),'' after ``(i)'' ; and
              (2) in subclause (ii), by inserting ``except as provided in
            clause (H)(ii)(III),'' after ``(ii)''.
      (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.--Clause (C) shall apply to any
                    regulations promulgated under subclauses (ii)(III) and
                    (vi).
              ``(viii) Vending machines.--In the case of an article of food
            sold from a vending machine that--
                      ``(I) 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
                      ``(II) 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 the
                    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 the 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
            section 403A(a)(4) of such Act;
              (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
            (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. 2563. PROTECTING CONSUMER ACCESS TO GENERIC DRUGS.

      (a) In General.--Section 505 of the Federal Food, Drug, and Cosmetic
    Act (21 U.S.C. 355) is amended by adding at the end the following:
      ``(w) Protecting Consumer Access to Generic Drugs.--
              ``(1) Unfair and deceptive acts and practices related to new
            drug applications.--
                      ``(A) Conduct prohibited.--It shall be unlawful for
                    any person to directly or indirectly be a party to any
                    agreement resolving or settling a patent infringement
                    claim in which--
                              ``(i) an ANDA filer receives anything of
                            value; and
                              ``(ii) the ANDA filer agrees to limit or
                            forego research, development, manufacturing,
                            marketing, or sales, for any period of time, of
                            the drug that is to be manufactured under the
                            ANDA involved and is the subject of the patent
                            infringement claim.
                      ``(B) Exceptions.--Notwithstanding subparagraph
                    (A)(i), subparagraph (A) does not prohibit a resolution
                    or settlement of a patent infringement claim in which
                    the value received by the ANDA filer includes no more
                    than--
                              ``(i) the right to market the drug that is to
                            be manufactured under the ANDA involved and is
                            the subject of the patent infringement claim,
                            before the expiration of--
                                      ``(I) the patent that is the basis
                                    for the patent infringement claim; or
                                      ``(II) any other statutory
                                    exclusivity that would prevent the
                                    marketing of such drug; and
                              ``(ii) the waiver of a patent infringement
                            claim for damages based on prior marketing of
                            such drug.
                      ``(C) Enforcement.--
                              ``(i) In general.--A violation of
                            subparagraph (A) shall be treated as an unfair
                            and deceptive act or practice and an unfair
                            method of competition in or affecting
                            interstate commerce prohibited under section 5
                            of the Federal Trade Commission Act and shall
                            be enforced by the Federal Trade Commission in
                            the same manner, by the same means, and with
                            the same jurisdiction as though all applicable
                            terms and provisions of the Federal Trade
                            Commission Act were incorporated into and made
                            a part of this subsection.
                              ``(ii) Inapplicability.--Subchapter A of
                            chapter VII shall not apply with respect to
                            this subsection.
                      ``(D) Definitions.--In this subsection:
                              ``(i) Agreement.--The term `agreement' means
                            anything that would constitute an agreement
                            under section 5 of the Federal Trade Commission
                            Act.
                              ``(ii) Agreement resolving or settling.--The
                            term `agreement resolving or settling', in
                            reference to a patent infringement claim,
                            includes any agreement that is contingent upon,
                            provides a contingent condition for, or is
                            otherwise related to the resolution or
                            settlement of the claim.
                              ``(iii) ANDA.--The term `ANDA' means an
                            abbreviated new drug application for the
                            approval of a new drug under section (j).
                              ``(iv) ANDA filer.--The term `ANDA filer'
                            means a party that has filed an ANDA with the
                            Food and Drug Administration.
                              ``(v) Patent infringement.--The term `patent
                            infringement' means infringement of any patent
                            or of any filed patent application, extension,
                            reissuance, renewal, division, continuation,
                            continuation in part, reexamination, patent
                            term restoration, patent of addition, or
                            extension thereof.
                              ``(vi) Patent infringement claim.--The term
                            `patent infringement claim' means any
                            allegation made to an ANDA filer, whether or
                            not included in a complaint filed with a court
                            of law, that its ANDA or drug to be
                            manufactured under such ANDA may infringe any
                            patent.
              ``(2) FTC rulemaking.--The Federal Trade Commission may, by
            rule promulgated under section 553 of title 5, United States
            Code, exempt certain agreements described in paragraph (1) from
            the requirements of this subsection if the Commission finds
            such agreements to be in furtherance of market competition and
            for the benefit of consumers. Consistent with the authority of
            the Commission, such rules may include interpretive rules and
            general statements of policy with respect to the practices
            prohibited under paragraph (1).''.
      (b) Notice and Certification of Agreements.--
              (1) Notice of all agreements.--Section 1112(c)(2) of the
            Medicare Prescription Drug, Improvement, and Modernization Act
            of 2003 (21 U.S.C. 3155 note) is amended by--
                      (A) striking ``the Commission the'' and inserting the
                    following: ``the Commission--
                      ``(A) the'';
                      (B) striking the period at the end and inserting ``;
                    and''; and
                      (C) adding at the end the following:
                      ``(B) any other agreement the parties enter into
                    within 30 days of entering into an agreement covered by
                    subsection (a) or (b).''.
              (2) Certification of agreements.--Section 1112 of such Act is
            amended by adding at the end the following:
      ``(d) Certification.--The chief executive officer or the company
    official responsible for negotiating any agreement required to be filed
    under subsection (a), (b), or (c) shall execute and file with the
    Assistant Attorney General and the Commission a certification as
    follows: `I declare under penalty of perjury that the following is true
    and correct: The materials filed with the Federal Trade Commission and
    the Department of Justice under section 1112 of subtitle B of title XI
    of the Medicare Prescription Drug, Improvement, and Modernization Act
    of 2003, with respect to the agreement referenced in this
    certification: (1) represent the complete, final, and exclusive
    agreement between the parties; (2) include any ancillary agreements
    that are contingent upon, provide a contingent condition for, or are
    otherwise related to, the referenced agreement; and (3) include written
    descriptions of any oral agreements, representations, commitments, or
    promises between the parties that are responsive to subsection (a) or
    (b) of such section 1112 and have not been reduced to writing.'.''.
      (c) GAO Study.--
              (1) Study.--Beginning 2 years after the date of enactment of
            this Act, and each year for a period of 4 years thereafter, the
            Comptroller General shall conduct a study on the litigation in
            United States courts during the period beginning years prior to
            the date of enactment of this Act relating to patent
            infringement claims involving generic drugs, the number of
            patent challenges initiated by manufacturers of generic drugs,
            and the number of settlements of such litigation. The
            Comptroller General shall transmit to Congress a report of the
            findings of such a study and an analysis of the effect of the
            amendments made by subsections (a) and (b) on such litigation,
            whether such amendments have had an effect on the number and
            frequency of claims settled, and whether such amendments
            resulted in earlier or delayed entry of generic drugs to
            market, including whether any harm or benefits to consumers has
            resulted.
              (2) Disclosure of agreements.--Notwithstanding any other law,
            agreements filed under section 1112 of the Medicare
            Prescription Drug, Improvement, and Modernization Act of 2003
            (21 U.S.C. 355 note), or unaggregated information from such
            agreements, shall be disclosed to the Comptroller General for
            purposes of the study under paragraph (1) within 30 days of a
            request by the Comptroller General.

                              PART 2--BIOSIMILARS

    SEC. 2565. LICENSURE 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
                              ``(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).
                      ``(D) Restrictions on biological products containing
                    dangerous ingredients.--If information in an
                    application submitted under this subsection, in a
                    supplement to such an application, or otherwise
                    available to the Secretary shows that a biological
                    product--
                              ``(i) is, bears, or contains a select agent
                            or toxin listed in section 73.3 or 73.4 of
                            title 42, section 121.3 or 121.4 of title 9, or
                            section 331.3 of title 7, Code of Federal
                            Regulations (or any successor regulations); or
                              ``(ii) is, bears, or contains a controlled
                            substance in schedule I or II of section 202 of
                            the Controlled Substances Act, as listed in
                            part 1308 of title 21, Code of Federal
                            Regulations (or any successor regulations);
                    the Secretary shall not license the biological product
                    under this subsection unless the Secretary determines,
                    after consultation with appropriate national security
                    and drug enforcement agencies, that there would be no
                    increased risk to the security or health of the public
                    from licensing such biological product under this
                    subsection.
              ``(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)(5) 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)(5) 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)(5) 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)(5).
            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) Pediatric studies.--
                      ``(A) Exclusivity.--If, before or after licensure of
                    the reference product under subsection (a) of this
                    section, the Secretary determines that information
                    relating to the use of such product in the pediatric
                    population may produce health benefits in that
                    population, the Secretary makes a written request for
                    pediatric studies (which shall include a timeframe for
                    completing such studies), the applicant or holder of
                    the approved application agrees to the request, such
                    studies are completed using appropriate formulations
                    for each age group for which the study is requested
                    within any such timeframe, and the reports thereof are
                    submitted and accepted in accordance with section
                    505A(d)(3) of the Federal Food, Drug, and Cosmetic Act
                    the period referred to in paragraph (7)(A) of this
                    subsection is deemed to be 12 years and 6 months rather
                    than 12 years.
                      ``(B) Exception.--The Secretary shall not extend the
                    period referred to in subparagraph (A) of this
                    paragraph if the determination under section 505A(d)(3)
                    of the Federal Food, Drug, and Cosmetic Act is made
                    later than 9 months prior to the expiration of such
                    period.
                      ``(C) Application of certain provisions.--The
                    provisions of subsections (a), (d), (e), (f), (h), (j),
                    (k), and (l) of section 505A of the Federal Food, Drug,
                    and Cosmetic Act shall apply with respect to the
                    extension of a period under subparagraph (A) of this
                    paragraph to the same extent and in the same manner as
                    such provisions apply with respect to the extension of
                    a period under subsection (b) or (c) of section 505A of
                    the Federal Food, Drug, and Cosmetic Act.
              ``(9) 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.
              ``(10) Naming.--The Secretary shall ensure that the labeling
            and packaging of each biological product licensed under this
            subsection bears a name that uniquely identifies the biological
            product and distinguishes it from the reference product and any
            other biological products licensed under this subsection
            following evaluation against such reference product.
      ``(l) Patent Notices; Relationship to Final Approval.--
              ``(1) Definitions.--For the purposes of this subsection, the
            term--
                      ``(A) `biosimilar product' means the biological
                    product that is the subject of the application under
                    subsection (k);
                      ``(B) `relevant patent' means a patent that--
                              ``(i) expires after the date specified in
                            subsection (k)(7)(A) that applies to the
                            reference product; and
                              ``(ii) could reasonably be asserted against
                            the applicant due to the unauthorized making,
                            use, sale, or offer for sale within the United
                            States, or the importation into the United
                            States of the biosimilar product, or materials
                            used in the manufacture of the biosimilar
                            product, or due to a use of the biosimilar
                            product in a method of treatment that is
                            indicated in the application;
                      ``(C) `reference product sponsor' means the holder of
                    an approved application or license for the reference
                    product; and
                      ``(D) `interested third party' means a person other
                    than the reference product sponsor that owns a relevant
                    patent, or has the right to commence or participate in
                    an action for infringement of a relevant patent.
              ``(2) Handling of confidential information.--Any entity
            receiving confidential information pursuant to this subsection
            shall designate one or more individuals to receive such
            information. Each individual so designated shall execute an
            agreement in accordance with regulations promulgated by the
            Secretary. The regulations shall require each such individual
            to take reasonable steps to maintain the confidentiality of
            information received pursuant to this subsection and use the
            information solely for purposes authorized by this subsection.
            The obligations imposed on an individual who has received
            confidential information pursuant to this subsection shall
            continue until the individual returns or destroys the
            confidential information, a court imposes a protective order
            that governs the use or handling of the confidential
            information, or the party providing the confidential
            information agrees to other terms or conditions regarding the
            handling or use of the confidential information.
              ``(3) Public notice by secretary.--Within 30 days of
            acceptance by the Secretary of an application filed under
            subsection (k), the Secretary shall publish a notice
            identifying--
                      ``(A) the reference product identified in the
                    application; and
                      ``(B) the name and address of an agent designated by
                    the applicant to receive notices pursuant to paragraph
                    (4)(B).
              ``(4) Exchanges concerning patents.--
                      ``(A) Exchanges with reference product sponsor.--
                              ``(i) Within 30 days of the date of
                            acceptance of the application by the Secretary,
                            the applicant shall provide the reference
                            product sponsor with a copy of the application
                            and information concerning the biosimilar
                            product and its production. This information
                            shall include a detailed description of the
                            biosimilar product, its method of manufacture,
                            and the materials used in the manufacture of
                            the product.
                              ``(ii) Within 60 days of the date of receipt
                            of the information required to be provided
                            under clause (i), the reference product sponsor
                            shall provide to the applicant a list of
                            relevant patents owned by the reference product
                            sponsor, or in respect of which the reference
                            product sponsor has the right to commence an
                            action of infringement or otherwise has an
                            interest in the patent as such patent concerns
                            the biosimilar product.
                              ``(iii) If the reference product sponsor is
                            issued or acquires an interest in a relevant
                            patent after the date on which the reference
                            product sponsor provides the list required by
                            clause (ii) to the applicant, the reference
                            product sponsor shall identify that patent to
                            the applicant within 30 days of the date of
                            issue of the patent, or the date of acquisition
                            of the interest in the patent, as applicable.
                      ``(B) Exchanges with interested third parties.--
                              ``(i) At any time after the date on which the
                            Secretary publishes a notice for an application
                            under paragraph (3), any interested third party
                            may provide notice to the designated agent of
                            the applicant that the interested third party
                            owns or has rights under 1 or more patents that
                            may be relevant patents. The notice shall
                            identify at least 1 patent and shall designate
                            an individual who has executed an agreement in
                            accordance with paragraph (2) to receive
                            confidential information from the applicant.
                              ``(ii) Within 30 days of the date of
                            receiving notice pursuant to clause (i), the
                            applicant shall send to the individual
                            designated by the interested third party the
                            information specified in subparagraph (A)(i),
                            unless the applicant and interested third party
                            otherwise agree.
                              ``(iii) Within 90 days of the date of
                            receiving information pursuant to clause (ii),
                            the interested third party shall provide to the
                            applicant a list of relevant patents which the
                            interested third party owns, or in respect of
                            which the interested third party has the right
                            to commence or participate in an action for
                            infringement.
                              ``(iv) If the interested third party is
                            issued or acquires an interest in a relevant
                            patent after the date on which the interested
                            third party provides the list required by
                            clause (iii), the interested third party shall
                            identify that patent within 30 days of the date
                            of issue of the patent, or the date of
                            acquisition of the interest in the patent, as
                            applicable.
                      ``(C) Identification of basis for infringement.--For
                    any patent identified under clause (ii) or (iii) of
                    subparagraph (A) or under clause (iii) or (iv) of
                    subparagraph (B), the reference product sponsor or the
                    interested third party, as applicable--
                              ``(i) shall explain in writing why the
                            sponsor or the interested third party believes
                            the relevant patent would be infringed by the
                            making, use, sale, or offer for sale within the
                            United States, or importation into the United
                            States, of the biosimilar product or by a use
                            of the biosimilar product in treatment that is
                            indicated in the application;
                              ``(ii) may specify whether the relevant
                            patent is available for licensing; and
                              ``(iii) shall specify the number and date of
                            expiration of the relevant patent.
                      ``(D) Certification by applicant concerning
                    identified relevant patents.--Not later than 45 days
                    after the date on which a patent is identified under
                    clause (ii) or (iii) of subparagraph (A) or under
                    clause (iii) or (iv) of subparagraph (B), the applicant
                    shall send a written statement regarding each
                    identified patent to the party that identified the
                    patent. Such statement shall either--
                              ``(i) state that the applicant will not
                            commence marketing of the biosimilar product
                            and has requested the Secretary to not grant
                            final approval of the application before the
                            date of expiration of the noticed patent; or
                              ``(ii) provide a detailed written explanation
                            setting forth the reasons why the applicant
                            believes--
                                      ``(I) the making, use, sale, or offer
                                    for sale within the United States, or
                                    the importation into the United States,
                                    of the biosimilar product, or the use
                                    of the biosimilar product in a
                                    treatment indicated in the application,
                                    would not infringe the patent; or
                                      ``(II) the patent is invalid or
                                    unenforceable.
              ``(5) Action for infringement involving reference product
            sponsor.--If an action for infringement concerning a relevant
            patent identified by the reference product sponsor under clause
            (ii) or (iii) of paragraph (4)(A), or by an interested third
            party under clause (iii) or (iv) of paragraph (4)(B), is
            brought within 60 days of the date of receipt of a statement
            under paragraph (4)(D)(ii), and the court in which such action
            has been commenced determines the patent is infringed prior to
            the date applicable under subsection (k)(7)(A) or (k)(8), the
            Secretary shall make approval of the application effective on
            the day after the date of expiration of the patent that has
            been found to be infringed. If more than one such patent is
            found to be infringed by the court, the approval of the
            application shall be made effective on the day after the date
            that the last such patent expires.''.
      (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) 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
                            Act 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).

    SEC. 2566. FEES RELATING TO BIOSIMILAR BIOLOGICAL PRODUCTS.

      Subparagraph (B) of section 735(1) of the Federal Food, Drug, and
    Cosmetic Act (21 U.S.C. 379g(1)) is amended by inserting ``, including
    licensure of a biological product under section 351(k) of such Act''
    before the period at the end.

         Subtitle D--Community Living Assistance Services and Supports

    SEC. 2571. ESTABLISHMENT OF NATIONAL VOLUNTARY INSURANCE PROGRAM FOR
                        PURCHASING COMMUNITY LIVING ASSISTANCE SERVICES AND
                        SUPPORTS.

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

        ``TITLE XXXII--COMMUNITY LIVING ASSISTANCE SERVICES AND SUPPORTS

    ``SEC. 3201. IN GENERAL.

      ``The Secretary shall establish a national voluntary insurance
    program to be known as the CLASS Independence Benefit Plan for
    purchasing community living assistance services and supports. Such
    program shall--
              ``(1) provide individuals who have functional limitations
            with tools that will allow them--
                      ``(A) to maintain their personal and financial
                    independence; and
                      ``(B) to 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. DEVELOPMENT AND MANAGEMENT OF PROGRAM.

      ``The Secretary shall develop the CLASS Independence Benefit Plan in
    an actuarially sound manner and--
              ``(1) set criteria for participation in the CLASS
            Independence Benefit Plan that do not restrict eligibility
            based on underwriting;
              ``(2) establish criteria for eligibility for benefits;
              ``(3) establish benefit levels;
              ``(4) establish mechanisms for collecting and distributing
            payments;
              ``(5) provide mechanisms to assist beneficiaries in the use
            of benefits;
              ``(6) promulgate such regulations as are necessary to carry
            out the CLASS program in accordance with this title; and
              ``(7) take any other action appropriate to develop, manage,
            and maintain the CLASS Independence Benefit Plan, including
            making adjustments to benefits paid out and premiums collected
            in order to--
                      ``(A) maintain program solvency; and
                      ``(B) ensure the program remains deficit neutral.

    ``SEC. 3203. REPORT.

      ``The Secretary shall submit to the Congress an annual report on the
    program under this title.''.
      (b) Effective Date.--Title XXXII of the Public Health Service Act, as
    added by subsection (a), shall take effect on the effective date of a
    statute establishing a voluntary payroll deduction under the Internal
    Revenue Code of 1986 to support the program authorized by such title.

                           Subtitle E--Miscellaneous

    SEC. 2581. STATES FAILING TO ADHERE TO CERTAIN EMPLOYMENT OBLIGATIONS.

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

    SEC. 2582. STUDY, REPORT, AND TERMINATION OF DUPLICATIVE GRANT
                        PROGRAMS.

      (a) Study.--The Secretary of Health and Human Services (in this
    section referred to as the ``Secretary'') shall conduct a study to
    determine if any grant program established by this division, or any
    amendment made by this division, is duplicative of one or more other
    Federal grant programs under the authority of the Secretary in
    existence as of the date of the enactment of this Act.
      (b) Report.--Not later than 1 year after the date of the enactment of
    this Act, the Secretary shall submit to Congress and make available to
    the public a report that contains the results of the study required
    under subsection (a).
      (c) Termination of Duplicative Grant Programs.--If the Secretary
    determines under subsection (a) that any grant program established by
    this division, or any amendment made by this division, is duplicative
    of one or more other Federal grant programs under the authority of the
    Secretary, the Secretary shall, to maximum extent appropriate,
    terminate such other Federal grant programs not later than 180 days
    after the date of the submission of the report under subsection (b).

    SEC. 2583. HEALTH CENTERS UNDER PUBLIC HEALTH SERVICE ACT; LIABILITY
                        PROTECTIONS FOR VOLUNTEER PRACTITIONERS.

      (a) In General.--Section 224 (42 U.S.C. 233) is amended--
              (1) in subsection (g)(1)(A)--
                      (A) in the first sentence, by striking ``or
                    employee'' and inserting ``employee, or (subject to
                    subsection (k)(4)) volunteer practitioner''; and
                      (B) in the second sentence, by inserting ``and
                    subsection (k)(4)'' after ``subject to paragraph (5)'';
                    and
              (2) in each of subsections (g), (i), (j), (l), and (m), by
            striking the term ``employee, or contractor'' each place such
            term appears and inserting ``employee, volunteer practitioner,
            or contractor'';
              (3) in subsection (g)(1)(H), by striking the term ``employee,
            and contractor'' each place such term appears and inserting
            ``employee, volunteer practitioner, and contractor'';
              (4) in subsection (l), by striking the term ``employee, or
            any contractor'' and inserting ``employee, volunteer
            practitioner, or contractor''; and
              (5) in subsections (h)(3) and (k), by striking the term
            ``employees, or contractors'' each place such term appears and
            inserting ``employees, volunteer practitioners, or
            contractors''.
      (b) Applicability; Definition.--Section 224(k) (42 U.S.C. 233(k)) is
    amended by adding at the end the following paragraph:
      ``(4)(A) Subsections (g) through (m) apply with respect to volunteer
    practitioners beginning with the first fiscal year for which an
    appropriations Act provides that amounts in the fund under paragraph
    (2) are available with respect to such practitioners.
      ``(B) For purposes of subsections (g) through (m), the term
    `volunteer practitioner' means a practitioner who, with respect to an
    entity described in subsection (g)(4), meets the following conditions:
              ``(i) The practitioner is a licensed physician, a licensed
            clinical psychologist, or other licensed or certified health
            care practitioner.
              ``(ii) At the request of such entity, the practitioner
            provides services to patients of the entity, at a site at which
            the entity operates or at a site designated by the entity. The
            weekly number of hours of services provided to the patients by
            the practitioner is not a factor with respect to meeting
            conditions under this subparagraph.
              ``(iii) The practitioner does not for the provision of such
            services receive any compensation from such patients, from the
            entity, or from third-party payors (including reimbursement
            under any insurance policy or health plan, or under any Federal
            or State health benefits program).''.

    SEC. 2584. REPORT TO CONGRESS ON THE CURRENT STATE OF PARASITIC
                        DISEASES THAT HAVE BEEN OVERLOOKED AMONG THE
                        POOREST AMERICANS.

      Not later than 12 months after the date of the enactment of this Act,
    the Secretary of Health and Human Services shall report to Congress on
    the epidemiology of, impact of, and appropriate funding required to
    address neglected diseases of poverty, including neglected parasitic
    diseases identified as Chagas Disease, cysticercosis, toxocariasis,
    toxoplasmosis, trichomoniasis, the soil-transmitted helminths, and
    others. The report should provide the information necessary to enhance
    health policy to accurately evaluate and address the threat of these
    diseases.

    SEC. 2585. STUDY OF IMPACT OF OPTOMETRISTS ON ACCESS TO HEALTH CARE AND
                        ON AVAILABILITY OF SUPPORT UNDER FEDERAL HEALTH
                        PROGRAMS FOR OPTOMETRY.

      (a) In General.--The Secretary of Health and Human Services (in this
    section referred to as the ``Secretary'') shall conduct a study with
    respect to optometrists and optometry to determine--
              (1) whether there is a current and projected role for, and
            the impact of, optometrists in increasing access to primary eye
            and vision care to underserved, rural, and senior populations;
              (2) the role and impact of optometrists in the early
            diagnosis and treatment of glaucoma, cataract, diabetes, and
            other conditions;
              (3) whether there is a need for optometrists to be recognized
            and supported as primary care providers;
              (4) whether there is an existence of, and the extent of, any
            barriers to recruitment and participation of underrepresented
            minorities in optometry, including the potential role played by
            the lack of eligibility of optometrists, optometry students,
            and facilities for certain Federal health programs; and
              (5) the scope of Federal support for clinical optometric
            education and options for enhancing that support--
                      (A) to address barriers to underrepresented minority
                    recruitment and participation in optometry; and
                      (B) to improve access to primary eye and vision care,
                    especially in underserved and rural areas.
      (b) Comment on Matters Studied.--In carrying out the study under
    subsection (a), the Secretary shall seek the comments of appropriate
    public and private entities.
      (c) Report to Congress.--Not later than 18 months after the date of
    the enactment of this Act, the Secretary shall submit to the Congress a
    report containing--
              (1) the results of the study under subsection (a);
              (2) a summary of comments received from public and private
            entities under subsection (b); and
              (3) recommendations for such legislation and administrative
            action as the Secretary determines to be appropriate regarding
            the issues studied under subsection (a).

                              Purpose and Summary

        The purpose of H.R. 3200, the ``America's Affordable Health
    Choices Act of 2009'', is to provide affordable, quality health
    care for all Americans and to reduce the growth in health care
    costs.
        It does that in a manner consistent with President Obama's
    principles for health reform: building on what works in today's
    healthcare system while repairing aspects that are broken. It
    provides for comprehensive reform in three key areas:
               Affordable Health Care Choices
               Medicare and Medicaid Improvements
               Public Health and Workforce Development

                         AFFORDABLE HEALTH CARE CHOICES

        H.R. 3200 reforms the health system by ensuring more
    affordable health care choices for all Americans. It provides
    for:
         Strong insurance market reforms: Pre-existing
    condition exclusions are prohibited; guarantee issue and
    renewal is required of all health insurance; and discrimination
    in coverage and premium rating based on health status, gender,
    or any other personal characteristics is prohibited. Premiums
    can vary only by geographic area and by age, with a limit of
    2:1 variation in rate variation by age. There are limits on the
    maximum out-of-pocket payments for covered benefits, and no
    annual or lifetime limits on benefits.
         A new national health insurance exchange:
    Individuals and small groups can purchase health benefits, with
    a choice among private insurers and a new public option
    competing on a level playing field.
         Affordability: Medicaid coverage expansions and
    new sliding scale affordability credits make premiums and cost
    sharing more affordable for those with income below 400% of the
    federal poverty level.
         Shared responsibility among individuals, employers
    and government: Individuals are required to have health
    coverage; employers (except for small employers) are required
    to either offer qualified health benefits or make a
    contribution toward the costs of health care; and new insurance
    reforms and oversight by the federal and state governments
    create a marketplace to foster choice and competition, while
    ensuring that coverage is affordable for those who need
    assistance.

                       MEDICARE AND MEDICAID IMPROVEMENTS

        H.R. 3200 improves and strengthens Medicare and Medicaid,
    provides for substantial savings and fosters long-term delivery
    system reforms through those programs. It provides for:
         Modernization of Medicare: Major delivery system
    reforms include innovative concepts such as accountable care
    organizations, medical homes, and bundling of acute and post-
    acute care services. Payment incentives decrease preventable
    hospital readmissions. Physician payments are improved, with a
    complete reform of the sustainable growth rate formula
    (eliminating the prospect of immediate, deep cuts in physician
    payments), along with payment improvements for primary care
    services.
         Benefit improvements: The Medicare Part D ``donut
    hole'' is phased out, financed by re-imposing rebates on the
    drugs purchased for individuals eligible for both Medicare and
    Medicaid; cost-sharing on preventive services is eliminated,
    and the low income subsidy programs in Medicare improved.
         Fraud and abuse protections: New tools are
    provided to combat waste, fraud, and abuse in Medicare and
    Medicaid, as well as in the new public option.
         Payment accuracy: Overpayments to Medicare
    Advantage plans are phased out, and payment systems and updates
    are made more accurate for providers in Medicare, following the
    recommendations of the Medicare Payment Advisory Commission and
    the President's budget. In total, the changes in Medicare will
    put the program on a much more solid financial growth pattern
    in the future and extend the life of the Medicare Hospital
    Insurance Trust Fund by five years.
         Medicaid improvements: In addition to the Medicaid
    coverage expansion, primary care payments are phased up to
    Medicare levels to enhance beneficiary access to services, and
    recommended preventive services are covered without cost-
    sharing.

                    PUBLIC HEALTH AND WORKFORCE DEVELOPMENT

        H.R. 3200 addresses critical health care access, public
    health, and enhancements in the health care workforce. It
    provides for:
         Community health centers: A significant expansion
    in community health centers to foster access to needed
    services.
         Workforce investments: Increased funding for the
    National Health Service Corps, and for training for primary
    care physicians, nurses, and public health professionals, with
    special attention to workforce diversity and the needs of
    health care shortage areas.
         Preventive services: Improvements in research and
    adoption of policy improvements in both clinical and community
    preventive services, including elimination of cost-sharing on
    recommended preventive services.
         Public health and wellness: Investments in state,
    territorial, and local public health infrastructure.

                      Background and Need for Legislation

        Rising costs, declining insurance coverage and suboptimal
    quality are evident in the U.S. healthcare system. National
    healthcare spending now is approximately $2.4 trillion, or
    about 17% of the gross domestic product (GDP). The U.S. Census
    Bureau estimates that more than 45.7 million people were
    uninsured in 2007, representing more than one-seventh of the
    population. Although the United States spends substantially
    more on health care per person than other industrialized
    countries, it scores only average or somewhat worse on many
    quality-of-care indicators.

                               HEALTH CARE COSTS

        Escalating healthcare costs are a significant public policy
    concern and key driver of calls to reform the healthcare
    system. The United States spends a large and growing share of
    national income on health care. In 2008, national health
    spending was approximately $2.4 trillion and accounted for
    nearly 17% of GDP. We spend substantially more than other
    developed countries on health care, both per capita and as a
    share of GDP. That strains the budgets of families, business,
    and government.
        Health insurance coverage is expensive and premiums have
    been growing rapidly. For private-sector employer plans in
    2008, the average premium for self-only and family coverage was
    $4,386 and $12,298, respectively. Moreover, from 1996 to 2006,
    health insurance premiums grew a cumulative 107% for self-only
    coverage and 130% for family coverage. In contrast, workers'
    earnings have grown more slowly. For example, over the same
    time period, the average weekly earnings of private-sector
    workers increased by 47%.
        To attract and maintain a qualified workforce, many
    businesses provide health benefits for their employees. As the
    cost of insurance rises, employers face a growing challenge
    paying for health benefits while managing labor costs to
    succeed in a competitive market. Given that health insurance
    premiums have been rising and employers on average pay a
    majority of those costs, the amount that employers pay for
    health insurance has been increasing both absolutely and as a
    share of labor costs. For example, in 1996, private-sector
    employers contributed an average of $1,650 towards the premium
    for self-only coverage. By 2006, that average had grown to
    $3,330; a 102% increase. In response to such conditions, some
    employers offer insurance to fewer workers or stop offering it
    altogether; ask employees to pay more for coverage; and reduce
    benefits.
        In addition, health care costs place significant pressure
    on the federal and state budgets--both directly, through
    spending on Medicare, Medicaid, and other programs, and
    indirectly, through tax expenditures for health insurance and
    expenses. The Congressional Budget Office (CBO) expects federal
    outlays for Medicare and Medicaid to exceed $700 billion in
    FY2009, representing about 5% of GDP. CBO projects that federal
    spending on Medicare and Medicaid combined will grow from
    roughly 5% of GDP today to almost 10% by 2035 and to more than
    17% by 2080.
        Even prior to the recent economic downturn, the Medicaid
    program's financing represented a growing share of federal and
    state budgets. The weakening economy is likely to exacerbate
    the issue. A poor economy affects how much money states can
    dedicate to the program while at the same time has the
    potential to vastly increase the number of individuals who meet
    the income eligibility thresholds that make them eligible for
    coverage.
        Underlying health care cost growth is a health care
    delivery system in the United States that is highly fragmented,
    with this fragmentation oftentimes reflected in a lack of
    coordinated, timely, effective, or efficient care. The system
    for delivering health services has arisen incrementally and has
    been shaped by a range of factors, including financing
    mechanisms and patterns in the supply and distribution of
    resources such as health care providers.
        In its June 2009 report to Congress, the Medicare Payment
    Advisory Commission (MedPAC) concluded that fundamental changes
    are needed in health care delivery in the United States, and in
    Medicare. The Commission recommended Medicare reforms that
    would, among other things, increase value, promote
    accountability and care coordination, change incentives to
    encourage efficiency and high quality, and set more accurate
    payment rates.
        In calling for action, the Council of Economic Advisors
    reported in June 2009 that genuine health reform that
    ultimately slowed the annual growth rate in health care costs
    by just 1.5 percentage points annually would:
               Increase GDP by nearly 8% in 2030;
               Increase income for a typical family of four
            by nearly $10,000 by 2030;
               Prevent disastrous increases in the federal
            budget deficit.

                                    COVERAGE

        Americans obtain health insurance in different settings and
    through a variety of methods. Those aged 65 and older are
    generally covered by the Medicare program, so most assessments
    of coverage issues and options focus on the population under
    age 65. For this population, the two dominant sources of
    coverage are employment-based coverage and government programs,
    largely Medicaid and the Children's Health Insurance Program
    (CHIP). There is also a relatively small ``non-group'' or
    individual health insurance market.
        In 2007, approximately 177 million people had employment-
    based health insurance. Employers who choose to offer health
    coverage may either purchase insurance from a state-licensed
    insurer or choose to self-fund health benefits for their
    employees (most larger employers self-fund benefits).
        Approximately 99% of large employers (200 or more workers)
    offer health benefits to at least some of their employees.
    Large employers are generally able to obtain lower premiums for
    a given health insurance package than small employers and
    individuals. The result is that the vast majority of large
    firms typically can find and provide health insurance in the
    private market, in contrast with small firms and individuals.
        Less than half of all small employers (less than 50
    employees) offer health insurance coverage to their employees.
    These pools are generally considered to be less stable than
    larger pools, as one or two employees moving in or out of the
    pool (or developing an illness) would have a greater impact on
    the average per-person cost of health care than they would in a
    larger pool. Also, small groups lack the economies of scale and
    leveraging ability available to large employers. Thus, small
    employers face greater difficulties in obtaining health
    insurance in the private market than large employers.
        Other individuals obtain coverage on their own in the non-
    group market. Depending on the applicable state laws,
    individuals who purchase health insurance in the non-group
    market may be rejected or face premiums that reflect their
    health status, which can make premiums lower for the healthy
    but higher for the sick. Even when these individuals are issued
    a health insurance policy, the insurer may be allowed to
    exclude coverage for pre-existing health conditions. Some
    health insurers have undertaken so-called post-claims
    underwriting practices, whereby the initial applications of
    individuals are re-examined after a claim is filed. If errors
    or omissions, even minor ones unrelated to the claim filed, are
    discovered the individual may be subject to a denial of
    coverage or a rescission of the policy.
        In August 2008, the U.S. Census Bureau estimated that 45.7
    million people had no health insurance in 2007 through
    employers, individual policies or government programs. The
    millions of uninsured, and underinsured, individuals in the
    United States present significant challenges to public
    policymakers and this lack of comprehensive coverage has served
    as an impetus for reform for decades.
        In calling for action, the Institute of Medicine (IOM) of
    the National Academies reported in 2009 that:
               Coverage is declining and will continue to
            decline;
               Health insurance is integral to personal
            well-being and health--For people without health
            insurance, there is a chasm between health care needs
            and access to services, despite the availability of
            some safety net services;
               High levels of uninsured in communities may
            undermine health care for the insured population.
        Further, the University of Washington Medical School found
    that a lack of health insurance causes more than 44,000 deaths
    each year, after adjusting for age, gender, education,
    employment status, smoking, and other factors. In addition, the
    Council of Economic Advisors reported in June 2009 that
    expanding insurance coverage to the uninsured would increase
    net economic well-being by roughly $100 billion a year, or
    about two-thirds of a percent of GDP.

                                    QUALITY

        Despite our spending far more than any other nation on
    health care, the U.S. health care system is characterized by
    systemic quality shortcomings.
        In a 1999 study, the IOM reported that between 44,000 and
    98,000 people die each year due to preventable medical errors
    at a cost of between 17 and 29 billion dollars per year.
    Serious adverse medication events are estimated to occur in up
    to 15% of hospitalized patients and more than 100,000 deaths
    are attributed annually to such reactions.
        With respect to the problems of overuse, misuse, and
    underuse of health care services, a study conducted by the
    Midwest Business Group on Health in 2003 found that
    approximately ``30 percent of all direct health care outlays
    are the result of poor-quality care, consisting primarily of
    overuse, misuse and waste.'' Another study found that as many
    as 20% to 30% of patients received contraindicated care. A 2007
    RAND study found that only 46.5% of children receive care
    recommended by evidence-based guidelines and a similar RAND
    study conducted in 2003 concluded that adults receive only 55%
    of indicated care. Taken together, these findings evidence
    significant shortfalls in the quality of care provided in the
    United States.
        Over the past decade, there have been numerous efforts to
    improve quality of care in the United States that have engaged
    a wide range of stakeholders. These efforts have generally
    focused on improving and refining metrics for measuring the
    quality of care delivered in a number of settings; publicly
    reporting comparative information on quality performance; and,
    in some cases, using metrics as the basis for payment policies
    to demand provider accountability (value-based purchasing).
        Despite observable progress, the most recent National
    Healthcare Quality Report (2008) indicated that health care
    quality is suboptimal and continues to improve at a slow pace.
    Among the challenges to making further improvements are
    disagreements about the utility or appropriateness of some
    measures (including concerns about how the public might
    interpret them), the fragmented nature of the American health
    care system, and barriers to access for some groups that
    complicate the work of providers.
        In calling for action at the Committee's hearing in June,
    2009, the Secretary of Health and Human Services, Kathleen
    Sebelius, testified:

              Despite the best efforts of business purchasers and
            private quality improvement initiatives and the
            development of standards, both government and private,
            recent reports indicate that the quality of care has
            actually declined in recent years. We will not be able
            to achieve the quality we need without the major
            reforms the President seeks. It will take a
            comprehensive approach to provide the leverage needed
            to improve care.

                        HEALTH SERVICES DELIVERY REFORM

        The health reform debate has embraced a number of proposals
    to improve the delivery of health care services as the vehicle
    for improving value in care. MedPAC's call for fundamental
    delivery reform through Medicare is noted above. Further, the
    call for delivery reforms include initiatives to improve the
    health care workforce; to encourage individuals to adopt
    healthier lifestyles; and to change the way that physicians and
    other providers treat and manage disease.
        Policymakers have considered leveraging federal dollars to
    selectively augment health care resources and improve the
    functioning of the delivery system, targeting areas such as
    emergency care, pain management, and the support of various
    programs, clinics, and centers. Finally, the need for reliable,
    comprehensive, and robust health data, and the federal
    government's role in ensuring access to this data, has been an
    important component of efforts that aim to reform the delivery
    system.

                        PAYMENT FOR HEALTH CARE SERVICES

        The inefficiencies resulting from fee-for-service payment
    arrangements in American health care are well documented. Most
    common in payment for physician and practitioner services, fee-
    for-service rewards the provision of a high volume of services
    without regard to the value of each service to a patient's
    health or a patient's preferences. Overtreatment can be harmful
    to a patient's health and leads to increased health spending
    for the patient, businesses, and employers. Fee-for-service
    also does not encourage physicians and other professionals to
    collaborate to manage a patient's health needs over time.
        Proposals have been offered to reform and replace fee-for-
    service payments in Medicare and private health insurance.
    Reformed payment methods focus on encouraging care coordination
    and the provision of high-quality, rather than high-volume,
    care.
        In testimony before the Committee, chairman of MedPAC Glenn
    Hackbarth noted:

              The health care delivery system we see today is not a
            true system: Care coordination is rare, specialist care
            is favored over primary care, quality of care is often
            poor, and costs are high and increasing at an
            unsustainable rate. Part of the problem is that
            Medicare's fee-for-service (FFS) payment systems reward
            more care, and more complex care, without regard to the
            value of that care. In addition, Medicare's payment
            systems create separate payment ``silos'' (e.g.,
            inpatient hospitals, physicians, post-acute care
            providers) and do not encourage coordination among
            providers within a silo or across the silos. We must
            address those limitations--creating new payment methods
            that will reward efficient use of our limited resources
            and encourage the effective integration of care.

                                   WORKFORCE

        The health workforce consists of a number of providers
    including physicians, physician assistants, nurses--including
    nurse practitioners, nurse-midwives, registered nurses,
    licensed practical or vocational nurses--pharmacists, dentists,
    and allied health professionals, such as audiologists and
    nutritionists. There are also a number of direct care workers
    who provide health and custodial services to the
    institutionalized population, and public health workers who
    work in government agencies and state and local health
    departments.
        Policymakers and experts have expressed concerns about the
    size, specialty mix, and geographic distribution of the
    healthcare workforce. Although quantifying the size of these
    healthcare provider shortages is a difficult endeavor, there is
    agreement that certain geographic areas, such as inner cities
    and rural areas, experience significant healthcare provider
    shortages. For example, HHS estimates that an additional 7,000
    physicians are needed in health professions shortage areas.
    Shortages of specific healthcare providers such as primary care
    physicians--physicians trained in the fields of family
    medicine, general internal medicine, and pediatric medicine--
    and nurses also exist at present. There is also broad consensus
    among experts and advisory groups that there will be further
    healthcare provider shortages in the future. For example, the
    Health Resources and Services Administration (HRSA)--the agency
    that administers the majority of health workforce programs--
    estimated that by 2020 there will be shortages in a number of
    physician specialties and nearly 67,000 too few primary care
    physicians. Additionally, a federal advisory group on the
    nursing workforce estimates that as of 2000 there was a 6%
    shortage of nurses and that this shortage is expected to grow
    to 20% in 2020.
        The federal government has a long-standing role in
    supporting workforce-related programs. Much of this support is
    through grants, contracts, and loan programs authorized in the
    Public Health Service Act (PHSA). PHSA Title III authorizes the
    National Health Service Corps, which provides scholarship and
    loan repayment to practitioners who agree to provide care in
    medically underserved areas. PHSA Title VII supports the
    training of health professionals, such as physicians, dentists,
    physician assistants, and public health workers, through
    various grants, contracts, and loan programs. PHSA Title VII
    also includes programs to encourage diversity in the healthcare
    workforce. PHSA Title VIII authorizes several programs to
    support nursing workforce development including grant,
    contract, scholarship, and loan programs to train nurses,
    support nursing faculty development, and increase diversity in
    the nursing workforce.
        Another major source of federal workforce support is
    through federal support of medical residency and fellowship
    training. Specifically, Medicare, through Graduate Medical
    Education (GME) payments to hospitals, provides more than $9
    billion to educate and train about 90,000 residents, and the
    U.S. Department of Veterans Affairs sponsors and funds
    residency training.
        Beyond these programs, the federal government supports the
    healthcare workforce in a variety of other ways. For example,
    Medicaid funds residency training, the armed forces offers
    residencies for enlisted physicians, and the U.S. Department of
    Education supports federally subsidized student loan programs
    to encourage students to enter health professions.
        In calling for action at the Subcommittee on Health's
    hearing in March 2009, Dr. Jeffrey Harris, President of the
    American College of Physicians, testified:

              A fundamental goal of delivery system reform should
            be to recognize and support the value of primary care
            in improving outcomes; reducing preventable
            overutilization of emergency rooms, hospitals and
            testing facilities; and achieving overall cost savings.

                            WELLNESS AND PREVENTION

        In the context of health, ``prevention'' may refer to a
    range of activities, from a plan for a more walkable community
    to an immunization, to a colonoscopy, to a diabetes management
    program. Prevention activities span a continuum of stages often
    referred to as primary, secondary and tertiary prevention.
    Primary prevention measures are those that prevent the risk of
    illness or injury entirely, or at a very early stage. These
    include public health (i.e. population-based) measures such as
    anti-smoking campaigns and nutrition and exercise guidelines.
    Secondary measures detect health problems at an early stage,
    when they are most amenable to cure. These include clinical
    preventive services such as cancer screenings. Tertiary
    measures are remedial, mitigating the effects of an illness or
    injury once a problem has occurred. Chronic disease management
    programs are sometimes referred to as tertiary prevention
    measures. Workplace ``wellness'' programs may incorporate
    activities at each stage of the prevention continuum.
        There is increasing concern that the prevalence of chronic
    diseases in the United States is on the rise, and that this
    development contributes both to a growing burden of illness
    among individuals, and to challenges in curbing cost growth in
    health care. According to the Centers for Disease Control and
    Prevention (CDC):

              Chronic diseases--such as heart disease, cancer, and
            diabetes--are the leading causes of death and
            disability in the United States. Chronic diseases
            account for 70% of all deaths in the U.S., which is 1.7
            million each year. These diseases also cause major
            limitations in daily living for almost 1 out of 10
            Americans or about 25 million people. Although chronic
            diseases are among the most common and costly health
            problems, they are also among the most preventable.
            Adopting healthy behaviors such as eating nutritious
            foods, being physically active and avoiding tobacco use
            can prevent or control the devastating effects of these
            diseases.

        Efforts to reform the nation's health system often include
    discussion of the role of prevention in reducing the burden of
    chronic diseases. Current federal law addresses prevention in
    several ways, including through (1) coverage of certain
    clinical preventive services under Medicare and Medicaid; (2)
    community-based research, disease prevention, and health
    promotion programs, which may be funded through federal grants;
    (3) support of evidence reviews to determine whether specific
    clinical and community prevention interventions are effective;
    and (4) regulation of certain employer-provided wellness
    programs in order to strike a balance between flexibility and
    compliance with current federal privacy, civil rights, and
    other laws.
        Many chronic diseases such as obesity and heart disease are
    worsened by unhealthy behaviors, and may not be amenable to
    successful management or cure unless such behaviors can be
    addressed. The federal government's role in encouraging healthy
    behaviors is varied, and includes developing and disseminating
    information for public health and medical professionals and the
    general public. This includes the work of the U.S. Preventive
    Services Task Force that is administered by the Agency for
    Healthcare Research and Quality and that provides
    recommendations about which preventive services (e.g. cancer
    screenings) should be incorporated into primary care practice.
        Through a variety of programs, the federal government also
    provides funding and technical assistance to state, local, and
    tribal health authorities and others to support community, or
    population-based, prevention activities. In addition, the CDC
    supports the Task Force on Community Preventive Services, which
    evaluates the effectiveness of primary prevention measures, and
    recommends the use of those interventions shown to be
    effective. For example, work by the Task Force has identified a
    number of population-based strategies that are effective in
    reducing tobacco use, promoting physical activity, and
    improving diabetes management, among many others.
        HHS Secretary Sebelius, at the Committee on Energy and
    Commerce's June 2009 hearing, called for comprehensive action
    on prevention and wellness:

              We must make important investments in prevention and
            wellness. The old adage is true: an ounce of prevention
            truly is worth a pound of cure. But for too long, we've
            sunk all our resources into cures and short-changed
            prevention. Preventing disease and controlling its
            effects over time must be the foundation of our health
            care system.

                             HEALTH DATA COLLECTION

        Currently a wide range of public and private data systems
    are used to monitor the nation's health, access to care, and
    cost and quality of that care. Key federal tracking initiatives
    include HealthyPeople 2010 (which tracks health promotion and
    disease prevention), Health U.S. (which tracks the health
    status of the nation), and the National Healthcare Quality and
    National Healthcare Disparities Reports (which track the
    quality of health care in the United States and disparities
    related to quality of, and access to, health care).
        Each of these efforts draws from a combination of
    administrative data, vital records, population-based data,
    provider-based data, surveillance data, and special studies.
    For example, 190 data systems are used to track HealthyPeople
    2010 objectives. Many, but not all, of these data systems and
    sources are sponsored by the Department of Health and Human
    Services, but others (such as population estimates used to
    calculate rates or data on specific populations such as Native
    Americans) are supported by other federal agencies (such as the
    Census Bureau or the Indian Health Service). Private and global
    data sources comprise other measures in the nation's health
    tracking efforts. For example, comparative international data
    may come from the World Health Organization or the Organization
    for Economic Cooperation and Development while pharmaceutical
    data or data on the managed care population may come from
    private sources.
        There are a large and growing number of public and private
    data sources that help inform our understanding of health,
    health care, and the potential effects of proposed policies. At
    present time, there is no central source of information at HHS
    or elsewhere, and no central repository for health data. While
    there are a number of efforts to coordinate federal data (such
    as interagency working groups or coordinating efforts through
    the Paperwork Reduction Act) and efforts to standardize the
    collection and reporting of data (through OMB data standards
    and the efforts of advisory groups such as the National
    Committee on Vital and Health Statistics), achieving full
    coordination at the national level remains a challenge.
        In calling for action at the Subcommittee on Health's
    hearing in June, 2009, Jeffrey Levi of the Trust for America's
    Health testified on the need for better use of information and
    data:

              As we enter a reformed health care system, harnessing
            the power of health information technology for public
            health purposes as well as health care is going to be
            essential. Assuring that the American people have a
            true sense of our progress . . . will require a
            commitment to collecting, analyzing, and releasing in
            an accessible manner, a full range of data about our
            nation's health.

                              Legislative History

        H.R. 3200 was introduced on July 14, 2009, by Committee on
    Energy and Commerce Chairman Emeritus Dingell, Chairman Waxman,
    Subcommittee on Health Chairman Pallone, as well as Chairman
    Rangel and Subcommittee Chairman Stark of the Committee on Ways
    and Means, and Chairman Miller of California and Subcommittee
    Chairman Andrews from the Committee on Education and Labor.
    H.R. 3200 was referred primarily to the Committee on Energy and
    Commerce, and in addition to the Committees on Ways and Means,
    Education and Labor, Oversight and Government Reform, and the
    Budget.
        During the 110th Congress, there were 17 hearings held by
    the Subcommittee on Health on issues relating to healthcare
    access and problems of those who are uninsured. These hearings
    also explored areas of health delivery systems, cost
    containment, and protecting health coverage during an economic
    downturn.
        In the first session of the 111th Congress, the
    Subcommittee on Health held five days of oversight hearings
    focused on making health care work for American families.
    Hearings were held on Tuesday, March 10, 2009; Tuesday, March
    17, 2009; Tuesday, March 24, 2009; Tuesday, March 31, 2009; and
    Thursday, April 2, 2009.
        A Discussion Draft of comprehensive health reform
    legislation was circulated by the Committee to the Members of
    the Committee and the public on June 19, 2009. The same
    Discussion Draft was also issued by the Committee on Ways and
    Means and the Committee on Education and Labor.
        The Committee on Energy and Commerce and its Subcommittee
    on Health held three days of legislative hearings on the
    Discussion Draft. Hearings by the Subcommittee on Health were
    held on Tuesday, June 23, 2009; Wednesday, June 24, 2009; and
    Thursday, June 25, 2009. The full Committee held a hearing on
    Wednesday, June 24, 2009, to receive testimony from the
    Secretary of Health and Human Services, the Hon. Kathleen
    Sebelius.

                            Committee Consideration

        The Committee on Energy and Commerce met in open markup
    session for five days to consider amendments to H.R. 3200. The
    Committee met on July 16, 17, 20, 30, and 31, 2009. The
    Committee adopted 78 amendments to the legislation. H.R. 3200
    was ordered favorably reported to the House, amended, by a roll
    call vote of 31 to 28.

                                Committee Votes

        Clause 3(b) of rule XIII of the Rules of the House of
    Representatives requires the Committee to list the record votes
    on the motion to report legislation and amendments and motions
    thereto. The Committee agreed to a motion by Mr. Dingell to
    order H.R. 3200 favorably reported to the House, amended, by a
    record vote of 31 yeas and 28 nays. The following is the
    recorded votes taken during Committee consideration, including
    the names of those Members voting for and against:

                Committee Oversight Findings and Recommendations

        In compliance with clause 3(c)(1) of rule XIII and clause
    2(b)(1) of rule X of the Rules of the House of Representatives,
    the Committee's oversight findings and recommendations are
    reflected in the body of this report.

         New Budget Authority and Congressional Budget Office Estimate

        With respect to the requirements of clause 3(c)(2) of House
    rule XIII and section 308(a) of the Congressional Budget Act of
    1974 and with respect to requirements of clause 3(c)(3) of
    House rule XIII and section 402 of the Congressional Budget Act
    of 1974, the Committee anticipates that a CBO cost estimate
    letter on H.R. 3200 will address these issues when the bill
    proceeds to consideration on the House floor. CBO is unable to
    provide a cost estimate prior to the reconciliation of the
    versions of the bill as amended and reported by the three
    committees of jurisdiction.

             Statement of General Performance Goals and Objectives

        In accordance with clause 3(c) of House rule XIII, the
    Committee finds that the goal of H.R. 3200 is to increase
    access to affordable quality health coverage and contain costs.

                       Constitutional Authority Statement

        Pursuant to clause 3(d)(1) of rule XIII of the Rules of the
    House of Representatives, the Committee finds that the
    constitutional authority for H.R. 3200 is provided in clauses
    1, 3, and 18 of Article I, section 8 of the United States
    Constitution.

                      Earmarks and Tax and Tariff Benefits

        H.R. 3200 does not contain any congressional earmarks,
    limited tax benefits, or limited tariff benefits as defined in
    clause 9 of rule XXI of the Rules of the House of
    Representatives.

                          Advisory Committee Statement

        The Committee finds that the legislation establishes or
    authorizes the establishment of advisory committees within the
    definition of 5 U.S.C. App., Section 5(b). Section 123 of the
    bill establishes a Health Benefits Advisory Committee. The
    Committee finds this committee is needed to make
    recommendations on covered benefits and essential, enhanced,
    and premium plans. Section 1191 establishes a Telehealth
    Advisory Committee. The Committee finds this committee is
    needed to advise the Secretary of Health and Human Services on
    policies of the Centers for Medicare and Medicaid Services
    regarding telehealth services. Section 1401 establishes a
    Comparative Effectiveness Research Commission, which the
    Committee finds is necessary to oversee and evaluate the
    activities of the Center for Comparative Effectiveness Research
    established by the bill.
        In addition, section 2261 establishes an Advisory Committee
    on Health Workforce Evaluation and Assessment. The Committee
    finds this entity is needed to make recommendations to the
    Secretary of Health and Human Services regarding
    classifications of the health workforce; standardized
    methodologies and procedures to enumerate the health workforce;
    the supply, diversity, and geographic distribution of the
    health workforce; retention of the health workforce; and
    policies to carry out these recommendations. Section 2310
    establishes a Task Force on Clinical Preventive Services, which
    the Committee finds is necessary to assist the Secretary of
    Health and Human Services in the review of scientific evidence
    related to costs, benefits, effectiveness, and appropriateness
    of clinical preventive services, gaps in such services, and
    other issues relating to clinical preventive services. Section
    2310 also establishes a Task Force on Community Preventive
    Services, which the Committee finds is necessary to assist the
    Secretary of Health and Human Services in the review of
    scientific evidence related to costs, benefits, effectiveness,
    and appropriateness of community preventive services, gaps in
    such services, and other issues relating to community
    preventive services. Section 2552 establishes the Interagency
    Pain Research Coordinating Committee. The Committee finds this
    entity is needed to coordinate all efforts within the
    Department of Health and Human Services and other federal
    agencies that relate to pain research.

                 Applicability of Law to the Legislative Branch

        Section 102(b)(3) of Public Law 104-1, the Congressional
    Accountability Act, requires a description of the application
    of this bill to the legislative branch. The Committee has
    determined that the bill would apply to the legislative branch
    and its employees in the same way it would apply to employers
    and employees in the private sector.

                           Federal Mandates Statement

        Section 423 of the Congressional Budget and Impoundment Act
    (as amended by section 101(a)(2) of the Unfunded Mandates
    Reform Act, P.L. 104-4) requires a statement of whether the
    provisions of the reported bill include unfunded mandates. The
    Committee anticipates that this issue will be addressed in a
    CBO cost estimate letter for the bill when it proceeds to
    consideration on the House floor.

                            Committee Cost Estimate

        Clause 3(d) of rule XIII of the Rules of the House of
    Representatives requires an estimate and comparison of the
    costs that would be incurred in carrying out H.R. 3200. The
    Committee anticipates that a CBO cost estimate letter will
    address these issues when the bill proceeds to consideration on
    the House floor.

                 Section-by-Section Analysis of the Legislation

    Sec. 1. Short Title; Table of Divisions, Titles, and Subtitles

        The short title may be cited as the America's Affordable
    Health Choices Act of 2009 . The section also provides a table
    of contents for the divisions, titles, and subtitles of the
    bill. This Act is divided into divisions, titles, and subtitles
    as follows:

                   DIVISION A--AFFORDABLE HEALTH CARE CHOICES

    Sec. 100. Purpose; Table of Contents of Division; General Definitions

                Purpose
        The purpose of this division is to provide affordable,
    quality health care for all Americans and reduce the growth in
    health care spending. This division achieves this purpose by
    building on what works in today's health care system, while
    repairing the aspects that are broken by:
             Enacting strong insurance market reforms;
             Creating a new Health Insurance Exchange, with
            a public health insurance option alongside private
            plans;
             Including sliding scale affordability credits;
            and
             Initiating shared responsibility among
            workers, employers, and the government.
        This division institutes health delivery system reforms
    both to increase quality and to reduce growth in health
    spending so that health care becomes more affordable for
    businesses, families, and government.
                General Definitions (Created within this Act)
         Acceptable Coverage.--a qualified health benefit
    plan coverage, coverage under a grandfathered health insurance
    coverage or current group health plan, Medicare Part A,
    Medicaid, Military Health System, Veteran's Health Care Program
    (VA), and other coverage the Secretary of HHS in coordination
    with the Health Choices Commissioner sees fit.
         Basic Plan.--a plan that offers the essential
    benefits package's minimum requirements to be a qualified
    health benefits plan approximately 70% of the actuarial value
    of the benefits provided.
         Cost-sharing.--includes deductibles, coinsurance,
    copayments, and similar charges but does not include premiums
    or any network payment differential for covered services or
    spending for non-covered services.
         Employment-Based Health Plan.--the term given to
    group health plans (as defined in section 733(a)(1) of ERISA as
    an employee welfare benefit plan to the extent that plan
    provides medical care to employees or their dependents, either
    directly, through insurance or otherwise)--and is comprised of
    federal and state government plans, tribal plans and church
    plans.
         Enhanced Plan.--a plan that offers, in addition to
    the level of benefits under a basic plan, a lower level of
    cost-sharing equivalent to approximately 85% of the actuarial
    value of the benefits provided.
         Essential Benefits Package.--health benefits
    coverage, consistent with the standards set forth by the
    Secretary no later than 18 months after enactment of this Act.
         Health Benefits Plan.--health insurance coverage
    and a group health plan, including the public health insurance
    option.
         Health Insurance Exchange.--created by this bill
    to facilitate access of individuals and employers, through a
    transparent process, to a variety of choices of affordable,
    quality health insurance coverage, including a public health
    insurance option.
         Premium Plan.--a plan that offers, in addition to
    the level of benefits under a basic plan, a lower level of
    cost-sharing equivalent to approximately 95% of the actuarial
    value of the benefits provided.
         Premium Plus Plan.--a premium plan that also
    offers additional benefits, such as oral health and vision
    care, all of which is approved by the Commissioner.
         Qualified Health Benefits Plan (QHBP).--a health
    benefits plan that meets the requirements set forth in Title I
    (by the Secretary) including the public health insurance option
    and cooperatives.
         QHBP Offering Entity.--an entity can be any of the
    following: a health benefits plan (that is a group health plan)
    in which the employer is the main source of financing, health
    insurance coverage which the insurance issuer is offering the
    coverage (to include cooperatives), the public health insurance
    option, a non-federal government plan established by the state
    or political subdivision of a state, and a federal government
    plan.
         Public Health Insurance Option.--a public plan
    (only available through the Health Insurance Exchange) with
    payment rates negotiated by the Secretary. The public option
    would be required to offer basic, enhanced, and premium plans,
    and would be allowed to offer premium-plus plans.
         Service Area, Premium Rating Area.--with respect
    to health insurance coverage: (1) if not within the Health
    Insurance Exchange, an area established by a QHBP offering
    entity of such coverage in accordance with applicable state law
    or (2) within the Health Insurance Exchange, an area
    established by such entity in accordance with state law and
    applicable rules set forth by the Commissioner for Exchange-
    participating health benefits plans.
         State.--the 50 states and the District of
    Columbia.
         Y1, Y2, ETC.--are numbered terms that mean 2013,
    2014, and subsequent years.

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

                         Subtitle A--General Standards

    Sec. 101. Requirements reforming health insurance marketplace

                Current Law
        Regulation of the private health insurance market is
    primarily done at the state level. State regulatory authority
    is broad in scope and includes requirements related to the
    issuance and renewal of coverage, benefits, rating, consumer
    protections, and other issues. Federal regulation of the
    private market is more narrow in scope and applicable mostly to
    employer-sponsored health insurance (i.e., through the Employee
    Retirement Income Security Act of 1974 (ERISA)) and through
    established federal minimum standards (i.e., through the
    Genetic Information Nondiscrimination Act of 2008 and the Paul
    Wellstone and Pete Domenici Mental Health Parity and Addiction
    Equity Act of 2008, etc.).
                Proposed Law
        This provision would require Qualified Health Benefits
    Plans (QHBPs) to meet the new federal health insurance
    standards specified in subtitles B (relating to affordable
    coverage), C (relating to essential benefits) and D (relating
    to consumer protection) of Title I. The section also provides
    terminology for the phrases ``enrollment in employment-based
    health plans'' and ``individual and group health insurance
    coverage.''

    Sec. 102. Protecting the choice to keep current coverage

                Current Law
        See description under Section 101.
                Proposed Law
        ``Grandfathered health insurance coverage'' would be
    defined as individual health insurance coverage that is in
    effect before the first day of Y1, as long as the insurance
    carrier does not (1) enroll new individuals on or after the
    first day of Y1 (would not affect subsequent enrollment of a
    dependent); (2) change any terms or conditions of the
    individual coverage, except as required by law; and (3) vary
    the percentage increase in premiums for a risk group of
    enrollees without changing the premium for all enrollees in the
    same risk group at the same rate, as specified by the
    Commissioner. The Commissioner would establish a 5-year grace
    period beginning Y1 for existing group health plans to
    transition to the new federal health insurance standards
    applied to QHBPs. Limited benefits plans specified in the
    provision, such as dental only, vision only, flexible spending
    arrangements, and others, are unaffected by these reforms and
    may continue to be sold to new applicants irrespective of other
    reforms.
        Individual health insurance coverage that is not
    grandfathered may only be offered after the first day of Y1 as
    an Exchange plan. Excepted benefits (e.g., accident or
    disability insurance) could be offered as long as they are
    offered and priced separately from health insurance coverage.
        For purposes of the individual mandate (established under
    title III of Division A), an individual would be required to
    have ``acceptable coverage.'' In order for an individual health
    insurance policy to be considered acceptable coverage, the
    policy would be either grandfathered health insurance coverage,
    in effect prior to Y1, or offered through the Exchange
    (established under title II of Division A). Group health
    coverage provided during the grace period would be considered
    acceptable coverage.
        Nothing in Division A of this bill would prevent the
    offering of stand-alone dental and vision plans under state
    law. The requirements of qualified health benefits plans would
    not apply to a stand-alone plan that was offered and priced
    separately from a qualified health benefits plan.

        Subtitle B--Standards Guaranteeing Access to Affordable Coverage

    Sec. 111. Prohibiting pre-existing condition exclusions

                Current Law
        The Health Insurance Portability and Accountability Act of
    1996 (HIPAA), which amended ERISA, limits the duration that
    issuers in the group market may exclude coverage for pre-
    existing health conditions for ``HIPAA eligible'' individuals,
    among other provisions. Group plans may impose pre-existing
    condition exclusions for no longer than 12 months (18 months in
    the case of a late enrollee), and must decrease that exclusion
    period by the number of months an enrollee had prior
    ``creditable coverage.'' HIPAA outright prohibits issuers in
    the individual market from excluding coverage for pre-existing
    conditions for certain HIPAA eligible individuals.
        All states require health issuers to reduce the period of
    time when coverage for pre-existing health conditions may be
    excluded, in compliance with HIPAA. As of January 2009 in the
    small group market, 21 states had pre-existing condition
    exclusion rules that provided consumer protection above the
    federal standard. And, as of December 2008, 42 states limit the
    period of time when coverage for pre-existing health conditions
    may be excluded for non-HIPAA eligible enrollees in the
    individual market.
                Proposed Law
        This provision would prohibit a qualified health benefits
    plan from excluding coverage for pre-existing health
    conditions, or otherwise limit or condition such coverage with
    respect to an individual or dependent based on any health
    status-related factors. Such factors include health status,
    medical condition (including both physical and mental
    illnesses), claims experience, receipt of health care, medical
    history, genetic information, evidence of insurability
    (including conditions arising out of acts of domestic violence)
    and disability.

    Sec. 112. Guaranteed issue and renewal for insured plans

                Current Law
        HIPAA requires that coverage sold to small groups (2-50
    employees) must be sold on a guaranteed issue basis. That is,
    the issuer must accept every small employer that applies for
    coverage. (Guaranteed issue rules do not address premiums.)
    HIPAA also guarantees that each issuer in the individual market
    make at least two policies available (``guaranteed
    availability'') to all HIPAA eligible individuals. In addition,
    HIPAA guarantees renewal or continuation of group coverage at
    the option of the plan sponsor (e.g., employer) and individual
    coverage at the option of the individual, with some exceptions.
    Insurers may not renew coverage under specified circumstances,
    such as nonpayment of premiums or fraud.
        All states require issuers to offer policies to firms with
    2-50 workers on a guaranteed issue basis, in compliance with
    HIPAA. As of January 2009 in the small group market, 13 states
    also require issuers to offer policies on a guaranteed issue
    basis to self-employed ``groups of one.'' And, as of December
    2008, 15 states require issuers in the individual market to
    offer some or all of their insurance products on a guaranteed
    issue basis to non-HIPAA eligible individuals.
                Proposed Law
        This provision would require issuers to offer all health
    insurance coverage on a guaranteed issue and renewal basis
    beginning in Y1, whether offered through the Exchange
    (established under subtitle A of Title II), through any
    employment-based health plan, or otherwise. Rescissions of
    coverage would be prohibited, except in cases of fraud.

    Sec. 113. Insurance rating rules

                Current Law
        There are no federal rating rules applicable to the private
    health insurance market. However, many states currently impose
    rating rules on insurance carriers in the small group and
    individual markets. Existing state rating rules restrict an
    insurer's ability to price insurance policies according to the
    risk of the person or group seeking coverage, and vary
    considerably from state to state. Such restrictions may specify
    the case characteristics (or risk factors) that may or may not
    be considered when setting a premium, such as age. The spectrum
    of existing state rating limitations ranges from pure community
    rating, to adjusted (or modified) community rating to rate
    bands. Some states have no limits on rating practices which
    permits insurance companies to charge unlimited amounts. Pure
    community rating means that premiums cannot vary based on any
    characteristic related to a person's or group's risk, including
    health. Adjusted community rating means that premiums cannot
    vary based on health, but may vary based on other key risk
    factors, such as gender or industry of work. Rate bands allow
    premium variation based on health and/or age, but such
    variation is limited according to a range specified by the
    state. For each characteristic, the state typically specifies
    the amount of allowable variation. As of January 2009 in the
    small group market, one state has pure community rating rules,
    eleven have adjusted community rating rules, and 35 have rate
    bands. As of December 2008 in the individual market, two states
    have pure community rating rules, five have adjusted community
    rating rules, and eleven have rate bands.
        There are no federally-established rating areas in the
    private health insurance market. However, some states have
    enacted rating rules that include geographic location as a
    factor on which premiums may vary. In these cases, the state
    has established rating areas. Typically, states use counties or
    zip codes to define those areas.
                Proposed Law
        This provision would impose a new federal floor on rating
    rules for qualified health benefits plans. QHBP premiums would
    at most vary by age (by no more than a 2:1 ratio within age
    categories specified by the Commissioner (established under
    section 141)), premium rating area (as permitted by state
    regulators or, in the case of an Exchange plan, as specified by
    the Commissioner), and family enrollment (as specified under
    state law and consistent with Commissioner rules).
        The Commissioner, in coordination with the Secretaries of
    Health and Human Services (HHS) and Labor, would conduct a
    study of the large group market to examine (1) characteristics
    of employers who purchase fully-insured health insurance
    products and employers who self-fund health benefits, including
    characteristics related to bearing risk and solvency, and (2)
    the extent to which rating rules cause adverse selection in the
    large group market or encourage small and mid-size employers to
    self-insure health benefits. The Commissioner would submit this
    report to Congress and the applicable agencies no later than 18
    months after enactment, and include any recommendations to
    ensure that the law does not provide incentives for small and
    mid-size employers to self-insure or create adverse selection
    in the risk pools of large group insurers and self-insured
    employers.
        Subsection (b) deals with a specific issue about
    calculating the actuarial value of insurance coverage of
    abortion services in plans that choose to cover them. This
    provision is discussed in detail below, in the section titled
    ``Abortion-Related Language in Division A.''

    Sec. 114. Nondiscrimination in benefits

                Current Law
        HIPAA established federal rules regarding non-
    discrimination based on health status-related factors. Group
    issuers are prohibited from establishing rules for eligibility
    and premium contributions based on health status-related
    factors. Those factors include health status, medical condition
    (including both physical and mental illnesses), claims
    experience, receipt of health care, medical history, genetic
    information, evidence of insurability (including conditions
    arising out of acts of domestic violence) and disability. In
    addition, the Genetic Information Nondiscrimination Act of 2008
    prohibits issuers in the individual health insurance market
    from establishing eligibility rules (including continued
    eligibility) based on an individual's genetic information. The
    Mental Health Parity Act of 1996, as amended, establishes
    parity by prohibiting the placement of a dollar limit (either
    annual or aggregate lifetime) on mental health benefits that is
    less than such a limit for medical/surgical benefits for groups
    with more than 50 employees.
                Proposed Law
        This provision would require QHBPs to comply with new
    nondiscrimination standards regarding health benefits or
    benefit structures established by the Commissioner, building on
    existing federal nondiscrimination rules in ERISA, the Public
    Health Service Act (PHSA), and the Internal Revenue Code of
    1986. These standards would apply to plans offered to
    individuals and groups of all sizes in QHBPs, not just groups
    with over 50 employees. This provision would apply existing
    mental health parity rules regardless of whether coverage is
    offered in the individual or group market and size of employer.

    Sec. 115. Ensuring adequacy of provider networks

                Current Law
        HIPAA established special rules for plans that develop a
    network of providers. It allows small group issuers to (1)
    limit the employers that apply for coverage to those firms with
    eligible individuals who live or work in the network service
    area, and (2) deny coverage to small employers if the issuer
    demonstrates (if required) to the state that it has limited
    provider capacity due to obligations to existing enrollees and
    it is applying this decision uniformly without regard to claims
    experience or health status-related factors. HIPAA also
    prohibits a small group issuer that has denied coverage in any
    service area to offer small group coverage in that area for 180
    days after the denial.
                Proposed Law
        This provision would require QHBPs that use provider
    networks to meet provider network standards that may be
    established by the Commissioner to ensure the adequacy of
    networks, and transparency in the cost-sharing differences
    between in- and out-of-network coverage. The term ``provider
    network'' means the providers with respect to covered benefits,
    treatments, and services available under a health benefit plan.

    Sec. 116. Ensuring value and lower premiums

                Current Law
        Medical loss ratio is the share of total premium revenue
    spent on medical claims. Medigap insurance policies are private
    supplemental health care policies that Medicare beneficiaries
    can purchase to help cover some items, services, and cost
    sharing not covered under Medicare. Medigap plans are required
    to have a minimum medical loss ratio of 65% for individual
    policies and 75% for group policies. In addition, some states
    impose medical loss ratios or related requirements on insurers
    in the individual and/or small group health insurance markets.
    As of June 2008, minimum ratios required by states ranged from
    55% to 80%.
                Proposed Law
        This provision would require QHBPs to comply with a medical
    loss ratio standard to be determined by the Commissioner. For
    any QHBP that does not meet such a standard, it would be
    required to provide rebates to enrollees, in a manner specified
    by the Commissioner, in sufficient amounts to meet such a loss
    ratio. To establish the medical loss ratio standard, the
    Commissioner would build on the definition and methodology,
    developed by the HHS Secretary under Section 161, for
    determining how to calculate such a ratio. The methodology
    would set the highest ratio possible to ensure adequate QHBP
    participation, competition both in and out of the Exchange, and
    value for consumers so that their premium payments are used
    predominately for medical claims.

        Subtitle C--Standards Guaranteeing Access to Essential Benefits

    Sec. 121. Coverage of essential benefits package

                Current Law
        There are very limited federal benefit mandates for health
    insurance. These standards were added to HIPAA and are
    described in the discussion of Section 122. There are more than
    2,000 state-level benefit mandates that vary across the
    country.
                Proposed Law
        This provision would require a QHBP to cover at least an
    ``essential benefit package.'' QHBPs could be offered in or
    outside of an Exchange. QHBPs offered outside of an Exchange
    would be allowed to offer additional benefits beyond those
    specified in the essential benefits package. For QHBPs offered
    through the Exchange, a plan offering a premium-plus level of
    benefits (established under Section 203) could also provide
    additional benefits.
        The requirements under Division A would not affect the
    offering of limited-purpose or ``excepted'' benefit plans,
    including policies covering dental or vision treatment, long-
    term care, workers' compensation, and other similar benefits,
    if such benefit plans are offered under a separate policy,
    contract, or certificate of insurance.
        A QHBP would not be allowed to impose coverage restrictions
    (except cost sharing) unrelated to the clinical appropriateness
    of the health care items and services.

    Sec. 122. Essential benefit package defined

                Current Law
        There are very few federally mandated benefits. The laws
    that provide guidance are found in the Employee Retirement
    Income Security Act (ERISA covers employer-sponsored plans),
    the Public Health Service Act (PHSA covers insurance plans and
    state and local government plans), and the Internal Revenue
    Code (IRC covers church plans in certain circumstances). There
    is no federal requirement that employers offer health
    insurance, or that any plans that are offered cover any
    specific benefits. However, the mandates that do exist require
    that if a plan (governed by ERISA, PHSA, or IRC) covers a
    particular service that is addressed in the statutes, then that
    benefit must be designed in a certain way. Those mandates
    include:
         The Paul Wellstone and Pete Domenici Mental Health
    Parity and Addiction Equity Act of 2008 (MHPA) (P.L. 110-343)
    requires a large group health plan to offer parity in mental
    health and substance use disorder benefits and medical and
    surgical benefits with regard to annual and lifetime limits,
    financial requirements and treatment limitations, but does not
    require a plan to cover mental health benefits.
         The Newborns' and Mothers' Health Protection Act
    of 1996 (NMHPA) (P.L. 104-204) requires plans that offer
    maternity coverage to pay for at least a 48-hour hospital stay
    following childbirth (96-hour stay in the case of a cesarean
    section).
         The Women's Health and Cancer Rights Act of 1998
    (P.L. 105-277) contains protections for patients who elect
    breast reconstruction in connection with a mastectomy. For plan
    participants and beneficiaries receiving benefits in connection
    with a mastectomy, plans offering coverage for a mastectomy
    must also cover reconstructive surgery and other benefits
    related to a mastectomy.
         The Genetic Information Nondiscrimination Act of
    2008 (GINA) (P.L. 110-233) prohibits discrimination based on
    genetic information by health insurers and employers. Broadly,
    GINA prohibits health insurers from engaging in three
    practices: (1) using genetic information about an individual to
    adjust a group plan's premiums, or, in the case of individual
    plans, to deny coverage, adjust premiums, or impose a pre-
    existing condition exclusion; (2) requiring or requesting
    genetic testing; and (3) requesting, requiring, or purchasing
    genetic information for underwriting purposes. It also
    prohibits employers from making hiring or firing decisions
    based on genetic information.
         Michelle's Law (P.L. 110-381) ensures that
    dependent post secondary education students who take a
    medically necessary leave of absence do not lose health
    insurance coverage. The law provides that a group health plan
    may not terminate a college student's health coverage simply
    because the student takes a medically necessary leave of
    absence from school or changes to part-time status. The leave
    of absence must be medically necessary, begin while the student
    is suffering from a serious illness or injury and would
    otherwise result in a loss of coverage.
        Although current federal law provides only a limited number
    of service and coverage mandates, it does provide some guidance
    toward the definition of preventive services for use by public
    programs and private insurance. The U.S. Preventive Services
    Task Force (USPSTF), administered by the Agency for Healthcare
    Research and Quality (AHRQ), reviews scientific evidence and
    makes recommendations to the health care community regarding
    the use of clinical preventive services, based on evidence of
    effectiveness and any harm associated with specific services.
    The USPSTF grades services as ``A'' through ``D,'' or notes
    that there is insufficient evidence to support a
    recommendation. Clinical services graded ``A'' or ``B'' by the
    USPSTF are recommended for use in clinical practice.
        Similarly, the Advisory Committee on Immunization Practices
    (ACIP), administered by the Centers for Disease Control and
    Prevention (CDC), reviews scientific evidence and makes
    recommendations to the Secretary and the CDC Director for the
    routine administration of vaccines to children, adolescents,
    and adults in the U.S. civilian population. The ACIP is not
    explicitly authorized; rather, it is based in general
    authorities of the Secretary in Titles II and III of the PHSA.
        ``Actuarial value'' is a summary measure of a health
    insurance plan's benefit generosity. It is expressed as the
    percentage of medical expenses estimated to be paid by the
    insurer for a standard population and set of allowed charges.
    Two plans that have the same actuarial value are ``actuarially
    equivalent.'' Because these are summary measures, two plans
    that are actuarially equivalent may not provide the same
    benefits for any two individuals. State health insurance
    regulations may include requirements expressed in terms of
    actuarial value.
                Proposed Law
        This provision would require the essential benefits package
    to cover specified items and services, limit cost sharing,
    prohibit annual and lifetime limits on covered services, ensure
    the adequacy of provider networks, and be equivalent (as
    certified by the Office of the Actuary of the Centers for
    Medicare and Medicaid Services) to the average prevailing
    employer-sponsored coverage.
        The essential benefits package would be required to cover
    the following items and services:
               Hospitalization;
               Outpatient hospital and clinic services,
            including emergency department services;
               Services of physicians and other health
            professionals;
               Services, equipment, and supplies incident
            to the services of a physician or health professional
            in appropriate settings;
               Prescription drugs;
               Rehabilitative and ``habilitative'' services
            (i.e., services to maintain or prevent the
            deterioration of the physical, intellectual, emotional,
            and social functioning of developmentally delayed
            individuals);
               Mental health and substance use disorder
            services, including behavioral health treatments;
               Preventive services, include those graded
            ``A'' or ``B'' by the Task Force on Clinical and
            Preventive Services, as established by this Act, and
            those vaccines recommended by the Director of the CDC;
               Maternity care; and
               Well-baby and well-child care; treatment of
            a congenital or developmental deformity, disease, or
            injury; and oral health, vision, and hearing services,
            equipment, and supplies for those under age 21.
        A qualified health benefits plan offering entity has the
    option of subcontracting with other entities to provide select
    benefits as is often the case currently, such as dental,
    vision, and mental health benefits.
        Mental health and substance use disorder services include
    medically necessary and appropriate treatments, items and
    services for disorders and conditions listed in the Diagnostic
    and Statistical Manual of Mental Disorders (DSM) published by
    the American Psychiatric Association.
        Services recommended with a grade A or B grade by the Task
    Force on Clinical Preventive Services (formerly the U.S.
    Preventive Services Task Force) and vaccines recommended for
    use by the Director of the Centers for Disease Control and
    Prevention constitute a floor for preventive services in the
    essential benefits package. The Health Benefits Advisory
    Committee has discretion to also consider recommendations of
    specialty medical associations, patient advocacy groups, and
    scientific societies in making recommendations to the Secretary
    of covered treatments, items and services within the essential
    benefits package.
        The essential benefits package would be subject to various
    requirements concerning cost-sharing. The package would be
    required to provide preventive items and services without cost-
    sharing (including well-baby and well-child care). The annual
    out-of-pocket limit in Y1 would be $5,000 for an individual and
    $10,000 for a family. These limits would be annually adjusted
    for inflation using the Consumer Price Index for all Urban
    Consumers (CPI-U). The Secretary could consider establishing a
    lower limit on cost-sharing for prescription drugs that would
    be included within the global cost-sharing cap. All out-of-
    pocket spending on prescription drugs would count toward both
    the lower, drug-specific limit and the global limit on all
    cost-sharing. The drug-specific cap could be helpful for
    chronically ill patients that rely on medications to remain
    healthy and avoid hospitalizations and other acute health care
    services. The Secretary in setting a drug-specific limit could
    do so at a level that will support medication adherence.
        To the extent possible, the Benefits Advisory Committee and
    the Secretary of HHS would establish cost-sharing levels using
    copayments (a flat dollar fee) and not coinsurance (a
    percentage fee). Cost-sharing for the Essential Benefits
    Package would result in coverage equal to approximately 70% of
    the actuarial value of the benefits if there were no cost-
    sharing imposed.
        This provision would also prohibit the requirement of
    abortion services as a minimum benefit in any plan. Each plan
    is to decide voluntarily on whether abortion is a covered
    benefit; in the case of the public option, the Secretary is to
    make that decision. This provision is discussed in detail below
    in the section titled ``Abortion-Related Language in Division
    A.''
        Adults 21 and over would not be required to receive
    separately priced stand-alone vision-only or dental-only
    coverage (as defined in Section 102(c)(3)).

    Sec. 123. Health Benefits Advisory Committee

                Current Law
        No provision.
                Proposed Law
        A Health Benefits Advisory Committee would be established
    to recommend covered benefits and cost-sharing parameters and
    the essential, enhanced, and premium plans. The Committee would
    be chaired by the Surgeon General. The Committee membership
    would be comprised of:
               Nine members, appointed by the President,
            who are neither federal employees nor officers;
               Nine members, appointed by the Comptroller
            General, who are neither federal employees nor
            officers; and
               An even number, up to eight members,
            appointed by the President, who are federal employees
            and officers.
        The initial appointments would be made within 60 days of
    enactment. Each Committee member would serve a three-year term,
    except the terms of the initial appointments would be adjusted
    to provide for staggered years of appointment. The members
    would reflect the interests of the many diverse groups of
    stakeholders so that no single interest would unduly influence
    the Committee's recommendations. At a minimum, Committee
    membership would reflect physicians and other health care
    providers, consumer representatives, employers, labor, health
    insurance issuers, experts in health care delivery, and experts
    in health disparities, and government agencies. At least one
    Committee member would be a practicing physician or health
    professional, and another member would be an expert on
    children's health. Finally, at least 25% of the Committee
    members would have to be health care practitioners who
    practiced in a rural area for at least the five years preceding
    the appointment.
        The Committee's recommendations to the Secretary on the
    essential benefits package (as defined in Section 122), cost-
    sharing levels for the enhanced plans and premium plans (as
    defined in Section 203), and periodic updates of the package
    would be required to incorporate innovation in health care. The
    Committee members would also be required to consider how the
    package would reduce health disparities, and would allow for
    public input as part of developing its recommendations. The
    Committee's initial benefit recommendations must be made to the
    Secretary within one year of enactment.
        In developing standards for the basic, enhanced and premium
    plans, the Committee would be required to calculate cost-
    sharing such that the enhanced plan would have benefits that
    are actuarially equivalent to about 85% of the actuarial value
    of the benefits provided in the essential benefits package, and
    the premium plans would have benefits that are actuarially
    equivalent to about 95% of the actuarial value of the benefits
    provided in the essential benefits package.
        Committee members would serve without pay, but would
    receive federal travel expenses, including per diem expenses.
    In addition, the Committee would be subject to the Federal
    Advisory Committee Act (which provides sunshine and
    transparency over advisory committee actions).
        The Secretary would be required to publish all
    recommendations developed pursuant to this Section in the
    Federal Register and on the HHS website.

    Sec. 124. Process for adoption of recommendations; adoption of benefit
            standards

                Current Law
        No provision.
                Proposed Law
        This section proposes a timeline under which the Secretary
    must choose whether to adopt the recommendations of the
    Committee established under section 123 of this bill. Within 45
    days of receiving the Committee's recommendations regarding the
    essential benefits package, the Secretary would be required
    either to adopt the benefit standards as written or not adopt
    the benefit standards. If the Secretary does not wish to adopt
    the recommendations, the Secretary shall notify the Committee
    of the reasons for this decision, and provide an opportunity
    for the Committee to revise and resubmit its recommendations.
        The Secretary would be required to adopt an initial set of
    benefit standards within 18 months of enactment. The Secretary
    would be required to publish all determinations under this
    section in the Federal Register. The Secretary would be
    required to periodically update the benefit standards. However,
    an essential benefits package that does not meet the essential
    benefits requirements specified in section 122 could not be
    adopted.

    Sec. 125. Prohibition of discrimination in health care services based
            on religious or spiritual content

                Current Law
        No provision.
                Proposed Law
        The Commissioner and insurance issuers offering health
    insurance coverage through the Health Insurance Exchange shall
    not discriminate in approving or covering a health care service
    based on its religious or spiritual content if the services are
    deductible as an eligible medical expense, as defined in the
    Internal Revenue Code.

                  Subtitle D--Additional Consumer Protections

    Sec. 131. Requiring fair marketing practices by health insurers

                Current Law
        States have established fair marketing standards to
    regulate insurers' marketing activities.
                Proposed Law
        This provision would require the Commissioner to establish
    uniform marketing standards for QHBPs.

    Sec. 132. Requiring fair grievance and appeals mechanisms

                Current Law
        ERISA does not require an employer to offer health
    benefits, but does mandate compliance to certain standards if
    an employer chooses to offer health benefits, such as
    procedures for appealing denied benefit claims. In addition, as
    of February 2008, 44 states and the District of Columbia
    mandate the independent review of benefit denials by an entity
    outside of the health plan (``external review'').
                Proposed Law
        This provision would require QHBPs to provide for timely
    grievance and appeals mechanisms as established by the
    Commissioner consistent with sections 139 through 139B.

    Sec. 133. Requiring information transparency and plan disclosure

                Current Law
        ERISA requires applicable health plans (as well as other
    ``welfare benefit'' plans) to disclose and report certain plan
    information to enrollees and regulators. For example, plan
    administrators must provide to enrollees a written summary plan
    description (SPD) that contains the terms of the plan and the
    benefits offered, including any material modifications, and the
    SPD must be written in a manner that can be understood by the
    average enrollee. Certain plans must file an annual report with
    the Department of Labor, containing information about the
    operation, funding, assets, and investments of those plans.
                Proposed Law
        This provision would require QHBPs to comply with
    disclosure standards established by the Commissioner concerning
    plan terms and conditions, claims payment policies, plan
    finances, claims denials, and other information as determined
    appropriate by the Commissioner. The Commissioner would require
    such disclosure to be provided in plain language. QHBPs would
    be required to comply with standards established by the
    Commissioner to ensure transparency to a provider regarding
    reimbursements between the plan and such health care provider.
    A change in a QHBP could not be made without reasonable and
    timely advance notice to enrollees about the change.
        The purpose of the pharmacy benefit managers transparency
    provision is to provide the Commissioner and QHBPs additional
    information on several aspects of the performance of pharmacy
    benefit managers: the spread between the price PBMs pay to
    pharmacies and the ultimate cost to the PBM of drugs; the
    extent to which PBMs are successful at switching patients to
    less costly generic drugs; the extent and reasons for switching
    patients to more expensive drugs; and the ability of PBMs to
    obtain--and pass through to QHPBs--discounts, rebates, and
    price concessions from drug manufacturers. Under the provision,
    a QHBP would be allowed to contract with a pharmacy benefit
    manager (PBM) to manage prescription drug coverage offered
    under the health plan, or control costs related to such
    coverage, only if as a condition of the contract the PBM is
    required to annually provide to the Commissioner and QHBP, in a
    form and manner to be determined by the Commissioner, certain
    information on the performance of the PBM under the contract,
    including the volume of prescriptions filled; aggregate average
    payments made to pharmacists by the PBM, and paid to the PBM by
    the QHBP, per prescription for mail order and retail sales;
    discounts, rebates, and price concessions received from drug
    manufacturers; volume of generic drugs dispensed; number of
    instances when enrollees switched from a less expensive
    prescribed drug to a more expensive prescription and the
    rationale for such switches, and other information. Information
    disclosed by a PBM to the Commissioner and QHBP would be
    considered confidential, and the disclosure of information in a
    form which discloses the identity of a specific PBM or a
    specific retailer, manufacturer, or wholesaler would be
    prohibited from disclosure by the Commissioner or QHBP except
    for specified purposes. The intent of these confidentiality
    provisions is to provide the same general level of
    confidentiality for this information as is given to Medicaid
    drug rebate data reported by manufactures under Section 1927 of
    the Social Security Act. The Commissioner would be allowed to
    publish industry-wide aggregate or average information to be
    used by the Commissioner, by QHBPs, and by members of the
    public in assessing the overall impact of PBMs on prescription
    drug prices and spending.

    Sec. 134. Application to qualified health benefits plans not offered
            through the Health Insurance Exchange

                Current Law
        No provision.
                Proposed Law
        The previous disclosure and other standards would apply to
    QHBPs offered outside of the Exchange only to the extent
    specified by the Commissioner.

    Sec. 135. Timely payment of claims

                Current Law
        Under Medicare Advantage (MA), private health plans are
    paid a per-person amount to provide all Medicare-covered
    benefits (except hospice) to beneficiaries who enroll in their
    plans. MA plans include health maintenance organizations (HMOs)
    and private fee-for-service (PFFS) plans, among other plan
    types. MA PFFS plans--that generally do not currently contract
    with providers--are required to pay 95% of ``clean claims''
    within 30 days of receipt. The Centers for Medicare and
    Medicaid Services (CMS) defines a clean claim as a claim that
    has no defect or impropriety, and is submitted with all the
    required documentation. The 30-day rule also applies to claims
    submitted to any MA organization by a provider who does not
    have a written contract with the plan. MA organizations are
    required to pay interest on clean claims that are not paid
    within 30 days. All other claims from non-contracted providers
    must be paid within 60 days. MA organizations that contract
    with providers (i.e., HMOs and PPOs) must include a prompt
    payment provision in their contracts.
                Proposed Law
        This provision would require QHBPs to comply with the
    prompt pay requirements applicable to Medicare Advantage plans.

    Sec. 136. Standardized rules for coordination and subrogation of
            benefits

                Current Law
        While there are no federal statutes specifying primary and
    secondary payment rules for multiple insurers in the private
    market, Section 1862(b) of the Social Security Act authorizes
    the Medicare Secondary Payer (MSP) program, which identifies
    specific conditions under which another party has primary
    responsibility for payment and Medicare is only responsible for
    qualified secondary payments. The statute authorizes several
    methods to identify cases when an insurer other than Medicare
    is the primary payer and to facilitate recoveries when
    incorrect Medicare payments have been made. Under certain
    conditions, the law makes Medicare the secondary payer to
    insurance plans and programs for beneficiaries covered through
    (1) a group health plan based on either their own or a spouse's
    current employment; (2) auto and other liability insurance; (3)
    no-fault liability insurance; and (4) workers' compensation
    situations, including the Black Lung program. Additionally, the
    Medicare statutes exclude Medicare coverage for items and
    services paid for directly or indirectly by a government
    entity, subject to certain limitations. This includes the
    Department of Veterans Affairs, among others.
                Proposed Law
        The Commissioner would establish standards for the
    coordination of benefits and reimbursement of payments in cases
    involving individual and multiple plan coverage.

    Sec. 137. Application of administrative simplification

                Current Law
        To support the growth of electronic record keeping and
    claims processing, HIPAA's Administrative Simplification
    provisions instructed the Secretary to adopt electronic format
    and data standards for several routine administrative and
    financial transactions between health care providers and health
    plans/payers. The standards apply to health care providers (who
    transmit any health information in electronic form in
    connection with a HIPAA-specified transaction), health plans,
    and health care clearinghouses.
                Proposed Law
        This provision would require QHBP-offering entities (as
    defined in the bill) to comply with existing and new
    administrative simplification standards under Title 11 of the
    Social Security Act and adopted under Section 163 (discussed
    below).

    Sec. 138. Information on end-of-life planning

                Current Law
        No provision.
                Proposed Law
        This provision would require QHBP offering entities to
    provide for the dissemination of information related to end-of-
    life planning to individuals seeking enrollment in Exchange-
    participating plans. The QHBP would be prohibited from
    promoting suicide, assisted suicide, or the active hastening of
    death. Moreover, the information presented would not presume
    the withdrawal of treatment and would be required to include
    end-of-life planning information that would maintain all or
    most medical interventions. Nothing in this provision would be
    construed to (1) require an individual to complete an advanced
    directive, physician's order for life sustaining treatment, or
    other end-of-life planning document; (2) require an individual
    to consent to restrictions on the amount, duration, or scope of
    medical benefits otherwise covered under a QHBP; or (3)
    encourage the hastening of death or the promotion of assisted
    suicide. An ``advance directive'' would be defined to include a
    living will, a comfort care order, or a durable power of
    attorney for health care.

    Sec. 139. Utilization review activities

                Current Law
        Section 503 of ERISA requires every employee benefit plan
    to ``provide adequate notice in writing to every participant or
    beneficiary whose claim for benefits under the plan has been
    denied, setting forth the specific reasons for such denial,
    written in a manner calculated to be understood by the
    participant'' and to ``afford a reasonable opportunity to any
    participant whose claim for benefits has been denied for a full
    and fair review by the appropriate named fiduciary of the
    decision denying the claim.'' Regulations accompanying this
    section of ERISA set out specific periods of time for private
    employment-based plans to evaluate a claim and inform an
    individual of its decision. While these limits do not govern
    when the benefits must be paid or provided, plans are required
    to pay or provide benefits within a reasonable time after a
    claim is approved.
        Urgent care claims must be decided as soon as possible,
    taking into account the medical needs of the patient, but no
    later than 72 hours after the plan receives the claim. The plan
    must inform an individual within 24 hours if more information
    is needed; and they have no less than 48 hours to respond. Then
    the plan must decide the claim within 48 hours after the
    missing information is supplied or the time to supply it has
    elapsed. The plan must provide notice that a claim has been
    granted or denied before the end of the time allotted for the
    decision.
        Pre-service claims must be decided within a reasonable
    period of time appropriate to the medical circumstances, but no
    later than 15 days after the plan has received the claim. The
    plan may extend the time period up to an additional 15 days if,
    for reasons beyond the plan's control, the decision cannot be
    made within the first 15 days. If more information is
    requested, the individual has at least 45 days to supply it.
    The plan then must decide the claim no later than 15 days after
    they are supplied with the additional information or after the
    period of time allowed to supply additional information ends,
    whichever comes first.
        Post-service health claims must be decided within a
    reasonable period of time, but not later than 30 days after the
    plan has received the claim. If, because of reasons beyond the
    plan's control, more time is needed to review a request, the
    plan may extend the time period up to an additional 15 days.
    However, the plan administrator has to let the individual know
    before the end of the first 30-day period, explaining the
    reason for the delay, requesting any additional information
    needed, and advising when a final decision is expected. If more
    information is requested, the individual has at least 45 days
    to supply it. The claim then must be decided no later than 15
    days after it has been supplied with the additional information
    or the period of time given by the plan to do so ends,
    whichever comes first. The plan must give notice that a claim
    has been denied in whole or in part before the end of the time
    allotted for the decision.
                Proposed Law
        A QHBP and a QHBP offering entity that offers a plan would
    be required to conduct utilization review (UR) activities
    meeting the requirements of this section. UR could be
    contracted out. Those activities include procedures to monitor
    or evaluate the use of coverage, clinical necessity,
    appropriateness, efficacy, or efficiency of healthcare
    services, procedures or settings, and include prospective
    review, concurrent review, second opinions, case management,
    discharge planning, and retrospective review. The UR program
    would include written clinical review criteria, based on valid
    clinical evidence, directed specifically at meeting the needs
    of at-risk populations and covered individuals with chronic
    conditions or severe illnesses. Once a service has been
    specifically pre-authorized for an enrollee, it could not be
    changed by a retrospective review. UR programs must be
    administered by qualified health care professionals who oversee
    review decisions.
        The UR program would be conducted by trained personnel, who
    could not be offered compensation to encourage claims denials,
    and could not be conducted by the practitioner who provided
    services to the individual in question, among other
    restrictions. UR activities involving prior authorization of
    services would be made as soon as possible in accordance with
    the medical exigencies of the case, but no later than 14 days
    after the request and no later than 3 business days after the
    date of receipt of information necessary to make a
    determination. An extension could be requested for additional
    information, within 5 business days of receiving the initial
    request. The deadline would then be extended to 14 days after
    receiving the additional information, but no later than 28 days
    after the request for prior authorization. For expedited cases
    (where the individual's life, health, or ability to regain
    maximum function was in jeopardy, or for continuity of care)
    the deadline would be 72 hours after the request. No prior
    authorization would be required for emergency services.
        For concurrent review of ongoing care, the decision must be
    provided no later than 1 business day after the date of receipt
    of necessary information, with sufficient time for an appeal
    before the service is reduced or eliminated. Plans would not be
    required to provide coverage that exceeded their limitations.
    In the case of UR for previously provided services, the
    decision would have to be provided within 30 days of the date
    of receipt of necessary information, but no later than 60 days
    after the request.
        Failure by a QHBP or QHBP entity to make a timely
    determination would be treated as a claims denial. Denials
    would have to be provided in writing, along with the reasons,
    instructions on how to initiate an appeal, and the
    availability, upon request, of the clinical criteria used, and
    other information. Claims for benefits would mean any request
    for coverage, for eligibility, or payment for items or services
    under a QHBP.

    Sec. 139A. Internal appeals procedures

                Current Law
        Under ERISA regulations, an individual covered by a private
    employment-based health plan has at least 180 days to file an
    appeal following an adverse benefit determination. The plan
    must provide claimants, on request and free of charge, copies
    of documents, records, and other information relevant to the
    claim for benefits. The plan also must identify, upon request,
    any medical or vocational expert whose advice was obtained by
    the plan.
        On appeal, claims must be reviewed by someone new who looks
    at all of the information submitted and consults with qualified
    medical professionals if a medical judgment is involved. This
    reviewer cannot be a subordinate of the person who made the
    initial decision and must give no consideration to that
    decision.
        Plans have specific periods of time within which to review
    an appeal, depending on the type of claim. Urgent care claims
    must be reviewed as soon as possible, taking into account the
    medical needs of the patient, but not later than 72 hours after
    the plan receives a request to review a denied claim. Pre-
    service claims must be reviewed within a reasonable period of
    time appropriate to the medical circumstances, but not later
    than 30 days after the plan receives a request to review a
    denied claim. Post-service claims must be reviewed within a
    reasonable period of time, but not later than 60 days after the
    plan receives a request to review a denied claim.
        There are two exceptions to these time limits. In general,
    single-employer collectively bargained plans may use a
    collectively bargained grievance process for their claims
    appeal procedure if it has provisions on filing, determination,
    and review of benefit claims. Multi-employer collectively
    bargained plans are given special timeframes to allow them to
    schedule reviews on appeal of post-service claims and
    disability claims for the regular quarterly meetings of their
    boards of trustees.
        Plans can require two levels of review of a denied health
    claim to finish the plan's claims process. If two levels of
    review are required, the maximum time for each review generally
    is half of the time limit permitted for one review.
        Once the decision on a claim is made following review, the
    plan must provide to the claimant a written or electronic
    notification of the decision. The notice must be in plain
    language that can be understood by participants in the plan. It
    must include all the specific reasons for the denial of the
    claim on appeal, refer the individual to the plan provisions on
    which the decision is based, provide information on any
    additional voluntary levels of appeal, explain the right to
    receive documents that are relevant to the benefit claim free
    of charge, and describe rights to seek judicial review of the
    plan's decision.
                Proposed Law
        Each QHBP and each QHPB offering entity that offers a plan
    would be required to provide adequate written notice to
    individuals (participants, beneficiaries and enrollees) who are
    denied a claim for benefits. The notice would include specific
    reasons for the denial and rights to further review or appeal.
    Individuals would have no less than 180 days to file for a full
    and fair review. Reviews of denied claims would be made by a
    physician (for cases involving a medical judgment) or a
    specialist (in the case of limited scope coverage) who is
    selected by the plan and did not make the initial denial. The
    QHBP offering entity would be required to complete the review
    and either affirm, reverse or modify the original denial. If
    the decision did not reverse the denial, the plan or issuer
    would transmit a written notice stating the reason for the
    decision, including a description of rights to any further
    appeal. Failure to issue such a decision by the deadline would
    be treated as final decision denying the claim.
        Generally, the deadline would be 14 days after the date of
    receipt of the request for internal review. An extension for
    additional necessary information would be allowed if the
    requestor was notified within 5 business days. The deadline
    would then be extended to 14 days after receiving the
    additional information, but no later than 28 days after the
    request for internal review. For expedited cases (where the
    individual's life, health, or ability to regain maximum
    function was in jeopardy, or for continuity of care) the
    deadline would be 72 hours after the request, or for ongoing
    care, before the end of the approved period of care. A plan or
    entity could waive its right for internal review, and in such
    cases the individual could proceed directly to any applicable
    external appeals process.

    Sec. 139B. External appeals procedures

                Current Law
        No specific provision in federal law. As of February 2008,
    however, 44 States and the District of Columbia mandate the
    independent review of benefit denials by an entity outside of
    the health plan (``external review'').
                Proposed Law
        A QHBP and a QHPB entity would be required to provide for
    an external appeals process. An externally appealable decision
    would be defined as a denial of claims based in whole or in
    part on a decision that the item or service is not medically
    necessary or appropriate, is investigational or experimental,
    or in which the decision as to whether the benefit is covered
    involved a medical judgment. It would also include a failure to
    meet the applicable deadline for internal review. It would not
    include specific exclusions or express limitations on the
    amount, duration or scope of coverage that do not involve
    medical judgment, or a decision regarding whether an individual
    is a participant beneficiary or enrollee under the plan. A plan
    or entity may require that external review only be conducted
    after a final decision is made on internal review (except in
    cases where the internal review decision is not made within
    necessary deadlines). A filing fee may be required, of no more
    than $25, except in cases where the individuals certify to the
    Secretary that they cannot afford the fee. The fee would be
    refunded if the external appeal entity reverses or modifies the
    denial.
        The external appeal process would be conducted under a
    contract between the plan or issuer and one or more qualified
    external appeal entities. Procedures would be implemented to
    ensure that the external appeal entity did not have incentives
    to make biased decisions. There would be a sample audit of
    decisions. The Secretary would establish other terms and
    conditions. A state could designate an entity to provide
    external review activities.
        The standards for external review would include at least
    the following: (1) fair, de novo determinations; (2)
    determinations of whether the decision was in accordance with
    the medical needs of the patient; (3) consideration of language
    in the plan or coverage documents relating to the definition of
    terms, such as medical necessity; and (4) evidence from the
    internal review, any personal health and medical information
    supplied by the individual, the opinion of the treating
    physician or health care professional. The external entity
    could also take into consideration other information such as
    results of studies and professional consensus. The external
    appeals entity would determine whether the claim was externally
    appealable and whether the decision should be expedited.
        Each party could submit information. The decision would be
    made no later than 21 days after the date (or 72 hours for
    expedited review) of the request for an external appeal, and
    written in layperson language. The appeals entity would also
    inform the participant of any rights, including review by
    courts. If the decision was to reverse or modify the denial,
    the plan would be required to authorize benefits, take action
    to provide benefits in a timely manner, and submit information
    documenting compliance.
        External appeals entities would have to be independent, use
    a panel of at least 3 clinical peers, have sufficient medical
    legal and other expertise, and meet other requirements. The
    entity must be certified, and periodically recertified, as
    specified by the bill. Reviewers exercising due care would not
    be criminally or civilly liable for performance of their
    duties.
        The decision by the external appeals entity would be
    binding on the plan. If the plan did not follow the decision,
    it would be subject to a civil money penalty of up to $1,000
    per day, until it adhered to the decision. An additional civil
    monetary penalty could be assessed against a person acting in
    the capacity of authorizing benefits determined by an external
    review entity for any pattern or practice of repeated refusal
    to authorize such benefits or for any pattern or practice of
    repeated violations of requirements of this section. The
    penalty would not exceed the lesser of 25% of the aggregate
    value of denied benefits or $500,000.
        This Act would not alter or eliminate any cause of action
    or legal rights or remedies of participants, beneficiaries,
    enrollees, and others under state or federal law. The
    provisions of this section would apply to all acceptable
    coverage in the same manner as such provisions apply with
    respect to QHBPs.

                             Subtitle E--Governance

    Sec. 141. Health Choices Administration; Health Choices Commissioner

                Current Law
        No provision.
                Proposed Law
        This provision would establish an independent agency in the
    executive branch of the United States called the Health Choices
    Administration (``Administration''). The Administration would
    be headed by a Health Choices Commissioner (``Commissioner''),
    who would be appointed by the President, with advice and
    consent of the Senate. Section 702 of the Social Security Act
    (detailing compensation, terms, general powers, rule-making,
    and delegation as applied to the Commissioner of Social
    Security and the Social Security Administration) would apply to
    the Commissioner.

    Sec. 142. Duties and authority of Commissioner

                Current Law
        No provision.
                Proposed Law
        This provision would make the Commissioner responsible for
    carrying out the following functions:
         Qualified Plan Standards.--Establishing QHBP
    standards, including the enforcement of such standards in
    coordination with state insurance regulators and the
    Secretaries of Labor and the Treasury.
         Health Insurance Exchange.--Establishing and
    operating the Health Insurance Exchange.
         Individual Affordability Credits.--Administering
    individual affordability credits, including the determination
    of eligibility for such credits.
         Promoting Accountability.--Undertaking activities
    in accordance with this section to promote accountability of
    QHBP offering entities in meeting federal health insurance
    requirements, regardless of whether such accountability is with
    respect to qualified health benefit plans offered through or
    outside the Health Insurance Exchange.
         Compliance Examination and Audits.--Coordinating
    with states to conduct audits of qualified health benefits
    plans compliance with federal requirements. These audits could
    include random compliance audits and targeted audits in
    response to complaints or other suspected non-compliance.
         Recoupment of Costs in Connection with Examination
    and Audits.--Authorizing the Commissioner to recoup from
    qualified health benefits plans reimbursement for costs of such
    examinations and audit of such QHBP offering entities.
         Data Collection.--Collecting data for the purposes
    of carrying out the Commissioner's duties, including promoting
    quality and value, protecting consumers, and addressing
    disparities in health and health care; the Commissioner may
    share such data with Secretary of Health and Human Services.
         Sanctions Authority.--Providing any of the
    following remedies (in addition to any other authorized by law)
    in coordination with state insurance regulators and the
    Secretary of Labor if it is determined that a QHBP offering
    entity violates a requirement:
              1. Civil money penalties of not more than the amount
            applicable under similar circumstances for similar
            violations under Medicare;
              2. Suspension of plan enrollment of individuals under
            such plan after the date the Commissioner notifies the
            entity of a decision until rectification of violation;
              3. In the case of an Exchange-participating health
            benefits plan, suspension of payment under the Health
            Insurance Exchange for individuals enrolled in the plan
            after the date the Commissioner notifies the entity of
            such decision and until corrective action is taken; or
              4. Work with state insurance regulators to terminate
            plans for repeated failure by the QHBP offering entity
            to meet this title's requirements.
         Standard Definitions of Insurance and Medical
    Terms.--Providing the development of standards for defining
    terms used in health insurance coverage, including insurance-
    related terms.
         Efficiency in Administration.--Issuing regulations
    for the effective and efficient administration of the Health
    Insurance Exchange and affordability credits including:
              1. The determination of eligibility for affordability
            credits.
              2. The use of personnel to carry out the duties of
            the Commissioner.

    Sec. 143. Consultation and coordination

                Current Law
        No provision.
                Proposed Law
        The Commissioner, as appropriate, would be required to
    consult with, at a minimum, the National Association of
    Insurance Commissioners (including for purposes of using model
    guidelines), state attorneys general, and state insurance
    regulators concerning the standards and enforcement for insured
    qualified health benefits plans described in this title.
    Concurrently, the Commissioner would be required to consult
    with, at a minimum, Indian tribes and tribal organizations,
    appropriate federal agencies, and appropriate state agencies
    concerning affordability credits and the offering of Exchange-
    participating health benefits plans to Medicaid eligible
    individuals.
        The Commissioner would be required to work in coordination
    with existing federal and state entities to the maximum extent
    feasible and in a manner preventing conflicts of interest.
    Concurrently, the Commissioner would seek to achieve uniform
    standards that sufficiently protect consumers in a manner that
    does not unreasonably affect employers and insurers.

    Sec. 144. Health Insurance Ombudsman

                Current Law
        The Department of Health and Human Services houses various
    complaint handling and client-assistance ombudsmen:
         Food and Drug Administration (FDA) Ombudsman.--
    Reviews marketing or investigational applications; provides
    information on import or export issues, ensures a fair hearing
    of claims of unfair or unequal treatment; also determines the
    jurisdiction of a product.
         Long-Term Care Ombudsman.--Mandated by Older
    Americans Act of 1965, consists of 1,000 paid individuals and
    14,000 volunteers who identify, investigate, and resolve
    complaints made by, or on the behalf, of residents. They have a
    blend of federal and state oversight.
         Medicare Beneficiary Ombudsman.--Created by the
    Medicare Prescription Drug, Improvement, and Modernization Act
    of 2003 (P.L. 108-173), is intended to ensure those eligible
    for Medicare have reliable and current information about their
    benefits, rights and protections under the Medicare program,
    and the procedures for getting problems and disputes resolved.
    The Ombudsman is to aid Medicare recipients in filing appeals
    if their insurance did not pay proper amounts for their medical
    services or those services were denied.
         Specialized Jurisdictional Ombudsmen.--The FDA
    also has four additional ombudsmen who serve as the points of
    contact for specific public complaints connected to the subject
    of their jurisdiction. They are located at the Center for
    Biologics Evaluation and Research, Center for Drug Evaluation
    and Research, Center for Devices and Radiological Health, and
    Center for Veterinary Medicine. If any of the above cannot
    resolve or rectify a complaint, the issue is then sent to the
    FDA Office of Ombudsman.
         State Health Insurance Ombudsman.--Several states
    (including VT, MN, and IL) have created State health insurance
    ombudsmen, with the core responsibilities of rectifying
    concerns encompassing access to care, billing problems, and
    access to health insurance. The Ombudsman provides information
    on state and federal programs that may be available, explains
    continuation rights under an existing health plan, provides
    help on how to shop for health insurance, and assists in
    appealing decisions made by their health insurance.
                Proposed Law
        The Commissioner would appoint within the Health Choices
    Administration a Qualified Health Benefits Ombudsman (with
    experience and expertise in the fields of health care and
    education). The Ombudsman would be required to perform the
    following duties:
         Receive and provide assistance with complaints,
    grievances, and requests for information submitted by
    individuals. The assistance would be provided more specifically
    in instances such as helping individuals determine relevant
    information for an appeal, assisting with any problems arising
    from disenrollment, choosing a qualified health benefits plan
    in which to enroll, and presenting information relevant to
    affordability credits.
         Submit annual reports to Congress and the
    Commissioner describing the activities of the Ombudsman,
    including recommendations for improvement in the Administration
    of this Division, as determined appropriate. The Ombudsman
    would not serve as an advocate for any increases in payments or
    new coverage of services, but would identify issues and
    problems in payment or coverage policies.

           Subtitle F--Relation to Other Requirements; Miscellaneous

    Sec. 151. Relation to other requirements

        Coverage Not Offered Through Exchange.--The requirements of
    this provision would not supersede specified federal and state
    laws with respect to the health insurance coverage not offered
    through the Health Insurance Exchange (whether or not offered
    in connection with an employment-based health plan). Such laws
    encompass applicable requirements under the Public Health
    Service Act for certain group health plans and state and local
    employee requirements for health insurance coverage, group
    health plan standards and requirements under ERISA, or other
    applicable federal or state laws. Nothing in this subsection
    would prevent application of state laws creating private rights
    of action with remedies or affect the application preemption
    (under Section 514 of ERISA).
        Coverage Offered Through the Exchange.--The requirements
    under this title would not supersede any requirements relating
    to genetic information nondiscrimination and mental health for
    such health insurance coverage (as long as those related do not
    prevent the application of requirements detailed in this
    division; as determined by the Commissioner). Concurrently,
    individual rights and remedies under state laws would apply.
    Nothing detailed in this paragraph would be construed as
    preventing the application of rights and remedies under state
    laws with respect to any referred requirement.

    Sec. 152. Prohibiting discrimination in health care

                Current Law
        HIPAA established federal rules regarding nondiscrimination
    based on health status-related factors. It prohibits group
    issuers from establishing rules for eligibility and premium
    contributions based on health status-related factors. Those
    factors include health status, medical condition (including
    both physical and mental illnesses), claims experience, receipt
    of health care, medical history, genetic information, evidence
    of insurability (including conditions arising out of acts of
    domestic violence) and disability. In addition, the Genetic
    Information Nondiscrimination Act of 2008 (GINA, P.L. 110-233)
    prohibits issuers in the individual health insurance market
    from establishing eligibility rules (including continued
    eligibility) based on an individual's genetic information. The
    Mental Health Parity Act of 1996, as amended, establishes
    parity in treatment limitations, financial requirements
    including annual or lifetime limits between mental health and
    substance use disorder benefits and medical and surgical
    benefits.
                Proposed Law
        Unless explicitly permitted within this Act and subsequent
    related regulations, all health care and related services
    (including insurance coverage and public health activities)
    covered by this Act would be provided regardless of personal
    characteristics extraneous to the provision of high quality
    health care or related services. Within 18 months of enactment,
    the Secretary would be required to ensure that all health care
    and related services would be provided without regard for
    extraneous personal characteristics.

    Sec. 153. Whistleblower protection

        No employer may discharge (or otherwise discriminate
    against) any employee with respect to his compensation, terms,
    conditions, or other privileges of employment because the
    employee (or an individual acting at the request of the
    employee):
         Provides or causes to provide to the employer,
    federal government, the attorney general of a relevant state,
    information relating to any violation of, or any act or
    omission the employee reasonably believes to be a violation of
    any provision, order, rule, or regulation promulgated under
    this Act.
         Testifies or is about to testify in a proceeding
    concerning such violation.
         Assists, participates or is about to assist or
    participate in such a proceeding.
         Objects to, or refuses to participate in any
    activity, policy, practice, or assigned task that the employee
    reasonably believes to be in violation of any provision, order,
    rule or regulation promulgated under this Act.
        Enforcement Action.--An employee covered by this section
    who alleges discrimination by an employer in violation may
    bring an action governed by the rules, procedures, legal burden
    of proof, and remedies detailed in section 40(b) of the
    Consumer Product Safety Act.
        Employer Defined.--The term employer in this section means
    any person (including one or more individuals, partnerships,
    associations, corporations, trusts, professional membership
    organization including a certification, disciplinary, or other
    professional body, unincorporated organizations,
    nongovernmental organizations, or trustees) engaged in profit
    or nonprofit business or industry whose activities are governed
    by this Act, and any agent, contractor, subcontractor, grantee,
    or consultant of such person.
        Rule of Construction.--The rule of construction set forth
    concerning employee protections in the United States Code would
    apply to this section.

    Sec. 154. Construction regarding collective bargaining

        Nothing in this division would be construed to alter or
    supersede any statutory authority (or other obligation) to
    engage in collective bargaining over the terms and conditions
    of employment related to health care.

    Sec. 155. Severability

        If any provision of this Act, or the application thereof
    toward any person or circumstance, is held unconstitutional,
    the application of the remaining provisions would not be
    affected.

    Sec. 156. Application of State and Federal laws regarding abortion

                Current Law
        The performance of abortions is regulated by both state and
    federal laws.
                Proposed Law
        This provision would ensure that state laws regarding the
    prohibition or requirement of coverage or funding for
    abortions, and state laws involving abortion-related procedural
    requirements are not preempted. The provision similarly
    provides that federal conscience protection and abortion-
    related antidiscrimination laws would not be affected by the
    bill. The rights and obligations of employees and employers
    under title VII of the Civil Rights Act of 1964 would also not
    be affected by the bill.
        This provision is discussed in detail below in the section
    entitled ``Abortion-Related Language in Division A.''

    Sec. 157. Non-discrimination on abortion and respect for rights of
            conscience

                Current Law
        Under Section 245 of the Public Health Service Act,
    federal, state, and local governments are prohibited from
    discriminating against health care entities that refuse to
    undergo abortion training, provide such training, perform
    abortions, or provide referrals for the relevant training for
    abortions. Under the so-called Weldon Amendment, which has been
    included in the annual appropriations measure for the
    Departments of Labor, Health and Human Services (HHS), and
    Education since 2004, appropriated funds may not be made
    available to a federal agency or program, or to a state or
    local government, that subjects any institutional or individual
    health care entity to discrimination on the basis that the
    entity does not provide, pay for, provide coverage of, or refer
    for abortions.
                Proposed Law
        This provision would prohibit a federal agency or program,
    or state or local government that receives federal financial
    assistance under the bill, from subjecting any individual or
    institutional health care entity to discrimination on the basis
    that the health care entity does not provide, pay for, provide
    coverage of, or refer for abortions. The provision would also
    prohibit a federal agency or program, or state or local
    government that receives federal financial assistance under the
    bill from requiring any health plan created or regulated under
    the bill to subject any individual or institutional health care
    entity to discrimination on the basis that the health care
    entity does not provide, pay for, provide coverage of, or refer
    for abortions. The HHS Office of Civil Rights would be
    designated to receive and coordinate the investigation of such
    complaints. This provision is discussed in detail below in the
    section titled ``Abortion-Related Language in Division A.''

                         Subtitle G--Early Investments

    Sec. 161. Ensuring value and lower premiums

                Current Law
        Medical loss ratio is the share of total premium revenue
    spent on medical claims. Some states impose medical loss ratios
    or related requirements on insurers in the individual and/or
    small group health insurance markets. As of June 2008, minimum
    ratios required by states ranged from 55% to 80%. In addition,
    Medigap insurance policies are private supplemental health care
    policies that Medicare beneficiaries can purchase to help cover
    some items, services, and cost sharing not covered under
    Medicare. Medigap plans are required to have a minimum medical
    loss ratio of 65% for individual policies and 75% for group
    policies.
                Proposed Law
        Each health insurance issuer that offers health insurance
    coverage in the small or large group market would be required
    to provide rebates to enrollees if the coverage provided had a
    medical loss ratio below a level specified by the Secretary,
    for any plan year. The amount of the rebate would be sufficient
    to meet such loss ratio. The methodology would be set at the
    highest level medical loss ratio possible designed to ensure
    adequate participation by issuers, competition in the health
    insurance market, and value for consumers so that their
    premiums would be used for services. The Secretary would
    establish a uniform definition and a methodology for
    determining medical loss ratio, taking into account special
    circumstances of plans such as size, type, and longevity of the
    plan. These same provisions would also apply to health
    insurance coverage offered in the individual market. This
    provision would be effective for plan years beginning on or
    after January 1, 2011.

    Sec. 162. Ending health insurance rescission abuse

                Current Law
        In the individual health insurance market, HIPAA guarantees
    renewal or continuation of individual health coverage at the
    option of the individual, except under specified circumstances.
    Those circumstances include nonpayment of premiums, fraud
    (including intentional misrepresentation of material fact) on
    the part of the enrollee, plan termination of coverage in the
    individual market, movement of enrollee outside of the network
    service area, or enrollee membership in an association ending
    (in the case of association sponsored coverage).
                Proposed Law
        This provision would clarify that the existing guaranteed
    renewability rules under HIPAA include prohibition of
    rescissions. An issuer would be allowed to rescind policies
    only upon clear and convincing evidence of fraud. No later than
    July 1, 2010, the Secretary would issue guidance on
    implementing this requirement. In order for a rescission to
    take effect, the issuer would be required to provide notice to
    the enrollee of the proposed rescission and give that enrollee
    the opportunity for a review of the determination by an
    independent, external third party under procedures specified by
    the Secretary. The health coverage for an enrollee who requests
    such a review would remain in effect until the third party
    determines such coverage may be rescinded under Secretarial
    guidance. The requirements related to external review would
    apply on and after October 1, 2010 to all health insurance
    coverage, regardless of date of issue.

    Sec. 163. Ending health insurance denials and delays of necessary
            treatment for children with deformities

                Current Law
        See description under Section 122.
                Proposed Law
        This provision would require issuers of group coverage and
    individual coverage that includes coverage for surgical
    benefits to provide coverage for outpatient and inpatient
    diagnosis and treatment of a child's congenital or
    developmental deformity, disease, or injury. Any such coverage
    would be subject to pre-authorization or pre-certification as
    required under the health plan, and include any surgical
    treatment deemed by the treating physician as medically
    necessary to approximate a normal appearance. The provision
    would define treatment and make conforming amendments. These
    requirements would apply to group health plans for plan years
    beginning on or after January 1, 2010, and to individual health
    plans offered, sold, issued, renewed, in effect or operated on
    or after January 1, 2010.

    Sec. 164. Administrative simplification

                Current Law
        HIPAA's Administrative Simplification provisions required
    the Secretary to adopt electronic format and data standards for
    nine specified administrative and financial transactions,
    including those related to enrollment in a health plan,
    eligibility for a plan, and health care payment and remittance.
    In addition, HIPAA directed the Secretary to adopt a standard
    for transferring standard data elements among health plans for
    the coordination of benefits and the sequential processing of
    claims. In 2000, CMS issued an initial set of standards for
    seven of the nine specified transactions and for the
    coordination of benefits. As required under HIPAA, CMS
    published an updated version of the standards in early 2009.
    The compliance date for implementing those updated standards is
    January 1, 2012.
        In September 2005, CMS published a proposed rule on a
    standard for electronic health care claims attachments, one of
    the two remaining transactions standards required to be
    adopted. A claims attachment transaction is used to request and
    supply additional data necessary to adjudicate a claim and
    typically includes specific clinical information that a plan
    needs in order to decide whether a service should be covered.
    This type of transaction is a key bridge between administrative
    transactions and clinical data. The claims attachment standard
    has yet to be finalized.
        HIPAA's Administrative Simplification provisions also
    instructed the Secretary to develop security standards to
    safeguard electronic health information from unauthorized
    access, use, and disclosure, and to issue standards to protect
    the privacy of patient information. The HIPAA privacy rule,
    which took effect in 2003, established a set of patient rights,
    including the right of access to one's medical information, and
    placed certain limitations of when and how health plans and
    health care providers may use and disclose patient information.
    The Health Information Technology for Economic and Clinical
    Health (HITECH) Act, enacted earlier this year as part of the
    Recovery Act, included a series of privacy and security
    provisions that amended and expanded the current HIPAA
    requirements. The HIPAA Administrative Simplification standards
    do not apply to the use and disclosure of information by
    financial institutions that are responsible for authorizing,
    processing, clearing, billing, transferring or collecting
    payments for premiums or health care.
                Proposed Law
        This provision would amend the HIPAA Administrative
    Simplification provisions by adding a new section requiring the
    Secretary, within two years of implementation of the updated
    HIPAA electronic transactions standards (i.e., by January
    2014), to adopt an additional set of financial and
    administrative transactions standards to help clarify,
    complete, and expand the existing requirements. The goal would
    be for the standards to be unique (with no conflicting or
    redundant standards), authoritative, and comprehensive,
    requiring minimal augmentation by paper transactions. In
    addition, the standards would describe all data elements in
    unambiguous terms and not permit optional fields. They would
    enable real-time (or near real-time) determination of a
    patient's financial responsibility at the point of service and
    adjudication of claims, and harmonize all common data elements
    across transactions standards. Finally, the standards would
    have to support electronic funds transfers as well as timely
    and transparent claim and denial management processes, enable
    providers to quickly and efficiently enroll with a health plan
    so as to conduct other electronic transactions, and provide for
    other requirements related to administrative simplification as
    identified by the Secretary.
        In developing the standards, the Secretary would be
    required to build upon existing and planned standards and
    regularly update the new standards. Within six months of
    enactment, the Secretary would be required to submit to
    Congress a plan for implementing and enforcing the new
    standards within five years of enactment. The plan would have
    to include a timetable for developing and regularly updating
    the new standards, implementation programs to help rural and
    other providers, an estimate of the funding needed to ensure
    timely completion of the implementation plan, and an
    enforcement process including timely investigation of
    complaints, random audits, and a fair and reasonable appeals
    process. The Secretary would have to ensure that all data
    collected pursuant to the new standards meets the HIPAA privacy
    and security requirements, as modified by the HITECH Act.
        The provision would require the Secretary, within one year
    of enactment, to issue a final rule to establish a standard for
    health claims attachment transactions. It also would clarify
    that the HIPAA standards do not apply to the use and disclosure
    of information by financial institutions that process payments
    unless they are business associates of health plans and
    healthcare providers.

    Sec. 165. Expansion of electronic transactions in Medicare

                Current Law
        Generally, Medicare statute prohibits payment to providers
    for Part A and B claims that are not submitted electronically.
    However, the Secretary is required to allow providers to submit
    paper claims if they have no method for submitting claims
    electronically or if they meet the definition of a small
    provider or supplier. ``A'' small provider is defined as a
    provider with fewer than 25 full-time employees or a physician,
    practitioner, facility, or supplier with fewer than 10 full-
    time employees. The Secretary also has the discretion to waive
    the electronic claims submission requirement in unusual cases
    that it deems appropriate.
                Proposed Law
        By January 1, 2015, the Secretary would be prohibited from
    paying Medicare Part A and B claims that are not submitted
    through electronic funds transfer or in electronic form as
    specified in ASC X12 835 Health Care Payment and Remittance
    Advice or subsequent standards. The exemption for providers
    that have no method for submitting claims electronically, for
    small providers or suppliers, and for unusual cases deemed
    appropriate by the Secretary would remain in effect.

    Sec. 166. Reinsurance program for retirees

                Current Law
        No provision in current law. Average per capita health
    spending among the near elderly (55- to 64-year-olds) in 2004
    was $7,787, or 50% more than spending among 45- to 54-year-olds
    ($5,210), and more than double that of 19- to 44-year olds
    ($3,370). These spending levels carry over into health
    insurance costs for these age groups. In the non-group market,
    average premiums for the near elderly were nearly $1,200 more
    than 45- to 54-year-olds and triple that for 25- to 34-year
    olds. The near elderly were more likely than their younger
    adult counterparts to spend more than 10% of their after-tax
    income on health care and health insurance premiums.
                Proposed Law
        No later than 90 days after enactment, the Secretary would
    establish a temporary reinsurance program, to provide
    reimbursement to assist participating employment-based plans
    with the cost of providing health benefits to eligible retirees
    who are 55 and older and their dependents, including eligible
    and surviving spouses. Health benefits would be required to
    include medical, surgical, hospital, prescription drug, and
    other benefits determined by the Secretary. An eligible
    employment-based plan would submit an application to the
    Secretary, as required. A participating employment-based
    program would submit claims for reimbursement to the Secretary,
    documenting the actual cost of items and services for each
    claim. Each claim would be based on the actual amount expended
    by the participant. The participating employment-based plan
    would take into account any negotiated price concessions, such
    as discounts, subsides, and rebates. The cost of deductibles
    and cost-sharing would be included in the cost of the claim,
    along with the amounts paid by the plan. For any valid claim,
    the Secretary would reimburse the plan for 80% of the portion
    of costs above $15,000 and below $90,000. This amount would be
    adjusted annually based on the percent increase in the medical
    care component of the Consumer Price Index, rounded to the
    nearest multiple of $1,000. Amounts paid to a participating
    employment-based plan would be used to lower cost directly to
    participants and beneficiaries in the form of premiums, co-
    payments, deductible, co-insurance, or other out-of-pocket
    costs, but would not be used to reduce the costs of an employer
    maintaining the employment-based plan. The Secretary would
    establish an appeals process for denied claims, procedures to
    protect against fraud, waste, and abuse, and would conduct
    annual audits of claims date.
        The Retiree Reserve Trust Fund would be established
    consisting of such amounts as appropriated or credited to the
    Fund to enable the Secretary to carry out the reinsurance
    program. The Secretary could request such sums as necessary to
    carry out this section, not to exceed $10 billion. Amounts
    appropriated and outlays from such appropriation would not be
    taken into account for purpose of any budget enforcement
    procedures, thus exempting the Fund from the framework of the
    budget resolution and the points of order which enforce that
    framework. The Secretary would have the authority to stop
    taking applications or take other steps to reduce expenditures
    to ensure that expenditures did not exceed available funds.

    Sec. 167. Limitations on pre-existing condition exclusions in group
            health plans and health insurance coverage in the group and
            individual markets in advance of applicability of new
            prohibition of pre-existing condition exclusions

                Current Law
        See description under Section 111.
                Proposed Law
        This provision would decrease the amount of time that
    issuers of group coverage would be allowed to exclude coverage
    for pre-existing health conditions, in advance of the effective
    date of the wholesale prohibition against any such coverage
    exclusions (established under Section 111). It would allow
    group health plans to impose pre-existing condition exclusions
    for no longer than 3 months (9 months in the case of a late
    enrollee). Also, it would allow issuers to review only the past
    30-day period for evidence of a pre-existing health condition,
    as opposed to the current look-back period of six months.
        Such changes would apply to group health plans beginning
    after the first six months following enactment. In the case of
    a collective bargaining agreement, such changes would apply
    either at the date on which the last collective bargaining
    agreement ends or three years after enactment, whichever is
    earlier.
        This provision also would prohibit coverage exclusions for
    pre-existing health conditions in the individual health
    insurance market, except to the extent that such exclusions
    could be applied consistent with the rules relating to group
    coverage, in advance of the effective date of the wholesale
    prohibition against any such coverage exclusions. It would
    specify the circumstances under which an issuer of individual
    coverage may impose a pre-existing health condition exclusion,
    and limit the duration of such exclusions to a maximum of three
    months. These changes would apply to individual coverage
    offered, sold, issued, renewed, in effect, or operated
    beginning after the first six months following enactment.
        These rules imposed on group and individual coverage would
    cease to apply once such plans become subject to the
    requirements under Section 111 that prohibit any exclusions for
    pre-existing health conditions.

           TITLE II--HEALTH INSURANCE EXCHANGE AND RELATED PROVISIONS

                     Subtitle A--Health Insurance Exchange

                Current Law
        No provision in federal law. The Health Insurance Exchange
    proposal, however, has some components that are similar to the
    Massachusetts Connector as an intermediary that assists
    individuals in acquiring health insurance.
                Proposed Law

    Sec. 201. Establishment of Health Insurance Exchange; outline of
            duties; definitions

        A Health Insurance Exchange (``Exchange'') would be
    established to facilitate access of individuals and employers
    to a variety of choices of affordable, quality health insurance
    coverage, including a public health insurance option. The
    Exchange would exist within the Health Choices Administration
    under the direction of the Health Choices Commissioner
    (described above in Sections 141 and 142). As described in
    greater detail in the following sections, regarding the
    Exchange, the Commissioner would (1) establish standards for,
    accept bids from, and negotiate and enter into contracts with
    entities seeking to offer qualified health benefits plans
    (QHBPs) through the Exchange, (2) facilitate outreach and
    enrollment of Exchange-eligible individuals and employers, and
    (3) conduct appropriate activities related to the Exchange,
    including establishment of a risk pooling mechanism and
    consumer protections.

    Sec. 202. Exchange-eligible individuals and employers

        Beginning in Y1, all individuals generally would be
    eligible to obtain coverage through the Exchange, unless they
    were enrolled in the following:
               a group plan through a full-time employee
            (including a self-employed person with at least one
            employee) for which the employer makes an adequate
            contribution (described below in Section 312);
               Medicare;
               Medicaid (except in certain cases, discussed
            below).
        Those enrolled in Tricare and veterans healthcare are
    eligible to obtain coverage through the Exchange. Regarding
    Medicaid, individuals could still participate in the Exchange
    if their Medicaid eligibility was related to COBRA continuation
    coverage, tuberculosis, or breast or cervical cancer. As
    described in greater detail in Section 1701, Medicaid would be
    expanded to cover individuals up to 133?% FPL who are not
    eligible under current state Medicaid programs--called ``non-
    traditional Medicaid eligible individuals'' per Section 205. A
    non-traditional Medicaid eligible individual could be Exchange-
    eligible if the individual was enrolled in a qualified health
    benefits plan, grandfathered health insurance coverage, or
    current group health plan during the six months before the
    individual became a non-traditional Medicaid eligible
    individual. During the period in which such an individual had
    chosen to enroll in an Exchange plan, the individual would be
    ineligible for regular Medicaid.
        Except for the Medicaid exception described above,
    individuals would lose eligibility for Exchange coverage once
    they become eligible for Medicare Part A, Medicaid (although in
    this case, the Commissioner could permit continued Exchange
    eligibility for such limited time as the Commissioner
    determines it is administratively feasible and consistent with
    minimizing disruption in the individual's access to health
    care), and other circumstances as the Commissioner provides.
    Besides those cases, once individuals enroll in an Exchange
    plan, they would continue to be eligible until they are no
    longer enrolled.
        Exchange-eligible employers could meet the requirements of
    the employer responsibility (Section 312) by offering and
    contributing adequately toward employees' enrollment through
    the Exchange. Those employees would be able to choose any of
    the available Exchange plans. Once employers are Exchange
    eligible and enroll their employees through the Exchange, they
    would continue to be Exchange eligible, unless they decided to
    then offer their own qualified health benefits plan(s).
        In Y1, only employers with 10 or fewer employees would be
    Exchange-eligible. In Y2, employers with 20 or fewer employees
    would be Exchange-eligible. Beginning in Y3, the Commissioner
    could permit larger employers to participate in the Exchange.
    These additional employers could be phased in or made eligible
    based on the number of full-time employees or other
    considerations the Commissioner deems appropriate. Employer and
    other employment-related definitions would be defined by the
    Commissioner.
        The Commissioner would have the authority to establish
    rules to deal with special situations with regard to uninsured
    individuals participating as Exchange-eligible individuals and
    employers, such as transition periods for individuals and
    employers who gain, or lose, Exchange-eligible participation
    status, and to establish grace periods for premium payment.
        The Commissioner would be required to provide for periodic
    surveys of Exchange-eligible individuals and employers
    concerning their satisfaction with the Exchange and its plans.
        The Commissioner would conduct an Exchange Access Study--a
    study of access to the Health Insurance Exchange for
    individuals and for employers, including individuals such as
    Medicaid recipients and employers who are not eligible and
    enrolled in Exchange plans. The goal of the study would be to
    determine if there are significant groups and types of
    individuals and employers who are not Exchange eligible but who
    would have improved benefits and affordability if made
    eligible. The study also would examine the terms, conditions,
    and affordability of group health coverage offered by employers
    and QHBP-offering insurers outside of the Exchange compared to
    Exchange-participating health benefits plans, as well as the
    affordability test standard for access of certain employed
    individuals to coverage in the Health Insurance Exchange. The
    Commissioner would submit the study to Congress by January 1 of
    Y3, Y6, and thereafter, and would include in the report
    recommendations regarding changes in standards for Exchange
    eligibility for individuals and employers.
        This section shall not be construed as affecting any
    authority under title 38 of the U.S. Code, Veterans benefits,
    or Chapter 55 of title 10 of the U.S. Code, Armed Forces.
        By December 31, 2011, the Secretary would submit a report
    to Congress comparing the benefit package offered in 2011 for
    an average Children's Health Insurance Program (CHIP) plan to
    the benefit standards adopted for the essential benefits
    package and the affordability credits discussed under Subtitle
    C. No child eligible for CHIP coverage could be enrolled in an
    Exchange plan until the Secretary has certified, based on the
    report and any resulting changes (if any), that QHBP coverage
    meeting the essential benefits package is at least comparable
    to average CHIP coverage available in 2011.

    Sec. 203. Benefits package levels

        The Commissioner would specify the benefits to be made
    available under Exchange plans during each plan year,
    consistent with this section and sections 121-134 above. The
    Commissioner could not enter into a contract with an entity
    wanting to offer coverage through the Exchange in a service
    area(s), unless the following requirements are met:
         The entity offers one Basic plan in a service
    area.
         If the entity offers a Basic plan in a service
    area, the entity may offer one Enhanced plan for the service
    area.
         If the entity offers an Enhanced plan in a service
    area, the entity may offer one Premium plan for the area.
         If the entity offers a Premium plan for a service
    area, the entity may offer one or more Premium-Plus plans for
    the area.
        All such plans could be offered under a single contract
    with the Commissioner.
        Consistent with the standards in sections 101-164 above,
    the Commissioner would also establish standards for the three
    primary levels of Exchange plans--Basic, Enhanced, and
    Premium--and for additional benefits that may be offered in
    Premium-Plus plans. Besides offering the essential benefits
    package (Section 122 above) for a QHBP, Basic plan benefit
    packages would be modified to provide for reduced cost-sharing
    for individuals eligible for the ``affordability cost-sharing
    credit,'' described below in Section 244. Excluding the credit,
    the benefit package of a Basic plan would have an actuarial
    value representing payment for approximately 70% of all the
    covered items and services in the essential benefits package
    (Section 122 above). Enhanced plans would have lower cost-
    sharing than Basic plans, representing approximately 85% of the
    actuarial value of all the covered items and services in the
    essential benefits package. Premium plans would have lower
    cost-sharing than Enhanced plans, representing approximately
    95% of the actuarial value of all the covered items and
    services in the essential benefits package. Premium-Plus plans
    would be Premium plans that also provide additional benefits
    not otherwise covered approved by the Commissioner, such as
    adult oral health and adult vision care. The portion of the
    premium that is attributable to such additional benefits would
    be separately specified.
        The Commissioner would establish a permissible range of
    variation of cost-sharing for the Basic, Enhanced, and Premium
    plans. Such variation would permit variations up to 10% in
    cost-sharing within specific benefit categories (Section 122);
    for example, with respect to a standard that provides for 20%
    coinsurance, the permissible variation would be between 18% and
    22% coinsurance. This would not prohibit a greater differential
    in cost sharing between different benefit categories or benefit
    tiers within a category such as between generic drugs and brand
    name drugs.
        If a state requires health insurers to offer benefits
    beyond the essential benefits package, such requirements would
    continue to apply to Exchange plans, but only if the state has
    entered into an arrangement satisfactory to the Commissioner to
    reimburse the Commissioner for the amount of any resulting net
    increase in affordability premium credits (Section 243).
        The Commissioner would assure that in each premium rating
    area of the Exchange, at least one Exchange plan provides
    coverage of both abortions for which federal funds appropriated
    for the Department of Health and Human Services are permitted
    and abortions for which such funds are not permitted under the
    Hyde Amendment. The Commissioner would also assure that in each
    premium rating area of the Exchange, at least one Exchange plan
    does not provide coverage of elective abortions. If a qualified
    health benefits plan did provide coverage of elective
    abortions, it would have to provide assurances to the
    Commissioner that affordability credits were not used to pay
    for such abortions, and only premium amounts attributable to
    the actuarial value described in section 113(b) were used for
    such purpose. This section is discussed in detail below in the
    section titled ``Abortion-Related Language in Division A.''

    Sec. 204. Contracts for the offering of Exchange-participating health
            benefits plans

        The Commissioner would establish standards, described
    below, for Exchange-participating entities and their health
    benefits plans. The Commissioner would certify entities and
    plans if the standards are met. The Commissioner would solicit
    and review bids from QHBP-offering entities for offering
    Exchange plans, negotiate with the entities, and enter into
    contracts with the entities for offering plans through the
    Exchange under terms negotiated between the Exchange and the
    entities.
        The Federal Acquisition Regulation (the principal set of
    rules that govern the contracting process for the federal
    government) would not apply to contracts between the
    Commissioner and QHBP-offering entities for offering Exchange
    plans.
        The standards for Exchange-participating entities would
    consist of the following requirements:
         The entity must be licensed to offer health
    insurance coverage under state law for each state in which it
    offers coverage.
         The entity must provide for reporting data/
    information specified by the Commissioner, including
    information necessary to administer the risk pooling mechanism
    in Section 206 and information to address disparities in health
    and health care.
         The entity must provide for implementation of the
    affordability credits provided for enrollees (described in
    Sections 241-246 below).
         The entity must accept all applicable enrollment
    via the Exchange, subject to such exceptions (such as capacity
    limitations) in accordance with the federal requirements for
    QHBPs (discussed under Title I), and would notify the
    Commissioner if it projects or anticipates reaching a capacity
    that would result in a limitation in enrollment.
         The entity must participate in the pooling
    mechanism as established by the Commissioner (described in
    Section 206 below).
         Regarding the Basic plan offered by the entity,
    the entity must contract for outpatient services with certain
    federally supported health care providers. The Commissioner
    would also specify how this requirement would apply to Health
    Maintenance Organizations (HMOs).
         The entity must provide culturally and
    linguistically appropriate communication and health services.
         The entity must comply with other applicable
    requirements of this title specified by the Commissioner, which
    would include standards regarding billing and collection
    practices for premiums and grace periods and which may include
    standards to ensure that the entity does not use coercive
    practices to force providers not to contract with other
    entities offering coverage through the Exchange.
        For the contracting process, entities' bids would have to
    contain the information required by the Commissioner. Contracts
    would last at least one year, but could be automatically
    renewed in the absence of notice of termination by either
    party. The contract would provide that if the Commissioner
    determines that a plan's provider network is not adequate, then
    the cost-sharing charged to a person who received out-of-
    network care would be the same as if the care had been provided
    in-network.
        In coordination with state insurance regulators, the
    Commissioner would establish processes to oversee, monitor, and
    enforce applicable requirements on Exchange-participating
    entities and QHBPs, including plan marketing. In conjunction
    with state insurance regulators, the Commissioner would
    establish a process for individuals and employers to file
    complaints concerning violations. The Commissioner could
    terminate a contract with an entity if it fails to comply with
    the requirements of this title; the Commissioner could also
    impose one or more intermediate sanctions.
        Any determination by the Commissioner to terminate a
    contract would be made in accordance with formal investigation
    and compliance procedures established by the Commissioner under
    which (a) the Commissioner provides the entity with the
    reasonable opportunity to develop and implement a corrective
    action plan to correct the deficiencies that were the basis of
    the Commissioner's determination; and (b) the Commissioner
    provides the entity with reasonable notice and opportunity for
    hearing (including the right to appeal an initial decision)
    before terminating the contract. However, these procedures need
    not apply if the Commissioner determined that a delay in
    termination would pose an imminent and serious risk to the
    health of individuals enrolled under the plan.
        Exchange plans would be prohibited from discriminating
    against any individual health care provider or health care
    facility because of its willingness or unwillingness to
    provide, pay for, provide coverage of, or refer for abortions.
    This provision is discussed in detail below in the section
    titled ``Abortion-Related Language in Division A.''

    Sec. 205. Outreach and enrollment of Exchange-eligible individuals and
            employers in Exchange-participating health benefits plan

        Outreach. The Commissioner would conduct outreach
    activities to inform and educate individuals and employers
    about the Exchange and its participating health plans. Such
    outreach would include outreach specific to vulnerable
    populations, such as children, individuals with disabilities,
    individuals with mental illness, and individuals with other
    cognitive impairments.
        The Commissioner could work with other entities, such as
    community-based, non-profit organizations with experience
    working with people who are low-income, uninsured, or from
    diverse communities. The Commissioner may support and contract
    with community-based non-profits to provide these services. The
    Commissioner's required outreach activities would include the
    following:
               broadly disseminate information on Exchange-
            participating plans, provided in a comparative manner
            and including information on benefits, premiums, cost-
            sharing, quality, provider networks, and consumer
            satisfaction;
               provide assistance to Exchange-eligible
            individuals and employers via a toll-free telephone
            hotline and an Internet website;
               develop and disseminate information to
            Exchange-eligible enrollees on their rights and
            responsibilities;
               assist Exchange-eligible individuals in
            selecting plans and obtaining benefits; and
               ensure the information is developed using
            plain language (described in Section 133 above).
        Enrollment. The Commissioner would be required to make
    timely determinations of whether individuals and employers are
    eligible for Exchange coverage and to establish and carry out
    an enrollment process, including at community locations.
    Enrollment would be permitted by mail, telephone,
    electronically, or in person.
        Open enrollment for individuals and employers to enroll in
    an Exchange plan and affordability credits (described in
    Sections 241-245 below) would be at least 30 days and would be
    during September through November of each year before benefits
    would begin, or such other time that would maximize the
    timeliness of income verification. However, the Commissioner
    would also provide for special enrollment periods to take into
    account special circumstances of individuals and employers,
    such as an individual who loses acceptable coverage,
    experiences a change in marital or other dependent status,
    moves outside the plan's service area, or experiences a
    significant change in income. The Commissioner, potentially
    with other appropriate entities, would be required to broadly
    disseminate information on the enrollment process, including
    before each enrollment period.
        The Commissioner would establish a process to automatically
    enroll the following individuals into an appropriate Exchange
    plan (potentially involving a random assignment or some other
    form of assignment that takes into account the health care
    providers used by the individual, or such other relevant
    factors specified by the Commissioner):
               Those who have applied for affordability
            credits, been determined eligible, have not opted out
            from receiving such credit, and do not enroll in
            another Exchange plan; and
               Those enrolled in an Exchange plan that is
            terminated who do not enroll in another Exchange plan.
        Under the enrollment process, individuals enrolled in an
    Exchange plan would pay such plans directly, not through the
    Commissioner or the Exchange.
        Special provisions apply to newborns born in the United
    States without acceptable coverage at birth. Until other
    acceptable coverage begins, the child would be considered a
    non-traditional Medicaid-eligible individual (for whom the
    state would be paid 100% federal reimbursement) and would be
    deemed as having elected Medicaid coverage. This coverage would
    end no later than the end of the month 60 days after the
    child's birth; at the end of that period, if the child still
    does not have acceptable coverage, the child is deemed a
    traditional Medicaid-eligible individual, for whom the state
    receives the regular Medicaid federal matching rate.
        As of the day before the first day of Y1, CHIP-eligible
    children, including targeted low-income children in a Medicaid-
    expansion CHIP program, would be deemed to be Exchange
    eligible. The Commissioner would notify each state in Y1
    whether the Exchange could support enrollment of these
    children.
        A ``traditional Medicaid eligible individual'' is a
    Medicaid-eligible individual excluding (1) those who are
    eligible because of the expansion of Medicaid in Section 1701
    of this legislation to individuals up to 133\1/3\% FPL and (2)
    a childless adult who would not otherwise be classified as
    categorically needy (as per current Medicaid statute, Section
    1902(a)(10)(A)) or medically needy (as per current Medicaid
    statute, Section 1902(a)(10)(C)) as in effect as of the day
    before the date of enactment of this Act. A ``non-traditional
    Medicaid-eligible individual'' is a Medicaid-eligible
    individual who is not a traditional Medicaid-eligible
    individual. Section 202 of the legislation includes provisions
    so that a non-traditional Medicaid eligible individual could be
    Exchange-eligible if the individual was enrolled in a qualified
    health benefits plan, grandfathered health insurance coverage,
    or current group health plan during the six months before the
    individual became a non-traditional Medicaid eligible
    individual. Under this section, the Commissioner would provide
    these individuals with the option to enroll in Medicaid rather
    than an Exchange plan and to change that election during open
    enrollment periods described earlier in this section.
        An Exchange-eligible individual could apply for a Medicaid-
    eligibility determination. If the individual is determined to
    be eligible, the Commissioner would provide for the
    individual's enrollment under the state Medicaid plan in
    accordance with the Medicaid memorandum of understanding. In
    the case of such an enrollment, the state would provide for the
    same periodic redetermination of eligibility under Medicaid
    that would apply if the individual had directly applied to the
    state Medicaid agency. The legislation would require the
    Commissioner, in consultation with the HHS Secretary, to enter
    into a memorandum of understanding with each state with respect
    to coordinating enrollment of individuals in Exchange plans and
    under state Medicaid programs, and to otherwise coordinate the
    implementation of these provisions with respect to the Medicaid
    program. This memorandum would permit the exchange of
    information consistent with limitations specified in Medicaid
    statute with respect to providing safeguards that restrict the
    use or disclosure of information concerning applicants and
    recipients to purposes directly connected with the
    administration of the state Medicaid plan, and at state's
    option, the exchange of information necessary to verify
    eligibility for other federal programs (e.g., for free and
    reduced price school lunches). None of these provisions could
    be construed as permitting such memorandum to modify or vitiate
    any requirement of a state Medicaid plan.
        In carrying out this section, the Commissioner would
    establish effective methods for communicating in plain language
    and a culturally and linguistically appropriate manner.
        Nothing in this division could be construed to affect the
    role of enrollment agents and brokers under state law,
    including with regard to the enrollment of individuals and
    employers in QHBPs, including the public health insurance
    option. This section preserves the ability of agents and
    brokers to assist employers and individuals in selecting health
    insurance available through an exchange and to enroll
    individuals and employers in qualified health benefits plans,
    including Exchange-participating health benefits plans and the
    public health insurance option, under terms determined between
    the agents and brokers and the plan. ``[E]nrollment agents or
    brokers'' include individuals and private health exchanges
    licensed as agents or brokers under state law to sell health
    insurance. Persons or employers enrolling in qualified health
    benefits plans through agents and brokers should not be
    discriminated against by HHS, the Health Choices
    Administration, and the Internal Revenue Service; including
    individuals accessing affordability credits or fulfilling their
    obligations under section 401 or employers fulfilling their
    obligations under Section 312 of this Act.

    Sec. 206. Other functions

        The Commissioner would be required to coordinate the
    distribution of affordability premium and cost-sharing credits
    (described below in Sections 243-244) to the Exchange plans.
    The Commissioner would also be required to establish a risk-
    pooling mechanism, to adjust premium payments to Exchange plans
    to take into account (in a manner specified by the
    Commissioner) the differences in the risk characteristics of
    individuals and employers enrolled under the Exchange plans.
        An Office of the Special Inspector General for the Exchange
    would be established, headed by a Special Inspector General
    appointed by the President and confirmed by the Senate. The
    Special Inspector General's nomination would be made as soon as
    practicable after the establishment of the Exchange.
        The duties of the Special Inspector General would consist
    of the following:
               Conduct, supervise, and coordinate audits,
            evaluations and investigations of the Health Insurance
            Exchange to protect the integrity of the Exchange as
            well as the health and welfare of participants in the
            Exchange;
               Report both to the Commissioner and to the
            Congress regarding program and management problems and
            recommendations to correct them;
               Related to the duties above, have other
            duties described as applying to the Special Inspector
            General of the Troubled Asset Relief Program (TARP),
            per paragraphs (2) and (3) of Section 121 of P.L. 110-
            343; and
             In carrying out these duties, have the
            authorities of inspectors general in Section 6 of the
            Inspector General Act of 1978.
        Other provisions of the TARP Special Inspector General
    would also be applied, regarding the basis of the Special
    Inspector General's appointment, how s/he might be removed,
    his/her salary, and available personnel, facilities and other
    resources.
        Not later than one year after the confirmation of the
    Special Inspector General, and annually thereafter, the Special
    Inspector General would submit to the appropriate committees of
    Congress a report summarizing the activities of the Special
    Inspector General during the one year period ending on the date
    the report is submitted.
        The Office of the Special Inspector General would terminate
    five years after the date of the enactment of this Act.

    Sec. 207. Health Insurance Exchange Trust Fund

        A ``Health Insurance Exchange Trust Fund'' would be created
    within the U.S. Treasury, consisting of such amounts as may be
    appropriated or credited to the fund. The Commissioner would
    pay from the Trust Fund amounts as determined necessary to make
    payments to operate the Exchange, including affordability
    credits.
        Dedicated payments to the Trust Fund would include the
    following:
               taxes on individuals not obtaining
            acceptable coverage (Section 401);
               taxes on employers electing to not provide
            health benefits (Section 412); and
               excise tax on employers who fail to satisfy
            health coverage participation requirements (Section
            411).
        Such additional sums as necessary would be appropriated.
    General provisions in the Internal Revenue Code regarding
    federal government trust funds would apply.

    Sec. 208. Optional operation of State-based health insurance exchanges

        If a state (or group of states, subject to the
    Commissioner's approval) applied to the Commissioner for
    approval of a state-based Health Insurance Exchange, and if the
    Commissioner approves such state-based Exchange, then the
    state-based Exchange would operate instead of the federal
    Exchange in that state(s).
        The Commissioner could not approve a state-based Exchange
    unless the following requirements were met (and would be
    required to approve it if the conditions were met):
         The state-based Exchange must demonstrate the
    capacity to and provide assurances satisfactory to the
    Commissioner that it could carry out the functions specified
    for the federal Exchange in the state(s) including:
               negotiating and contracting with qualified
            plans;
               enrolling Exchange-eligible individuals and
            employers in plans;
               establishing sufficient local offices to
            meet the needs of Exchange-eligible individuals and
            employers;
               administering premium and cost-sharing
            credits (described below in Sections 241-246) using the
            same methodologies, and at least the same income
            verification methods, as would otherwise apply and at a
            cost to the federal government that is not greater than
            what would otherwise apply; and
               enforcement activities consistent with
            federal requirements.
         There is no more than one Exchange in operation in
    any one state.
         The state provides assurances satisfactory to the
    Commissioner that approval of such an Exchange would not result
    in any net increase in expenditures to the federal government.
         The state provides for reporting of such
    information as the Commissioner determines and assurances
    satisfactory to the Commissioner that it will vigorously
    enforce violations of applicable requirements.
         Such other requirements as the Commissioner may
    specify.
        If a state was operating an ``Exchange'' prior to January
    1, 2010, and sought to operate a state-based Exchange under
    this section, the Commissioner would presume the Exchange meets
    the required standards. The Commissioner would be required to
    establish a process to work with such a state, but could
    determine, after working with the state, that the state does
    not comply with such standards.
        A state-based Exchange could, at the option of the state,
    and only after providing timely and reasonable notice to the
    Commissioner, cease operation. In this case, the federal
    Exchange would be operational in the state(s).
        The Commissioner could terminate the approval (for some or
    all functions) of a state-based Exchange if the Commissioner
    determined that it no longer met the requirements listed above
    or was no longer capable of carrying out such functions. In
    lieu of terminating the state-based Exchange's approval, the
    Commissioner could temporarily assume some or all functions of
    the state-based Exchange until the Commissioner determined that
    it met the applicable requirements and was capable of carrying
    out those functions. The ceasing or termination of a state-
    based Exchange would be effective in such time and manner as
    the Commissioner would specify.
        Enforcement authorities of the Commissioner would be
    retained by the Commissioner. The Commissioner could specify
    functions of the federal Exchange that may not be performed by
    a state-based Exchange or that could be performed by both the
    Commissioner and the state-based Exchange.
        In the case of a state-based Exchange, except as the
    Commissioner may otherwise specify, any references to the
    ``Exchange'' or to the ``Commissioner'' in the area in which
    the state-based Exchange operates would be deemed a reference
    to the state-based Exchange and the head of that Exchange.
        In the case of a state-based Exchange, funding assistance
    would be provided for its operation in the form of a matching
    grant, with a state share of expenditures required.
        This provision would also enable a state to receive an
    incentive payment if it enacts and implements an alternative
    medical liability law that complies with the bill. The
    Secretary would determine that a state law is compliant if she
    is satisfied that the State has enacted and is currently
    implementing the law, and finds the law to be ``effective.'' To
    determine the effectiveness of a law, the Secretary would
    consider whether it makes the medical liability system more
    reliable through the prevention of or prompt and fair
    resolution of disputes, it encourages the disclosure of health
    care errors, and it maintains access to affordable liability
    insurance. The state law would be required to provide for an
    ``early offer'' system, a ``certificate of merit'' program, or
    a combination of both. In general, an early offer system
    permits a defendant to offer to a claimant within 180 days
    after a claim is filed, periodic payment of the claimant's
    economic losses. If an early offer is not made, the injured
    party can proceed with a normal tort claim for both economic
    and noneconomic damages. However, if an early offer is made and
    the claimant declines the offer, both the standard of
    misconduct and standard of proof are raised. A certificate of
    merit program requires claimants, when a medical malpractice
    suit is first filed, to include testimony from a qualified
    medical expert that establishes that there is merit to the
    claim. A state that receives an incentive payment would have to
    use it to improve health care in the state. The Secretary may
    provide technical assistance to those states that apply for or
    are awarded an incentive payment. Not later than one year after
    the date of enactment, the Secretary shall submit to Congress
    an annual report on the progress states have made in adopting
    and implementing alternative medical liability laws that comply
    with this provision.

    Sec. 209. Limitation on premium increases under Exchange-participating
            health benefits plans

        This provision would limit Exchange plans' premium
    increases to 150% of annual medical inflation, unless the plan
    receives one of two exceptions (none of which would preempt
    existing State prior-approval laws): (1) the plan must offer
    additional benefits required by the Commissioner, or (2) the
    plan demonstrates to the Commissioner (or, if determined
    appropriate by the Commissioner, the State insurance
    commissioner) that the premium limitation would threaten its
    financial viability or its ability to provide timely benefits
    to plan participants.

                   Subtitle B--Public Health Insurance Option

    Sec. 221. Establishment and administration of a public health insurance
            option as an Exchange-qualified health benefits plan

                Current Law
        There is no federal public option available for the non-
    disabled population under age 65. Medicare is an example of a
    federal public health insurance program for the aged and
    disabled. Under Medicare, Congress and the Department of Health
    and Human Services (HHS), Centers for Medicare and Medicaid
    Services (CMS) determine many parameters of the program
    including eligibility rules, financing (including determination
    of payroll taxes, and premiums), required benefits, payments to
    health care providers, and cost-sharing amounts. However, even
    within this public plan, CMS subcontracts with private
    companies to carry out much of the administration of the
    program.
                Proposed Law
        The provision would require the Secretary of Health and
    Human Services (Secretary) to provide for the offering of a
    public health insurance option through the Exchange starting
    Y1. The Secretary would be required to ensure that the public
    option provided choice, competition, and stability of
    affordable, high-quality coverage throughout the United States.
    The Secretary's primary responsibility would be to create a
    low-cost plan without compromising quality or access to care.
        The public option would only be available through the
    Health Insurance Exchange. The public option would be required
    to comply with requirements applicable to Exchange-
    participating health benefit plans, including requirements
    related to benefits, benefit levels, provider networks,
    notices, consumer protections, and cost sharing. The public
    option would be required to offer Basic, Enhanced, and Premium
    plans, and would be allowed to offer Premium-Plus plans.
        The Secretary would be allowed to enter into contracts for
    the administration of the public option in the same manner as
    the Secretary is allowed to enter into contracts for the
    administration of the Medicare program. These administrative
    functions include, subject to restrictions, determination of
    payment amounts, making payments, beneficiary education and
    assistance, provider consultative services, communication with
    providers, and provider education and technical assistance.
    This includes contracting with appropriate non-profit entities,
    including Medicare's Quality Improvement Organizations, quality
    improvement entities created under Section 2401 of this Act, or
    other appropriate organizations, to assist providers to improve
    their performance. The provision would prohibit contracts that
    involve the transfer of insurance risk.
        The Secretary would be required to establish an office of
    the ombudsman for the public health insurance option which
    would have duties similar to those of the Medicare Beneficiary
    Ombudsman.
        The Secretary would be required to collect data necessary
    to establish premiums and payment rates and for other purposes,
    including improving quality and reducing racial, ethnic, and
    other disparities in health and health care.
        With respect to the public health insurance option, the
    Secretary would be treated as an entity offering a Quality
    Health Benefit Plan through the Exchange.
        The provisions relating to access to federal courts for
    enforcement of rights under Medicare would apply to the public
    option and individuals enrolled under the public option in the
    same manner that they apply to Medicare and Medicare
    beneficiaries.

    Sec. 222. Premiums and financing

        The Secretary would be required to establish
    geographically-adjusted premiums for the public option in a
    manner that complies with the premium rules established by the
    Commissioner for Exchange-participating health benefit plans
    and at a level sufficient to fully finance the cost of health
    benefits and administration for the public option. Premiums
    would be required to include an appropriate amount for a
    contingency margin of not less than 90 days of estimated
    claims. Starting in 2015, the Secretary would be required to
    solicit recommendations from the American Academy of Actuaries
    prior to setting the amount of the contingency margin.
        The provision would establish an account in the Treasury
    for receipts and disbursements attributable to the public
    option, including start-up funding. The start-up funding would
    be equal to the sum of $2 billion for the establishment of the
    public option, and such sums as may be necessary to cover 90
    days worth of reserves based on projected enrollment. These
    amounts would be authorized to be appropriated to the Secretary
    out of any funds in the Treasury not otherwise appropriated.
    The Secretary would be required to provide for repayment of the
    start-up funding in an amortized manner over a 10-year period
    starting in Y1. The provision specifies that nothing in this
    section could be construed as authorizing any additional
    appropriations to the account, other than amounts otherwise
    provided with respect to other Exchange-participating plans. As
    under the Medicare Advantage program, states could not impose a
    premium tax or similar tax with respect to the public option.
    In no case shall the public health insurance option receive any
    Federal funds for purposes of insolvency in any manner similar
    to the manner in which entities receive Federal funding under
    the Troubled Assets Relief Program.

    Sec. 223. Payment rates for items and services

        The Secretary would be required to establish payment rates
    for services and health care providers under the public option
    consistent with the modernized payment initiatives and payment
    reforms specified in Section 224.
        The Secretary would be required to negotiate rates in a
    manner that resulted in payment rates not lower, in aggregate,
    than rates under Medicare and not higher, in aggregate, than
    the average rates paid by other qualified health benefits plan
    offering entities for services and health care providers. The
    provision specifies that nothing would prevent the use of
    innovative payment methodologies such as those described in
    Section 224 in connection with the negotiation of payment
    rates. As introduced and reported, H.R. 3200 would allow the
    Secretary discretion to establish a prescription drug
    formulary, and use other methods, including those used by
    private sector pharmacy benefit managers, to reduce
    prescription drug costs under the public health insurance
    option, and the Committee expects that the Secretary would
    implement such a formulary. Section 223(a)(4), as added by the
    Committee, would require that the Secretary establish a
    particular formulary for prescription drugs under the public
    health insurance option. Health care providers participating in
    Medicare would be participating providers in the public health
    insurance option unless they opted out in a process established
    by the Secretary. Not later than 18 months before the first day
    of 2013, the Secretary would be required to promulgate rules
    for the opt out process. Under the opt out process, (a)
    providers would be provided at least a 1-year period prior to
    the first day of 2013 to opt out, (b) no provider would be
    penalized for opting out, (c) the Secretary would be required
    to include information on how providers participating in
    Medicare who choose to opt out of participating in the public
    option may opt back in, and (d) there would be an annual
    enrollment period in which providers may decide whether to
    participate in the public option.
        The provision would prohibit administrative or judicial
    review of a payment or methodology established under this
    section, or Section 244 on modernized payment initiatives and
    delivery system reform.

    Sec. 224. Modernized payment initiatives and delivery system reform

        Beginning in the first year of the public option, the
    Secretary would be given the authority to use innovative
    payment mechanisms and policies to determine payments for items
    and services under the public option. The payment mechanisms
    and policies may include the following: patient-centered
    medical home, other care management payments, accountable care
    organizations, value-based purchasing, bundling of services,
    differential payment rates, performance or utilization based
    payments, partial capitation, and direct contracting with
    providers. The Secretary would be required to design and
    implement the payment mechanisms and policies in a way that
    promotes care that is integrated, patient-centered, efficient
    and of quality, and that seeks to either (a) improve health
    outcomes, (b) reduce health disparities, (c) address geographic
    variation in the provision of health services, (d) prevent or
    manage chronic illness, or (e) provide efficient and affordable
    care. To the extent allowed under the rules for Exchange-
    participating plans, the provision would allow cost-sharing and
    payment rates under the public option to be modified to
    encourage the use of services that promote health and value.
        The Secretary shall monitor and evaluate the progress and
    payment of delivery system reforms under this section and shall
    seek to implement such reforms on as large a geographic scale
    as practical and economical in so much that the Secretary finds
    such reforms are successful in improving quality and reducing
    costs. The Secretary may delay the implementation of such
    reforms in a geographic area in which such implementation would
    place the public health insurance option at a competitive
    disadvantage. The Secretary may also prioritize such a reform
    in a high cost geographic area in order to reduce total program
    costs or to promote high value care. The provision specifies
    that nothing in the subtitle would prevent the Secretary from
    varying payments based on different payment structure models
    for different geographic areas.

    Sec. 225. Provider participation

                Current Law
        No provision.
                Proposed Law
        The Secretary would be required to establish conditions of
    participation for health care providers under the public
    option. The Secretary would be prohibited from allowing a
    health care provider to participate unless appropriately
    licensed or certified under state law. A health care provider
    that was excluded from participation in a federal health care
    program (as defined in Section 1128(f) of the Social Security
    Act), would be prohibited from participating under the public
    option.

    Sec. 226. Application of fraud and abuse provisions

                Current Law
        Title XVIII of the SSA, the Medicare statutes, requires
    activities that prevent, detect, investigate, and prosecute
    health care fraud and abuse. In general, initiatives designed
    to fight fraud, waste, and abuse are considered program
    integrity activities. Program integrity is considered a
    component of the effective and efficient administration of
    government programs, which are entrusted with ensuring that
    taxpayer dollars are spent wisely. Efforts to ensure Medicare
    program integrity encompass a wide range of activities and
    require coordination among multiple private and public
    entities. This includes processes directed at reducing payment
    errors to Medicare providers, as well as activities to prevent,
    detect, investigate, and ultimately prosecute health care fraud
    and abuse.
                Proposed Law
        The provisions of law (other than criminal law) identified
    by the Secretary by regulation, in consultation with the
    Inspector General, that impose sanctions with respect to waste,
    fraud, and abuse under Medicare would also apply to the public
    health insurance option. The Secretary shall not be given
    discretion as to whether criminal laws apply, but rather
    criminal laws apply regardless of the Secretary.

    Sec. 227. Application of HIPAA insurance requirements

                Current Law
        HIPAA established federal rules regarding insurance in the
    individual and group markets. These include rules on non-
    discrimination based on health status-related factors, pre-
    existing condition exclusions, provisions on renewal and
    termination of coverage, the Genetic Information
    Nondiscrimination Act of 2008, the Mental Health Parity Act of
    1996, as amended and other requirements.
                Proposed Law
        The requirements of the Public Health Service Act sections
    2701 to 2792 apply to the public health insurance option in the
    same manner they apply to health insurance coverage offered by
    a health issuer in the individual market.

    Sec. 228. Application of health information privacy, security, and
            electronic transaction requirements

                Current Law
        HIPAA established federal privacy and security rules in
    1996. In addition, it established rules for standardized
    electronic transactions such as eligibility and claims payment.
                Proposed Law
        Part C of title XI of the Social Security Act applies to
    the public health insurance option in the same manner it
    applies to health insurance coverage offered by a health issuer
    in the individual market.

    Sec. 229. Enrollment in public health insurance option is voluntary

        The provision would clarify that enrollment in the public
    health insurance option is voluntary and nothing in the
    division would require anyone to enroll in it.

                  Subtitle C--Individual Affordability Credits

    Sec. 241. Availability through Health Insurance Exchange

                Current Law
        No provision.
                Proposed Law
        This provision would provide premium and cost-sharing
    credits to ``affordable credit eligible individuals'' (defined
    in Section 242) for certain individuals enrolled in coverage
    through the Exchange. The Commissioner would pay each QHBP
    participating in the Exchange the aggregate amount of credits
    for all eligible individuals enrolled in that plan.
        An Exchange-eligible individual could apply to the
    Commissioner, through the Exchange or another entity under an
    arrangement made with the Commissioner, in a form and manner
    specified by the Commissioner. The Commissioner, through the
    Health Insurance Exchange or through another public entity
    under an arrangement made with the Commissioner, would make a
    determination as to eligibility of an individual for
    affordability credits. The Commissioner would establish a
    process whereby, on the basis of information otherwise
    available, individuals may be deemed eligible for credits. The
    Commissioner would also establish effective methods that ensure
    that individuals with limited English proficiency are able to
    apply for affordability credits.
        If the Commissioner determines that a state Medicaid agency
    has the capacity to make a determination of eligibility for
    affordability credits under the same standards as used by the
    Commissioner under the Medicaid memorandum of understanding
    (described above in Section 205), the state Medicaid agency is
    authorized to conduct such determinations for any Exchange-
    eligible individual who requests such a determination, and the
    Commissioner would reimburse the state Medicaid agency for the
    costs of conducting such determinations.
        In addition, there would be a Medicaid screen-and-enroll
    obligation, that when individuals apply for affordability
    credits, a determination would be made as to whether they are
    eligible for Medicaid. If they are determined eligible for
    Medicaid, the Commissioner, through the Medicaid memorandum of
    understanding, would provide for their enrollment under the
    state Medicaid plan, and the state would provide for the same
    periodic redetermination of eligibility under Medicaid as would
    otherwise apply.
        During the first two years of implementation, credits would
    be allowed for coverage under a Basic plan only. Beginning in
    the third year, credits would be allowed for coverage under
    Enhanced or Premium plans by a process established by the
    Commissioner. The individual would be responsible for any
    difference between the premium for an Enhanced or Premium plan
    and the credit amount based on a Basic plan applicable to that
    enrollee.
        Under subsection (c)(3) an affordability credit is
    specifically prohibited from being used for payment for
    abortion services. This provision is discussed in detail below
    in the section titled ``Abortion-Related Language in Division
    A.''
        The Commissioner would be authorized to request from the
    Treasury Secretary information that may be required to carry
    out this subtitle (regarding individual affordability credits),
    consistent with existing rules regarding confidentiality and
    disclosure of tax return information. Individuals who are
    eligible to receive credits would not receive them in the form
    of cash payments.

    Sec. 242. Affordable credit eligible individual

        This provision would define an ``affordable credit eligible
    individual'' as an individual who (1) is lawfully present in a
    state in the United States (other than a nonimmigrant, with
    some exceptions), (2) is enrolled in an Exchange plan and is
    not enrolled through an employer plan that meets the employer
    responsibility to contribute toward employee and dependent
    coverage (described below in Section 312), (3) has family
    income below 400% FPL, and (4) who is not a Medicaid-eligible
    individual (other than some exceptions described above in
    Section 202). Family members who are eligible for credits will
    be treated as a single affordable credit eligible individual.
        Credits would not be available to full-time employees of an
    employer offering coverage consistent with the employer
    contribution rules described in Section 312. The Commissioner
    would make exceptions to this rule for divorced or separated
    individuals, or dependents of employees who would otherwise be
    eligible for credits. Exceptions would also be made, beginning
    in Y2, for full-time employees whose premium costs under a
    group health plan exceed 12% of family income.
        Income would be defined as ``modified adjusted gross
    income'' (MAGI), per the new section 59B of the Internal
    Revenue Code, added in Section 401. The Commissioner would
    conduct a study to examine the application of income disregards
    for the purposes of the affordability credits. The Commissioner
    would submit a report to Congress of such a study, including
    recommendations as the Commissioner determines appropriate.
    Affordability credits would not be treated as a federal means-
    tested public benefit for eligibility purposes for qualified
    aliens under the Personal Responsibility and Work Opportunity
    Reconciliation Act of 1996.
        In the introduced bill, employers with payrolls under
    $250,000 were exempt from the employer responsibility
    requirements, and those with payrolls between $250,000 and
    $400,000 had phased in responsibility requirements. The
    Committee adopted an amendment that reflects the Committee's
    view that this employer responsibility exemption should apply
    to employers with payrolls under $500,000 instead of $250,000,
    with phased-in responsibility for those with payrolls between
    $500,000 and $750,000 instead of $250,000 and $400,000.

    Sec. 243. Affordable premium credit

        This section would establish the rules for determining the
    amount of the premium credit provided to eligible individuals
    enrolled in an Exchange plan. The ``affordability premium
    credit'' would be an amount equal to the lesser of (1) the
    amount by which the enrollee's premium exceeds a specified
    level that is considered affordable (``affordable premium
    amount''), or (2) the amount by which the ``reference premium''
    (the average premium of the three least expensive Basic plans
    in the individual's premium rating area) exceeds the
    ``affordable premium amount''. In calculating the reference
    premium, the Commissioner may exclude plans with extremely
    limited enrollments.
        The affordable premium credit amount would be calculated on
    a monthly basis, based on the following table, to limit
    individuals' premium payments to a percentage of family income
    (MAGI) relative to the poverty level, as specified in the table
    below.

    ------------------------------------------------------------------------
                                                             Premium payment
                                                               limit, as a
                  Federal poverty level (FPL)                  percent of
                                                                 income
    ------------------------------------------------------------------------
    133% or less..........................................         1.5
    150%..................................................         3
    200%..................................................         5.5
    250%..................................................         8
    300%..................................................        10
    350%..................................................        11
    400%..................................................        12
    ------------------------------------------------------------------------

        The Commissioner would establish premium percentage limits
    so that for individuals whose family income is between the
    income tiers specified in the table, the percentage limits
    would increase on a linear sliding scale. Beginning in 2014,
    the Commissioner would adjust the percentages in the table so
    that the percentage of premiums paid by the government versus
    enrollees in each income tier remains the same as in 2013.
        Every year, beginning before January 1, 2014, the Chief
    Actuary of the Centers for Medicare and Medicaid Services (CMS)
    would estimate the cost savings in the previous year from the
    provisions listed below and would report the estimate to the
    Commissioner, who would provide for an appropriate increase in
    the table above so that those cost savings could be reflected
    in increased affordability credits:
               formulary provisions under the public option
            (Section 223(a)(4));
               pharmacy benefit managers (PBM) transparency
            (Section 133(d));
               accountable care organizations in Medicaid
            (Section 1730);
               administration simplifications (Sections
            163-164);
               limitations on Exchange plan premium
            increases (Section 209); and
               the authority of the Secretary to negotiate
            lower Part D prescription drug prices (Section 1186).

    Sec. 244. Affordability cost-sharing credit

        The affordability cost-sharing credit under this section
    would be available to those enrolled in an Exchange plan whose
    income is less than 400% FPL. The Commissioner would specify
    reductions in cost-sharing amounts and the annual limitation
    (out-of-pocket maximum) on cost-sharing under a Basic plan so
    that the average percentage of covered benefits paid by the
    plan (as estimated by the Commissioner) is equal to the
    percentages (actuarial values) in the table for each income
    tier.

    ------------------------------------------------------------------------
                                                            Actuarial value
                 Federal poverty level (FPL)                  percentage
    ------------------------------------------------------------------------
    150% or less........................................                 97
    200%................................................                 93
    250%................................................                 85
    300%................................................                 78
    350%................................................                 72
    400%................................................                 70
    ------------------------------------------------------------------------

        The Commissioner would provide payments to QHBP-offering
    entities in an amount equivalent to the increased actuarial
    value of benefits resulting from the cost-sharing reductions.

    Sec. 245. Income determinations

        This provision would use an individual's adjusted gross
    income in the most recent taxable year for determination of a
    credit under this subtitle. The Commissioner would take steps
    as may be appropriate to ensure the accuracy of determinations
    and redeterminations under this subtitle. The Commissioner
    would request information from the Treasury Secretary as may be
    permitted to verify income information submitted in
    applications for credits. The Commissioner would establish
    procedures for verification of income if no tax return is
    available for the most recent completed tax year. The
    Commissioner would establish special rules for cases when an
    individual's income is expected (in a manner specified by the
    Commissioner) to be significantly different from the income
    submitted for application for and determination of a credit.
    The Commissioner would establish rules under which an
    individual would be required to inform the Commissioner when
    there is a significant change in income. Such mechanism would
    provide for guidelines that specify the circumstances that
    qualify as a significant change, the verifiable information
    required to document such a change, and the process for
    submission of such information. If the Commissioner receives
    new information from an individual regarding the family income
    of the individual, the Commissioner would provide for a
    redetermination of the individual's eligibility to be an
    affordable credit eligible individual.
        An individual who intentionally misrepresents family income
    or fails to disclose to the Commissioner a significant change
    in family income would be liable for repayment of any
    improperly received credit and, in the case of intentional
    misrepresentation, may be required to pay an additional penalty
    as imposed by the Commissioner.
        For a CHIP-eligible child deemed to be eligible for
    coverage through the Exchange, during the first year of
    implementation the Commissioner would establish rules under
    which family income of the child is deemed to be no greater
    than the family income of that child as most recently
    determined by the State under CHIP. The Commissioner would
    examine the feasibility and implication of adjusting the
    application of the federal poverty level in this subtitle to
    take into account geographic differences, in order to reflect
    cost-of-living variations across the country. The Commissioner
    would ensure that the study covers the territories (Puerto
    Rico, U.S. Virgin Islands, Guam, Northern Mariana Islands and
    any other territory or possession of the United States), paying
    special attention to the disparity that exists among poverty
    levels and the cost of living in the territories and the impact
    of such disparities on efforts to expand health coverage and
    ensure health care. The Commissioner would submit a report to
    Congress, no later than the first day of the second year of
    implementation, on such a study and make recommendations as
    appropriate.

    Sec. 246. No Federal payment for undocumented aliens

        No credits are permitted for individuals who are not
    lawfully present in the country. The Commissioner will have to
    establish a process to enforce this federal requirement and
    ensure no undocumented persons receive affordability credits.

                   Subtitle D--Health Insurance Cooperatives

    Sec. 251. Establishment

    Sec. 252. Start-up and solvency grants and loans

    Sec. 253. Definitions

                Current Law
        Some states have laws and regulations applicable to a
    specific type of multiple employer welfare arrangement (MEWA),
    a health insurance cooperative, a non-profit arrangement which
    allows small businesses to join as members and obtain health
    benefits offered through the cooperative. While ERISA gives the
    Department of Labor some authority to regulate MEWAs, States
    are the primary regulators.
                Proposed Law
        This provision would require the Commissioner, in
    consultation with the Treasury Secretary, to establish a
    program to provide grants and loans for the establishment and
    initial operation of health insurance cooperatives. The program
    would be established within six months after enactment. Such
    cooperatives would provide insurance through the Exchange
    (established under Section 201) or state-based exchange
    (established under Sec 208), but would not substitute for the
    public health insurance option. A state is not required to
    establish a health cooperative.
        Within 36 months after enactment, the Commissioner may make
    (1) loans to cooperatives to assist them with start-up costs,
    and (2) grants to cooperatives to assist them in meeting
    applicable state solvency requirements. The cooperative would
    need to meet specified criteria in order to be awarded such a
    grant or loan. Such criteria include the requirements that the
    cooperative be run as a non-profit, member-run organization,
    not be sponsored by the state, be licensed in the state which
    it offers insurance, and other requirements. This provision
    would allow cooperatives in different states to integrate their
    administrative, insurance, and other functions. Cooperatives
    that violate the terms of the grant and loan program and fails
    to make corrections would be required to repay the total amount
    received. This provision would authorize a total of $5 billion
    in appropriations for the period of FY2010 to FY2014 for grants
    and loans under this section.
        With respect to cooperatives, the definition of a ``state''
    would refer to the 50 states and the District of Columbia. And
    the definition of a ``member'' would refer to an individual
    who, after the cooperative offers health insurance, is enrolled
    in such coverage.

                        TITLE III--SHARED RESPONSIBILITY

                      Subtitle--Individual Responsibility

    Sec. 301. Individual responsibility

                Current Law
        No provision.
                Proposed Law
        The provision cross-references the shared responsibility
    provisions of section 59B of the Code (as added by section 401
    of the bill) which provides for a tax on individuals (or a
    husband and wife in the case of a joint return) who do not
    maintain coverage under acceptable health insurance for
    themselves and each of their qualifying children. The provision
    is effective for taxable years beginning after December 31,
    2012.

             Subtitle B--Health Coverage Participation Requirements

               Part 1--Health Coverage Participation Requirements

    Sec. 311. Health coverage participation requirements

                Current Law
        Currently, it is optional whether employers contribute to
    the costs of health insurance for their employees' health
    insurance. For employers who choose to offer coverage to their
    employees, the cost to an employer of providing health coverage
    for its employees, including the cost of employer contributions
    towards health coverage premiums, is generally deductible as an
    ordinary and necessary business expense for employee
    compensation. In addition, compensation in the form of
    employer-provided health insurance is not subject to payroll
    taxes.
        The Employee Retirement Income Security Act of 1974
    (``ERISA'') preempts state law relating to certain employee
    benefit plans, including employer-sponsored health plans. While
    ERISA specifically provides that its preemption rule does not
    exempt or relieve any person from any state law which regulates
    insurance, ERISA also provides that an employee benefit plan is
    not deemed to be engaged in the business of insurance for
    purposes of any state law regulating insurance companies or
    insurance contracts. As a result of this ERISA preemption,
    self-insured employer-sponsored health plans need not provide
    benefits that are mandated under state insurance law.
        While ERISA does not require an employer to offer health
    benefits, it does require compliance with certain rules if an
    employer chooses to offer health benefits, such as compliance
    with plan fiduciary standards, reporting and disclosure
    requirements, and procedures for appealing denied benefit
    claims. ERISA was amended (as well as the Public Health Service
    Act\1\ and the Internal Revenue Code) in the Consolidated
    Omnibus Budget Reconciliation Act of 1985 (``COBRA'') and the
    Health Insurance Portability and Accountability Act of 1996
    (``HIPAA''), adding other federal requirements for health
    plans, including rules for health care continuation coverage,
    limitations on exclusions from coverage based on preexisting
    conditions, and a few benefit requirements such as minimum
    hospital stay requirements for mothers following the birth of a
    child.
    ---------------------------------------------------------------------------
        \1\42 U.S.C. 6A.
    ---------------------------------------------------------------------------
        Under Medicaid, states may establish ``premium assistance''
    programs, which pay a Medicaid beneficiary's share of premiums
    for employer-sponsored health coverage. Besides being available
    to the beneficiary through his or her employer, the coverage
    must be comprehensive and cost-effective for the State. A 2007
    U.S. Department of Health and Human Services, Center for
    Medicare and Medicaid Services analysis titled ``The State
    Children's Health Insurance Program'' showed that 12 states had
    Medicaid premium assistance programs as authorized under
    current law.
                Proposed Law
        An employer has a responsibility requirement. To fulfill
    the requirement, employers offering health benefit plans are
    required to offer individual and family coverage under a
    qualified health benefits plan (or under certain grandfathered
    plans). They are required to make contributions to help
    discharge the coverage costs of employees enrolled in the
    employer-provided plan.
        Beginning in the second year after the general effective
    date of the market reforms of the bill, employers are required
    to make contributions to the Health Insurance Exchange (the
    ``Exchange'') for employees who decline employer-provided
    coverage and instead enroll in an Exchange-participating plan
    pursuant to an affordability waiver. However, contributions are
    not required if the employee declines coverage because the
    employee is enrolled in family coverage in the Exchange as a
    spouse or dependent of another insured. The provision is
    effective for periods beginning after December 31, 2012.

    Sec. 312. Employer responsibility to contribute towards employee and
            dependant coverage

        Employers that offer health benefit plans are required to
    offer individual and family coverage under a qualified health
    benefit plan (or certain grandfathered health insurance plans).
    For a plan to be a ``qualified health benefits plan'' it needs
    to meet certain minimum coverage requirements, minimum benefit
    requirements, and has specific requirements such as a
    prohibition on annual and lifetime limits, but it need not be
    offered through the Exchange. They are required to make
    contributions to help discharge the coverage costs of employees
    (and their spouses and qualifying children, if any) enrolled in
    the employer-provided plan.
        For full time employees, the contribution amount is
    required to be at least 72.5% of the lowest cost plan offered
    by the employer which meets the requirements of the essential
    benefits package. This employer contribution amount is 65% for
    eligible employees electing family coverage. The essential
    benefits bans annual or life time limits on covered health care
    items or services and certain specified minimum services, it
    has a set out of pocket maximum, it imposes certain
    requirements as to network adequacy as determined by the Health
    Choices Commissioner, and other protections.
        For part-time employees, the contribution amount is a
    fraction or prorated amount of the minimum contributions made
    for full time employees, with such fraction being equal to a
    ratio of the average weekly hours worked by the employee
    compared to the minimum weekly hours specified by the Health
    Choices Commissioner. The coverage offered to non full time
    employees can be a less generous coverage package but the
    coverage package must meet the essential benefits requirements
    at a minimum.
        An employer cannot satisfy the minimum contribution
    requirement through a salary reduction arrangement with the
    employee.
        An employer that elects to offer health benefit plans must
    provide each employee with a 30-day opt-out period after the
    employee becomes eligible for employer-provided coverage in
    which to either decline coverage entirely or affirmatively
    enroll in a health plan. At the end of the 30-day period, if
    the employee does not make an affirmative election with respect
    to health coverage, the employer must automatically enroll the
    employee for individual (not family) coverage in the employer-
    sponsored health benefit plan with the lowest applicable
    employee premium.
        Employers are required, within a reasonable period before
    the beginning of each plan year, to provide employees with
    written notice of employees' rights and obligations relating to
    automatic enrollment. The notice must be both comprehensive in
    scope (for example, it must explain opt-out and affirmative
    election rights) and easily understood by the average employee
    to whom it pertains. Specifically, the notice must explain an
    employee's right to make an affirmative election as to health
    coverage rather than being automatically enrolled; and, if more
    than one level of benefits or employee premium is offered by
    the employer, the notice must explain in which level of
    benefits and employee premium the employee will be
    automatically enrolled absent an affirmative election.
        Employers that offer health benefit plans are required to
    provide the Health Choices Commissioner, and the Secretaries of
    Labor, Health and Human Services, and the Treasury with
    information required by the Health Choices Commissioner to
    ascertain compliance with the provision's requirements.
        The provision is effective for periods beginning after
    December 31, 2012.

    Sec. 313. Employer contributions in lieu of coverage

        Beginning in 2014, employers are required to make
    contributions to the Health Insurance Exchange for employees
    who decline employer-provided coverage and instead enroll in an
    Exchange-participating plan. The contribution amount is equal
    to 8% of the average wages paid by the employer to its employee
    during the time the employee was enrolled in the non-employer-
    provided plan. However, contributions are not required if the
    employee declines coverage because the employee is enrolled in
    family coverage as a spouse or dependent of another insured.
    Additionally, such contributions are not required if an
    employee declines coverage for any reason and does not enroll
    in the exchange, including receiving coverage through Medicare,
    Medicaid, as a spouse or dependent of another's plan, or
    chooses to not be covered.
        Employers with annual payrolls not exceeding $250,000
    during the preceding calendar year are not subject to the tax.
    Employers with annual payrolls between $250,000 and $400,000
    during the preceding calendar year are subject to a reduced
    rate. Employer contributions are paid to the Health Choices
    Commissioner and deposited into the Health Insurance Exchange
    Trust Fund. The contributions are not tied to a particular
    employee (i.e., the contribution does not subsidize an
    employee's premium liability). This contribution requirement
    parallels the payroll tax equal to 8% of wages that applies to
    non-electing employers. The provision is effective for periods
    beginning after December 31, 2012.

    Sec. 314. Authority related to improper steering

        The Health Choices Commissioner (in coordination with the
    Secretaries of Labor, Health and Human Services, and the
    Treasury) has the authority to set standards for determining
    whether employers, in the course of offering coverage, are
    undertaking any actions to affect the risk pool within the
    Health Insurance Exchange by inducing sicker or older employees
    to enroll in Exchange-participating health plans rather than in
    employer-provided plans. An employer found to be violating
    these standards is treated as not meeting the provision's
    coverage requirements. The provision is effective for periods
    beginning after December 31, 2012.

       Part 2--Satisfaction of Health Coverage Participation Requirements

    Sec. 323. Satisfaction of health coverage participation requirements
            under the Public Health Service Act

        Under the provision, employers are required to make an
    affirmative election regarding whether to offer health benefit
    plans to employees. Employers electing to offer health benefit
    plans are required to have their plans meet certain minimum
    coverage requirements. Employers electing to offer health
    benefit plans are treated as having established and maintained
    a group health plan for purposes of ERISA, and the provision's
    health coverage participation requirements are deemed to be
    part of the terms and conditions of the employer-provided plan.
        The Secretary of Health and Human Services is required to
    conduct periodic audits of a representative sampling of
    employers and employer-provided group health plans in order to
    discover noncompliance. The Secretary of Health and Human
    Services must share findings of noncompliance with the
    Secretary of the Treasury and the Health Choices Commissioner,
    and must take timely enforcement action as appropriate to
    achieve compliance.
        Separate elections may be made with regard to full time
    employees and those who are not full time employees. Coverage
    offered each need not be equivalent, but both must be offered
    coverage that meets the essential benefits package at a
    minimum.
        The Secretary of Health and Human Services (in coordination
    with the Health Choices Commissioner) may terminate an
    employer's election (and thus subject the employer to the
    payroll tax imposed on employers that do not offer coverage) if
    the Secretary determines that the employer was substantially
    noncompliant with the health coverage participation
    requirements. The Secretary is permitted to promulgate
    regulations to carry out the provisions of these coverage
    requirements, and may issue interim final rules as appropriate.
        Employers who elect to provide coverage but whose health
    benefit plans fail to meet the provision's minimum health
    coverage participation requirements are subject to penalties of
    $100 per day for each employee to whom the failure applies. The
    provision permits the penalties to be assessed through an
    excise tax or a civil penalty under the Public Health Service
    Act. Penalties for any particular failure may not be
    duplicated, however. The Secretary of Health and Human Services
    is required to give advance written notification of failure to
    employers prior to the assessment of a penalty.
        The penalties do not apply to (1) periods during which an
    employer used reasonable diligence but did not discover any
    failures, and (2) failures that were corrected within 30 days
    of discovery (but only if such failures were due to reasonable
    cause and not willful neglect). Penalties imposed on employers
    for unintentional failures (i.e., due to reasonable cause and
    not willful neglect) are to be limited to the lesser of 10
    percent of the aggregate amount paid or incurred by the
    employer during the preceding taxable year for group health
    plans, or $500,000.
        The provision is effective for periods beginning after
    December 31, 2012.

    Sec. 324. Additional rules relating to health coverage participation
            requirements

        The Health Choices Commissioner and the Secretaries of
    Labor, Health and Human Services, and the Treasury are required
    to execute an interagency memorandum of understanding to ensure
    coordination with respect to regulations, rulings,
    interpretations, and enforcement of the employer responsibility
    requirements relating to the offering of health insurance set
    forth in the Code and the parallel provisions in ERISA and the
    Public Health Service Act. The interagency memorandum must
    provide that in the case of multiemployer group health plans
    the health coverage participation requirements apply to the
    plan sponsor and the contributing sponsors of the plan. A
    multiemployer plan is a collectively bargained plan maintained
    by more than one employer, usually within the same or related
    industries, and a labor union. ERISA section 3(37). The
    provision is effective for periods beginning after December 31,
    2012.

                    Abortion-Related Language in Division A

                Current Law
        Abortion is widely covered by private insurance. One study
    concluded that, of surveyed insurance plans, 87% covered
    abortion services.\2\ Another study found that, of surveyed
    insurance plans, 46% covered abortion services.\3\ A comparison
    of the two studies examined the different methodologies used by
    each (e.g., who was surveyed, definition of plans), and
    concluded that, ``The actual answer is probably somewhere in
    between, meaning that most Americans with employer-based
    insurance currently have coverage for abortion.''\4\
    ---------------------------------------------------------------------------
        \2\Sonfield, et al., ``U.S. Insurance Coverage of Contraceptives
    and the Impact Of Contraceptive Coverage Mandates,'' Perspectives on
    Sexual and Reproductive Health (2002) (available at http://
    www.guttmacher.org/pubs/psrh/full/3607204.pdf).
        \3\Claxton, et al., ``Employer Health Benefits: 2003,'' Kaiser
    Family Foundation (2003) (available at http://www.kff.org/insurance/
    upload/Kaiser-Family-Foundation-2003-Employer-Health-Benefits-Survey-
    Full-Report.pdf).
        \4\``Guttmacher Memo on Insurance Coverage of Abortion,''
    Guttmacher Institute (July 22, 2009; updated Sept. 18, 2009) (available
    at http://www.guttmacher.org/media/inthenews/2009/07/22/index.html).
    ---------------------------------------------------------------------------
        Some states impose restrictions on what abortion services
    private insurance may cover. Currently, four states restrict
    insurance coverage only to instances in which pregnancy
    endangers the life of the woman; in those states abortion
    coverage is only available through a separate rider at
    additional cost.\5\ Additional states impose restrictions on
    insurance for public employees.\6\
    ---------------------------------------------------------------------------
        \5\``State Policies in Brief: Restricting Insurance Coverage of
    Abortion,'' Guttmacher Institute (Oct. 1, 2009) (available at http://
    www.guttmacher.org/statecenter/spibs/spib_RICA.pdf).
        \6\Ibid.
    ---------------------------------------------------------------------------
        Federal health programs (including Medicaid) are prohibited
    from using federal funds to pay for abortion services by an
    amendment added annually since 1977 to the Labor/HHS/
    Appropriations bill.\7\ That amendment (popularly known as the
    ``Hyde Amendment'') in its current form prohibits the use of
    federal funds for any abortion unless the pregnancy is the
    result of rape or incest or is life-endangering.\8\ The
    amendment affirmatively adds, however, that it does not
    prohibit the expenditure of private funds by a state, locality,
    entity, or private person.\9\ Indeed, while federal funds may
    not be used to provide abortion services through Medicaid,
    seventeen states pay for all or most medically necessary
    abortions with their own funds and another six states use state
    funds to pay for a limited group of abortions beyond the Hyde
    Amendment.\10\
    ---------------------------------------------------------------------------
        \7\Shimabukuro ``Abortion: Legislative Response,'' CRS Report for
    Congress (Apr. 10, 2009).
        \8\Cf. Secs. 506 and 507 of H.R. 3293 (``An Act making
    appropriations for the Departments of Labor, Health and Human Services,
    and Education, and related agencies for the fiscal year ending
    September 30, 2010, and for other purposes'')(111th Congress, 1st
    Session)(2009) (available at http://thomas.loc.gov/cgi-bin/query/
    C?c111:./temp/-c111gEfpRH).
        \9\Sec. 507(b) of H.R. 3293 (``An Act making appropriations for the
    Departments of Labor, Health and Human Services, and Education, and
    related agencies for the fiscal year ending September 30, 2010, and for
    other purposes'')(111th Congress, 1st Session)(2009) (available at
    http://thomas.loc.gov/cgi-bin/query/C?c111:./temp/-c111gEfpRH).
        \10\``State Policies in Brief: State Funding of Abortion Under
    Medicaid,'' Guttmacher Institute (October 1, 2009) (available at http:/
    /www.guttmacher.org/statecenter/spibs/spib_SFAM.pdf).
    ---------------------------------------------------------------------------
                Proposed Law
        The legislation makes no changes to the Hyde Amendment. All
    funds appropriated through the Labor/HHS Appropriations bill
    each year will continue to be covered by its restrictions, as
    they have for more than 30 years. But, with the exception of
    those programs in Division C, most funds in this legislation
    are not to be subject to annual appropriations and will not be
    subject to the Hyde Amendment. The bill as originally
    introduced was silent on abortion services, providing only a
    broad list of health benefit categories and leaving the
    determination of specific benefits to the Health Benefits
    Advisory Committee and the Secretary. If no changes had been
    made to the bill, it would have been possible to construe the
    legislation to allow federal funds to be used to pay for
    abortion services.
        For this reason, the Committee adopted an amendment offered
    by Congresswoman Capps (and already popularly known as the
    ``Capps Amendment''). That amendment places a number of
    restrictions on abortion in health reform, which are discussed
    in detail below. Most notably, it prohibits the use of
    Affordability Credits (the federal funds in the bill that
    assist people to purchase health insurance) to pay for
    abortions that are not allowed by the Hyde Amendment. It also
    prohibits all parties with decision-making authority (i.e., the
    Secretary of HHS, the Commissioner of the Exchange, and the
    Benefits Advisory Committee) from requiring that abortion
    coverage be made a minimum benefit in health insurance; the
    decision whether or not to cover abortion is to be made
    individually by each plan in the Exchange. A detailed
    description follows.
        Under the terms of the bill, abortion cannot be made a
    required minimum benefit; the bill notes every party that might
    have a role in such a decision (i.e., the Secretary, the
    Benefits Advisory Committee, and the Commissioner of the
    Exchange) and prohibits each from requiring that abortion
    services be made a minimum benefit. Instead, each private
    insurance plan is allowed to decide on its own whether to cover
    abortion. In the case of the public option, the Secretary of
    HHS must decide if abortion will be covered. As such decisions
    are made, the Commissioner (who administers the workings of the
    Insurance Exchange) must assure that every region has at least
    one plan that covers abortion and one plan that does not. (It
    should be noted that Commissioner may designate as the plan
    that does not cover abortion a plan that covers all of the Hyde
    exceptions (i.e., rape, incest, or life-endangerment), some of
    the Hyde exceptions, or none of them.)
        Plans (including the public option) that do choose to cover
    abortion may not pay for abortions beyond those permitted by
    the Hyde Amendment with federal funds; those permitted by the
    Hyde Amendment may be paid for with Federal funds. Inasmuch as
    the Hyde Amendment is an annual decision by the Congress as
    part of its appropriations process and has, over its history,
    varied in its exceptions,\11\ the bill does not incorporate the
    statutory language of the Hyde Amendment. Rather, the bill
    adopts by cross-reference the Hyde Amendment to the Labor/HHS
    Appropriations legislation as it is in force in any future
    year. Thus, if the Hyde Amendment were amended to return to its
    original form (i.e., including an exception only for life-
    endangerment but not for rape or incest), the allowable use of
    federal funds in plans in the Exchange would automatically be
    restricted in the same way. Conversely, if the Hyde Amendment
    were amended to include a new exception (e.g., fetal
    abnormality, an exception included in a number of state
    laws\12\), then the allowable use of federal funds in plans in
    the Exchange would automatically be expanded in the same way.
    The Committee has made this cross-reference in an attempt to
    keep the use of federal funds for abortions consistent across
    programs: Medicaid and other appropriated programs will be
    governed by the annual Hyde Amendment; inasmuch as many
    beneficiaries will likely move from Medicaid to the Exchange
    (or vice versa) during a year, the Committee believes insurance
    coverage through the Exchange should be parallel to coverage in
    Medicaid. If abortion restrictions change in Medicaid, it will
    be simpler for the beneficiary, her health care providers, and
    program administration if the restrictions in the Exchange are
    automatically the same. The Committee emphasizes that this
    cross-reference itself makes no change in the Hyde Amendment
    itself or in its application to any federal funds.
    ---------------------------------------------------------------------------
        \11\Shimabukuro, ``Abortion: Legislative Response,'' CRS Report for
    Congress, p. 13 (Apr. 10, 2009).
        \12\``State Policies in Brief: State Funding of Abortion Under
    Medicaid,'' Guttmacher Institute, p. 2 (Oct. 1, 2009) (available at
    http://www.guttmacher.org/statecenter/spibs/spib_SFAM.pdf).
    ---------------------------------------------------------------------------
        Under the legislation, the Commissioner of the Exchange is
    required to estimate the actuarial cost of abortion coverage
    beyond that allowed under the Hyde Amendment under a basic
    plan. In a routine actuarial estimate of health services, one
    might consider the cost offsets of such coverage; for instance,
    in the case of abortion, the estimator might calculate the
    foregone insurance costs of labor, delivery, and postnatal
    care. In this case, however, the legislation forbids the
    Commissioner from taking such offsets into account. The
    Committee has taken these extra steps to ensure that the full
    estimated cost is one that is covered solely by private dollars
    and that federal funds are not used to pay for abortion
    services.
        After the Commissioner has estimated the actuarial cost of
    abortion coverage, those plans that have voluntarily chosen to
    include such coverage (including the public option, if the
    Secretary chooses to have it cover abortion) must segregate
    sufficient policyholder premium dollars to pay for abortion
    services beyond those allowed by the Hyde Amendment. As with
    the Hyde Amendment, no federal funding (meaning no general
    revenue funds, no taxpayer funds, no public dollars, etc.) may
    be used for this purpose. Premium dollars, however, are money
    that comes directly from the insured person and goes directly
    to their insurance plan; the funds are not deposited in the
    Treasury, they do not come through Washington, and they do not
    pass through the tax system. It is factually, legally, and
    theoretically wrong to characterize these funds as federal
    funds. Similar prohibitions on the use of federal funds by an
    agency have widespread precedent: For example, federal
    contractors may not use federal funds to lobby, and religious
    organizations receiving federal assistance for a secular
    purpose may not use federal funds to promote religion. These
    prohibitions are successfully and routinely carried out with
    accounting procedures and audits by both the administering
    agencies and, in some instances, the Government Accountability
    Office.
        The legislation also affirmatively states that the bill
    does not preempt any state laws regarding abortion (including
    parental consent, waiting periods, etc.). In considering the
    applicability of other aspects of health reform to the
    insurance that state and local governments provide to their
    employees, the Committee specifically discussed the limitations
    that some states have imposed on abortion coverage. The
    Committee was explicit that these limitations will be preserved
    under the legislation and that similar limitations and
    restrictions are to be allowed to continue.
        The legislation also explicitly continues a variety of laws
    popularly known as Abortion Conscience Clauses (i.e.,
    permission for providers to refuse to provide abortions and not
    to be discriminated against on that basis).\13\ Some of these
    laws are permanent (e.g., the Church Amendment, adopted in
    1973); others are annual (e.g., the amendments to the Labor/HHS
    Appropriations Acts, popularly known as the Weldon Amendment).
    ---------------------------------------------------------------------------
        \13\For a discussion of such laws, see Shimabukuro, ``The History
    and Effect of Abortion Conscience Clause Laws,'' CRS Report for
    Congress (Apr. 7, 2009).
    ---------------------------------------------------------------------------
        In addition to the Capps Amendment, which continues
    existing Abortion Conscience Clauses that already exist, the
    Committee also adopted another amendment, authored by
    Congressman Stupak, to create a new conscience clause
    specifically for this legislation. This provision would
    prohibit any public entity (federal, state, or local) that
    receives funding under this Act (or an amendment made by this
    Act) from discriminating against a health care entity on the
    basis of that entity's unwillingness to provide, pay for,
    provide coverage for, or refer for abortions.

                 DIVISION B--MEDICARE AND MEDICAID IMPROVEMENTS

                      TITLE I--IMPROVING HEALTH CARE VALUE

               Subtitle A--Provisions Relating to Medicare Part A

                         Part 1--Market Basket Updates

                    Part 2--Other Medicare Part A Provisions

                    Subtitle B--Provisions Related to Part B

                          Part 1--Physicians' Services

    Sec. 1121. Sustainable growth rate reform

                Current Law
        Medicare payments for services of physicians and certain
    non-physician practitioners are made on the basis of a fee
    schedule. The fee schedule assigns relative values to services
    that reflect physician work (i.e., time, skill, and intensity
    it takes to provide the service), practice expenses, and
    malpractice costs. The relative values are adjusted for
    geographic variation in costs. The adjusted relative values are
    then converted into a dollar payment amount by a conversion
    factor. The law specifies a formula, commonly referred to as
    the sustainable growth rate (SGR) system, for calculating the
    annual update to the conversion factors and the resultant fees.
        If cumulative physician expenditures are below the
    expenditure target, then an annual update is calculated based
    on several variables including the Medicare Economic Index
    (MEI). (Created in 1975, the MEI is an inflation index similar
    to the Consumer Price Index that includes the prices of inputs
    required for the production of physician services including the
    physician's time, the cost of hiring employees such as
    technicians and clerical staff, rent, medical equipment,
    supplies, and drugs.) However, when cumulative physician
    expenditures exceed the expenditure target, the SGR system
    reduces the annual update factor (and therefore, all physician
    reimbursements under the fee schedule) to attempt to bring
    cumulative expenditures in line with the target.
        Reductions resulting from application of the SGR have been
    frequently overridden by legislation. Section 101 of the
    Medicare, Medicaid, and SCHIP Extension Act of 2007 (P. L. 110-
    173, MMSEA) increased the update to the conversion factor for
    Medicare physician payment by 0.5% compared with 2007 rates for
    the first six months of 2008. The Medicare Improvements for
    Patients and Providers Act of 2008 (MIPPA, P.L. 110-275)
    extended the 0.5% increase in the physician fee schedule that
    was set to expire on June 30, 2008, through the end of 2008 and
    set the update to the conversion factor to 1.1% for 2009. The
    conversion factor for 2010 and subsequent years will be
    computed as if this modification had never applied, so unless
    further legislation is passed, the update formula will require
    a 21% reduction in physician fees beginning January 1, 2010 and
    by additional amounts annually for at least several years
    thereafter.
        The calculation of the expenditure target has been
    criticized for including items that are not reimbursed under
    the Medicare physician fee schedule. Specifically, MedPAC and
    various physician organizations have suggested removing Part B
    drugs from the calculation of the baseline and growth targets.
    In its proposed rule for payment for physicians' services in
    2010, CMS proposed removing Part B drugs from those targets.
                Proposed Law
        For the past several years, Congress has failed to make
    substantive changes to the SGR mechanism.
        Since 2002, Congress has enacted a series of short-term
    fixes that have avoided payment reductions called for by the
    SGR, but failed to address the fundamental flaws with the
    formula. Meanwhile, the projected budgetary cost of
    comprehensive reform to the SGR has soared and the depth of
    required payment rate reductions has deepened.
        The Committee has long recognized that the current update
    methodology is unsustainable and must be replaced. This
    legislation makes needed reforms that reflect more realistic
    allowances for growth in spending on physician services, while
    still holding physicians accountable for overall spending on
    the services they provide.
        Instead of grouping all physician expenditures together in
    the calculation of the annual update to the fee schedule under
    the SGR system, the bill would establish separate target growth
    rates for evaluation and management services and for all other
    services. This will help counteract the historical
    undervaluation of those services. The bill would also rebase
    the SGR baseline to 2009 expenditures for calculating future
    expenditure targets.
        Future update adjustments would be calculated against a new
    baseline; the allowed expenditures for 2009 would be the amount
    of the actual expenditures for physicians' services during
    2009. Instead of setting the expenditure target using physician
    expenditures since April 1, 1996, increased according to the
    SGR system, the proposal would rebase the physician expenditure
    target using physician expenditures beginning January 1, 2009,
    with future targets determined under a new formula. The
    proposal would also limit the services included in the target
    growth rate computation to services covered under the physician
    fee schedule.
        The bill would modify how updates to the fee schedule would
    be determined. For 2010, the update to the single conversion
    factor would be the percentage increase in the MEI. To
    calculate future updates, separate target growth rates would be
    established for 2 categories of services: evaluation and
    management services and all other services. Evaluation and
    management services would include procedure codes for Medicare
    covered services in the category designated Evaluation and
    Management in the Health Care Common Procedure Coding and
    Medicare-covered preventive services. The service categories
    would apply without regard to the specialty of the physician
    providing the service. The calculation of the update factors
    would be based on physician expenditures in these categories
    beginning January 1, 2009.
        The application of multiple conversion factors would begin
    with 2011. The initial conversion factors for 2011 would be
    based upon the single conversion factor for 2010 multiplied by
    the update factors for such category for 2011. To update the
    conversion factors for the two service categories in subsequent
    years, the conversion factor for each category for the previous
    year would be adjusted by the update established for the
    category.
        In determining the allowed expenditures for 2010, total
    2009 actual expenditures for all services included in the SGR
    computation for each service category would be increased by the
    growth rate to obtain 2010 allowed expenditures for each
    service category. In subsequent years, the amount of allowed
    expenditures for such category would be the allowed
    expenditures for the preceding year increased by the target
    growth rate (as described below) for such category and year.
        Each category would have a separate target growth rate. The
    target growth rate for a year, beginning with 2010, would be
    computed and applied separately for each service category as
    defined above and would be computed using the same method for
    computing the target growth rate except that the update to the
    conversion factor for evaluation and management services as
    well as Medicare covered preventive services would be allowed
    to increase by the percentage growth rate of GDP per capita
    plus 2 percentage points, while the increase for all other
    physicians' services would be allowed to grow at the percentage
    rate of increase in GDP per capita plus 1 percentage point. The
    Secretary would publish the target growth rate for such
    succeeding year and each of the 2 preceding years by November 1
    of each year.
        Creating two separate expenditure targets and allowing
    higher growth for evaluation and management and preventive
    services infuses additional resources into these services to
    encourage their use. Furthermore, removing labs, drugs, and
    other ``incident to'' services from the calculation will result
    in the targets being more closely aligned with actual spending
    for physician services, rather than drug price inflation. Where
    the current system imposes a growth target of per capita GDP,
    the provision will allow spending to grow at GDP + 2 or GDP + 1
    for each category, a target more in line with expected and
    historical growth in medical spending. A more realistic target
    will create a more stable payment system while still
    maintaining spending restraints in payments for physician
    services.
        Providers participating in the accountable care
    organization (ACO) pilot program would have the option of
    pursuing separate target growth amounts applicable only that
    organization. No later than January 1, 2012, the Secretary
    would develop a method that would (1) allow each ACO to have
    its own Medicare Part B expenditure targets and updates that
    would be consistent with the methodologies described above, and
    (2) provide that the target growth rate applicable to other
    physicians would not apply to physicians to the extent that
    their services are furnished through the ACO. This method would
    apply beginning with 2012. In determining the expenditure
    targets and updates for physicians in the ACO pilot program,
    the Secretary could apply the difference in the update on a
    claim-by-claim or lump sum basis and such a payment would be
    taken into account under the pilot program. Allowing
    accountable care organizations to have their own unique
    spending targets will increase the incentive for physicians to
    form or join such organizations. Physicians who participate in
    ACOs and choose to have their own spending targets will be held
    harmless from growth of physicians outside the ACO, further
    incentivizing those physicians to participate in an ACO
    arrangement.

    Sec. 1122. Misvalued codes under the physician fee schedule

                Current Law
        The Medicare physician fee schedule is based on assigning
    relative weights to each of the approximately 7,500 physician
    service codes used to bill Medicare. The relative value for a
    service compares the relative work involved in performing one
    service with the work involved in providing other physicians'
    services. The scale used to compare the value of one service
    with another is known as a resource-based relative value scale
    (RBRVS).
        The Centers for Medicare and Medicaid Services (CMS), which
    is responsible for maintaining and updating the fee schedule,
    continually modifies and refines the methodology for estimating
    relative value units (RVUs). CMS relies on advice and
    recommendations from the American Medical Association/Specialty
    Society Relative Value Scale Update Committee (RUC) in its
    assessments. In general, as currently implemented, increases in
    RVUs for a service or number of services lowers the resultant
    fees for other physician services. One consequence has been
    that the payments for evaluation and management codes, whose
    RVUs typically are not increased over time, have fallen
    relative to other codes whose RVUs have increased as a
    consequence of new technologies that have been introduced into
    coverage with relatively high RVUs. CMS is required to review
    the RVUs no less than every five years.
        In determining adjustments to RVUs used as the basis for
    calculating Medicare physician reimbursement under the fee
    schedule, the Secretary has authority to adjust the number of
    RVUs for any service code to take into account changes in
    medical practice, coding changes, new data on relative value
    components, or the addition of new procedures. The Secretary is
    required to publish an explanation of the basis for such
    adjustments.
        These adjustments are subject to a budget neutrality
    condition. With the exception of certain expenditures that are
    exempt by statute, the adjustments may not cause the amount of
    expenditures made under the Medicare physician fee schedule to
    differ from year to year by more than $20,000,000 from the
    expenditures that would have been incurred without such an
    adjustment.
        Under current law, the Secretary appoints 15 physicians
    (nominated by physicians organizations) to form the Practicing
    Physicians Advisory Council, including both participating and
    nonparticipating physicians and physicians practicing in rural
    areas and underserved urban areas. This council meets each
    quarter to discuss certain proposed changes in regulations and
    carrier manual instructions related to physician services
    identified by the Secretary.
                Proposed Law
        Traditionally the five-year review has led to more
    increases in work RVUs than decreases. MedPAC and other
    observers have stated that more attention needs to be given to
    the accurate valuation of services in order to maintain the
    integrity of the fee schedule.
        The provision gives clearer direction to the Secretary to
    maintain accurate valuation of services and prioritizes
    identification of potentially misvalued codes. The provision
    also addresses concerns that CMS does not have the resources or
    administrative authority to conduct such reviews by providing
    funding to the agency. Providing additional resources will
    promote collection of more timely and accurate data that can be
    used to improve valuation of services.
        The Secretary would periodically identify and make
    appropriate adjustments to the relative values for the services
    identified as being potentially misvalued. The Secretary would
    examine the following, as appropriate: (1) codes (and families
    of codes as appropriate) for which there has been the fastest
    growth; (2) codes (and families of codes as appropriate) that
    have experienced substantial changes in practice expenses; (3)
    codes for new technologies or services within an appropriate
    period (such as three years) after the relative values are
    initially established for such codes; (4) multiple codes that
    are frequently billed in conjunction with furnishing a single
    service; (5) codes with low relative values, particularly those
    that are often billed multiple times for a single treatment;
    (6) codes that have not been subject to review since the
    implementation of the RBRVS (the so-called Harvard-valued
    codes''); and (7) such other codes determined to be appropriate
    by the Secretary.
        In conducting the review and adjustments (1) the Secretary
    could use existing processes to receive recommendations on the
    review and appropriate adjustment of potentially misvalued
    services; (2) the Secretary could conduct surveys, other data
    collection activities, studies, or other analyses as
    appropriate to facilitate the review and appropriate
    adjustment; (3) the Secretary could use analytic contractors to
    identify and analyze potentially misvalued services identified,
    conduct surveys or collect data, and make recommendations on
    the review and appropriate adjustment of services; (4) the
    Secretary could coordinate the review and appropriate
    adjustment with the existing periodic (no less often than every
    5 years) review of the relative values; (5) the Secretary could
    make appropriate coding revisions (including using existing
    processes for consideration of coding changes) that could
    include consolidation of individual services into bundled codes
    for payment under the fee schedule; and (6) the Secretary would
    apply the existing budget neutrality condition that applies to
    relative value adjustments to this proposal.
        The Secretary would establish a process to validate
    relative value units under the fee schedule. The evaluation
    process could 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 could include validation of the pre,
    post, and intra-service components of work. The validation of
    work relative value units would include a sampling of codes for
    services that is the same as the potentially misvalued codes
    described above.
        The Secretary could conduct the validation using methods
    described above to identify potentially misvalued services, as
    the Secretary determines to be appropriate. Following the
    evaluation, the Secretary would make appropriate adjustments to
    the work relative value units under the fee schedule. The same
    budget neutrality provision would apply to adjustments to
    relative value units made as a result of the evaluation.
        For FY2010 and each subsequent fiscal year, $20 million
    would be appropriated to the CMS Program Management Account to
    carry out the provisions described above. The amounts
    appropriated for a fiscal year would be available until
    expended.
        The provision also clarifies how certain existing statutes
    might pertain to the proposals contained in this section.
    Chapter 35 of title 44 of the United States Code, pertaining to
    the Coordination of Federal Information Policy, and the
    provisions of the Federal Advisory Committee Act (5 U.S.C.
    App.) would not apply to the modifications proposed in this
    section. Notwithstanding any other provision of law, the
    Secretary could implement the proposed modifications in order
    to identify, adjust, and evaluate potentially misvalued codes
    by program instruction or otherwise. Section 4505(d) of BBA,
    which placed requirements on how the Secretary developed the
    practice expense RVUs, would be repealed. Except for provisions
    related to confidentiality of information, the provisions of
    the Federal Acquisition Regulation would not apply to this
    section or the amendment made by this section. Finally, the
    statute establishing the Practicing Physicians Advisory Council
    would be repealed.

    Sec. 1123. Payments for efficient areas

                Current Law
        Medicare uses a fee schedule to reimburse physicians for
    the services they provide. In certain circumstances, physicians
    receive an additional payment to encourage targeted activities.
    These bonuses, typically a percentage increase above the
    Medicare fee schedule amounts, can be awarded for a number of
    activities including demonstrating quality achievements,
    participating in electronic prescribing, or practicing in
    underserved areas.
                Proposed Law
        The proposal would create new incentive payments for
    ``efficient'' areas. Providers delivering services on or after
    January 1, 2011, and before January 1, 2013, who practice in an
    area identified as an ``efficient'' area would receive an
    additional payment (on a monthly or quarterly basis) equal to
    5% of the payment amount for the Medicare Part B services.
        Based upon available data, the Secretary would identify
    those counties or equivalent areas in the United States in the
    lowest fifth percentile of utilization based on per capita
    spending for Medicare part A and part B services provided in
    the most recent year for which data are available as of the
    date of the enactment. The Secretary would standardize per
    capita spending to eliminate the effect of geographic
    adjustments in payment rates.
        For purposes of the additional payment for providers in
    ``efficient'' areas, if the Secretary were to use the 5-digit
    postal ZIP Code where the service is furnished, the dominant
    county of the postal ZIP Code would be used to determine
    whether the postal ZIP Code is in a county described as an
    ``efficient'' area. There would be no administrative or
    judicial review respecting (1) the identification of a county
    or other area as an efficient area; or (2) the assignment of a
    postal ZIP Code to a county or other area designated as an
    efficient area.
        The Secretary would identify counties or areas designated
    as ``efficient'' as part of the proposed and final rule to
    implement the physician fee schedule for the applicable year.
    The Secretary would post the list of counties identified as
    efficient on the CMS website.

    Sec. 1124. Modifications to the Physician Quality Reporting Initiative
            (PQRI)

                Current Law
        The Tax Relief and Health Care Act of 2006 (TRHCA, P.L.
    109-432) required the establishment of a physician quality
    reporting system that would include an incentive payment, based
    on a percentage of the allowed Medicare charges for all such
    covered professional services, to eligible professionals who
    satisfactorily report data on quality measures. CMS named this
    program the Physician Quality Reporting Initiative (PQRI). The
    Medicare Improvements for Patients and Providers Act of 2008
    (MIPPA, P.L. 110-275) made this program permanent and extended
    the bonuses through 2010; the incentive payment was increased
    from 1.5% of total allowable charges under the physician fee
    schedule in 2007 and 2008 to 2% in 2009 and 2010.
        Providers that successfully report for services provided in
    calendar year 2009 will receive an incentive payment of two
    percent of total allowable charges for the physician fee
    schedule. Providers may choose claims-based reporting or
    registry-based reporting. For claims-based reporting, providers
    seeking incentive payments for the entire calendar year may
    meet the requirement by reporting on one measures group for a
    sample of 30 consecutive Medicare part B fee-for-service
    patients (FFS), or report for one measures group for 80% of
    applicable Medicare part B FFS. For providers seeking to report
    for the six-month period beginning July 1, 2009, similar
    criteria apply for those that report through CMS approved
    registries.
                Proposed Law
        The PQRI program has the potential to be a valuable tool
    measuring the quality of services furnished by physicians to
    Medicare beneficiaries. However, its potential usefulness has
    been limited by problems with the way the initiative has been
    implemented. This provision addresses those problems, extends
    the payment initiative for two years, and improves the program
    by integrating it with the incentive program for the adoption
    and use of health information technology.
        Not later than January 1, 2011, the Secretary would develop
    and implement a mechanism to provide timely feedback to
    eligible professionals on the performance of the eligible
    professional with respect to satisfactorily submitting data on
    quality measures under the PQRI program.
        Not later than January 1, 2011, the Secretary would
    establish and have in place an informal process for eligible
    professionals to appeal the determination that an eligible
    professional did not satisfactorily submit data on quality
    measures for the PQRI program.
        The bill would integrate physician quality reporting under
    the PQRI and EHR reporting relating to the meaningful use of
    EHR. The integration would consist of the following: (1) the
    development of measures that would both demonstrate meaningful
    use of an electronic health record for purposes of EHR
    reporting and provide information on the clinical quality of
    the care furnished to an individual; (2) the collection of
    health data to identify deficiencies in the quality and
    coordination of care for Medicare beneficiaries; and (3) other
    activities as specified by the Secretary. The Secretary would
    develop such a plan no later than January 1, 2012.
        Incentive payments under the PQRI program would be extended
    by two years, through 2012; for each of the years 2009 through
    2012, the bonus would be 2% of Part B payments.

    Sec. 1125. Adjustment to Medicare payment localities

                Current Law
        The Medicare fee schedule pays providers differently
    according to the geographic location, known as a Medicare
    physician payment locality, in which the provider practices. By
    construction, the costs of providing physician services were
    relatively consistent within each payment locality at the time
    when they were defined; sub-regions of a state were designated
    as separate payment localities only if the data showed a marked
    difference between the costs in that area compared with the
    rest of the state.
        Each year, the Centers for Medicare and Medicaid Services
    (CMS) uses data from a number of sources to calculate separate
    geographic practice cost indices (GPCIs) for each payment
    locality for each of three component inputs required to produce
    physician services (physician work, practice expense, and
    medical malpractice insurance). For each locality, these 3
    GPCIs are then combined to produce a weighted average index of
    relative costs, called the geographic adjustment factor (GAF).
        In constructing the payment localities, the Health Care
    Financing Administration (HCFA, now CMS) used an iterative
    criteria that compared the relative cost of a potentially
    distinct locality with the GAFs in the rest of the state.
    Localities that had GAFs at least 5% higher than the rest of
    the state were designated as a separate locality; this process
    was repeated until this condition was not met, whereupon the
    remaining regions of the state were combined into one locality.
    In 1996, HCFA reduced the number of Medicare localities for
    physician payment by aggregating several existing contiguous
    localities with similar costs and combining other localities to
    create a single payment area for the entire state. As a result,
    there are currently 89 Medicare physician payment localities
    based on counties or aggregates of counties across the 50
    states; some localities are the entirety of the state while
    other states may have several payment localities. None of the
    payment localities cross state lines.
        Economic conditions have affected parts of the country
    differently in the years since the payment localities were
    created. If localities were to be created based on data from
    recent years using the original methodology, the resulting
    number and composition of the payment localities might not be
    the same as the ones that currently exist.
                Proposed Law
        A GAO report issued July 2007 confirmed significant
    problems with inaccurate pricing that result from current
    methodology used to establish Medicare's payment localities.
    While the problem is not limited to California, during the last
    15 years that state has experienced some of the largest
    economic and demographic shifts, leading to large disparities
    between local costs and geographic price adjustments. Revising
    and updating the state's payment localities to reflect costs at
    the Metropolitan Statistical Area (MSA) level will achieve a
    balance between price accuracy and administrative feasibility.
    In order to minimize the effect of resources shifting from one
    area of the state to another that result from this change, the
    provision provides temporary relief to counties in California
    that would be adjusted downward. The payment localities used as
    the basis for the geographic adjustment of Medicare physician
    payments under the fee schedule would be changed in the state
    of California. Under the proposal, payments to California
    physicians would transition from a system based on the current
    localities to one based on MSAs. For services furnished on or
    after January 1, 2011, the Secretary would revise the Medicare
    physician payment areas for the State of California to be based
    on MSAs.
        The methodology for constructing the new payment areas
    would be similar to the original methodology, but the Core-
    Based Statistical Areas-Metropolitan Statistical Areas, as
    defined by the Office of Management and Budget (OMB), would be
    used as the geographic units for comparing GAFs. First, the
    Secretary would list all MSAs within California by their GAFs
    in descending order. In the first iteration, the Secretary
    would compare the GAF of the highest-cost MSA in the state to
    the weighted-average GAF of the group of remaining MSAs in the
    state. If the ratio of the GAF of the highest-cost MSA to the
    weighted-average GAF of the rest of state is 1.05 or greater
    then the highest-cost MSA becomes a separate fee schedule area.
    In each subsequent iteration, the Secretary would compare the
    MSA of the next-highest GAF to the weighted-average GAF of the
    group of remaining MSAs. If the ratio of the next-highest MSA's
    GAF to the weighted-average of the remaining lower-cost MSAs is
    1.05 or greater, that MSA would become a separate fee schedule
    area. The iterative process would continue until the ratio of
    the GAF of the highest-cost remaining MSA to the weighted-
    average of the remaining lower-cost MSAs is less than 1.05, and
    the remaining group of lower-cost MSAs would form a single fee
    schedule area. If two MSAs were to have identical GAFs, they
    would be combined in that step of the iterative comparison.
        The provision would require that no GPCIs be reduced during
    the first 5 years of the transition from the former county-
    based payment localities to the MSA-based fee schedule areas.
    For services furnished in California on or after January 1,
    2011, and before January 1, 2016, the Secretary would increase
    any such index to the county-based fee schedule area value on
    December 31, 2009, if the index under the new calculation would
    be less than the value on January 1, 2010.
        The new fee schedule areas would be subject to periodic
    review and adjustments. Not less often than every 3 years, the
    Secretary would review and update the California Rest-of-State
    fee schedule area using MSAs as defined by the OMB applying the
    iterative methodology described above. This revision would be
    made effective concurrently with the application of the
    periodic review of the adjustment factors required under
    current law for California for 2012 and subsequent periods and
    would be linked to the review of the GPCIs for all fee schedule
    areas that occurs not less often than every 3 years. Upon
    request, the Secretary would make any county-level or MSA
    derived data used to calculate the geographic practice cost
    index available to the public.

    Sec. 1126. Resource-based feedback program for physicians in Medicare

                Current Law
        Both MedPAC and the Government Accountability Office (GAO)
    have suggested that CMS provide information to physicians on
    their resource use with the expectation that physicians who are
    outliers would alter their practice patterns as a result.
    MedPAC asserts that physicians would be able to assess their
    practice styles, evaluate whether they tend to use more
    resources than their peers, evaluate what evidence-based
    research (if available) recommends, and revise practice styles
    as appropriate. MedPAC notes that in certain instances, the
    private sector use of feedback has led to a small downward
    trend in resource use. The GAO notes that certain public and
    private health care purchasers routinely evaluate physicians in
    their networks using measures of efficiency and other factors
    and that the purchasers it studied linked their evaluation
    results to a range of incentives to encourage efficiency.
        Section 131(c) of MIPPA established such a physician
    feedback program, which CMS initiated before January, 2009. The
    Physician Feedback Program uses Medicare claims data and other
    data to provide confidential feedback reports to physicians
    (and as determined appropriate by the Secretary, to groups of
    physicians) that measure the resources involved in furnishing
    care to Medicare beneficiaries. CMS initially called this
    effort the Physician Resource Use Feedback Program, but has
    renamed this initiative the ``Physician Resource Use
    Measurement and Reporting Program.'' The program would consist
    of multiple phases. The interim final rules for phase I of the
    program include the following parameters: (1) the program will
    use both per capita and episode of care methodologies to
    measure resource use; (2) the program will include a cost of
    service category analysis (for example, imaging services or
    inpatient admissions); (3) four calendar years of claims data
    will be used; (4) the feedback program will focus on high cost
    and/or high volume conditions; (5) feedback will also include
    reporting to physician specialties relevant to the selected
    focal conditions; (6) the program will focus on physicians
    practicing in certain geographic areas, and (7) the program
    will establish low, median, and high cost benchmarks.
        MIPPA also requires the GAO to conduct a study of the
    Physician Feedback Program as described above, including the
    implementation of the Program, and to submit a report to
    Congress by March 1, 2011, containing the results of the study,
    together with recommendations for such legislation and
    administrative action as the Comptroller General determines
    appropriate.
                Proposed Law
        The proposal would expand and strengthen the existing
    physician feedback program. The feedback reports would include
    measures of the utilization of services under the Medicare
    program based on claims data and would include quality data
    under the existing physician quality reporting initiative
    (PQRI) as well as other information determined to be
    appropriate. These reports would be provided confidentially to
    physicians and other practitioners (those who furnish services
    for which payment is made under Medicare and for which such
    payment would be made if furnished by a physician).
        No later than December 31, 2010, in consultation with
    physicians and others as appropriate, the Secretary would
    develop an episode grouper or other resource analysis tool that
    could be used to measure physician resource use. The Secretary
    could update the grouper from time to time as appropriate.
        The feedback reports would include information allowing the
    comparison of a physician's resource use pattern to the use
    patterns of peers. These reports could include resource use
    data on a per capita basis, a per episode basis, or both. The
    reports would include information regarding nationwide groups
    of similarly situated physicians (taking into consideration
    specialty, practice setting, and such other criteria as the
    Secretary finds appropriate) and comparing the pattern of
    services of each physician in the group to the group average
    pattern of services. In the reports, the Secretary would
    include details about the services, procedures, and relevant
    clinical information to identify factors that could account for
    significant variation of a physician from national norms, such
    as high rates of elective surgeries, diagnostic services, or
    other utilization attributable to the judgment of the
    physician.
        The Secretary would disseminate feedback reports and would
    seek to establish the reports' validity and credibility to
    physicians. The Secretary would experiment with communications
    methods such as the following: (1) direct meetings between
    contracted physicians, facilitated by the Secretary, to discuss
    the contents of feedback reports, including any reasons for
    divergence from national averages; (2) contracts with local,
    non-profit entities engaged in quality improvement efforts at
    the community level, who would use the feedback reports or
    equivalent tools as specified by the Secretary, where any data
    exchanged would be protected by appropriate privacy safeguards;
    (3) mailings or other methods of communication that facilitate
    large-scale dissemination; or (4) other methods specified by
    the Secretary.
        During 2011, the Secretary would evaluate the efficacy of
    the feedback methods with regard to changing practice patterns
    to improve quality and decrease costs. Taking into account the
    cost of each method, the Secretary would expand the program by
    developing a plan to disseminate feedback reports in a
    significant manner in the regions and cities of the country
    with the highest utilization of services under Medicare. The
    Secretary would disseminate, to the extent practicable,
    feedback reports in a manner consistent with the following: (A)
    during 2011, at least 1,000 reports; (B) during 2012, at least
    10,000 reports; (C) during 2013, at least 25,000 reports; (D)
    during 2014 and subsequent years, reports to the physicians
    with utilization within the highest 5 percent of physicians,
    subject to the following authority to focus efforts. The
    Secretary could focus the program and the dissemination of
    feedback reports on appropriate subsets of physicians, such as
    physicians who (1) practice in geographic areas that account
    for unusually high rates of spending per capita, (2) treat
    conditions that have a high cost or volume under Medicare, (3)
    use a high amount of resources compared to other physicians, or
    (4) treat at least a minimum number of Medicare beneficiaries.
        The Secretary would establish a process by which a
    physician could opt not to receive feedback reports under this
    program. Chapter 35 of title 44, United States Code would not
    apply to this section. Notwithstanding any other provision of
    law, the Secretary could implement this feedback program
    through program instruction or otherwise.

                         Part 2--Market Basket Updates

    Sec. 1131. Incorporating productivity improvements into market basket
            updates that do not already incorporate such improvements

                Current Law
        Medicare pays for hospital outpatient department services
    under its outpatient prospective payment system (OPPS).
    Generally, Medicare's OPPS base payment amount is increased
    each year by an annual update that is linked to projected
    changes in specific market basket (MB) indices which are
    designed to measure the change in the price of goods and
    services purchased by the provider. Starting in CY2009,
    hospitals paid under OPPS that do not submit required quality
    data will have the applicable MB percentage reduced by two
    percentage points. The reduction would apply for that year and
    would not be taken into account in subsequent years.
        Ambulance services are paid on the basis of a national fee
    schedule, which is being phased in. The national fee schedule
    is fully phased-in for air ambulance services. For ground
    ambulance services, payments through 2009 are equal to the
    greater of the national fee schedule or a blend of the national
    and regional fee schedule amounts. The portion of the blend
    based on national rates is 80% for 2007-2009. In 2010 and
    subsequently, the payments in all areas will be based on the
    national fee schedule amount. The fee schedule amounts are
    updated each year by the consumer price index for all urban
    consumers (CPI-U).
        Since January 1, 2008, Medicare pays for surgery-related
    facility services provided in an ambulatory surgery center
    (ASC) using a payment system based on the hospital OPPS. The
    new payment system will be implemented over a four-year
    transition period. Beginning in CY2010, the ASC conversion
    factor will be updated annually using the CPI-U. This update
    will be subject to a 2 percentage point reduction if required
    quality data are not provided.
        Clinical lab services are paid on the basis of area-wide
    fee schedules. The fee schedule amounts are periodically
    updated. The annual clinical laboratory test fee schedule
    update adjustment for 2009-2013 will be the percentage increase
    or decrease in the CPI-U minus 0.5 percentage points.
        Except in Competitive Acquisition Areas where payments for
    items and services are to be based on suppliers' bids, Medicare
    pays for durable medical equipment (DME) on the basis of fee
    schedules. Items are classified into five groups for
    determining the fee schedules and making payments: (1)
    inexpensive or other routinely purchased equipment (defined as
    items costing less than $150 or which are purchased at least
    75% of the time); (2) items requiring frequent and substantial
    servicing; (3) customized items; (4) oxygen and oxygen
    equipment; and (5) other items referred to as capped rental
    items. In general, fee schedule rates are established locally
    and are subject to national limits. In general, fee schedule
    amounts are updated annually by the CPI-U. Updates were
    eliminated for 1998-2000; payments were increased by the CPI-U
    for 2001; and payments were frozen for 2002. MMA eliminated the
    updates for 2004-2008. In 2009, for items and services selected
    before July 1, 2008 to be part of a Competitive Acquisition
    Program for durable medical equipment, prosthetics, orthotics,
    and supplies (DMEPOS), the update was a decrease of 9.5
    percent. This decrease applied across geographic areas and was
    not restricted to Competitive Acquisition Areas. This
    adjustment allowed provisions in the Medicare Improvements for
    Patients and Providers Act of 2008 (MIPPA, P.L. 110-275)
    delaying the implementation of the Competitive Acquisition
    Program to be budget neutral. For items and services that had
    not been selected before July 1, 2008, to be part of the
    Competitive Acquisition Program, the payment update for 2009
    was the CPI-U. For 2010 through 2013, the updates are to be the
    CPI-U. In 2014, if an item received a payment decrease in 2009,
    the update is to be equal to the CPI-U plus 2 percentage
    points, otherwise the update is to be the CPI-U. Starting in
    2015, the update is to be the CPI-U. Payment updates for DME do
    not include an adjustment for productivity.
                Proposed Law
        The annual update to the Medicare physician fee schedule
    already incorporates adjustments for gains in productivity.
    This provision creates uniformity across Medicare providers by
    creating a productivity adjustment for other Part B providers.
    This adjustment will encourage greater efficiency in health
    care provision, hold Medicare providers accountable for
    achieving productivity gains on par with the overall economy,
    and more accurately align Medicare payments with provider
    costs.
        The productivity adjustment would equal the percentage
    change in the 10-year moving average of annual economy-wide
    private nonfarm business multi-factor productivity. The
    estimate used would be that published before the promulgation
    of the regulation establishing increases in the Medicare rates
    for the year or period. The productivity adjustment would be
    included in annual updates for OPPS, ambulance services,
    clinical laboratory services, and certain durable medical
    equipment years beginning in CY2010. The productivity
    adjustment would be the same as that applied to providers in
    Part A established under Section 1103 of the bill.
        Starting in CY2010, to the extent an annual percentage
    change factor applies to ASC services, it would include the
    productivity adjustment.

                            Part 3--Other Provisions

    Sec. 1141. Rental and purchase of power-driven wheelchairs

                Current Law
        Wheelchairs, including power-driven wheelchairs, are
    covered by Medicare Part B under the capped-rental category of
    the durable medical equipment (DME) benefit. Medicare pays for
    power-driven wheelchairs in one of two ways: either Medicare
    will pay the supplier a monthly rental amount during the
    beneficiary's period of medical need (though payments are not
    to exceed 13 continuous months), or, payment is made on a lump-
    sum basis at the time the supplier furnishes the chair, if the
    beneficiary chooses the lump-sum payment option. The same
    payment choice applies to replacement power-driven wheelchairs
    as well.
        Medicare covers over 600 power wheelchair models under 42
    procedure codes (Healthcare Common Procedure Coding System,
    HCPCS). Power wheelchairs are further classified into 3 broad
    groups based on their reported performance in categories such
    as speed, range of travel and the height of the vertical
    obstruction they can climb. Group 3 must meet the highest
    performance standards. Group 2 and Group 1 must meet
    intermediate and the lowest performance requirements,
    respectively. For example, a Group 3 wheelchair must be able to
    travel a minimum of 12 miles on a single charge of its
    batteries, while the minimum travel requirements for Group 2
    and Group 1 chairs are 7 and 5 miles, respectively.
        The Secretary is required to establish a competitive
    acquisition program for specified durable medical equipment;
    the competitive acquisition program would replace the Medicare
    fee schedule payments. The program is to be phased-in, starting
    in 10 of the largest metropolitan statistical areas (MSAs) in
    2009; expanding to 80 of the largest MSAs in 2011 and remaining
    areas after 2011. The Secretary is permitted to phase-in first
    items and services with the highest cost and highest volume, or
    those items and services that the Secretary determines to have
    the largest savings potential first, which includes power-
    driven wheelchairs in the initial round of bidding.
                Proposed Law
        This provision would restrict the ``lump-sum'' payment
    provision for new and replacement power-driven wheelchairs to
    those recognized by the Secretary as classified within Group 3
    or higher. The provision would be effective for chairs
    furnished on or after January 1, 2010, but would not apply to
    competitive bidding areas where bids had been submitted before
    October 1, 2010.
        There are a sizeable number of wheelchairs purchased by
    Medicare during the first month of use that are not used beyond
    the 13 month rental period. By eliminating the first month full
    purchase option, the provision reduces waste in the Medicare
    program. This change protects beneficiaries from the burden of
    paying the cost-sharing associated with the wheelchair in one
    lump sum.
        The practical requirements of patients with complex
    conditions such as quadriplegia and Louis Gehrig's disease
    usually justify the outright purchase of mobility devices
    rather than rentals. These special needs patients require
    wheelchairs that are highly customized, use complex
    technologies, and are in use for very long periods--if not the
    rest of the patient's lifetime. As such, the provision
    continues to allow for first-month purchase of complex mobility
    devices classified as Group 3 or higher.

    Sec. 1141A. Election to take ownership, or to decline ownership, of a
            certain item of complex durable medical equipment after the 13-
            month capped rental period ends

                Current Law
        Pressure reducing support surfaces are used for the care or
    prevention of pressure ulcers. A pressure ulcer, also known as
    a bedsore, is an area of the skin that breaks down when the
    person stays in one position for too long without shifting his
    or her weight. Pressure reducing support surfaces are covered
    by Medicare Part B under the capped-rental category of the
    durable medical equipment (DME) benefit. For beneficiaries that
    fulfill coverage criteria for a pressure reducing support
    surface, Medicare will pay the supplier a monthly rental amount
    during the beneficiary's period of medical need (though
    payments are not to exceed 13 continuous months). On the first
    day after the thirteenth continuous month of rental payments,
    the supplier of the item is required to transfer title of the
    item to the beneficiary.
        After the supplier transfers title to the beneficiary,
    Medicare pays for maintenance and servicing for parts and labor
    not otherwise covered under a manufacturer's warranty if the
    Secretary determines that payments are reasonable and
    necessary. Payment amounts for such maintenance and services
    are determined by the Secretary.
        Support surfaces come in different categories. A Group 3
    support surface is a complete bed system known as air-fluidized
    beds. It simulates the movement of fluid by circulating
    filtered air through silicone-coated ceramic beads.
                Proposed Law
        This provision would eliminate the automatic transfer of
    title of group 3 support surfaces to beneficiaries after 13
    months of continuous use. Effective upon enactment, this
    provision would require DME suppliers, during the tenth
    continuous month of rental, to offer the beneficiary the option
    to accept or reject the transfer of title to a Group 3 support
    surface after the thirteenth month of rental. The beneficiary
    would be deemed to reject the title, unless it was accepted
    within one month of the offer.
        If the individual accepted the title, it would be
    transferred on the first day that begins after the thirteenth
    month of continuous rental; reasonable and necessary
    maintenance and servicing not otherwise covered by a
    manufacturer's warranty would be covered by Medicare, as under
    current law. If the beneficiary did not accept the title,
    payments for maintenance and servicing would be as follows: no
    maintenance and serving payment during the first 6 months
    following the 13 continuous months of rental payments; during
    the first month of each succeeding 6 month period, a
    maintenance and servicing payment could be made, (for parts and
    labor not covered by the supplier's or manufacturer's warranty
    as determined by the Secretary, to be appropriate for Group 3
    support surfaces) and in an amount equal to the lower of (a) a
    reasonable and necessary maintenance and servicing fee or fees
    established by the Secretary, or (b) 10% of the total purchase
    price, as specified.

    Sec. 1142. Extension of payment rule for brachytherapy

                Current Law
        The Medicare Prescription Drug, Improvement and
    Modernization Act (MMA, P.L. 108-173) required Medicare's
    outpatient prospective payment system to make separate payments
    for specified brachytherapy sources. As mandated by the Tax
    Relief and Health Care Act of 2006 (TRHCA, P.L. 109-432), this
    separate payment was made using hospitals' charges adjusted to
    their costs until January 1, 2008. The Medicare, Medicaid, and
    SCHIP Extension Act of 2007 (MMSEA, P.L. 110-173) extended cost
    reimbursement for brachytherapy services until July 1, 2008.
    The Medicare Improvements for Patients and Providers Act of
    2008 (MIPPA, P.L. 110-275) extended cost reimbursement for
    brachytherapy until January 1, 2010.
                Proposed Law
        The provision would extend cost reimbursement for
    brachytherapy until January 1, 2012.

    Sec. 1143. Home infusion therapy report to Congress

                Current Law
        Infusion therapy involves the administration of medication
    through a needle or a catheter. If a physician determines that
    it is medically appropriate for a particular patient, some
    infusion therapies may be provided in a patient's home.
    Infusion therapies that can be provided in the home include
    treatments such as antibiotic therapy, chemotherapy, pain
    management, and hydration therapy.
        Infusion drugs administered in a patient's home are covered
    under the Medicare Part D drug benefit and in some cases when
    such drugs are furnished incident to covered durable medical
    equipment. Medicare Part D does not, however, cover supplies,
    equipment, or professional services associated with home
    infusion therapy.
                Proposed Law
        The Committee is exploring options to promote home and
    community-based care to allow beneficiaries to remain healthy
    and independent. Expanded Medicare coverage of home infusion
    therapy has the potential to achieve these results for the
    Medicare program and for beneficiaries. It is possible that if
    infusion therapy was more widely available in the home setting,
    Medicare beneficiaries could avoid the higher costs associated
    with being admitted to hospitals and nursing homes for this
    treatment. They also could avoid the serious risk of
    healthcare-acquired infections, which is a growing problem in
    institutional settings. The Committee directs the Medicare
    Payment Advisory Commission to assess the potential benefits of
    complete coverage of home infusion therapy under Medicare and
    provide recommendations to Congress as to whether and how the
    Medicare program can efficiently and effectively provide such
    coverage, after considering how home infusion is covered and
    paid for by private health plans and Medicare Advantage plans.
        The provision would require the Medicare Payment Advisory
    Committee (MedPAC) to submit a report to Congress not later
    than 12 months after the date of enactment. The report would be
    required to include (a) an analysis of the scope of coverage
    for home infusion therapy services (and the scope of services
    provided) in traditional Medicare, Medicare Advantage, the
    Veterans Health Administration, and among private payers; (b)
    the benefits and costs of providing such coverage under the
    Medicare program, including a calculation of the potential
    savings achieved through avoided or shortened hospital or
    nursing home stays; (c) an assessment of data on home infusion
    therapy that might be used to construct payment mechanisms
    under Medicare and (d) recommendations, if any, on the
    structure of a payment system under the Medicare program for
    home infusion therapy services, including an analysis of MA and
    private plan payment methodologies for home infusion therapy
    and their applicability to the Medicare program.

    Sec. 1144. Require Ambulatory Surgical Centers (ASCs) to submit cost
            data and other data

                Current Law
        Ambulatory surgery centers (ASCs) must meet certain health,
    safety, and other specified standards in order to participate
    in Medicare. The Centers for Medicare and Medicaid Services
    implemented a new payment system for ASCs on January 1, 2008.
    The new payment system, which is being phased-in over a 4-year
    period, uses the ambulatory payment classification groups that
    are the basis for Medicare's outpatient prospective payment
    system (OPPS) for hospital outpatient departments. ASCs have
    never been required to submit cost reports. In March 2009, the
    Medicare Payment Advisory Commission recommended that Congress
    require ASCs to submit cost data and quality data that would
    allow for an effective evaluation of the adequacy of Medicare's
    payment rates.
        The number of Medicare-certified ASCs has grown
    substantially in recent years, growing at an annual rate of 6.7
    percent from 2002 to 2007. Spending per beneficiary also
    increased substantially during that time period, growing at an
    average annual rate of 8.4 percent, and receiving $2.9 billion
    in payments from Medicare and beneficiary cost-sharing in 2007.
    Ninety-one percent of ASCs have at least one physician-owner
    and MedPAC has pointed out that the presence of physician
    ownership of ASCs may influence referral patterns.
                Proposed Law
        MedPAC uses cost data to analyze the adequacy of Medicare
    payments in many areas. However, cost data are not available
    for ASCs, limiting MedPAC's ability to assess payment adequacy.
    This provision instructs the Secretary to require ASCs to
    submit reports on their facility costs as a condition for
    agreeing to participate in Medicare. That data will allow
    MedPAC to properly assess Medicare's payment adequacy for ASCs.
    The specifications for the cost report data would take into
    account the requirements for hospital cost data. No later than
    3 years from enactment, an ASC cost reporting form would be
    developed. The ASC cost reports would be periodically audited.
    The requirements would apply to agreements applicable to cost
    reporting periods beginning 18 months after the date the
    Secretary develops the cost reporting form.
        This provision also follows MedPAC's recommendation to
    require reporting of quality data. Beginning in 2012, the
    Secretary would require ASCs to report quality data, including
    data on health care associated infections.

    Sec. 1145. Treatment of certain cancer hospitals

                Current Law
        Eleven cancer hospitals are exempt from the inpatient
    prospective payment system (IPPS) used to pay inpatient
    hospital services provided by acute care hospitals.
    Historically, they have been paid on a reasonable cost basis,
    subject to certain payment limitations and incentives. These
    hospitals are also held harmless under the outpatient
    prospective payment system (OPPS) and will not receive less
    from Medicare under this payment system than under the prior
    outpatient payment system. Under OPPS, Medicare pays for
    outpatient services using as defined by ambulatory payment
    classification (APC) groups.
                Proposed Law
        The provision requires the Secretary to determine if the
    costs incurred by cancer hospitals with respect to APCs exceed
    those costs incurred by other hospitals reimbursed under OPPS.
    If the costs in cancer hospitals exceed the costs incurred by
    other hospitals, the Secretary would be required to provide for
    an appropriate adjustment for cancer hospitals for outpatient
    services furnished starting January 1, 2011.
        The provision addresses concerns that the cost of
    outpatient services at PPS-exempt cancer hospitals is greater
    than that at other outpatient hospitals and that these higher
    costs are not currently reflected and adequately reimbursed
    under the current payment system. This provision directs CMS to
    assess whether such a cost differential exists, and if so, to
    remedy it. This provision supplements the existing hold
    harmless provision under 1833(t)(7)(D)(ii) of the Social
    Security Act as the hold harmless will continue to apply in the
    situation where the combination of existing payments and any
    payment change under this section results in a payment less
    than the pre-BBA amount.

    Sec. 1146. Medicare Improvement Fund

                Current Law
        Section 188 of MIPPA established the Medicare Improvement
    Fund (MIF), available to the Secretary to make improvements
    under the original fee-for-service program under Parts A and B
    for Medicare beneficiaries. Under current law, $22.29 billion
    are available to the Secretary for this purpose for services
    furnished during FY2014. For fiscal year 2020 and in each
    subsequent fiscal year, the amount in the fund would be the
    Secretary's estimate, as of July 1 of the fiscal year, of the
    aggregate savings in Medicare expenditures due to payment
    reductions resulting from payment reductions imposed on various
    Medicare providers as an incentive for the adoption and
    meaningful use of certified EHR technology.
                Proposed Law
        Over the course of several years, money has been set aside
    in the MIF to fund policies that would improve and modernize
    the Medicare program. This provision would fulfill this intent
    by using the MIF to offset important investments in Medicare
    made by this bill. The remaining $8 billion will be available
    to fund increases in payment rates implemented under section
    1158, regarding Medicare geographic payment adjustments. Any
    amount not spent under that section would remain in the MIF
    through 2019.

    Sec. 1147. Payment for Imaging Services

                Current Law
        Under the Medicare fee schedule, some services have
    separate payments for the technical component and the
    professional component. For example, imaging procedures
    generally have two parts: the actual taking of the image (the
    technical component), and the interpretation of the image (the
    professional component). Medicare pays for each of these
    components separately when the technical component is furnished
    by one provider and the professional component by another. When
    both components are furnished by one provider, Medicare makes a
    single global payment that is equal to the sum of the payment
    for each of the components.
        CMS's method for calculating the Medicare fee schedule
    reimbursement rate for advanced imaging services assumes that
    imaging machines are operated 25 hours per week, or 50% of the
    time that practices are open for business. Setting the
    equipment use factor at a lower rather than at a higher rate
    has led to higher payment for these services. Citing evidence
    showing that the utilization rate is 90%, rather than the 50%
    currently assumed, MedPAC has recommended CMS to use the higher
    utilization rate in the calculation of fee schedule payments
    for advanced imaging services.
        According to MedPAC and the Government Accountability
    Office (GAO), there are opportunities to improve the efficiency
    of the Medicare fee schedule. In 2005, MedPAC recommended
    reducing certain fees to account for efficiencies and savings
    from the technical preparation and supplies achieved when
    multiple imaging services are furnished sequentially on
    contiguous body parts during the same visit. Starting January
    1, 2006, physicians receive the full technical component fee
    for the highest paid imaging service in a visit, but technical
    component fees for additional imaging services are reduced by
    25%.
        The work relative value units in the Medicare physician fee
    schedule were and are developed with input from the physician
    community. Refinements in existing values and the establishment
    of values for new services are included in the annual fee
    schedule updates. The refinement and update process is based in
    part on recommendations made by the American Medical
    Association's Specialty Society Relative Value Update Committee
    (RUC), which receives input from many physician specialty
    societies. Current law requires a review of the relative values
    every five years.
        Section 1834(e)(1)(B) defines advanced diagnostic imaging
    services to include diagnostic magnetic resonance imaging,
    computed tomography, and nuclear medicine (including positron
    emission tomography), and other diagnostic imaging services as
    specified by the Secretary in consultation with physician
    specialty organizations and other stakeholders.
                Proposed Law
        The utilization rate for calculating the payment for
    advanced diagnostic imaging equipment as defined under current
    law would be increased from 50% to 75%. For single session
    imaging involving continuous body parts, the proposal would
    reduce the technical component fees for additional imaging
    services to 50%. These modifications would apply to services
    furnished on or after January 1, 2011.
        Recent MedPAC analysis found problems with the current
    calculation of practice expenses for imaging providers. Low
    assumptions about equipment use artificially inflate the price
    Medicare pays for imaging services. MedPAC has recommended
    increasing the utilization assumption for advanced imaging
    equipment to more accurately reflect actual utilization rates.
        MedPAC has also recommended reducing the technical
    component for a second image on a contiguous body part. When a
    second image on an adjacent body part is taken, the clerical
    time, preparation, and supplies needed for the second image are
    significantly reduced. In 2006, CMS administratively proposed
    to reduce payment for the second image by 50 percent, but
    eventually implemented a smaller 25 percent discount. By
    increasing the discount to 50 percent, this provision would
    reflect economies arising from studies on multiple body parts
    and bring Medicare payment policy in line with private payers.

    Sec. 1148. Durable medical equipment program improvements

                Current Law
        The Secretary is prohibited from issuing or renewing a
    provider number for payment of Medicare durable medical
    equipment, prosthetics, orthotics, and supplies (DMEPOS) claims
    for a supplier unless the supplier provides the Secretary with
    a surety bond of not less than $50,000. The Secretary may waive
    this requirement in the case of a supplier that provides a
    comparable surety bond under state law. The final regulation
    exempts certain individuals from the surety bond requirement,
    including certain physicians and non-physician practitioners,
    physical and occupational therapists, state-licensed orthotic
    and prosthetic personnel, and government-owned suppliers.
        Medicare Part B pays for certain items of durable medical
    equipment (DME) including oxygen and oxygen equipment. The
    Deficit Reduction Act (DRA, P.L. 109-171) changed how long
    Medicare would make rental payments for oxygen equipment. It
    changed from the entire period of medical need, to a rental
    period of 36-months. The Medicare Improvements for Patients and
    Providers Act of 2008 (MIPPA, P.L. 110-275) requires suppliers
    to continue furnishing the equipment during any period of
    medical need for the remainder of the reasonable useful
    lifetime of the equipment, which is defined by the Secretary as
    5 years (or 60 months).
        The Medicare Prescription Drug, Improvement, and
    Modernization Act of 2003 (MMA, P.L. 108-173) required the
    Secretary to establish and implement quality and accreditation
    requirements for Medicare suppliers of DMEPOS. The Medicare
    Improvements for Patients and Providers Act of 2008 (MIPPA,
    P.L. 110-275) exempted a group of health care professionals
    from having to become accredited unless the Secretary
    determined the standards were designed specifically to be
    applied to those professionals. The Secretary was given
    authority to exempt certain professionals from the
    accreditation requirement if the Secretary determined that
    licensing, accreditation, or other mandatory quality
    requirements applied to those professionals. The provision
    identified some of the professionals subject to the provision,
    including: physicians; physical or occupational therapists;
    physicians assistants; nurse practitioners; clinical nurse
    specialists; orthotists; and prosthetists.
        For a description of DME payment policies, see section 1131
    of this legislation.
                Proposed Law
        This section will make a number of technical changes to the
    durable medical equipment program that will improve the program
    for beneficiaries.
        Surety Bond: This provision would waive the surety bond
    requirement for a pharmacy that (1) supplies durable medical
    equipment, prosthetics, orthotics, and supplies, (2) has been
    issued a provider number for at least 5 years, and (3) has not
    received an adverse action, as defined in the Code of Federal
    Regulations.
        Oxygen Equipment: This provision would modify the time
    period during which the supplier would be required to furnish
    medically necessary oxygen and oxygen equipment. As of the
    twenty-seventh month of the 36 month rental period, the
    supplier furnishing the equipment would be required to continue
    furnishing the equipment (either directly or through
    arrangements with other suppliers) during any subsequent period
    of medical need for the remainder of the reasonable useful
    lifetime of the equipment, as determined by the Secretary,
    regardless of the location of the individual, unless another
    supplier accepted the responsibility to furnish equipment
    during the remainder of the period. This provision would be
    effective upon enactment and would apply to equipment furnished
    to individuals for whom the twenty-seventh month of a
    continuous period of use occurred on or after July 1, 2010.
        This provision would also allow a beneficiary to begin a
    new 36-month rental period if the supplier who had been
    furnishing oxygen and oxygen equipment to the beneficiary was
    declared bankrupt and its assets were liquidated and at the
    time of the declaration and liquidation more than 24 months of
    rental payments had been made.
        Accreditation: This provision would exempt pharmacies
    enrolled as Medicare DMEPOS suppliers from the accreditation
    requirement for the purposes of supplying diabetic testing
    supplies, canes, and crutches. Any supplier that had submitted
    an application for accreditation before August 1, 2009, would
    be deemed as meeting applicable standards and accreditation
    requirements under the subparagraph until the independent
    accreditation organization took action on the supplier's
    application.
        Payment Adjustment: The provision would reduce the fee-
    schedule update amount for covered items of durable medical
    equipment for 2010, 2011, 2012, and 2013. The amount of the
    update would be reduced by 0.5%. (The fee schedule update for
    covered DME would also be subject to a productivity improvement
    adjustment as described in Section 1131 of this bill.)

    Sec. 1149. MedPAC study and report on bone mass measurement

                Current Law
        No current law.
                Proposed Law
        The Medicare Payment Advisory Commission would be
    instructed to conduct a study regarding bone mass measurement,
    including computed tomography, dual-energy x-ray
    absorptriometry, and vertebral fracture assessment. The study
    would focus on the following: (1) an assessment of the adequacy
    of Medicare payment rates for such services, taking into
    account costs of acquiring the necessary equipment,
    professional work time, and practice expense costs; (2) the
    impact of Medicare payment changes since 2006 on beneficiary
    access to bone mass measurement benefits in general and in
    rural and minority communities specifically; (3) a review of
    the clinically appropriate and recommended use among Medicare
    beneficiaries and how usage rates among such beneficiaries
    compares to such recommendations; and (4) in conjunction with
    the findings under (3), recommendations, if necessary,
    regarding methods for reaching appropriate use of bone mass
    measurement studies among Medicare beneficiaries. Not later
    than 9 months after enactment, the Commission would submit a
    report to the Congress containing a description of the results
    of the aforementioned study and the conclusions and
    recommendations, if any, regarding each of the issues described
    above.

    Sec. 1149A. Exclusion of customary prompt pay discounts extended to
            wholesalers from manufacturer's average sales price for
            payments for drugs and biologicals under Medicare part B

                Current Law
        Medicare Part B pays for a small number of drugs in certain
    circumstances such as drugs administered to patients in
    physician offices and outpatient departments. The Medicare
    Prescription Drug Improvement and Modernization Act of 2003
    (MMA, P.L. 108-173) established a Part B drug reimbursement
    methodology based on the Average Sales Price (ASP) of drugs;
    since January 2005, Medicare has paid for most physician
    administered drugs based on 106% of the volume-weighted ASP for
    each drug code. MMA defines ASP as the average manufacturer's
    sales of a drug to all purchasers in the United States in a
    given quarter. The ASP is net of any price concessions provided
    by the manufacturer to the purchaser (e.g. the wholesaler,
    group purchasing organization or provider) such as prompt pay
    discounts, volume discounts, and rebates other than those
    obtained through the Medicaid drug rebate program.
                Proposed Law
        This provision would exclude customary prompt pay
    discounts, to the extent such discounts do not exceed 2% of the
    product's wholesale acquisition cost, extended to wholesalers
    from the calculation of ASP for drugs or biologicals sold on or
    after January 1, 2011, and before January 1, 2016. The term
    ``wholesale acquisition cost'' means, with respect to a drug or
    biological, the manufacturer's list price for the drug or
    biological to wholesalers or direct purchasers in the United
    States, not including prompt pay or other discounts, rebates or
    reductions in price, for the most recent month for which the
    information is available, as reported in wholesale price guides
    or other publications of drug or biological pricing data.

    Sec. 1149B. Timely access to post-mastectomy items

                Current Law
        Under Medicare Part B a breast prosthesis is covered for a
    patient who has had a mastectomy. An external breast prosthesis
    garment, with mastectomy form is covered for use in the
    postoperative period prior to a permanent breast prosthesis or
    as an alternative to a mastectomy bra and breast prosthesis.
    The breast prosthesis and garment are not covered by Medicare
    prior to the mastectomy or breast cancer surgery as there is no
    medical need for the items.
                Proposed Law
        Upon enactment, the provision would specify that payment
    for post-mastectomy external breast prosthesis garments would
    be made regardless of whether the items are supplied to the
    beneficiary prior to or after the mastectomy procedure or other
    breast cancer surgical procedure. The Secretary would be
    required to develop policies to ensure appropriate beneficiary
    access and utilization safeguards.

    Sec. 1149C. Moratorium on Medicare reductions in payment rates for
            certain interventional pain management procedures covered under
            the ASC fee schedule

                Current Law
        The Centers for Medicare and Medicaid Services implemented
    a new payment system for ASCs starting on January 1, 2008. The
    new payment system is being phased in over a 4-year period and
    uses the ambulatory payment classification groups that are the
    basis for Medicare's outpatient prospective payment system
    (OPPS) for hospital outpatient departments. Under the new
    payment system, Medicare's payments for certain services will
    increase and those for other services will decrease relative to
    payment amounts in use prior to 2008.
                Proposed Law
        Medicare payments for interventional pain management
    services provided in ASCs starting January 1, 2010, and before
    January 1, 2010, would be increased to be not less than the
    payment rate in effect as of January 1, 2007, under the prior
    payment system. This interventional pain services included
    under this provision would be epidural injections, facet joint
    injections, and sacroiliac joint injections.

    Sec. 1149D. Medicare coverage of services of qualified respiratory
            therapists performed under the general supervision of a
            physician

                Current Law
        Under current law, respiratory therapists cannot be
    reimbursed independently under the Medicare fee schedule, as
    they are not included in the definition of physicians and other
    providers. Thus, services provided by respiratory therapists
    outside of hospital settings are generally covered as services
    ``incident to a physician's professional service.''
    Accordingly, the physician must directly supervise the service
    (meaning the physician must be physically present) when the
    physician is not the one providing the service.
                Proposed Law
        The definition of ``medical and other health services''
    would be amended to add a new subparagraph addressing
    respiratory therapy and respiratory therapists. For purposes of
    the Medicare program, respiratory therapy services would
    include those services that are performed by a respiratory
    therapist under the general (not direct) supervision of a
    physician for the diagnosis and treatment of respiratory
    illnesses (and would be physicians' services if furnished by a
    physician). These services would be paid for under the Medicare
    fee schedule, but only if no facility or other provider charges
    are paid with respect to the furnishing of such services. The
    term ``respiratory therapist'' would mean an individual who (1)
    is credentialed by a national credentialing board recognized by
    the Secretary, (2) is licensed to practice respiratory therapy
    in the state in which the respiratory therapy services are
    performed, or in the case of an individual in a state which
    does not provide for such licensure, is legally authorized to
    perform respiratory therapy services (in the state in which the
    individual performed such services) under state law or the
    state regulatory mechanism provided by state law, (3) is a
    registered respiratory therapist; and (4) holds a bachelor's
    degree.
        Payment for these respiratory services furnished by a
    respiratory therapist would be the amount equal to 80% of the
    lesser of the actual charge for the services or 85% of the
    Medicare fee schedule amount provided for the same services if
    furnished by a physician. This change applies to services
    furnished on or after January 1, 2010.

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

    Sec. 1151. Reducing potentially preventable hospital readmissions

                Current Law
        Medicare pays for most acute care hospital stays using a
    prospectively determined payment for each discharge. Payment
    also depends on the relative resource use associated with a
    patient classification group, referred to as the Medicare
    Severity diagnosis related groups (MS-DRGs), to which the
    patient is assigned based on an estimate of the relative
    resources needed to care for a patient with a specific
    diagnosis and set of care needs. Medicare's inpatient
    prospective payment system (IPPS) includes adjustments that
    reflect certain characteristics of the hospital. For instance,
    a hospital with an approved resident training program would
    qualify for an indirect medical education (IME) adjustment;
    hospitals that serve a sufficient number of poor Medicare or
    Medicaid patients would receive higher Medicare payments
    because of their disproportionate share hospital (DSH)
    adjustment. Hospitals in Maryland are not paid using IPPS;
    rather they receive Medicare payments based on a state-specific
    Medicare reimbursement system.
        Critical Access Hospitals (CAHs) are limited-service
    facilities that are located more than 35 miles from another
    hospital (15 miles in certain circumstances) or designated by
    the state as a necessary provider of health care; offer 24-hour
    emergency care; have no more than 25 acute care inpatient beds;
    and have a 96-hour average length of stay. Medicare pays CAHs
    on the basis of 101% of the reasonable costs of the facility
    for inpatient and outpatient services. Certain aspects of the
    CAH payment system are not subject to administrative or
    judicial review.
        According to Medicare Payment Advisory Commission's
    (MedPAC) analysis of 2005 Medicare data, 6.2% of
    hospitalizations of Medicare beneficiaries resulted in
    readmission within 7 days and 17.6% of hospitalizations
    resulted in readmission within 30 days. The 17.6% of hospital
    readmission accounts for $15 billion in Medicare spending.
    These readmission rates reflect the total number of
    readmissions, including those that may not have been related to
    the initial diagnosis and may not have been preventable.
    MedPAC, CMS, and others have expressed concern that providers
    do not have financial incentives to reduce potentially
    preventable readmissions. In addition, MedPAC, in its June 2008
    report, recommended that Medicare's payments to hospitals with
    relatively high readmission rates for select conditions be
    reduced.
                Proposed Law
        Hospital readmissions for Medicare beneficiaries are costly
    and prevalent. Studies have demonstrated that almost 20% of
    Medicare beneficiaries who had been discharged from a hospital
    were rehospitalized within 30 days and accounted for almost $15
    billion in spending in a year. A number of interventions at the
    time of discharge have been shown to decrease readmissions.
    Researchers have suggested that supportive palliative care and
    increased efforts to coordinate prompt and reliable follow-up
    care with primary care physicians by hospital providers would
    reduce readmissions and increase patient satisfaction.
        To reduce readmission rates, enhance quality of care and
    improve coordination during discharge planning, policies for
    the reduction of readmission rates have been recommended by
    MedPAC. This section takes into account the recommendations set
    forth by MedPAC regarding payment policies pegged to
    readmission rates. The policy adjusts payments for hospitals,
    critical access hospitals and hospitals paid under 1814(b)(3)
    based on the dollar value of each hospital's percentage of
    potentially preventable Medicare readmissions for 3 conditions
    with measures that have been endorsed by NQF as risk-adjusted
    readmission measures. It also directs the Secretary to expand
    the policy to additional conditions in future years and
    authorizes the Secretary to modify the adjustment based on a
    hospital's performance in readmissions compared to a ranking of
    hospitals nationally.
        In addition, because care received after a discharge can be
    a primary contributor to preventable readmission, the policy
    incorporates penalties for post-acute care providers and
    directs the Secretary to study whether similar penalties should
    be applied to physicians.
        Penalties for Hospitals. IPPS hospitals and those hospitals
    in Maryland paid under a state-specific Medicare payment system
    would receive reduced payments for potentially preventable
    hospital readmissions occurring on or after October 1, 2011.
    Under this proposal, hospitals with lower potentially
    preventable readmission rates would receive smaller payment
    reductions while hospitals with higher potentially preventable
    readmission rates would receive higher payment reductions.
    Certain components of Medicare hospital payments would be
    exempt from these payment reductions.
        Reduced hospital payments for readmissions would be
    calculated by multiplying the base operating DRG payment amount
    by an adjustment amount. The base operating DRG payment amount
    is the base amount that would have been paid under IPPS reduced
    by payments associated with IME and DSH. In the case of
    hospitals in Maryland, the base amount would be the payment
    amount under their state system.
        The adjustment factor for a hospital in a fiscal year would
    be the greater of (1) a floor adjustment factor equal to a
    reduced percentage of the discharge payment or (2) the excess
    readmissions ratio for the applicable fiscal year. The floor
    adjustment factor would be 0.99 of the discharge payments in
    FY2012, 0.98 of the discharge in FY 2013, 0.97 in FY 2014, or
    0.95 in subsequent fiscal years. The excess readmissions ratio
    would equal 1 minus the ratio of the aggregate payments for
    excess readmissions for the hospital divided by the aggregate
    payments for all discharges.
        Aggregate payments for excess readmissions for a hospital
    for a fiscal year would be the sum of the applicable conditions
    of the product of the base operating DRG payment for each
    applicable condition multiplied by the number of admissions for
    each condition multiplied by the excess readmissions ratio
    minus one. The excess readmissions ratio is the ratio of the
    risk adjusted readmissions based on actual readmissions divided
    by the risk adjusted expected readmissions. This number would
    not be less than one. The ratio would be calculated for each
    applicable condition for a hospital for the applicable period.
    The aggregate payments for all discharges would be calculated
    as the sum of the hospital's base operating DRG payments for
    all discharges for all conditions for such a fiscal year.
        Excess readmissions would be prohibited from including
    conditions for which there are fewer than a certain minimum
    number (as determined by the Secretary) of discharges within a
    certain time period. To encourage hospitals to continue to
    reduce their potentially preventable readmission rates over
    time, beginning with discharges for FY2014, the Secretary would
    be able to determine the excess readmissions ratio based on a
    ranking of hospitals by readmission ratios (from lower to
    higher readmissions) normalized to a benchmark that is lower
    than the 50th percentile.
        An applicable condition would be defined as a condition or
    procedure that represents high volume or high expenditures for
    Medicare or meets other specified criteria that also satisfies
    certain measures of readmissions. These measures of readmission
    would be those that have been endorsed by a consensus based
    entity with a performance measurement contract under section
    1890 of the Social Security Act, excluding readmissions that
    are unrelated to the prior discharge (such as a planned
    readmission or transfer to another applicable hospital).
    Readmission would be defined as an admission to the hospital of
    an individual who had been discharged from either the same or
    another applicable hospital within a time period from the date
    of discharge as specified by the Secretary.
        Starting in FY2012, the Secretary would select 3 applicable
    conditions that have been endorsed by the consensus based
    entity as of the date of enactment. Beginning with FY2013, the
    Secretary would be required to expand the list of applicable
    conditions for such readmissions to include 4 conditions
    identified by the MedPAC in its June 2007 Report to Congress.
    The Secretary would also be able to include an appropriate all-
    condition measure of readmissions. In expanding the list of
    conditions, the Secretary would be required to seek the
    endorsement by a consensus-based entity, but would be able to
    apply such conditions without such endorsement.
        The Secretary would be required to monitor activities of
    applicable hospitals to determine if such hospitals took the
    steps to avoid patients at risk to reduce the likelihood of
    increasing readmissions for applicable conditions. If the
    Secretary determines that such a hospital had taken such steps,
    the Secretary could impose an appropriate sanction after having
    provided notice to the hospital and the opportunity for that
    hospital to alleviate such steps.
        For fiscal years beginning on or after FY2011, the
    Secretary would be required to increase DSH payments to
    targeted hospitals that received $10 million or more in
    disproportionate share payments in their most recently settled
    cost report. These targeted hospitals would be required to
    provide satisfactory assurances that the increased payments
    would be used for transitional care activities. These would be
    activities designed to address the patient noncompliance issues
    that result in higher than normal readmission rates, such as
    one or more of the following: (1) providing care coordination
    services to assist in transitions from the targeted hospital to
    another setting; (2) hiring translators and interpreters; (3)
    increasing services offered by discharge planners; (4) ensuring
    that individuals receive a summary of care and medication
    orders upon discharge; (5) developing a quality improvement
    plan to assess and remedy preventable readmission rates; (6)
    assigning discharged individuals to a medical home; and (7)
    doing other activities as determined by the Secretary.
        The Secretary would estimate the percent of the DSH
    increase subject to aggregate and hospital-specific caps. In
    the aggregate, increases would not exceed 5% of the estimated
    savings that would occur in a fiscal year from hospital
    readmissions policies described above. For specific hospitals,
    DSH increases would not exceed the estimated difference in
    spending that would occur in a fiscal year for a hospital due
    to the application of the excess readmissions policy. The
    Secretary would make these additional DSH payments on a lump
    sum basis, a periodic basis, a claim by claim basis or in any
    other form deemed appropriate. Not later than 3 years after
    funds are first made available, GAO would be required to submit
    a report on the use of such funds.
        No administrative or judicial review could be conducted of
    the determination of the base operating DRG amounts; the
    methodology for determining the adjustment factor and its
    various components (excess readmissions ratio, aggregate
    payments for excess readmissions and aggregate payments for all
    discharges, applicable conditions, and applicable periods);
    measures of readmissions; the determination of a targeted
    hospital for additional DSH payments, the increase in DSH
    payments, the aggregate DSH cap, the hospital-specific DSH
    limit, and the form of DSH payment.
        Application to Critical Access Hospitals (CAHs). CAHs would
    receive reduced payments for preventable hospital readmissions
    starting for cost reporting periods beginning in FY2012 and in
    subsequent fiscal years. The adjustment factor for acute care
    hospitals would be applied. The methodology for determining the
    adjustment factor, including the determination of aggregate
    payments for actual and expected readmissions, applicable
    periods, applicable conditions, and measures of readmission
    would not be subject to administrative or judicial review.
        Application to Post-Acute Care Providers. The proposal
    would also reduce Medicare payments on claims from post-acute
    care providers (skilled nursing facilities, inpatient
    rehabilitation facilities, home health agencies, and long-term
    care hospitals) for patients readmitted to an applicable
    hospital or a CAH within 30 days of an initial discharge from a
    hospital or a CAH. Payments to post-acute providers would be
    reduced by 0.996 for the fiscal year or rate year 2012; 0.993
    for the fiscal or rate year 2013; and 0.99 for fiscal or rate
    year 2014. This policy would apply to the discharges or
    services furnished on or after the first day of the fiscal or
    rate year, beginning on or after October 1, 2011.
        The Secretary would be required to develop appropriate
    measures of readmissions rates for post-acute care providers
    and to submit such measures for endorsement through a
    consensus-based entity, such as the National Quality Forum. The
    Secretary would be required to adopt, expand, and apply such
    measures, in the same manner as for applicable hospitals
    established earlier in the legislation. To the extent such
    measures would be adopted, the Secretary would adopt similar
    payment policies for post-acute providers on or after October
    1, 2014, that have been established for applicable hospitals
    and CAHs. Post-acute providers would also be subject to the
    monitoring and penalties established for applicable hospitals
    and CAHs elsewhere in this legislation.
        Physicians. The Secretary would be required to conduct a
    study to determine how this readmissions policy could be
    applied to physicians and issue a public report no later than
    one year after enactment. Such approaches would be required to
    be considered: (1) creating a code (or codes) and budget
    neutral payment amount(s) under the fee schedule for services
    furnished by an appropriate physician who sees an individual
    within the first week after discharge from a hospital or CAH;
    (2) developing measures of readmissions rates for individuals
    treated by physicians; (3) applying a payment reduction for
    physicians who treat the patient during the initial admissions
    that results in a readmission; and (4) methods for attributing
    payments or payment reductions to the appropriate physician or
    physicians.
        Funding. In addition to funds otherwise available, out of
    any funds in the Treasury not otherwise appropriated, there
    would be appropriated, to the CMS Program Management Account,
    $25 million for each fiscal year beginning with 2010. Amounts
    appropriated for a fiscal year would be required to be
    available until expended.

    Sec. 1152. Post-acute care services payment reform plan and bundling
            pilot program

                Current Law
        Medicare pays for most post-acute care (PAC) services,
    including skilled nursing facilities (SNF), long-term care
    hospitals (LTCH), inpatient rehabilitation facilities (IRF),
    and home health, under prospective payment systems (PPS)
    established for each type of provider. Under each PPS, a
    predetermined rate is paid for each unit of service, such as a
    hospital discharge, or a payment classification group. As some
    Medicare beneficiaries with complex health conditions and
    multiple co-morbidities move between hospital stays and a range
    of PAC providers, Medicare makes separate payments to each
    provider for covered services. Payments across PAC settings may
    differ considerably even though the clinical characteristics of
    the patient and the services delivered may be very similar.
        The Deficit Reduction Act of 2005 (P.L. 109-171) required
    the Centers for Medicare and Medicaid Services (CMS) to develop
    a Post-Acute Care Payment Reform Demonstration (PAC
    demonstration). The goal of this initiative is to standardize
    patient assessment information from PAC settings and to use
    these data to guide payment policy in the Medicare program.
    This demonstration began in 2008 and a report is expected to be
    submitted to Congress by the Secretary in 2011. CMS has also
    established a 3-year Acute Care Episode (ACE) Demonstration to
    test the effects of using a bundled payment for inpatient
    hospital and physician services for a set of 9 orthopedic and
    28 cardiovascular conditions. There are 5 participants in the
    ACE demonstration, which began early in 2009.
        The Medicare Payment Advisory Commission (MedPAC), among
    others, has expressed concern that providers do not have
    financial incentives to coordinate across episodes of care nor
    to evaluate the full spectrum of care a patient may receive. In
    its June 2008 report, MedPAC recommended that a bundled payment
    system for an episode of care be explored in a pilot program.
    Under this voluntary program, a single provider entity would
    receive a bundled payment intended to cover the costs of the
    full range of care needed over the hospitalization episode,
    including 30 days post-discharge. MedPAC recommended that the
    pilot program should have clearly established guidelines for
    determining whether it should be discontinued or expanded to
    the entire Medicare program
                Proposed Law
        Fee-for-service payment systems reward high patient and
    procedure volume and do not encourage care coordination
    delivered across an episode of care. Ideally, the payment
    system should incentivize hospitals, post-acute institutions,
    and physicians to collaborate in coordinating care for Medicare
    beneficiaries and to work efficiently together.
        Currently, hospitals are paid in a single amount based on
    the patient's diagnosis to cover all hospital costs associated
    with the stay except for physician services. Surgeons are paid
    a bundled fee called a global surgical fee that includes the
    post-surgical follow up visits. MedPAC suggests that while
    these payment innovations may have improved providers'
    efficiency (e.g., shorter length of stay) during the episode of
    care, they apply to only one provider and therefore have a
    limited effect in reducing the aggregate volume of services
    paid for by Medicare.
        Health policy experts have recommended that under a bundled
    payment structure, Medicare would pay a single provider entity
    an amount intended to cover the costs of providing a full range
    of care needed over a hospitalization episode that would
    include the acute care and the post-acute care setting.
    However, a bundled payment system has significant implications
    for the future delivery of care for Medicare beneficiaries.
    Such a broad policy change requires significant research and
    planning to implement in order to protect the quality of care
    received by beneficiaries and the integrity of the program.
        The Secretary would be required to develop a detailed plan
    to reform payment for Medicare's PAC services, including
    specifications for a bundled payment to improve their
    coordination, quality, and efficiency, and to improve outcomes
    for individuals. For this plan, PAC services would include
    those services provided by SNFs, IRFs, LTCHs, hospital based
    outpatient rehabilitation facilities, and home health agencies
    to individuals after discharge from a hospital and such other
    services as determined appropriate by the Secretary.
        The plan would be required to include consideration of the
    following issues: (1) the nature of payments under a PAC
    bundle, including the type of provider or entity to whom
    payment should be made, the scope of activities and services
    included in the bundle, whether payment for physicians'
    services would be included, and the period covered by the
    bundle; (2) whether the payment should be consolidated with the
    payment under the inpatient prospective system or a separate
    payment established for such bundle, and if a separate payment
    is established, whether it should be made only upon use of PAC
    services or for every discharge; (3) whether the bundle should
    be applied across all categories of providers of inpatient
    services and PAC services or whether it should be limited to
    certain categories of providers, services, or discharges, such
    as high volume or high cost MS-DRGs; (4) the extent to which
    payment rates could be established to achieve offsets for
    efficiencies that could be expected to be achieved with a
    bundled payment, whether such rates should be established on a
    national basis or for different geographic areas, whether such
    rates should vary according to discharge, case mix, outliers,
    and geographic differences; (5) the nature of protections
    needed for individuals under a system of bundled payments to
    ensure that individuals receive quality care, are furnished the
    level and amount of services needed, as determined by an
    appropriate assessment instrument, and the extent to which
    transitional care services would improve quality of care for
    individuals and the functioning of a bundled post-acute system;
    (6) the nature of relationships that may be required between
    hospitals and providers of PAC services to facilitate bundled
    payments, including the application of gainsharing, anti-
    referral, anti-kickback, and anti-trust laws; (7) quality
    measures that would be appropriate for reporting by hospitals
    and post-acute providers; (8) how cost-sharing for a PAC bundle
    should be treated relative to current rules for cost-sharing
    for inpatient hospital, home health, skilled nursing facility,
    and other services; (9) how other programmatic issues should be
    treated in a PAC bundle; and (10) such other issues as the
    Secretary would deem appropriate.
        In the development of this plan, the Secretary would be
    required to consult relevant stakeholders and to consider
    experience with such research studies and demonstrations that
    the Secretary determines appropriate. In addition, the
    Secretary would be required to analyze the impacts (including
    geographic impacts) of PAC reform approaches, including the
    effect on beneficiaries, hospitals, PAC providers, and
    physicians; use existing data (such as data submitted on
    claims) and collect such data as the Secretary would determine
    appropriate; and if patient functional status measures are
    appropriate for the analysis, to the extent practical, build
    upon the Continuity Assessment Record and Evaluation (CARE)
    tool being developed to measure the health and functional
    status of Medicare acute discharges and changes in severity and
    other outcomes for Medicare PAC patients under CMS' PAC
    demonstration plan.
        Out of any funds in the Treasury not otherwise
    appropriated, there would be appropriated to the Secretary for
    the CMS Program Management Account $15 million for each of the
    fiscal years 2010 through 2012. These amounts appropriated for
    the fiscal years would be available until expended.
        The Secretary would be required to issue interim public
    reports on a periodic basis and, not later than 3 years after
    enactment, issue a final public report on this plan and its
    impact.
        Conversion of Acute Care Episode Demonstration to Pilot
    Program and Expansion to Include Post-Acute Services. This
    provision would require the Secretary, by no later than January
    1, 2011, and for the purpose of promoting bundled payments to
    promote efficient and high quality delivery of care, to convert
    the acute care episode demonstration into a pilot program and
    expand it to include post-acute services and such other
    services the Secretary determines to be appropriate (which may
    include transitional services).
        The Secretary would be required to set specific goals for
    the number of acute and post-acute bundling test sites under
    the pilot program to ensure that it is of sufficient size and
    scope to: (1) test the approaches under the pilot program in a
    variety of settings, including urban, rural, and underserved
    areas; (2) include geographic areas and additional conditions
    that account for significant program spending, as defined by
    the Secretary; and (3) disseminate the pilot program rapidly on
    a national basis if appropriate. To the extent that the
    Secretary finds the inpatient and post-acute care bundling to
    be successful in improving quality and reducing costs, the
    Secretary would be required to implement such mechanisms and
    reforms under the pilot program on as large a geographic scale
    as practical and economical. The Secretary would be required to
    only expand the pilot program if the CMS' Chief Actuary
    certifies that the demonstration and pilot programs maintain or
    increase the quality of care received by individuals and such
    demonstration program and that the pilot program reduces
    program expenditures. Participation in this pilot program would
    be voluntary.

    Sec. 1153. Home health payment update for 2010

                Current Law
        Home health agencies (HHAs) are paid under a prospective
    payment system (PPS) that began on October 1, 2000. Payment is
    based on 60-day episodes of care for beneficiaries, subject to
    several adjustments, with unlimited episodes of care in a year.
    The payment covers skilled nursing, therapy, medical social
    services, aide visits, medical supplies, and other services.
    Durable medical equipment is not included in the home health
    PPS. The base payment amount, or national standardized 60-day
    episode rate, is increased annually by an update factor that is
    determined, in part, by the projected increase in the home
    health market basket (MB) index. This index measures changes in
    the costs of goods and services purchased by HHAs. Since 2007,
    HHAs are required to submit to the Secretary health care
    quality data. An HHA that does not submit the required quality
    data will receive an update of the MB minus two percentage
    points. This reduction only applies to the payment year in
    question.
                Proposed Law
        This section implements a MedPAC recommendation to maintain
    payment rates for home health agencies (HHAs) for CY2010 at
    their levels in 2009. Home health agencies would still be
    subject to the data quality provision for subsequent years.

    Sec. 1154. Payment adjustments for home health care

                Current Law
        Home health agencies (HHAs) are paid under a prospective
    payment system (PPS) that began on October 1, 2000. Payment is
    based on 60-day episodes of care for beneficiaries, subject to
    several adjustments, with unlimited episodes of care in a year.
    The payment covers skilled nursing, therapy, medical social
    services, aide visits, medical supplies, and other services.
    Durable medical equipment is not included in the home health
    PPS. The base payment amount, or national standardized 60-day
    episode rate, is increased annually by an update factor that is
    determined, in part, by the projected increase in the home
    health market basket (MB) index. This index measures changes in
    the costs of goods and services purchased by HHAs. Since 2007,
    HHAs are required to submit to the Secretary health care
    quality data. An HHA that does not submit the required quality
    data will receive an update of the MB minus two percentage
    points. This reduction only applies to the payment year in
    question.
        In calendar year (CY) 2008, CMS made refinements to the
    home health (HH) PPS. These refinements included a reduction in
    the national standardized 60-day episode payment rate, phased-
    in over 4 years, to account for changes in case mix that are
    not related to HH patients' actual clinical conditions; changes
    to the case-mix model to account differently for comorbidities
    and the differing health characteristics of longer-stay
    patients, including increasing the number of HH resource groups
    from 80 to 153; changes to the way the PPS accounts for the
    impact of rehabilitation services on resource use to reduce the
    impact of financial incentives on the delivery of therapy
    visits; and an increased payment for low utilization payment
    adjustment (LUPA) episodes that occur as the only episode or
    the first episode during a period of HH; and other changes.
    These refinements resulted in payment changes described in
    Federal Regulation Sec. 484.220 issued on Aug. 29, 2007 (72 FR
    49879).
        This regulation established changes to the HHA case-mix
    index to account for the relative resource utilization of
    different patients. These changes modified the coding or
    classification of different units of service that do not
    reflect real changes in case-mix. As a result, the national
    prospective 60-day episode payment rate was adjusted downward
    by 2.75% for CY2008-2010; then by 2.71% for CY2011.
                Proposed Law
        Pursuant to a MedPAC recommendation, the provision would
    accelerate the case-mix adjustments described in 42 FR
    Sec. 484.220 by implementing both the planned CY2011 adjustment
    of 2.71% and the planned CY2010 adjustment of 2.75% at the same
    time in CY2010, for a total FY2010 downward adjustment of
    5.46%. The amounts of these adjustments would not be limited if
    more recent data were to indicate that a greater adjustment
    would be appropriate.
        One source of Medicare overpayments to HHAs is the use of
    outdated data in payment rates. The prospective payment system
    for home health services developed in 1998 is based on agencies
    providing an average of 32 visits per 60-day episode. However,
    since that time, the number of visits per episode has dropped
    by 30 percent, to an average of 22 visits. This provision
    incorporates those changes into the payment system.
        Starting in 2011, HH prospective payment amounts would be
    adjusted by a uniform percentage determined appropriate by the
    Secretary and based on analysis of factors such as changes in
    the average number and types of visits in an episode since the
    implementation of the PPS, changes in the intensity of visits
    in an episode, growth in cost per episodes, and other factors
    that the Secretary would consider to be relevant. For years
    after 2011, such amounts would be required to be equal to the
    amount paid for the previous year updated by the HH market
    basket.
        If the Secretary is not able to compute the changed
    prospective payment amounts for 2011 on a timely basis, then
    the Secretary would be required to pay 95% of what the
    prospective payment amount would have been had this provision
    not applied. And, under such circumstances, the Secretary would
    be required to compare, before July 1, 2011, amounts paid to
    the amount that would have been paid had the Secretary been
    able to compute the adjustment on a timely basis. For 2012, the
    Secretary would be required to decrease or increase the
    prospective payment amount (or at the Secretary's discretion,
    over a period of several years beginning with 2012), by the
    amount (if any) by which the amount applied is greater or less,
    respectively, than the amount that should have been applied.

    Sec. 1155. Incorporating productivity improvements into market basket
            update for home health services

                Current Law
        Home health agencies (HHAs) are paid under a prospective
    payment system (PPS) that began on October 1, 2000. Payment is
    based on 60-day episodes of care for beneficiaries, subject to
    several adjustments, with unlimited episodes of care in a year.
    The payment covers skilled nursing, therapy, medical social
    services, aide visits, medical supplies, and other services.
    Durable medical equipment is not included in the home health
    PPS. The base payment amount, or national standardized 60-day
    episode rate, is increased annually by an update factor that is
    determined, in part, by the projected increase in the home
    health market basket (MB) index. This index measures changes in
    the costs of goods and services purchased by HHAs. Since 2007,
    HHAs are required to submit to the Secretary health care
    quality data. A HHA that does not submit the required quality
    data will receive an update of the MB minus two percentage
    points. This reduction only applies to the payment year in
    question.
        Each year, the Medicare Payment Advisory Commission
    (MedPAC) makes payment update recommendations for the different
    payment systems. In its view, Medicare's payment systems should
    encourage efficiency: providers should be able to reduce the
    quantity of inputs to produce a unit of service while
    maintaining quality. Accordingly, MedPAC begins its update
    deliberations with an assumption that all providers can achieve
    efficiency gains similar to the economy and examines the Bureau
    of Labor Statistics' estimate of the 10-year moving average
    rate of past growth in total factor productivity for the
    economy as a whole. This policy target links Medicare's
    expectations for efficiency improvements to the productivity
    gains achieved by firms and workers who pay taxes that fund
    Medicare. MedPAC's annual update recommendation depends on its
    overall assessment of the circumstances of a given set of
    providers in any year.
                Proposed Law
        The annual update to the Medicare physician fee schedule
    already incorporates adjustments for gains in productivity.
    This provision creates uniformity across Medicare providers by
    creating a productivity adjustment for home health agencies.
    This adjustment will encourage greater efficiency in health
    care provision, hold Medicare providers accountable for
    achieving productivity gains on par with the overall economy,
    and more accurately align Medicare payments with provider
    costs.
        The provision would make annual updates by the HH MB
    subject to a productivity adjustment as long as the annual
    update would not be less than zero. The productivity adjustment
    would equal the 10-year moving average of changes in annual
    economy-wide private non-farm business multi-factor
    productivity. The estimate used would be that published before
    the promulgation of the regulation establishing the Medicare
    rates for the year or period. This provision would be required
    to apply to home health market basket percentage increases for
    years beginning with 2010.

    Sec. 1156. Limitation on Medicare exception to the prohibition on
            certain physician referrals for hospitals

                Current Law
        Physicians are generally prohibited from referring Medicare
    patients for certain services to facilities in which they (or
    their immediate family members) have financial interests.
    However, among other exceptions, physicians are not prohibited
    from referring patients to hospitals in which they have
    ownership or investment interests that include the hospital's
    entire business (the so-called whole hospital exception).
    Providers that furnish substantially all of its designated
    health services to individuals residing in rural areas are
    exempt as well.
        Entities receiving Medicare payment for covered items and
    services are required to provide the information on the
    entities' ownership, investment, and compensation arrangements.
    This information includes the covered items and services
    provided by the entity, and the names and unique physician
    identification numbers of all physicians (or those whose
    immediate relatives) who have an ownership or investment
    interest, or certain compensation arrangements.
                Proposed Law
        The provision prohibits new physician-owned hospitals from
    participating in Medicare. The provision addresses concerns
    about the strong incentive self-referral exerts on physician
    decision-making and the potential negative implications of that
    conflict of interest for patient safety and the volume of
    services in Medicare.
        Under this provision, only hospitals meeting certain
    requirements would be exempt from the prohibition on self-
    referral. Hospitals (including rural providers) that have
    physician ownership and a provider agreement in operation on
    January 1, 2009, and that meet other specified reporting and
    disclosure requirements would be exempt from this self-referral
    ban. Hospitals would be allowed to maintain the percentage of
    the total ownership or investment held in the hospital (or in
    an entity whose assets include the hospital) by physician
    owners or investors in the aggregate at the level that existed
    as of date of enactment. Hospitals would be allowed to expand
    the number of operating rooms, procedure rooms, or beds of the
    hospital if certain criteria are met. The exempted hospital
    could not have converted from an ambulatory surgical center to
    a hospital after enactment.
        To qualify for the exemption, entities receiving Medicare
    payment for covered items and services would be required to
    provide the information on the entities' ownership, investment,
    and compensation arrangements. This information includes the
    covered items and services provided by the entity, and the
    names and unique physician identification numbers of all
    physicians (or those with immediate relatives) who have an
    ownership or investment interest, or certain compensation
    arrangements. Such information would be provided in the form,
    manner, and at such times as specified. This requirement would
    not apply to designated health services provided outside of the
    United States or to entities deemed to provide services
    infrequently paid by Medicare.
        An exempt entity would also be (1) required to submit an
    initial report and periodic updates at specified intervals that
    contained a detailed description of the identity of each
    physician owner and investor as well as any other owners and
    investors in the hospital; and any other information on the
    nature and extent of all ownership interests in the hospital;
    (2) required to provide to all patients a disclosure relating
    to any referring physician owner's ownership interest in the
    hospital and, if applicable, any such ownership interest of the
    treating physician (by a time that permits the patient to make
    a meaningful decision regarding the receipt of care) ; and (3)
    required to disclose the fact that the hospital is partially or
    wholly owned by one or more physician investors on any public
    website for the hospital and in any public advertising for the
    hospital. This requirement would not apply to designated health
    services provided outside of the United States or to entities
    deemed to provide services infrequently paid by Medicare.
    Information provided by hospitals would be published and
    periodically updated on the Internet website of the Centers for
    Medicare and Medicaid Services (CMS). Any person who fails to
    meet required reporting and disclosure requirements are subject
    to a civil monetary penalty of not more than $10,000 for each
    day for which reporting is required to have been made or for
    each case in which disclosure is required to have been made.
        Exempt hospitals would ensure bona fide ownership and
    investment by meeting the following requirements: (1) any
    ownership or investment interest offered to a physician could
    not be offered on more favorable terms than those offered to a
    person who is not in a position to refer patients or otherwise
    generate hospital business; (2) the hospital (or investors in
    the hospital) could not directly or indirectly provide loans or
    financing for physician owners or investors in the hospital;
    (3) the hospital or its investors could not guarantee a loan,
    make a payment toward a loan, or otherwise subsidize a loan to
    any individual physician owner, investor, group of physician
    owners or investors that is related to acquiring an ownership
    or investment interest in the hospital; (4) ownership or
    investment returns must be distributed to investors in the
    hospital in an amount that is directly proportional to the
    investment or ownership by the hospital investor; (5) the
    investment interest of the owner or investor is directly
    proportional to the capital contributions made at the time the
    ownership or investment interest is obtained; (6) physician
    owners and investors do not receive any guaranteed receipt or
    right to purchase other business related interests in the
    hospital, including the purchase or lease of any property under
    the control of other investors in the hospital or located near
    the premises of the hospital; (7) the hospital does not offer a
    physician owner the opportunity to purchase or lease any
    property under hospital control on more favorable terms than
    those offered to others and (8) the hospital does not condition
    any physician ownership or investment interests on the
    physician making or influencing referrals to the hospital or
    generating business for the hospital.
        To ensure patient safety, those exempt hospitals that do
    not offer emergency services would have to have the capacity to
    (1) provide assessment and initial treatment for medical
    emergencies; and (2) refer and transfer the patient with the
    medical emergency to the hospital with the required capability
    if it lacks the capabilities to treat the involved emergency.
    Those hospitals that do not have any physician available on the
    premises 24 hours per day, 7 days a week must disclose such
    fact to the patient before admitting the patient. Following
    such a disclosure, the hospital would receive a signed
    acknowledgement from the patient that the patient understands
    that fact. The Secretary would retain the ability to terminate
    a hospital's provider agreement if the hospital is not in
    compliance with Medicare's conditions of participation.
        Exempt hospitals would be permitted to increase the number
    of operating rooms, procedure rooms or beds after the date of
    enactment under certain criteria. A procedure room includes a
    room in which catheterizations, angiographies, angiograms, and
    endoscopies are furnished. This would not include emergency
    rooms or departments (except for rooms in which
    catheterizations, angiographies, angiograms, and endoscopies
    are furnished). Hospitals meeting certain criteria would be
    allowed to expand, with these criteria including (1) a hospital
    that is located in a county where the population increased
    during the most recent 5-year period at a rate that is at least
    150% of the state's population increase; (2) a hospital whose
    Medicaid inpatient admission percentage is equal to or greater
    than the average percentage for all hospitals located in the
    county; (3) a hospital 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; (4) a hospital that is located in a
    state with an average bed capacity less than the national
    average; (5) a hospital that has an average bed occupancy rate
    that is greater than the state average bed occupancy rate; and
    (6) meets other established requirements.
        This capacity increase would be limited to facilities on
    the main campus of the hospital and could not exceed 200% of
    the number of operating rooms, procedure rooms and beds at the
    time of enactment. Any increase would only be permitted in
    facilities on the main campus of the hospital. The process for
    expansion should allow the opportunity for community input and
    should permit an applicable hospital to apply for the expansion
    exception up to once every two years. The Secretary would be
    required to promulgate regulations establishing the appeal
    process no later than the first day of the month beginning 18
    months after the date of enactment. The appeal process would be
    implemented one month after the date of regulations are
    promulgated. These regulations would be able to be issued as
    interim final regulations. The final decision regarding an
    expansion request will be posted on the CMS website no later
    than 120 days after a complete application is received. There
    shall be no administrative or judicial review of this process.
        The Secretary would be required to establish policies and
    procedures to ensure compliance with these requirements. The
    enforcement efforts may include unannounced site reviews of
    hospitals. In addition to funds otherwise available, starting
    in FY2010, $5 million would be appropriated in each fiscal year
    from not otherwise appropriated funds in the Treasury for
    purposes of carrying out this section. Appropriated funds would
    be available until expended. Certain federal laws with respect
    to the coordination of federal information policy established
    by Chapter 35 of Title 44 of the United States Code would not
    apply to these requirements.

    Sec. 1157. Institute of Medicine study of geographic adjustment factors
            under Medicare

                Current Law
        Generally, Medicare's payment systems include adjustment
    factors to account for the geographic differences in the costs
    of providing health care services. For example, Medicare's
    physician fee schedule (which with modifications is used to
    reimburse other health care practitioners in Medicare) uses the
    geographic practice cost index (GPCI) for this purpose;
    Medicare's inpatient prospective payment system (IPPS) uses a
    hospital wage index to adjust payments for acute care
    hospitals. With modifications, the IPPS wage index is used to
    calculate payments for inpatient rehabilitation hospitals,
    inpatient psychiatric hospitals, long term care hospitals,
    skilled nursing facilities, and home health agencies.
                Proposed Law
        This provision addresses concerns that have been raised
    about the methodology and data used to geographically adjust
    Medicare payment rates.
        The Secretary would enter into a contract with the
    Institutes of Medicine (IOM) of the National Academies to
    conduct a comprehensive empirical study with appropriate
    recommendations on the accuracy of the geographic adjustment
    factors established for Medicare's physician fee schedule and
    for Medicare's IPPS. The study would include an evaluation of
    the empirical validity of the adjustments; methodology used to
    determine the adjustments, and measures used for the
    adjustments. The latter would take into account the timeliness
    of the data and frequency of data revisions; data sources and
    validity, and operational costs of participating providers. The
    study would also examine the effect of the adjustment factors
    on the level and distribution of the health workforce within
    the United States. This would include recruitment and retention
    accounting for workforce mobility between urban and rural
    areas; ability of hospital and other facilities to maintain an
    adequate and skilled workforce; patient access to providers and
    needed medical technology. The study would also examine the
    effect of the adjustment factors on population health and
    quality of care and the ability of providers to furnish
    efficient, high value care. The IOM report would be submitted
    to the Secretary and to Congress no later than one year from
    enactment. Necessary funds would be authorized to be
    appropriated to carry out this study.

    Sec. 1158. Revision of Medicare payment systems to address geographic
            inequities

                Current Law
        Generally, Medicare's payment systems include adjustment
    factors to account for the geographic differences in the costs
    of providing health care services. Section 1157 requires the
    IOM to conduct a study of the geographic practice cost index
    (GPCI) used to adjust Medicare's physician fee schedule and the
    hospital wage index used in Medicare's inpatient prospective
    payment system (IPPS).
        Generally, the Centers for Medicare and Medicare Services
    promulgates changes to Medicare's physician fee schedule and
    IPPS through an annual rulemaking process where proposed
    changes and a notice of a public comment period are published
    in the Federal Register. Subsequently, a final rule
    establishing the payment polices and responding to public
    comments is published in the Federal Register. Medicare's IPPS
    and physician payments are on different payment years and
    therefore rulemaking schedules. Generally the new IPPS payment
    rates are effective October 1 of each year and new physician
    fee schedule is effective as of January 1 of each year.
                Proposed Law
        The Secretary would be required to take into account the
    IOM recommendations included in the report on the adequacy of
    Medicare's geographic adjustments established in the previous
    section. Appropriate proposals to revise the respective
    geographic adjustments would be included in the proposed rules
    applicable to the rulemaking process for Medicare's payments
    for physicians' services and IPPS hospitals. The proposals
    would be included in the next applicable rulemaking cycle after
    submission of the IOM report to the Secretary. The Secretary
    would be able to change the geographic adjustments accordingly,
    but could not reduce an adjustment below that which applied in
    the payment system in the prior payment year. These adjustments
    for services furnished before January 1, 2014, could not exceed
    the amounts in the Medicare Improvement Fund as amended in this
    legislation. No more than half of that $8 billion would be
    available in any one payment year.

                     Subtitle D--Medicare Advantage Reforms

                       Part 1--Payment and Administration

    Sec. 1161. Phase-in of payment based on fee-for-service costs

                Current Law
        Most Medicare beneficiaries (about 75%) receive their care
    through the original Medicare program, often called fee-for-
    service Medicare (FFS). Medicare Advantage (MA) is an
    alternative way for Medicare beneficiaries to receive covered
    benefits. Under MA, private health plans are paid a per-person
    amount to provide all Medicare-covered benefits (except
    hospice) to beneficiaries who enroll in their plan. Beginning
    in 2006, the Secretary began determining MA payment rates by
    comparing plan bids to a benchmark. Each bid represents the
    plan's estimated revenue requirement for providing required
    Parts A and B Medicare services to an average Medicare
    beneficiary. The benchmark amounts represent the maximum amount
    the federal government will pay a plan for providing required
    Medicare benefits. If a plan's bid is less than the benchmark,
    its payment equals its bid plus a rebate of 75% of the
    difference between the benchmark and the bid. The rebate must
    be used to provide additional benefits, reduce enrollees'
    Medicare cost sharing expenses, or reduce enrollees' monthly
    Part B, Part D, or supplemental premiums (for services beyond
    required Medicare benefits). The remaining 25% of the
    difference is retained by the federal government. If a plan's
    bid is equal to or above the benchmark, its payment is equal to
    the benchmark amount, and each enrollee in that plan will pay
    an additional premium equal to the amount by which the bid
    exceeds the benchmark.
        In general, the MA benchmarks in each local area (county)
    are updated annually by the overall growth in Medicare
    expenditures, otherwise known as the National MA Growth
    Percentage. In certain years (known as rebasing years), plan
    payments are updated by the greater of the growth percentage or
    100% of fee-for-service (FFS) costs, with adjustments.
    Beginning in 2010, the benchmarks will be adjusted to phase-out
    the value of indirect medical education costs. Payments for the
    indirect costs of medical education will continue to be made
    directly to hospitals.
        MA benchmarks are based, in part, on historical Medicare
    private plan payment rates. The Balanced Budget Act of 1997
    (P.L. 105-33, BBA) increased payments to private plans above
    rates of per person FFS costs in some areas. Subsequent
    legislation also increased payment rates to private plans. The
    historical payment rates were used as the basis for the
    benchmark amounts, as specified in the Medicare Prescription
    Drug, Improvements, and Modernization Act of 2003, (P.L. 108-
    173, MMA). As a result, current MA benchmarks exceed per capita
    FFS costs in virtually all areas, in some cases substantially.
                Proposed Law
        Private plans were initially included in the Medicare
    program to test whether managed care would improve efficiency
    and innovation and reduce costs, especially in parts of the
    county where traditional, or fee-for-service (FFS), Medicare
    was an inefficient purchaser. Reflecting this goal, Medicare
    Health Maintenance Organizations were originally paid at 95
    percent of the average adjusted per capita costs (AAPCC) in
    fee-for-service Medicare at the county level. New Medicare
    policies enacted in 1997, 2000 and 2003 now result in
    overpayments to Medicare Advantage (MA) plans. MedPAC estimates
    that, on average, payments to plans were 14% higher than costs
    in fee-for-service Medicare, on average.
        Starting in 2011, the provision would phase-in MA payment
    based on per person FFS spending each county. Starting 2013, MA
    benchmarks would be equal to per capita FFS spending in each
    county. In no event would a benchmark be less than per capita
    FFS spending. This provision would not apply to Programs of
    All-Inclusive Care for the Elderly (PACE). Phasing MA payments
    down to FFS costs in each county over three years gives MA
    plans time to adjust, if necessary, to the new payment rates.
        The phase-down of MA payments to FFS costs applies equally
    to all 50 states and the territories; however, Puerto Rico is a
    unique situation that the Committee expects that the Secretary
    will use authority under current law to examine. Specifically,
    very few Medicare beneficiaries in Puerto Rico choose to enroll
    in Part B; instead, MA plans buy down the Part B premium for
    enrollees and therefore many Medicare beneficiaries enroll in
    MA to receive all of their Medicare services. With only a small
    population enrolled in Part B through traditional Medicare, the
    county FFS expenditures calculated by the Secretary are low and
    unstable from year-to-year. Therefore, the Committee expects
    that when calculating county FFS rates for Puerto Rico, the
    Secretary will use utilization and expenditure data from MA
    plans under current authority and adjust these rates and risk
    scores appropriately.

    Sec. 1162. Quality bonus payments

                Current Law
        Payments to MA plans are not contingent on the quality of
    care provided to Medicare beneficiaries. However, all MA
    organizations are required to have a quality improvement
    program before January 1, 2010. As part of the quality
    improvement program, plans must collect, analyze, and report
    data to measure health outcomes and other indices. Plans are
    also required to report quality data to CMS, with some
    exceptions.
        The Medicare Improvements for Patients and Providers Act of
    2008 (P.L. 110-275, MIPPA) required for Medicare Payment
    Advisory Commission (MedPAC) to conduct a study on how
    comparable quality measures of performance and patient
    experience can be collected and reported by 2011 for MA and
    original Medicare. The report is to be submitted to Congress
    not later than March 31, 2010.
        Payments to MA plans are determined by comparing plan bids
    to a benchmark. Each bid represents the plan's estimated
    revenue requirement for providing required Medicare services to
    an average Medicare beneficiary. The benchmark is the maximum
    amount Medicare will pay a plan. If the plan bid is below the
    benchmark, the plan payment is the bid plus 75% of the
    difference between the bid and the benchmark. If the bid is
    above the benchmark, the plan payment is equal to the benchmark
    and each plan enrollee must pay a premium equal to the
    difference between the bid and the benchmark.
                Proposed Law
        This provision creates a pay-for-quality program in
    Medicare Advantage. Today, plans that deliver poor quality care
    are paid as much as plans that provide high quality care. This
    situation provides no incentive for plans to focus on improving
    the quality of care received by their enrollees. By changing
    the payment incentives facing plans this provision will drive
    Medicare Advantage plans to focus on providing services that
    improve the health of their enrollees.
        For plan years starting with 2011, MA plans identified as
    high quality plans or improved quality plans would receive an
    increase in their benchmark amounts. For high quality plans,
    the increase would be 1% in 2011, 2% in 2012 and 3% in
    subsequent years. For improved quality plans, the increase
    would be 0.33% in 2011, 0.66% in 2012, and 1% in subsequent
    years.
        The Secretary would be required to compute a quality
    performance score for each MA plan for each year beginning in
    2010. The calculation of quality scores for MA plans would
    change over time. For years before 2014, the quality score
    would be equal to a blend (as designated by the Secretary) of
    the plan's Healthcare Effectiveness Data and Information Set
    (HEDIS) scores, Consumer Assessment of Health Care Providers
    and Systems (CAHPS) scores, and such other measures of clinical
    quality as the Secretary specifies. The measures would be risk-
    adjusted as deemed appropriate by the Secretary. By 2013, the
    Secretary would be required to implement new reporting
    requirements for quality measures that reflect the outcomes of
    care experienced by MA enrollees. These measures may include
    (a) measures of rates of admission and readmission to a
    hospital, (b) measures of prevention quality, such as those
    established by the Agency for Healthcare Research and Quality,
    (c) measures of patient mortality and morbidity following
    surgery, (d) measures of health functioning such as limitations
    on activities of daily living and survival for patients with
    chronic diseases, (e) measures of patient safety, and (f) other
    measures as determined by the Secretary. The measures would be
    risk-adjusted as the Secretary deemed appropriate. In
    determining the quality measures to be used, the Secretary
    would be required to consider the MedPAC recommendations
    presented in their report to Congress mandated under MIPPA. The
    Secretary would be required to provide preferential
    consideration to measures of quality collected on, or
    comparable to measures of quality under Medicare Parts A and B.
    The Secretary would be required to follow specified rules for
    selection of quality measures. Specifically, the Secretary
    would be required to provide preference to clinical quality
    measures that have been endorsed by a consensus-based entity
    under contract with the Secretary. The Secretary would also be
    required to publish the measures in the Federal Register and
    provide for public comment on those measures prior to their
    selection. For 2014 and 2015, the Secretary would have the
    authority to compute quality performance scores based on a
    blend of the HEDIS/CAHPS scores and the new quality reporting
    measures. For years beginning in 2016, the preponderance of
    measures used to calculate MA plan quality would be required to
    be the new quality reporting measures.
        The provision would specify which year's data would be used
    to calculate quality measures. For payments in 2011, quality
    measure data for 2009 would be used. Starting in 2012, payments
    would be based on quality measures for the second preceding
    year. Each MA organization would be required to report quality
    data to the Secretary for the determination of quality
    performance scores under this part, in a time and manner
    specified by the Secretary.
        Based on the quality performance scores, each plan would be
    ranked to determine which are ``high quality MA plans'' and
    ``improved quality MA plans'' and thus receive the
    corresponding benchmark increases. The Secretary would be
    required to rank plans from highest to lowest based on absolute
    scores and projected enrollment, and from highest to lowest
    based on percentage improvement in score and projected
    enrollment for the plan from the previous year. A plan which
    does not report quality data would be counted as having the
    lowest plan performance and lowest percentage improvement.
    Based on the quality performance scores, and the estimated
    proportion of enrollment, the Secretary would be required to
    identify the MA plans with the highest scores that are
    projected to include 20 percent of the aggregate projected
    enrollment for the year. These plans will be identified as
    ``high quality MA plans.'' The same methodology would be used
    to determine ``improved quality MA plans.'' Starting in 2011,
    the Secretary would be required to notify ``high quality
    plans'' and ``improved quality plans'' of their status and the
    corresponding payment adjustment for the year. The Secretary is
    to notify these plans through the annual announcement of
    benchmark rates and through publication on the website for the
    Medicare program. The Secretary would be given the authority to
    disqualify an MA plan from receiving a quality bonus if the
    Secretary identifies deficiencies in the plan's compliance with
    rules under this part.

    Sec. 1163. Extension of secretarial coding intensity adjustment
            authority

                Current Law
        In general, Medicare payments to MA plans are risk-adjusted
    to account for the variation in the cost of providing care to
    enrollees of varying health status. Risk adjustment is designed
    to compensate plans for the increased cost of treating older
    and sicker beneficiaries, and thus discourage plans from
    preferential enrollment of healthier individuals. The Medicare
    risk adjustment models take into account the variation in
    expected medical expenditures of the Medicare population
    associated with demographic characteristics (age, sex, current
    Medicaid eligibility, original Medicare eligibility due to a
    disability), as well as medical diagnoses. The Deficit
    Reduction Act of 2005 (P.L. 109-171, DRA) required the
    Secretary, when risk adjusting payments to MA plans during
    2008, 2009, and 2010, to adjust for patterns of diagnosis
    coding differences between MA plans and providers under parts A
    and B of Medicare, to the extent that the Secretary identified
    such differences based on an analysis of data submitted for
    2004 and subsequent years.
                Proposed Law
        This provision would allow CMS to continue making
    appropriate adjustments to Medicare Advantage payments to
    account for any ``upcoding'' identified by the agency.

    Sec. 1164. Simplification of annual beneficiary election periods

                Current Law
        Medicare beneficiaries may enroll in or change their
    enrollment in MA from November 15 to December 31 each year (the
    annual, coordinated election period). Changes go into effect on
    January 1 of the next year. During the first three months of
    the year, beneficiaries can enroll in an MA plan, and
    individuals enrolled in an MA plan can either switch to a
    different MA plan or return to original Medicare. This period
    is known as the continuous open enrollment and disenrollment
    period. However, during the three-month period, beneficiaries
    cannot change their drug coverage but can change prescription
    drug plans.
                Proposed Law
        The current annual election period, from November 15
    through December 31, gives MA and Part D plans very little, if
    any, time to process enrollment requests and ensure that on
    January 1, each beneficiary is properly enrolled in the plan.
    Allowing for a two-week processing period between the end of
    the annual election period and the start of the plan year
    better ensures that enrollees do not experience any gaps in
    coverage, and that plans are able to process enrollments in
    time for the start of the plan year.
        The provision would move the annual, coordinated election
    period to 15 days earlier in the year--November 1 to December
    15, rather than from November 15 to December 30. The provision
    would also eliminate the continuous open enrollment and
    disenrollment period (during the first three months of the
    year.) The change would simplify enrollment options so that
    beneficiaries select drug plans and the mode of receiving parts
    A and B benefits at the same time.

    Sec. 1165. Extension of reasonable cost contracts

                Current Law
        Reasonable Cost plans are MA plans that are reimbursed by
    Medicare for the actual cost of providing services to
    enrollees. Cost plans were created in the Tax Equity and Fiscal
    Responsibility Act (P.L. 97-248, TEFRA) of 1982. The Balanced
    Budget Act of 1997 (P.L. 105-33, BBA) included a provision to
    phase-out the reasonable cost contracts, however, the phase-out
    has been delayed over the years by legislation. These plans are
    allowed to operate indefinitely, unless two other plans of the
    same type (i.e., either 2 local or 2 regional plans) offered by
    different organizations operate for the entire year in the cost
    contract's service area. After January 1, 2010, the Secretary
    may not extend or renew a reasonable cost contract for a
    service area if (1) during the entire previous year there were
    either two or more MA regional plans or two or more MA local
    plans in the service area offered by different MA
    organizations; and (2) these regional or local plans meet
    minimum enrollment requirements.
                Proposed Law
        This provision would extend for two years--from January 1,
    2010, to January 1, 2012--the length of time reasonable cost
    plans could continue operating regardless of any other MA plans
    serving the area. The provision would modify the minimum
    enrollment requirement used as one of the criteria the
    Secretary considers when determining whether to renew or extend
    a reasonable cost plan. The enrollment criteria would apply to
    the portion of the MA regional or local plan's service area for
    the year that it was within the service area of the reasonable
    cost contract (and not the total service area of the MA
    regional or local plan).

    Sec. 1166. Limitation of waiver authority for employer group plans

                Current Law
        The Secretary has the authority to waive or modify
    requirements that hinder the design of, the offering of, or the
    enrollment in employer or union sponsored MA plans. Such plans
    can be offered either under contracts between the union or
    employer group and a Medicare Advantage organization, or
    directly by the employer or union group.
                Proposed Law
        The MMA gave broad authority to CMS many requirements in
    order to encourage employers to provide retiree coverage
    through Medicare Advantage. While some requirements of MA plans
    marketing in the individual market may not be applicable to
    employers contracting with or offering an MA plan, and can
    appropriately be waived, it is crucial that retirees enrolling
    in such a MA plan have adequate access to a provider network.
    Requiring that MA plans offer local plans alongside employer
    group plans ensures that they are meeting network adequacy
    requirements and enrollees are protected.
        For employers or unions that sponsor an MA plan directly
    (and not through a contract with a private MA organization),
    the Secretary would only have authority to waive or modify MA
    requirements for the plan if 90% of eligible individuals
    enrolled in the plan live in a county in which the MA
    organization offers an MA local plan. This provision would
    apply to plan years on or after January 1, 2011. The provision
    would not apply to plans in effect as of December 31, 2010.

    Sec. 1167. Improving risk adjustment for payments

                Current Law
        In general, Medicare payments to MA plans are risk-adjusted
    to account for the variation in the cost of providing care to
    enrollees of varying health status. Risk adjustment is designed
    to compensate plans for the increased cost of treating older
    and sicker beneficiaries, and thus discourage plans from
    preferential enrollment of healthier individuals. The Medicare
    risk adjustment models take into account the variation in
    expected medical expenditures of the Medicare population
    associated with demographic characteristics (age, sex, current
    Medicaid eligibility, original Medicare eligibility due to a
    disability), as well as medical diagnoses, and differences in
    coding practices between MA and providers under Medicare Part A
    and B.
                Proposed Law
        The provision would require the Secretary to continue to
    refine the risk adjustment system used for Medicare Advantage
    payments to ensure its accuracy with regard to populations with
    high health needs, particularly beneficiaries with low incomes
    and chronic conditions.
        Not later than 1 year after enactment, the Secretary would
    be required to submit a report to Congress evaluating the
    adequacy of the Medicare Advantage risk adjustment system at
    predicting costs for beneficiaries with chronic or co-morbid
    conditions, beneficiaries dually-eligible for Medicare and
    Medicaid, and non-Medicaid eligible low-income beneficiaries.
    The report would be required to also address the need and
    feasibility of including further gradations of diseases or
    conditions and multiple years of beneficiary data. Taking this
    report into account, not later than January 1, 2012, the
    Secretary would be required to implement necessary improvements
    to the MA risk adjustment system.

    Sec. 1168. Elimination of the MA regional plan stabilization fund

                Current Law
        The MMA created MA regional preferred provider
    organizations and established the MA Regional Plan
    Stabilization Fund to encourage plans to enter into and/or
    remain in the MA Regional Program. The fund was originally set
    at $10 billion with additional money added to the fund from
    savings in the bidding process. Funds were to be available from
    2007 through the end of 2013. Subsequent legislation decreased
    the amount of funds available and delayed their availability.
    Most recently, MIPPA reduced the initial funding of the program
    to one dollar. Money from the regional plan bidding process
    continues to flow into the Fund. Expenditures from the Fund are
    delayed until 2014.
                Proposed Law
        Regional PPOs are no longer new products so this fund is no
    longer necessary.
        The provision would eliminate the MA Regional Plan
    Stabilization Fund. Any amounts contained in the Fund would be
    transferred to the Federal Supplementary Medical Insurance
    Trust Fund.

    Sec. 1169. Study regarding the effects of calculating Medicare
            Advantage payment rates on a regional average of Medicare fee
            for service rates

                Current Law
        No current law.
                Proposed Law
        The provision would require the Administrator of the
    Centers for Medicare and Medicaid Services to conduct a study
    to determine the potential effects of calculating MA rates on a
    more aggregated geographic basis, rather than using county
    boundaries. The Administrator would be required to consider
    whether the alternatives would result in (a) improvements in
    quality of care, (b) greater equity among providers, and (c)
    more predictable benchmark amounts. In conducting the study,
    the Administrator would be required to consult with (a) experts
    in health financing, (b) representatives of foundations and
    other nonprofit entities that have conducted research on
    Medicare financing issues, (c) Medicare Advantage plans, and
    (d) such other entities or people as determined by the
    Secretary. Not later than one year after the date of enactment,
    the Administrator would be required to submit a report to
    Congress with a detailed statement of findings and conclusions
    of the study, together with recommendations for legislation and
    administrative action.

                 Part 2--Beneficiary Protections and Anti-Fraud

    Sec. 1171. Limitation on cost-sharing for individual health services

                Current Law
        Each MA plan must provide all required Part A and B
    Medicare benefits (other than hospice) to individuals entitled
    to Medicare Part A and enrolled in Part B. The aggregate amount
    of cost sharing in a MA plan must be equal to the aggregate
    amount of cost sharing in original Medicare. Cost sharing per
    enrollee (excluding premiums) for covered services cannot be
    more than the actuarial value of the deductibles, coinsurance,
    and co-payments under traditional Medicare.
        Dual eligibles are persons also entitled to the full range
    of benefits under their state's Medicaid program. Qualified
    Medicare beneficiaries (QMBs) are those aged or disabled
    individuals that are entitled to have some of their Medicare
    cost sharing and Part B premiums paid by the federal-state
    Medicaid program, but are not entitled to coverage of Medicaid
    services.
                Proposed Law
        Using a standard of actuarial equivalence across cost
    sharing for all services leaves an opportunity for MA plans to
    increase cost sharing for infrequently-used services that
    enrollees may not scrutinize--like home health or cancer
    drugs--while lowering cost sharing for more commonly used
    services, like physician visits. While this may be attractive
    for enrollees who are relatively healthy, it has potentially
    serious out-of-pocket cost implications for those enrollees who
    fall sick. MA plans that receive a rebate, because their bid is
    below the county benchmark, can use this rebate to lower cost
    sharing for certain services, either to attract enrollment or
    to encourage use of certain services (e.g. visits to a primary
    care physician). Setting a maximum cost sharing that does not
    exceed cost sharing under traditional Medicare ensures that no
    beneficiary will have higher out-of-pocket costs because they
    choose to receive Medicare services through a private plan.
        For plan years beginning on or after January 1, 2011, this
    provision would prohibit MA plans from offering benefits with
    cost sharing requirements that are greater than the cost
    sharing requirements imposed under the traditional Medicare
    program. The ``actuarially equivalent'' standard in the statute
    would be eliminated. Medicare private plans would not be
    prohibited from using flat co-payments or per diem rates in
    lieu of the cost sharing amounts imposed under Part A and B
    Medicare, as long as they did not exceed the level of cost
    sharing under traditional Medicare. This provision would also
    prohibit plans from imposing cost-sharing for dual-eligible
    individuals or qualified Medicare beneficiaries enrolled in a
    Medicare MA plan that exceeds the cost-sharing amounts
    permitted under the Medicare and Medicaid statutes.

    Sec. 1172. Continuous open enrollment for enrollees in plans with
            enrollment suspension

                Current Law
        Special Election Periods (SEPs) allow beneficiaries the
    option to discontinue or change their enrollment in a MA plan
    outside of the annual coordinated election period. The
    circumstances in which an enrollee can exercise this option
    include (1) an MA plan terminates its participation in the MA
    program or in a specific area, (2) an individual's place of
    residence changes, (3) the MA plan violates a provision of its
    contract or misrepresents the plan's provisions in marketing
    the plan, or (4) other exceptional conditions as provided by
    the Secretary.
                Proposed Law
        This provision would expand the categories of beneficiaries
    eligible to participate in a SEP to include beneficiaries
    enrolled in private plans that have been suspended for not
    meeting the terms of their contract. This provision would
    require the Secretary to take into account the health or well-
    being of an individual when determining what constitutes
    eligibility for a SEP.

    Sec. 1173. Information for beneficiaries on MA plan administrative
            costs

                Current Law
        The Secretary must provide for the dissemination of
    information to current and prospective Medicare beneficiaries
    about MA plans, including, but not limited to benefits, cost
    sharing, service areas, access to providers, out-of-area
    coverage, emergency coverage, and supplemental benefits.
        By the first Monday in June, each local MA plan must submit
    to the Secretary an aggregate monthly bid amount (which
    includes separate bids for required services, any offered
    supplemental benefits, and any offered drug benefits) for each
    MA plan it intends to offer in the upcoming calendar year. The
    bid is based on the average revenue requirements in the payment
    area for an enrollee with a national average risk profile. The
    Secretary has the authority to evaluate and negotiate the
    plan's bid amounts and its proposed benefit packages.
                Proposed Law
        This provision would require Medicare Advantage plans to
    meet minimal standards of efficiency, consistent with
    requirements being placed on qualifying health benefits plans
    in the non-Medicare sector under this legislation.
        This provision would require the publication of
    administrative cost information, including the medical loss
    ratio (MLR), for MA plans. Plans that fail to meet a minimum
    MLR would be subject to sanctions, such as enrollment
    suspension and potential termination.
        Beginning in 2011, the Secretary would be required to
    publish the MLR for the previous year by November 1 for each MA
    plan contract. The definition of MLR would be defined by the
    Secretary, taking into account the definition adopted by the
    Health Choices Commissioner under Section116 of this Act. Each
    MA plan would be required to submit to the Secretary, in a
    manner and form specified by the Secretary, the necessary data
    for publishing MLR information on a timely basis. For 2010 and
    2011, the data submitted would be required to be consistent in
    content with the data reported as part of the MA plan bid in
    June 2009 for 2010.
        For contract years beginning in 2010, the Secretary would
    be required to develop and implement standardized elements and
    definitions for reporting the data necessary to calculate a
    MLR. The elements and definitions would be developed in
    consultation with the Health Choices Commissioner,
    representatives of MA organizations, experts on health plan
    accounting systems, and representatives of the National
    Association of Insurance Commissioners. The Secretary would be
    required to publish a report describing the elements and
    definitions no later than December 31, 2010.
        Beginning in 2014, if the Secretary determines that a MA
    plan failed to have a MLR of at least 0.85, the plan would be
    required provide enrollees with a rebate of their Part C
    premiums (or Part B or D, if applicable) by the amount
    necessary to meet a MLR of at least 0.85. The Secretary would
    also be required to restrict enrollment in the MA plan if the
    plan failed to meet the MLR requirement for 3 consecutive years
    and terminate the plan's contract if the plan failed to meet
    the MLR requirements for 5 consecutive years.

    Sec. 1174. Strengthening audit authority

                Current Law
        The Secretary is required to provide for the annual
    auditing of the financial records of at least \1/3\ of MA
    plans. Each contract with a MA plan is required to provide that
    the Secretary has the right to inspect or evaluate the quality,
    appropriateness and timeliness of services performed under the
    contract. Contracts must also provide the Secretary with the
    right to audit any plan's books and records related to the
    plan's ability to bear risk, the services delivered, or any
    amounts payable under the contract.
        By the first Monday in June, each local MA plan must submit
    to the Secretary an aggregate monthly bid amount (which
    includes separate bids for required services, any offered
    supplemental benefits, and any offered drug benefits) for each
    MA plan it intends to offer in the upcoming calendar year. The
    bid is based on the average revenue requirements in the payment
    area for an enrollee with a national average risk profile. The
    Secretary has the authority to evaluate and negotiate the
    plan's bid amounts and its proposed benefit packages.
                Proposed Law
        This provision strengthens the ability of the Secretary to
    act on findings from audits of MA plans and Prescription Drug
    Plans (PDPs).
        Each contract with a MA plan would be required to include a
    provision that the Secretary have the authority to take
    necessary action, including the pursuit of financial
    recoveries, to address deficiencies identified during an annual
    audit. The provision would apply to Part D PDPs in the same
    manner as certain other MA contract provisions apply to PDP
    plans. The provision would apply to audits conducted for
    contract years beginning on or after January 1, 2011.

    Sec. 1175. Authority to deny plan bids

                Current Law
        By the first Monday in June, each local MA plan must submit
    to the Secretary an aggregate monthly bid amount (which
    includes separate bids for required services, any offered
    supplemental benefits, and any offered drug benefits) for each
    MA plan it intends to offer in the upcoming calendar year. The
    bid is based on the average revenue requirements in the payment
    area for an enrollee with a national average risk profile. The
    Secretary has the authority to evaluate and negotiate the
    plan's bid amounts and its proposed benefit packages.
        Potential PDP sponsors are also required to submit bids by
    the first Monday in June of the year prior to the plan benefit
    year. The following information must be included with the bid:
    (1) coverage to be provided; (2) actuarial value of qualified
    prescription drug coverage in the region for a beneficiary with
    a national average risk profile; (3) information on the bid,
    including the basis for the actuarial value, the portion of the
    bid attributable to basic coverage and, if applicable, the
    portion attributable to enhanced coverage, and assumptions
    regarding the reinsurance subsidy; and (4) service area. The
    bid also includes costs (including administrative costs and
    return on investment/profit) for which the plan is responsible.
    The bid must exclude costs paid by enrollees, payments expected
    to be made by CMS for reinsurance, and any other costs for
    which the sponsor is not responsible.
                Proposed Law
        Under current law, the Secretary has the authority to
    negotiate bids with most MA plans and PDPs. So that the
    Secretary can hold plans wishing to participate in Part C to a
    high standard, this provision clarifies that the Secretary may
    reject plan bids.

    Sec. 1176. Limitation on enrollment outside open enrollment period of
            individuals into chronic care specialized MA plans for special
            needs individuals

                Current Law
        Under the Medicare Prescription Drug, Improvement, and
    Modernization Act of 2003 (MMA, P.L. 108-173), Congress created
    a new type of Medicare Advantage (MA) coordinated care plan
    focused on individuals with special needs. Special needs plans
    (SNPs) are allowed to target enrollment to one or more types of
    special needs individuals identified by Congress as (1)
    institutionalized; (2) dually eligible; and/or (3) individuals
    with severe or disabling chronic conditions.
        Congress has since passed additional legislation affecting
    SNPs. The original SNP authority established by MMA was to
    expire on December 31, 2008. Passage of the Medicare, Medicaid,
    and SCHIP Extension Act of 2007 (MMSEA, P.L. 110-173)
    authorized the SNP program through December 31, 2009, but also
    established a moratorium on the creation of SNPs after January
    1, 2008, although existing plans could continue to enroll
    qualified individuals. More recently, the Medicare Improvements
    for Patients and Providers Act of 2008 (MIPPA, P.L. 110-275),
    extended the moratorium on designation of new SNPs until
    January 1, 2011, and authorized the SNP program through the
    same date. MIPPA also required SNPs to collect, analyze, and
    report data on their models of care before January 1, 2010.
        In addition to legislative changes affecting SNPs, the CMS
    has issued regulatory guidance on recent legislative changes.
    CMS' guidance included an interim final rule that, among other
    issues, required data to be reported that demonstrates
    compliance with 10 quality indicators. Most recently, CMS
    issued a Final Rule in the January 12, 2009, Federal Register.
        The number of SNPs has increased dramatically since 2004,
    the first year of operation. In 2004, CMS approved 11 SNPs, but
    by January 2008, CMS had approved 787 SNPs, including 442 dual-
    eligible SNPs, 256 chronic care SNPs, and 89 institutional
    SNPs. In September 2008, there were 1.2 million beneficiaries
    in SNPs.
        Medicare beneficiaries may enroll in or change their
    enrollment in Medicare Advantage from November 15 to December
    31 each year. Changes go into effect January 1 of the next
    year. During the first three months of the year, beneficiaries
    can enroll in an MA plan, and individuals enrolled in an MA
    plan can either switch to a different MA plan or return to
    original Medicare. Beneficiaries may also enroll in MA or
    switch their enrollment if they qualify for a Special Election
    Period (SEP) as defined in statutes or by the Secretary. One
    SEP specified by the Secretary in the Medicare Managed Care
    Manual allows individuals with severe or disabling chronic
    conditions to enroll in a SNP designed for individuals with
    those conditions. This SEP only applies as long as the
    individual has the qualifying condition and ends once the
    beneficiary enrolls in a SNP. Once the SEP ends, that
    individual may make enrollment changes only during applicable
    MA election periods.
                Proposed Law
        The current SEP for beneficiaries eligible for a chronic
    condition SNP encourages aggressive marketing by plans and is
    confusing for beneficiaries accustomed to annual enrollment
    periods. The new SEP will be more narrowly targeted to the time
    around a beneficiary's diagnosis, but the provision gives
    authority to the Secretary to determine how long after a
    diagnosis the beneficiary is permitted to elect a SNP. This
    should be a length of time sufficient for the beneficiary to
    understand the consequences of a diagnosis and learn about
    options for specialized plans.
        This provision would require that beginning on January 1,
    2011, SNPs serving beneficiaries with severe or disabling
    conditions could only enroll eligible individuals during an
    annual, coordinated open enrollment period or at the time of
    diagnosis of the disease or condition that would qualify an
    individual for a chronic care SNP.

    Sec. 1177. Extension of authority of special needs plans to restrict
            enrollment

                Current Law
        Prior to January 1, 2011, SNPs may restrict enrollment to
    those who are in one or more classes of special needs
    individuals. Starting January 1, 2010, new SNP enrollment must
    be limited exclusively to individuals that meet the criteria
    for which the SNP is designated: those dually eligible for
    Medicare and Medicaid, chronic care, or institutional care.
    Further, MIPPA required that dual eligible SNPs contract with
    state Medicaid agencies to provide medical assistance services
    (Medicaid), which may include long-term care services. If SNPs
    do not have contracts with Medicaid agencies by January 1,
    2010, then they can continue to operate, but are prohibited
    from expanding their service areas. However, state Medicaid
    agencies are not required to enter into contracts with SNPs.
                Proposed Law
        Congress and the Secretary have taken legislative and
    regulatory steps to ensure that SNPs offer specialized services
    for the populations enrolled. The provision extends SNP
    authority for a limited number of years in order to allow plans
    to meet these requirements.
        A small subset of SNPs that have fully integrated Medicare
    and Medicaid services for dually eligible beneficiaries would
    receive a longer extension.
        This Section would extend the time period, from January 1,
    2011, to January 1, 2013, during which SNPs may restrict
    enrollment to individuals who meet the definition of the
    respective SNP. In addition, certain SNPs that had contracts
    with states would be grandfathered so that they would be
    permitted to restrict enrollment to beneficiaries who meet the
    definition of special needs individuals through January 1,
    2016. To be grandfathered SNPs would be required to have had
    contracts with states where the state had a CMS-approved
    integrated Medicare-Medicaid program as of January 1, 2004.
        The Secretary would be required to contract with an
    independent health services evaluation organization to evaluate
    the grandfathered SNPs in terms of their impact on cost,
    quality of care, patient satisfaction, and other subjects as
    specified by the Secretary. The Secretary would be required to
    submit to Congress by December 31, 2011, a report on the
    analysis of the grandfathered SNPs. The report would include
    recommendations on the treatment of the grandfathered SNPs as
    deemed appropriate by the Secretary.

                  Subtitle E--Improvements to Medicare Part D

    Sec. 1181. Elimination of coverage gap

                Current Law
        Medicare law sets out a defined standard benefit structure
    under the Part D prescription drug benefit. In 2009, the
    standard benefit includes a $295 deductible and a 25%
    coinsurance until the enrollee reaches $2,700 in total covered
    drug spending. After this initial coverage limit is reached,
    there is a gap in coverage in which the enrollee is responsible
    for the full cost of the drugs until total costs hit the
    catastrophic threshold, $6,153.75 in 2009. Each year, the
    deductible, co-payments, and coverage thresholds are increased
    by the annual percentage increase in average per-capita
    aggregate expenditures for covered outpatient drugs for
    Medicare beneficiaries for the 12-month period ending in July
    of the previous year.
        Part D plan sponsors are allowed to offer plans that differ
    in benefit design, but are actuarially equivalent, or they may
    offer ``enhanced'' plans that offer more generous coverage.
    Currently, almost all plans include a coverage gap in their
    benefit designs. CMS estimates that 31.7% (8.3 million) of Part
    D enrollees reached the initial coverage limit of their drug
    plans in 2007.
        Some beneficiaries with limited income and resources may
    qualify for assistance with a portion of their Part D premiums,
    cost-sharing, and other out-of-pocket expenses. Medicare
    beneficiaries who qualify for Medicaid based on their income
    and assets (dual eligibles) are automatically deemed eligible
    for the full low-income subsidy. Prior to the implementation of
    the Medicare Part D outpatient prescription drug benefit,
    established by the Medicare Prescription Drug Improvement and
    Modernization Act of 2003 (MMA, P.L. 108-173), Medicaid was the
    primary payer for drugs for full-benefit dual-eligible
    beneficiaries.
        The Omnibus Budget Reconciliation Act of 1990 (P.L. 101-
    508) requires drug manufacturers who wish to have their drugs
    available for Medicaid enrollees to enter into rebate
    agreements with the Secretary of HHS, on behalf of the states.
    Under the agreements, pharmaceutical manufacturers must provide
    state Medicaid programs with rebates on drugs paid for Medicaid
    beneficiaries. The formulas used to compute the rebates are
    intended to ensure that Medicaid pays the lowest price that the
    manufacturers offer for the drugs. In return for entering into
    agreements with the Secretary, state Medicaid programs are
    required to cover all of the drugs marketed by those
    manufacturers (with possible exceptions for the 11 categories
    of drugs that states are allowed to exclude from coverage).
        The rebates are computed and remitted by pharmaceutical
    manufacturers each quarter based on utilization information
    supplied by the state programs. States collect the rebates from
    the manufacturers. The federal share of the rebates are
    subtracted from states' claims for their federal share of
    program costs. In setting the amount of required rebates, the
    law distinguishes between two classes of drugs. The first
    includes single source drugs (generally, those still under
    patent) and ``innovator'' multiple source drugs (drugs
    originally marketed under a patent or original new drug
    application (NDA) but for which generic competition now
    exists). The second class includes all other, ``non-innovator''
    multiple source drugs (generics).
        Manufacturers are required to pay state Medicaid programs a
    basic rebate for single source and innovator multiple source
    drugs. Basic rebate amounts are determined by comparing the
    Average Manufacturer Price (AMP) for a drug to the ``best
    price,'' which is the lowest price that is offered by the
    manufacturer in the same period to any wholesaler, retailer,
    nonprofit, or public entity. The basic rebate is the greater of
    15.1% of the AMP or the difference between the AMP and the best
    price. For non-innovator multiple source drugs, basic rebates
    are equal to 11% of the AMP. Manufacturers are also required to
    pay an additional Medicaid inflation rebate for single source
    drugs. This rebate is equal to the amount by which the increase
    in the AMP of the single source drug exceeds the increase in
    the consumer price index.
                Proposed Law
        This provision closes the coverage gap (commonly called the
    ``doughnut hole'' in Part D prescription drug benefits and
    institutes a rebate in Medicare for prescription drugs covered
    under Part D.
        Funds received from the new rebate requirement will be used
    to pay for the elimination of the Part D coverage gap. Since
    the program's inception, this mid-year gap in benefits has
    plagued millions of beneficiaries who continue to pay their
    monthly premium, yet also have to pay 100 percent of the cost
    of their drugs out-of-pocket. This section would eliminate the
    gap over time, ensuring that beneficiaries are insured against
    the full cost of drugs throughout the entire benefit year.
        Coverage Gap. This provision would phase in an elimination
    of the coverage gap. For each year beginning with 2011, the
    Secretary would progressively increase the initial coverage
    limit and decrease the annual out-of-pocket threshold until
    there is a continuation of coverage from the initial coverage
    limit up to the expenditure threshold at which catastrophic
    coverage begins. Starting in 2011, the initial coverage limit
    for each year, as determined using current annual percentage
    increase methodology, would be increased by one-half of the
    cumulative phase-in percentage (the sum of the annual phase-in
    percentage for the year and the annual phase-in percentages for
    each previous year) times the out-of-pocket gap amount (the
    amount by which the annual out-of-pocket threshold for the year
    exceeds the sum of the annual deductible for the year and one-
    fourth the amount by which the initial coverage limit for the
    year exceeds the annual deductible). Also beginning in 2011,
    the annual out-of-pocket threshold would be decreased by one-
    half of the cumulative phase-in percentage of the out-of pocket
    gap amount for the year multiplied by 1.75.
        The annual phase in percentage would be 13% for 2011; 5%
    for years 2012 through 2015; 7.5% for years 2016 through 2018,
    and 10% for 2019 and each subsequent year.
        The combined effect of those changes would be to eliminate
    about $500 of the coverage gap in 2011 and additional amounts
    thereafter until it is closed in 2023. The closure of the
    coverage gap is split even between increases in the initial
    coverage limit and decreases in the catastrophic threshold.
        Requiring Drug Manufacturers to Provide Rebates for Full-
    Benefit Dual Eligibles. When prescription drug coverage for six
    million dually eligible beneficiaries was switched from
    Medicaid to Medicare Part D in 2006, drug manufacturers
    received a windfall amounting to almost $4 billion in just the
    first two years of the program. While Medicaid rebates are
    statutorily required at a certain level, rebates in the Part D
    program are entirely negotiated between plans and
    manufacturers, giving the federal government and taxpayers--who
    pay for the Part D program--no control over the level of rebate
    provided. Requiring that rebates from drug manufacturers in the
    Part D program match the rebates required under Medicaid
    ensures that for the same beneficiary, manufacturers are not
    permitted to charge higher prices to the government under Part
    D than under Medicaid. Manufacturers will continue to enter
    into rebate agreements with the Part D plans. However, if that
    rebate amount does not equal the Medicaid rebate amount for a
    particular drug, the manufacturer would be required to make up
    the difference in rebate payments directly to the federal
    government.
        Under this provision, drug manufacturers would be required
    to provide the Secretary a rebate for any covered Part D drug
    of the manufacturer dispensed after December 31, 2010, to any
    full-benefit dual eligible individual for which payment was
    made by a prescription drug plan (PDP) sponsor or a Medicare
    Advantage (MA) organization.
        The amount of the rebate for a rebate period would be equal
    to the product of the total number of units of such dosage form
    and strength of the drug dispensed and the amount, if any, by
    which the Medicaid rebate, as modified by this statute, and
    including both the basic and inflation rebate, for such form,
    strength, and period, exceeds the average Medicare drug program
    full-benefit dual eligible rebate amount for such form,
    strength, and period.
        The average Medicare drug program full-benefit dual
    eligible rebate amount means with respect to each dosage form
    and strength of a covered outpatient drug provided by a
    manufacturer for a rebate period, the sum for all PDP sponsors
    and MA organizations administering a Medicare Advantage drug
    plan (MA-PD), of the product for each such sponsor or
    organization of: the sum of all rebates, discounts, or other
    price concessions, calculated on a per unit basis (but only to
    the extent that any such rebate, discount, or other price
    concession applies equally to drugs dispensed to full-benefit
    dual eligible Medicare drug plan enrollees and drugs dispensed
    to PDP and MA-PD enrollees who are not full-benefit dual
    eligible enrollees) and the number of units of such dosage and
    strength of the drug dispensed during the rebate period to
    full-benefit dual eligible enrollees, divided by the total
    number of units of the drug dispensed during the rebate period
    to all full-benefit dual eligible PDP and MA-PD enrollees.
        In general, a rebate agreement would be effective for an
    initial period of not less than 1 year and would be
    automatically renewed for a period of not less than 1 year. The
    Secretary would be required to establish other terms and
    conditions of the rebate agreement including terms and
    conditions related to compliance.
        For contract years beginning on or after January 1, 2011,
    each drug plan contract entered into with a PDP sponsor or a MA
    organization would require that the sponsor or organization
    report to each manufacturer not later than 60 days after the
    end of each rebate period, information on the total number of
    units of each dosage, form, and strength of each drug the
    manufacturer dispensed to full-benefit dual eligible Medicare
    drug plan enrollees under any PDPs or MA-PDs operated by the
    sponsor during the rebate period; information on the price
    discounts, price concessions, and rebates for such drugs for
    such form, strength, and period; information on the extent to
    which such price discounts, price concessions, and rebates
    apply equally to full-benefit dual eligible Medicare drug plan
    enrollees and enrollees who are not full-benefit dual eligible
    plan enrollees; and any additional information that the
    Secretary determines is necessary to enable the Secretary to
    calculate the average Medicare drug program full-benefit dual
    eligible rebate amount. The report would be in a form
    consistent with a standard reporting format established by the
    Secretary, and a copy of the information would be reported to
    the Secretary for the purpose of oversight and evaluation. The
    information submitted would be treated as confidential. The
    rebate would be paid by the manufacturer to the Secretary not
    later than 30 days after the date of receipt of this
    information.
        The provision would allow the Medicare Payment Advisory
    Commission, the Congressional Budget Office, and the GAO,
    access to the information, and the information reported may be
    used by the HHS Office of Inspector General for audits,
    investigations, and evaluations. Additional confidentiality
    provisions (with the exception of clause iv) from the Medicaid
    rebate section (1927(b)(3)) of the Social Security Act also
    apply to the Medicare Part D rebate data reported under this
    section.
        With respect to GAO, the confidentiality provision that
    incorporates section 1927(b)(3) of the Social Security Act is
    intended to reflect and confirm GAO's existing right to access
    Part D information in light of its broad authority at 31 U.S.C.
    716.
        In cases where information was not submitted timely or if
    false information is submitted, penalties would be imposed. PDP
    sponsors and MA organizations would be subject to a civil money
    penalty in the amount of $10,000 for each day in which such
    information has not been provided. If the sponsor or
    organization knowingly provides false information, the sponsor
    or organization would be subject to a civil money penalty in an
    amount not to exceed $100,000 for each item of false
    information. Such penalties would be in addition to any other
    civil money penalties as may be prescribed by law.
        The rebates for full-benefit dual eligible Medicare drug
    plan enrollees would be paid into the Medicare Prescription
    Drug Account in the Supplementary Medical Insurance Trust Fund
    and used to pay for all or part of the gradual elimination of
    the coverage gap.

    Sec. 1182. Discounts for certain Part D drugs in original coverage gap

                Current Law
        None.
                Proposed Law
        In June 2009, the trade association representing brand-name
    pharmaceutical manufacturers--PhRMA--pledged to provide a 50%
    discount to seniors in the Part D coverage gap to alleviate the
    high costs that seniors currently faced. This section would
    enact that promise into law.
        Manufacturers of prescription drugs would, as a condition
    of allowing any of the drugs they manufacture to be treated as
    covered drugs under Medicare Part D, be required to enter into
    agreements with Medicare Part D drug plan sponsors to provide
    discounts on drugs provided to plan enrollees in the coverage
    gap period. This provision would be applicable to drugs
    dispensed after December 31, 2010.
        Under a discount agreement, a drug manufacturer would be
    required to provide to each PDP or MA-PD a discount for
    qualifying drugs of the manufacturer dispensed to a qualifying
    enrollee when in the original Part D coverage gap. A qualifying
    drug would be defined as a drug that is produced under an
    original new drug application approved by the FDA, or a drug
    that was initially marketed under such an application, or a
    biological product approved under Section 351(a) of the Public
    Health Service Act, and that is covered under the plan's
    formulary and is dispensed to an individual who is in the
    original gap in coverage.
        The Secretary would establish the terms and conditions of
    the discount agreement, including those relating to compliance,
    similar to the terms and conditions for rebate agreements
    between states and drug manufacturers for drugs provided to
    Medicaid recipients. However, the discounts would be applied to
    PDP and MA-PDs rather than to state plans, PDP sponsors and MA
    organizations, instead of states, would be required to provide
    the necessary utilization information to drug manufacturers;
    and PDP sponsors and MA organizations would be responsible for
    reporting information on drug-component negotiated prices
    instead of other manufacturer prices used in calculating
    Medicaid rebates.
        The amount of the discount for a discount period for a plan
    would be equal to 50% of the amount of the negotiated price for
    qualifying drugs, excluding any dispensing fee for the period
    involved. The sponsor or plan would provide the discount to the
    enrollee at the time the enrollee pays for the drug if the
    enrollee is in the actual gap in coverage, and in such cases
    the amount of the discount, in addition to the amount actually
    paid by the enrollee, would count toward costs incurred by the
    plan enrollee. If the enrollee is in the portion of the
    original gap in coverage that is not in the actual gap in
    coverage, the discount shall not be applied against the
    negotiated price for the purpose of calculating the beneficiary
    payment.
        A qualifying enrollee is defined as an individual who is
    enrolled in a PDP or an MA-PD plan who is not a subsidy-
    eligible individual as defined in section 1860D-14(a)(3). The
    original gap in coverage is defined as the gap that would occur
    between the initial coverage limit and the out-of-pocket
    threshold if the phase-out of the coverage gap described in
    Section 1181 did not apply. The actual gap in coverage refers
    to the gap between the initial coverage limit and the out-of-
    pocket threshold as modified by Section 1181.
        With regard to payments to pharmacists, discounts under
    this section are to be treated in a similar fashion to any
    other discounts, rebates, or price concessions provided to PDP
    sponsors, and payments to pharmacists in conjunction with these
    discounts are to be made consistent with prompt payment
    requirements under Section 1860D-12(b)(4), with the pharmacist
    to be fully reimbursed for clean claims within 14 days.

    Sec. 1183. Repeal of provision relating to submission of claims by
            pharmacies located in or contracting with long-term care
            facilities

                Current Law
        Section 172 of the Medicare Improvements for Patients and
    Providers Act of 2008 (MIPPA; P.L. 110-275) provided for a new
    set of requirements for contracts between Part D drug plan
    sponsors and pharmacies located in or contracting with long-
    term care facilities for plan years beginning on or after
    January 1, 2010. Under that section, each contract entered into
    with a PDP sponsor or MA-PD plan is required to provide that a
    pharmacy located in or having a contract with a long-term care
    facility would have between 30 and 90 days to submit claims for
    reimbursement.
                Proposed Law
        This provision repeals Section 172 of the MIPPA to allow
    long-term pharmacies and nursing homes more time to coordinate
    with state Medicaid programs.
        This provision would be applicable for contract years
    beginning with 2010.

    Sec. 1184. Including costs incurred by AIDS drug assistance programs
            and Indian Health Service in providing prescription drugs
            toward the annual out-of-pocket threshold under part D

                Current Law
        Under a standard Medicare part D plan design, beneficiaries
    must incur a certain level of out-of-pocket costs ($4,350 in
    2009) before catastrophic protection begins. These include
    costs that are incurred for the deductible, cost-sharing, or
    benefits not paid because they fall in the coverage gap. Costs
    are counted as incurred, and thus treated as true out-of-pocket
    (TrOOP) costs only if they are paid by the individual (or by
    another family member on behalf of the individual), paid on
    behalf of a low-income individual under the subsidy provisions,
    or paid under a State Pharmaceutical Assistance Program.
    Incurred costs do not include amounts for which no benefits are
    provided--for example, because a drug is excluded under a
    particular plan's formulary. Additional payments that do not
    count toward TrOOP include part D premiums and coverage by
    other insurance, including group health plans, workers'
    compensation, Part D plans' supplemental or enhanced benefits,
    or other third parties.
                Proposed Law
        This requires the Secretary to count contributions from
    other programs designed to help beneficiaries with their drug
    costs for the purpose of assessing when a beneficiary reaches
    the catastrophic cap. This change will lower prescription drug
    costs for beneficiaries who receive assistance from other
    sources.
        The provision would treat as incurred those costs that are
    borne or paid by the Indian Health Service, Indian tribe or
    tribal organization or an urban Indian organization (as defined
    in Section 4 of the Indian Health Care Improvement Act) to
    count toward the out-of-pocket threshold. Costs paid under an
    AIDS Drug Assistance Program under part B of title XXVI of the
    Public Health Service Act would also count toward the out-of-
    pocket threshold. The provision would apply to costs incurred
    on or after January 1, 2011.

    Sec. 1185. Permitting mid-year changes in enrollment for formulary
            changes that adversely impact an enrollee

                Current Law
        Part D plans are permitted to operate formularies--lists of
    drugs that a plan chooses to cover and the terms under which
    they are covered. By law part D plans may not change the
    therapeutic categories and classes in a formulary other than at
    the beginning of each plan year except as the Secretary may
    permit to take into account new therapeutic uses and newly
    approved covered part D drugs. The law further stipulates that
    any removal of a covered part D drug from a formulary and any
    change in the preferred or tiered cost-sharing status of such a
    drug shall take effect only after appropriate notice is made
    available to the Secretary, affected enrollees, physicians,
    pharmacies, and pharmacists.
        Under current regulations, a part D sponsor may not remove
    a covered part D drug from its part D plan's formulary or make
    any change in the preferred or tiered cost-sharing status of a
    covered part D drug on its plan's formulary between the
    beginning of the open enrollment period and 60 days after the
    beginning of the contract year associated with that open
    enrollment period except under certain circumstances, for
    example, when a covered drug has been deemed unsafe by the FDA
    or removed from the market by its manufacturer. After March 1
    of a given plan year, part D sponsors may make maintenance
    changes to their formularies, such as replacing brand name
    drugs with new generic drugs or modifying formularies as a
    result of new information on drug safety or effectiveness.
    According to CMS policy, if part D sponsors remove part D drugs
    from their formularies, move covered part D drugs to a less
    preferred tier status, or add utilization management
    requirements, these changes must be approved by CMS and
    sponsors may make such changes only if enrollees currently
    taking the affected drug are exempt from the formulary change
    for the remainder of the contract year. Part D sponsors may
    expand formularies by adding drugs to their formularies,
    reducing copayments or coinsurance by placing a drug on a lower
    cost-sharing tier, or deleting utilization management
    requirements at any time during the year.
                Proposed Law
        Beneficiaries choose prescription drug plans based on a
    number of factors, including whether a plan covers the drugs
    they are currently taking. Though CMS has imposed certain
    restrictions on plan formulary changes, there is no protection
    for beneficiaries who are nonetheless harmed by a mid-year
    formulary change. This provision will allow adversely affected
    beneficiaries to choose a new plan, and will discourage plans
    from making mid-year formulary changes for highly prescribed
    drugs.
        The provision would establish a special open enrollment
    period for an individual to change plans during a period other
    than during the annual open enrollment period. The provision
    would apply to an individual enrolled in a prescription drug
    plan (or an MA-PD plan) who has been prescribed a drug and is
    using the drug while enrolled in the plan in the case where the
    formulary of the plan materially changed (other than at the end
    of the contract year) such as to reduce coverage or increase
    the cost-sharing of the drug. The provision would not apply in
    cases where the drug was removed from the formulary because of
    a recall or withdrawal issued by the Food and Drug
    Administration (FDA) or because the drug was replaced with a
    therapeutically equivalent generic drug. The provision would
    also not apply in instances where utilization management was
    applied for drugs for which FDA required a boxed warning or
    drugs subject to a Risk Evaluation and Management Strategy
    under subsection (f) of section 505-1 of the Federal Food,
    Drug, and Cosmetic Act. The provision would apply to contract
    years beginning on or after January 1, 2011.

    Sec. 1186. Negotiation of lower covered part D drug prices on behalf of
            Medicare beneficiaries

                Current Law
        Part D plan sponsors (or the pharmaceutical benefit
    managers (PBMs) they have contracted with) negotiate prices
    with drug manufacturers, wholesalers, and pharmacies and are
    required to provide beneficiaries with access to these
    negotiated prices for covered part D drugs. The law
    specifically states that the Secretary may not interfere with
    the negotiations between drug manufacturers and pharmacies and
    PDP sponsors. Further, the Secretary may not require a
    particular formulary or institute a price structure for the
    reimbursement of covered part D drugs. This is known as the
    non-interference provision (SSA 1860D-11(i)).
                Proposed Law
        The 2003 Medicare Modernization Act specifically banned the
    HHS Secretary from negotiating with drug manufacturers for
    lower drug prices on behalf of Part D enrollees. A series of
    investigations in 2006, 2007, and 2008 by the House Oversight
    Committee has found that the private plans that run the part D
    program are unable to effectively negotiate with drug
    manufacturers, resulting in higher drug prices for part D
    enrollees and higher taxpayer costs for the part D program.
    This provision overturns the negotiating ban, and requires that
    the Secretary negotiate with drug manufacturers for lower part
    D prices.
        This provision would strike section 1860D-11(i), and in its
    place, add language that would require the Secretary to
    negotiate with pharmaceutical manufacturers' prescription drug
    prices (including discounts, rebates and other price
    concessions) that may be charged to PDP sponsors and MA
    organizations. The provision allows prescription drug plans to
    obtain discounts or price reductions below those negotiated by
    the Secretary. The provision would also maintain the
    prohibition against the establishment of a formulary by the
    Secretary; however, there would no longer be an explicit
    prohibition of the institution of a price structure. Not later
    than June 1, 2011, and every six months thereafter, the
    Secretary would be required to submit to the House Committees
    on Ways and Means, Energy and Commerce, and Oversight and
    Government Reform and to the Senate Finance Committee a report
    on the prices and discounts achieved as a result of the
    negotiations. The provision would take effect on the date of
    enactment and would first apply to negotiations and prices for
    plan years beginning on January 1, 2011.
        PDP sponsors and MA organizations serve as third-party
    payers for drugs, reimbursing pharmacies for drugs that the
    pharmacies purchase from drug wholesalers or directly from drug
    manufacturers. The intent of this section is to reduce the
    prices charged by drug manufacturers via the ability of the
    Secretary to negotiate with these manufacturers for discounts,
    rebates, and price concessions. This section shall not be
    construed to require negotiation between the Secretary and
    retail or mail-order pharmacies.

    Sec. 1187. State certification prior to waiver of licensure
            requirements under Medicare prescription drug program

                Current Law
        Medicare part D participants must obtain coverage through a
    part D sponsor--a private insurer or other entity that has
    contracted with Medicare to provide prescription drug benefits.
    According to section 1860D-12 of the Social Security Act, a
    sponsor of a prescription drug plan is required to be organized
    and licensed under state law as a risk-bearing entity eligible
    to offer health insurance or health benefits coverage in each
    state it offers a prescription drug plan. Under certain
    circumstances, a sponsor may apply to the Centers for Medicare
    and Medicaid Services (CMS) for a waiver of this requirement.
    For example, if CMS determines, based on the application and
    other evidence presented, that a state did not process a
    sponsor's substantially complete application for licensure
    within 90 days of receipt, did not approve the licensing
    application based on grounds other than those required under
    federal law, or does not have a PDP sponsor licensing process
    in place, the licensure requirement may be waived. In such
    instances, the sponsor must obtain certification from the state
    that the organization meets a level of financial solvency or
    other standards required by the state.
        The National Association of Insurance Commissioners (NAIC)
    has noted instances in which PDP sponsors have been granted
    waivers from state licensure requirements but did not have
    fully completed applications for licensure pending at the time
    the waiver had been granted.
                Proposed Law
        This provision would ensure that prescription drug plans
    are in compliance with applicable state laws relating to
    insurance licensure.
        The provision would amend section 1860D-12 of the Social
    Security Act to require that CMS may only grant a waiver of
    licensure for a particular state if it has received a
    certification from the state insurance commissioner that the
    prescription drug plan has a substantially complete application
    pending in that state. Additionally, the waiver could be
    revoked if the state insurance commissioner submits a
    certification to CMS that the sponsor committed fraud with
    respect to the waiver, did not made a good faith effort to
    satisfy state licensing requirements, or was determined by the
    state to be ineligible for licensure. The requirements would be
    effective for plan years beginning January 1, 2010.

                 Subtitle F--Medicare Rural Access Protections

    Sec. 1191. Telehealth expansion and enhancements

                Current Law
        Medicare covers certain services including professional
    consultations, office and other outpatient visits, individual
    psychotherapy, pharmacological management, psychiatric
    diagnostic interview examinations, neurobehavioral status
    exams, and end stage renal disease related services delivered
    via an eligible telecommunications system. An interactive
    telecommunications system is required as a condition of
    payment. The originating site (the location of the beneficiary
    receiving the telehealth service) can be a physician or
    practitioner's office, a critical access hospital, a rural
    health clinic, a federally qualified health center, a hospital-
    based renal dialysis center, a skilled nursing facility, a
    community mental health center or a hospital. The originating
    site must be in a rural health professional shortage area or in
    a county that is not in a metropolitan statistical area or at
    an entity that participates in a specified federal telemedicine
    demonstration project.
                Proposed Law
        This provision expands Medicare's telehealth benefit and
    ensures that CMS benefits from valuable outside expertise in
    the administration of the benefit.
        The provision specifies that a renal dialysis facility
    would be included as a covered originating site for telehealth
    services effective for services starting January 1, 2011.
        The Secretary would appoint a Telehealth Advisory Committee
    to make policy recommendations regarding telehealth services
    including the appropriate addition or deletion of covered
    services and procedure codes for authorized payments.
        The Advisory Committee would be composed of 9 members: 5
    would be practicing physicians; 2 would be practicing non-
    physician healthcare practitioners, and 2 shall be
    administrators of telehealth programs. In appointing the
    committee members, the Secretary would be required to ensure
    that each member has prior experience with the practice of
    telemedicine or telehealth; would give preference to
    individuals who are currently providing telemedicine or
    telehealth services or who are involved in telemedicine or
    telehealth programs; would ensure that committee membership
    represents a balance of specialties and geographic regions; and
    would take into account the recommendations of stakeholders.
        The Telehealth Advisory Committee would meet at least twice
    each calendar year and at other times provided by the
    Secretary. The committee members would serve for the term
    specified by the Secretary. An advisory committee member would
    not be able to participate in a particular matter considered in
    meeting if such a member (or an immediate family member) had a
    financial interest that could be affected by the advice given
    to the Secretary. Section 14 of the Federal Advisory Committee
    Act governing termination, renewal and continuation of
    committees would not apply. The Secretary would establish this
    committee regardless of any limitation that would apply to the
    number of advisory committees that may be established with the
    Department of Health and Human Services or otherwise.
        In making determinations with respect to covered services,
    the Secretary would be required to take into account the
    recommendations of the Telehealth Advisory Committee. If the
    Secretary does not implement a recommendation, the Secretary
    would publish a statement providing the reason for such
    decision in the Federal Register.

    Sec. 1192. Extension of outpatient hold harmless provision

                Current Law
        Small rural hospitals (with no more than 100 beds) that are
    not sole community hospitals (SCHs) can receive additional
    Medicare payments if their outpatient payments under the
    prospective payment system are less than under the prior
    reimbursement system. For calendar year CY2006, these hospitals
    received 95% of the difference between payments under the
    prospective payment system and those that would have been made
    under the prior reimbursement system. The hospitals receive 90%
    of the difference in CY2007 and 85% of the difference in CY2008
    and CY2009. Sole community hospitals with not more than 100
    beds receive 85% of the payment difference for covered Hospital
    Outpatient Department (HOPD) services furnished on or after
    January 1, 2009, and before January 1, 2010.
                Proposed Law
        This provision protects small rural hospitals from the
    financial losses they would face under the outpatient
    prospective payment system. Eligible hospitals will receive a
    partial hold harmless payment until the end of CY2011.
        Small rural hospitals and sole community hospitals with not
    more than 100 beds would receive 85% of the payment difference
    for covered HOPD services furnished until January 1, 2012.

    Sec. 1193. Extension of section 508 hospital reclassifications

                Current Law
        Section 508 of the Medicare Prescription Drug, Improvement
    and Modernization Act of 2003 (MMA, P.L. 108-173) provided $900
    million for a one-time, 3 year geographic reclassification of
    certain hospitals that were otherwise unable to qualify for
    administrative reclassification to areas with higher wage index
    values. These reclassifications were extended from March 31,
    2006, to September 30, 2007, by the Tax Relief and Health Care
    Act of 2006 (P.L. 109-432). The Medicare, Medicaid and SCHIP
    Extension Act (P.L. 110-173) extended the reclassifications to
    September 30, 2008. The Medicare Improvements for Patients and
    Providers Act of 2008 (MIPPA, P.L. 110-275) extended the
    reclassifications until September 30, 2009. These extensions
    are exempt from any budget neutrality requirements.
                Proposed Law
        The section 508 reclassifications would be extended until
    September 30, 2011.

    Sec. 1194. Extension of geographic floor for work

                Current Law
        The Medicare fee schedule is adjusted geographically for
    three factors to reflect differences in the cost of resources
    needed to produce physician services: physician work, practice
    expense, and medical malpractice insurance. The geographic
    adjustments are indices that reflect how each area compares to
    the national average for a ``market basket'' of goods. A
    geographic practice cost index (GPCI) with a value of 1.00
    represents the average across all areas. A series of bills set
    a temporary floor value of 1.00 on the physician work index
    beginning January 2004; most recently, section 134 of the MIPPA
    extended the application of this floor when calculating
    Medicare physician reimbursement through December 2009. The
    other geographic indices (for practice expense and medical
    malpractice) were not modified by these Acts.
                Proposed Law
        Rural physicians put in as much time, skill, and intensity
    into their work as physicians in urban areas. This provision
    ensures that rural physicians are paid at least the average
    rate for their work. Adjustments for practice expense and
    malpractice, reflecting the differing costs in operating
    practices and purchasing malpractice insurance across the
    country, are not affected by this provision.
        The proposal would extend the 1.00 floor for the geographic
    index for physician work for an additional 2 years through
    December, 2011.

    Sec. 1195. Extension of payment for technical component of certain
            physician pathology services

                Current Law
        Legislation enacted in 1997 specified that independent labs
    that had agreements with hospitals on July 22, 1999, to bill
    directly for the technical component of pathology services
    could continue to do so in 2001 and 2002. The provision has
    been periodically extended, most recently through December 31,
    2009 by MIPPA.
                Proposed Law
        This provision is needed in order to continue allowing
    direct billing for the technical component for independent labs
    that have agreements with hospitals. Without this extension,
    hospitals will incur an additional cost that is not included in
    the payment rate under the prospective payment system. This
    provision protects rural beneficiaries' access to laboratory
    services.
        The bill would extend this provision through 2011.

    Sec. 1196. Extension of ambulance add-ons

                Current Law
        Ambulance services are paid on the basis of a national fee
    schedule, which is being phased in. The fee schedule
    establishes seven categories of ground ambulance services and
    two categories of air ambulance services. The national fee
    schedule is fully phased in for air ambulance services. For
    ground ambulance services, payments through 2009 are equal to
    the greater of the national fee schedule or a blend of the
    national and regional fee schedule amounts. The portion of the
    blend based on national rates is 80% for 2007-2009. In 2010 and
    subsequently, the payments in all areas will be based on the
    national fee schedule amount.
        The fee schedule payment for an ambulance service equals a
    base rate for the level of service plus payment for mileage.
    Geographic adjustments are made to a portion of the base rate.
    For the period July 2004 to December 2009, mileage payments are
    increased for ground ambulance services originating in rural
    low population density areas. For the period July 1, 2004 until
    December 31, 2008, there is a 25% bonus on the mileage rate for
    trips of 51 miles and more. Payments for ground transports
    originating in rural areas or rural census tracts are increased
    by 3% for the period of October 1, 2008, through December 31,
    2009.
        MIPPA specifies that any area designated as rural for the
    purposes of making payments for air ambulance services on
    December 31, 2006, will be treated as rural for the purpose of
    making air ambulance payments during the period July 1, 2008
    until December 31, 2009.
                Proposed Law
        This provision helps to cover the cost of providing
    ambulance services in rural areas.
        The provision would maintain the 3% higher payments for
    ground transports originating in rural areas or rural census
    tracts until December 31, 2011. The MIPPA provision maintaining
    the designation of certain areas as rural for the purposes of
    Medicare's payments for air ambulance services would be
    maintained until December 31, 2011.

    Sec. 1197. Ensuring proportional representation of interests in rural
            areas on MedPAC

                Current Law
        The Balanced Budget Act of 1997 established the Medicare
    Payment Advisory Commission (MedPAC) to advise Congress on
    issues impacting the Medicare program. The Commission is
    composed of 17 members appointed for three-year terms by the
    Comptroller General. Represented on the Commission are a mix of
    health care providers, health researchers, insurance
    organization officials, employers, representatives from
    prescription drug benefit programs, and consumers, among
    others. Specifically, the Medicare statute indicates that
    individuals appointed to MedPAC should be nationally recognized
    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.
                Proposed Law
        The provision requires that the proportion of MedPAC
    commissioners who would represent the interests of health care
    providers and beneficiaries located in rural areas would be no
    less than the proportion of total number of Medicare
    beneficiaries who live in rural areas. This provision would
    apply to appointments to MedPAC made after enactment.

                 DIVISION B--MEDICARE AND MEDICAID IMPROVEMENTS

                  TITLE II--MEDICARE BENEFICIARY IMPROVEMENTS

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

    Sec. 1201. Improving assets tests for Medicare savings program and low-
            income subsidy program

                Current Law
        Federal assistance is provided to certain low-income
    persons to help them meet Medicare Part D premium and cost-
    sharing charges. To qualify for the part D low-income subsidy,
    Medicare beneficiaries must have resources no greater than the
    income and resource limits established by the Medicare
    Prescription Drug, Improvement, and Modernization Act of 2003
    (P.L.108-173, MMA).
        Individuals may qualify for the full subsidy in two ways:
    (1) if they are eligible for Medicaid or one of the Medicare
    Savings Programs (Qualified Medicare Beneficiary (QMB),
    Specified Low Income Medicare Beneficiary (SLMB), or Qualifying
    Individual (QI)), or are recipients of Supplemental Security
    Income (SSI) benefits, they are deemed automatically eligible;
    or (2) if they apply for the benefit, through their State
    Medicaid agency or through the Social Security Administration
    (SSA) and are determined to have an annual income below 135% of
    the federal poverty level (FPL) and have resources below a
    certain limit (in 2009, $6,600 for an individual or $9,910 if
    married). Beneficiaries may qualify for a partial subsidy if
    they apply and are determined to have an annual income below
    150% of the FPL and whose resources do not exceed a certain
    limit (in 2009, $11,010 for individuals or $22,010 if married).
    (When determining whether a beneficiary qualifies for the
    Medicare Part D low-income subsidy, $1,500 per person in
    resources are excluded from consideration if the beneficiary
    indicates that he/she expects to use resources for burial
    expenses; otherwise $1,500 should be added to the above asset
    limits for an individual and $3,000 for a couple.)
        Federal assistance is also provided to individuals to
    assist with premium and cost sharing arising under Parts A and
    B of Medicare (the Medicare Savings Programs). QMBs are
    entitled to receive payments (on their behalf) for their
    Medicare Part B premium and cost-sharing for services under
    Parts A and B. SLMBs and QIs are entitled to payments for Part
    B premiums. Each category of beneficiary is subject to an
    income test and an asset test of $4,000 for an individual and
    $6,000 for a couple in 2009.
                Proposed Law
        This section harmonizes the asset tests for eligibility for
    all LIS eligible individuals--full and partial Part D subsidy--
    and the MSP to simplify the test, and raises the maximum level
    to prevent seniors with nest eggs from being disqualified from
    receiving the subsidy.
        Under this provision, the maximum resource levels used to
    determine eligibility for the low income subsidy would be
    increased. In 2012, the level would be $17,000 for an
    individual and $34,000 for a couple. In subsequent years, the
    asset level would be increased by the annual percent increase
    in the Consumer Price Index (all items, U.S. city average) as
    of September of the previous year.
        These maximum resources levels would also apply for
    determining eligibility for Medicare Savings programs,
    beginning January 1, 2012.

    Sec. 1202. Elimination of part D cost-sharing for certain non-
            institutionalized full-benefit dual eligible individuals

                Current Law
        Cost-sharing subsides for Low-Income Subsidy (LIS)
    enrollees are linked to the standard prescription drug
    coverage. Full-subsidy eligibles have no deductible, minimal
    cost sharing during the initial coverage period and coverage
    gap, and no cost-sharing over the catastrophic threshold.
        Full-benefit dual eligibles who are residents of medical
    institutions or nursing facilities have no cost-sharing. Other
    full-benefit dual-eligible individuals with incomes up to 100%
    of poverty have cost-sharing, for all costs up to the out-of-
    pocket threshold, of $1.10 in 2009 for a generic drug
    prescription or preferred multiple source drug prescription and
    $3.20 in 2009 for any other drug prescription. All other full-
    subsidy-eligible individuals have cost-sharing for all costs up
    to the out-of-pocket threshold, of $2.40 in 2009 for a generic
    drug or preferred multiple source drug and $6.00 in 2009 for
    any other drug.
                Proposed Law
        Under this provision, cost-sharing would not apply to
    persons who are full benefit dual eligibles and for whom a
    determination was made that but for the provision of home- and
    community-based care, the individual would require the level of
    care provided in a hospital or a nursing facility or
    intermediate care facility for the mentally retarded and such
    care would be paid for by Medicaid. Such home- and community-
    based care would be that provided under Section 1915 or 1932 of
    the SSA or under a waiver under Section 1115 of the Act. The
    provision would apply to drugs dispensed on or after January 1,
    2011.
        Extending the protection against cost-sharing to dually
    eligible beneficiaries who are eligible to be institutionalized
    in a hospital or facility for the mentally retarded ensures
    that these beneficiaries are not penalized for choosing to
    receive care in a home or community-based setting.

    Sec. 1203. Eliminating barriers to enrollment

                Current Law
        In general, states administer eligibility determinations
    for the Medicare Savings Program (MSP), a set of cost-sharing
    and premium subsidies available to certain low-income Medicare
    beneficiaries. Currently, states may require income and asset
    documentation through self-declaration or through other
    procedures. State policies on this issue vary based on the
    eligibility group, but a considerable amount of paper-based
    documentation may be required to determine whether an
    individual meets financial eligibility requirements for
    Medicaid.
        Under the low-income subsidy program under Medicare Part D,
    full-benefit dual eligibles, those receiving assistance through
    Medicare Savings Programs, and recipients of SSI are deemed
    subsidy-eligible individuals for up to one year; other persons,
    or their personal representatives, have to apply for
    assistance. Applicants may apply either at state Medicaid
    offices or Social Security offices. Applicants are required to
    provide information from financial institutions, as requested,
    to support information in the application, and to certify as to
    the accuracy of the information provided.
                Proposed Law
        Medicare beneficiaries applying for a low-income subsidy
    under the prescription drug program would be permitted to apply
    on the basis of self-certification of income and resources. The
    information provided would be subject to administrative
    verification; however, and except in extraordinary situations
    as determined by the Commissioner of SSA, the individual would
    not be required to provide additional documentation.
    Verification would be accomplished through data-sharing between
    the SSA and the Internal Revenue Service described under
    existing authority. This provision would be effective beginning
    January 1, 2010.

    Sec. 1204. Enhanced oversight relating to reimbursements for
            retroactive low-income subsidy enrollment

                Current Law
        Certain groups of Medicare beneficiaries automatically
    qualify (and are deemed eligible) for the full low-income
    subsidy. Dual eligibles who qualify for Medicaid based on their
    income and assets are automatically deemed eligible for
    Medicare prescription drug low-income subsidies. Additionally,
    those who receive premium and/or cost-sharing assistance from
    Medicaid through the Medicare savings programs, plus those
    eligible for SSI cash assistance, are automatically deemed
    eligible for low-income subsidies and need not apply for them.
    CMS deems individuals automatically eligible for LIS effective
    as of the first day of the month that the individual attains
    the qualifying status (e.g., becomes eligible for Medicaid,
    MSP, or SSI). The end date is, at a minimum, through the end of
    the calendar year within which the individual becomes eligible.
        For individuals who are newly full-benefit dual eligibles,
    their Medicaid prescription drug coverage ceases as soon as the
    individual is eligible for part D, regardless of whether the
    individual is enrolled in a Part D plan. This creates the risk
    of coverage gaps for these individuals. To prevent coverage
    gaps between the end of Medicaid prescription drug coverage and
    the start of Medicare prescription drug coverage, CMS
    regulation specifies that auto-enrollment is effective the
    month in which the person becomes full-benefit dual eligible.
    Because Medicaid eligibility is often retroactive, CMS randomly
    auto-enrolls new full-benefit dual eligibles into Part D plans
    retroactively to the start of their full dual status.
        Other individuals with limited income and resources who do
    not automatically qualify may apply for the low-income subsidy
    and have their eligibility determined by either the SSA or
    their state Medicaid agency. An individual who applies and is
    determined eligible for the LIS is eligible effective the first
    day of the month in which the individual submitted an
    application. In most cases, this means that LIS status is
    applied retroactively. If a beneficiary is already enrolled in
    a Part D plan, the Part D sponsor must take steps to ensure
    that the beneficiary has been reimbursed for any premiums or
    cost-sharing the member had paid that should have been covered
    by the subsidy.
        CMS issued a request for proposals (RFP) on February 17,
    2009, to solicit a contractor (a national prescription drug
    plan sponsor) to cover Part D prescription drug claims for
    retroactive periods of coverage for full-benefit dual eligible
    and SSI-eligible individuals, as well as point of sale coverage
    at a pharmacy for certain individuals with the Part D low-
    income subsidy who are not yet enrolled in a Part D plan.
    Beginning in 2010, CMS has the demonstration authority to test
    a revised approach for providing retroactive and immediate need
    coverage. Under the demonstration, CMS will contract with a
    single Medicare Part D plan (PDP) sponsor to pay for all claims
    for retroactive auto-enrollment periods plus current and
    immediate need claims for all LIS eligibles. CMS will modify
    its auto and facilitated enrollment process so that all those
    with retroactive effective dates are assigned to the
    demonstration for those retroactive periods, but continue to be
    randomly assigned for prospective periods to standard LIS PDPs.
                Proposed Law
        Through existing authority under current law, the Secretary
    has established a requirement that Part D plans make
    appropriate retroactive reimbursements to beneficiaries and
    third parties. This provision would codify and clarify that
    process. It also would implement oversight procedures of the
    retroactive reimbursement process to allow the Secretary to
    better determine whether the payments for this retroactive
    coverage from CMS to the Part D plans are accurately and
    consistently reimbursed to beneficiaries and third parties.
        In the case of a retroactive LIS enrollment, the
    beneficiary, or a third party that is owed payment on behalf of
    the beneficiary, would be entitled to be reimbursed for covered
    drug costs incurred by the beneficiary during the retroactive
    coverage period. The retroactive coverage period is defined as
    the period beginning on the effective date of LIS assistance
    for which the individual is eligible and ending on the date the
    plan effectuates the status of such individual as eligible.
    Covered drug costs would be defined as the amount by which the
    costs incurred by the beneficiary for covered part D drugs,
    premiums and cost sharing exceeds such costs that would have
    been incurred if the beneficiary had been receiving low-income
    subsidy to which the individual was entitled.
        The reimbursement would be made automatically by the Part D
    plan sponsor upon appropriate notice that the beneficiary is
    eligible for assistance and no further information would need
    to be submitted to the plan by the beneficiary. For each such
    reimbursement, the PDP or a Medicare Advantage Prescription
    Drug Plan (MA-PD) would be required to include a line-item
    description of the items for which the reimbursement is made.
    Additionally, the provision would require that reimbursement be
    submitted not later than 45 days after the date on which the
    plan receives notice from the Secretary that the beneficiary is
    eligible for assistance or the date on which the beneficiary
    files the claim with the plan.
        A retroactive LIS enrollment beneficiary would be defined
    as an individual who is enrolled in a PDP or an MA-PD and
    subsequently becomes eligible as a full-benefit dual eligible
    individual, Medicare Savings Program eligible, or eligible for
    SSI, or is a full-benefit dual eligible individual who is
    automatically enrolled in such a plan. Beneficiaries who
    enrolled in a plan whose sponsor entered into a contract with
    the Secretary, pursuant to CMS's RFP issued on February 17,
    2009, relating to Medicare part D retroactive coverage for
    certain low income beneficiaries, or a similar subsequent
    request for such proposals, would not be included in this
    definition.

    Sec. 1205. Intelligent assignment in enrollment

                Current Law
        Special enrollment rules apply to individuals eligible for
    the Part D low income subsidy. Generally, there is a two-step
    process for low-income persons to gain Part D coverage. First,
    a determination must be made that they qualify for the
    assistance; second, they must enroll, or be enrolled, in a
    specific Part D plan.
        According to Section 1860D-14 of the Social Security Act
    (SSA), full-benefit dual-eligible individuals who have not
    elected a Part D plan are to be auto-enrolled into one by CMS.
    If there is more than one plan available that has a monthly
    beneficiary premium that does not exceed the premium assistance
    amount under the low-income subsidy, the beneficiary is to be
    enrolled on a random basis among all such plans in the PDP
    region. The individual has the option of declining or changing
    such enrollment.
        Some dual eligibles may find that they are auto-enrolled in
    a plan that may not best meet their needs. For example, it is
    possible that the specific drug(s) that a beneficiary is
    currently taking is not covered by the new plan. For this
    reason, beneficiaries are able to change enrollment at any
    time, with the new coverage effective the following month.
                Proposed Law
        The Medicare Modernization Act prohibited CMS from using
    any methodology other than random assignment when automatically
    enrolling full benefit dual eligibles into Part D plans. While
    this process results in beneficiaries enrolled in the lowest
    cost plans based on monthly premium, it does not take into
    consideration whether this vulnerable population is enrolled in
    quality plans that cover the beneficiaries' necessary
    medications. While dual eligibles have the option of enrolling
    in a different plan, this is a particularly frail population
    that may not have the capacity to evaluate and choose among all
    of the available plans. The provision instructs CMS to evaluate
    methodologies for intelligently assigning dual eligibles to
    Part D plans based on cost--but also on formulary coverage for
    beneficiaries' needed prescriptions, use of prior authorization
    and other restrictions, and quality measures--and to implement
    if the Secretary determines that a methodology could both
    minimize cost to the program and maximize access of dual
    eligibles to needed prescription drugs.
        The Secretary would be given the option to use an
    ``intelligent assignment'' process as an alternative to the
    random assignment process. The intelligent assignment process
    would be designed to maximize the access of full-benefit dual
    eligibles to necessary prescription drugs while minimizing
    costs to the individual and to the program to the greatest
    extent possible. The process would be required to take into
    account the extent to which prescription drugs necessary for
    the individual are covered, the use of prior authorization or
    other restrictions on access to coverage of drugs, and the
    overall quality of a prescription drug plan as measured by
    quality ratings established by the Secretary.
        The provision would take effect for contract years
    beginning with 2012.

    Sec. 1206. Special enrollment period and automatic enrollment process
            for certain subsidy eligible individuals

                Current Law
        In general, a Medicare beneficiary who does not enroll in
    Part D during his or her initial enrollment period may enroll
    only during the annual open enrollment period, which occurs
    from November 15 to December 31 each year. Coverage begins the
    following January 1. Beneficiaries already enrolled in a Part D
    plan may change their plans during the annual open enrollment
    period.
        There are a few additional, limited occasions when an
    individual may enroll in or disenroll from a Part D plan or
    switch from one Part D plan to another, called special
    enrollment periods. For example, special enrollment periods are
    allowed for individuals who (1) move to a new geographic area,
    (2) involuntarily lose creditable coverage, (3) receive
    inadequate information on creditable coverage status, (4) are
    subject to a federal error, or (5) are enrolled in a PDP that
    has failed or been terminated.
                Proposed Law
        Under current statutory authority, the Secretary has
    established a continuous SEP whereby upon becoming eligible for
    Part D, the Secretary automatically enrolls full benefit dual
    eligibles into a Part D plan; the individual retains the right
    to decline or change enrollment in any month. The Secretary has
    also expanded this SEP to include all individuals who are
    eligible for the Part D low-income subsidy (LIS). This
    provision codifies CMS's interpretation of current law with
    regard to allowing an SEP and automatic enrollment process for
    all LIS-eligible beneficiaries. It also requires the Secretary
    to use an automatic assignment process to enroll low-income
    beneficiaries who failed to enroll in a prescription drug plan
    or MA-PD plan during the special enrollment period. This
    assignment process would be identical to that used for full-
    benefit dual eligibles. The individual would have the option of
    declining or changing such enrollment.
        The provision would apply with respect to subsidy
    determination made for months beginning with January 2011.

    Sec. 1207. Application of MA premiums prior to rebate in calculation of
            low income subsidy benchmark

                Current Law
        The federal government pays up to 100% of the Part D
    premiums for LIS beneficiaries who are enrolled in benchmark
    plans. A Part D plan qualifies as a benchmark plan if it offers
    basic Part D coverage with premiums equal to or lower than the
    regional low-income premium subsidy amount. The regional low-
    income benchmark premium amount, calculated annually, is the
    weighted average of all premiums in each of the 34 prescription
    drug plan (PDP) regions for basic prescription drug coverage,
    or the actuarial value of basic prescription drug coverage for
    plans that offer enhanced coverage options, or for Medicare
    Advantage Prescription Drug plans (MA-PD), the portion of the
    premium attributable to basic prescription drug benefits.
        Under the Medicare Advantage program (Part C), plans bid to
    offer Parts A and B coverage to beneficiaries. CMS bases the
    Medicare payment for a MA plan on the relationship between its
    bid and a benchmark (different from the LIS benchmark). The MA
    benchmark represents the maximum amount the federal government
    will pay a plan for providing required Medicare benefits. If a
    plan's bid is less than the benchmark, its payment equals its
    bid plus a rebate of 75% of the difference between the
    benchmark and the bid. The rebate must be used to provide
    additional benefits to enrollees, reduce Medicare cost sharing
    expenses, or reduce a beneficiary's monthly Part B,
    prescription drug, or supplemental premium (for services beyond
    the required Medicare benefits).
        MA plans offering prescription drug coverage submit a
    separate bid for the Part D portion. Payment for the portion of
    the premium attributable to basic prescription drug benefits is
    calculated in the same way as that for stand-alone PDPs;
    however the MA plan may choose to apply some of its Part C
    rebate payments to lower the Part D premium. Any contribution
    by an MA plan of its rebate amount towards the Part D premium
    will lower the Part D benchmark premium amount and, typically,
    reduce the number of standalone PDPs qualifying as full-subsidy
    plans.
                Proposal
        The statute would be modified to exclude the Part C rebate
    amounts from the MA-PDP premium bids when calculating the low-
    income regional benchmark for subsidy determinations made for
    months beginning with January 2011.
        Excluding the rebate portion of the premium from the
    calculation of the LIS benchmark will decrease the number of
    beneficiaries who have to switch plans each year because their
    plan's premium exceeds the LIS benchmark.

                    Subtitle B--Reducing Health Disparities

    Sec. 1221. Ensuring effective communication in Medicare

                Current Law
        Federal civil rights policy (Section 601 of Title VI of the
    Civil Rights Act of 1964, 42 U.S.C. 2000d) requires most health
    care providers to make interpretation services available to
    limited English proficiency (LEP) patients. Health and Human
    Services (HHS) regulations promulgated pursuant to section 602
    forbid recipients from utiliz[ing] criteria or methods of
    administration which have the effect of subjecting individuals
    to discrimination because of their race, color, or national
    origin, or have the effect of defeating or substantially
    impairing accomplishment of the objectives of the program with
    respect to individuals of a particular race, color, or national
    origin. 45 CFR 80.3(b)(2).
        HHS regulations (45 CFR 80.3(b)(2)) require all recipients
    of federal financial assistance from HHS to provide meaningful
    access to LEP persons. Recipients of HHS assistance may include
    (but are not limited to) hospitals, nursing homes, home health
    agencies, managed care organizations, universities, state,
    county, and local health agencies, Medicaid agencies, public
    and private contractors, vendors, physicians, and other
    providers. Providers who only receive Medicare Part B payments
    are not considered recipients of HHS assistance (45 CFR 80.2).
        Research has demonstrated that Medicare beneficiaries with
    limited English proficiency have a harder time accessing health
    care than LEP seniors covered by Medicaid. Some authors have
    argued that this difference may be attributed to the fact that
    federal civil rights policies require Medicaid health care
    providers to offer language assistance, while physicians
    serving only Medicare patients are not subject to the same
    requirements. Although all providers are bound by Civil Rights
    Act of 1964 which obligates health care professionals to make
    interpreters available to LEP patients, studies have suggested
    that a lack of reimbursement for language services and poor
    enforcement of Title VI has sometimes made it difficult for LEP
    Medicare beneficiaries to access translation services.
                Proposed Law
        This provision directs the Secretary to evaluate the
    effectiveness of culturally and linguistically appropriate care
    by directing the Secretary to conduct a study that examines the
    extent to which Medicare providers utilize, offer or make
    available language services for beneficiaries who are limited
    English proficient. The study will also evaluate ways that
    Medicare should develop payment systems for language services.
        The provision would require the Secretary of the Department
    of Health and Human Services to conduct a study to examine the
    extent to which Medicare providers utilize, offer, or make
    available language services for beneficiaries who are limited
    English proficient and ways that Medicare should develop
    payment systems for language services. The study would include
    an analysis of: ways to develop and structure appropriate
    payment systems for language services for Medicare providers;
    the feasibility of adopting a payment methodology for on-site
    interpreters; the feasibility of Medicare contracting directly
    with agencies that provide off-site interpretation, including
    telephonic and video interpretation; the feasibility of
    modifying the existing Medicare resource-based relative value
    scale by using adjustments when a patient is LEP; and how each
    of these options would be funded. The study would also include
    an analysis of the extent to which providers under Medicare
    Parts A, B, C, and D utilize, offer, or make available language
    services for beneficiaries with LEP; and the nature and type of
    language services provided by states for Medicaid recipients,
    and the extent to which such services could be utilized by
    Medicare providers.
        The potential payment systems included in the analysis
    could allow variations based on types of service providers,
    available delivery methods, and costs for providing language
    services. Factors could include: the type of language service
    provided, such as the provision of health care or health care
    related services directly in a non-English language by a
    bilingual provider or use of an interpreter; the type of
    interpretation provided, such as in-person, telephonic, video
    interpretation; the methods and costs of providing language
    services, including the costs of providing language services
    with internal staff and/or through contract with external
    independent contractors or agencies; providing services for
    languages not frequently encountered in the United States; and
    providing services in rural areas.
        The Secretary would be required to submit a report to
    appropriate committees of Congress not later than 12 months
    after the date of enactment of this Act. The Paperwork
    Reduction Act would not apply for purposes of carrying out this
    study. The necessary funds to conduct the study would be
    authorized to be appropriated.
        This provision also would authorize the Secretary to apply
    sanctions, such as civil money penalties, suspension of
    enrollment, and suspension or payments, to Medicare Advantage
    organizations that substantially fail to provide required
    language services to LEP beneficiaries enrolled in their plans.

    Sec. 1222. Demonstration to promote access for Medicare beneficiaries
            with limited-English proficiency by providing reimbursement for
            culturally and linguistically appropriate services

                Current Law
        Refer to current law under Section 1221.
                Proposed Law
        Although recipients of federal funds are required to offer
    language services, Medicare does not reimburse for these
    services. Testing alternative methods of delivering culturally
    and linguistically appropriate services will enable Medicare to
    apply best practices and improve both access to and quality of
    services to beneficiaries with limited English proficiency.
        Not later than 6 months after the completion of the study
    described in section 1221, the Secretary, acting through the
    CMS, would be required to carry out a demonstration program
    under which the Secretary would award no fewer than 24 three-
    year grants to eligible Medicare providers to improve effective
    communication between providers and Medicare beneficiaries
    living in communities where racial and ethnic minorities,
    including populations that face language barriers, are
    underserved with respect to such services. Using the results of
    the completed study, the Secretary would adjust, as
    appropriate, the distribution of grants to target Medicare
    beneficiaries who are in the greatest need of language
    services. Grants would be limited to $500,000 or less over
    three years for any grantee.
        To be eligible to receive a grant, an entity would be
    required to be a Medicare provider of services under Parts A or
    B, a Medicare Advantage organization offering a Medicare part C
    plan, or a sponsor of a part D prescription drug plan (PDP). To
    the extent feasible, the Secretary would award at least 6
    grants each to part A providers, part B providers, part C
    organizations, and to prescription drug sponsors. The Secretary
    would be required to give priority to applicants that have
    developed partnerships with community organizations or agencies
    with experience in language access. The Secretary would also
    need to ensure that grantees represent variations in types of
    language services, languages needed and their frequency of use,
    urban and rural settings, at least two geographic regions as
    defined by the Secretary, and at least two large urban areas
    with diverse populations.
        The grantee would be required to use the grant funds to pay
    for the provision of competent language services to LEP
    Medicare beneficiaries. Such services may be provided through
    on-site interpretation, telephonic interpretation, video
    interpretation, or direct provision of health care or health
    care-related services by a bilingual health care provider. The
    grantee may also use bilingual providers, staff, or contract
    interpreters. The grantee may use up to 10% of the grant funds
    to pay for administrative costs associated with the provision
    of competent language services and for required reporting.
    Grantees that are part C organizations or PDP sponsors would be
    required to ensure that their network providers, including
    physicians and pharmacies, receive at least 50% of the grant
    funds to pay for the provision of language services.
        The payments to grantees would be calculated based on the
    estimated numbers of LEP Medicare beneficiaries in a grantee's
    service area, using the most recently available data from the
    Bureau of Census or other state-based study on the number of
    individuals served by the grantee who speak English less than
    ``very well,'' or using the grantee's own data on Medicare
    beneficiaries' primary language if the Secretary determines
    such data to be reliable. Payment would only be provided to
    grantees that report their costs of providing language services
    and may be modified annually at the discretion of the
    Secretary. If the grantee does not provide the reports for the
    first year of a grant, the Secretary would be able to terminate
    the grant and to solicit applications from new grantees to
    participate in the subsequent two years of the demonstration
    program.
        Payments would only be provided to grantees that utilize
    competent bilingual staff or competent interpreter or
    translation services which meet the state standards currently
    in effect if the grantee operates in a state that has statewide
    health care interpreter standards. For grantees operating in
    states without such standards, the grantee would be required to
    utilize interpreters who follow the National Council on
    Interpreting in Health Care's Code of Ethics and Standards of
    Practice. This requirement would not apply if a beneficiary
    requests the use of family, friends, or other persons untrained
    in interpretation and the grantee documents the request in the
    beneficiary's record. This requirement would also not apply in
    the case of a medical emergency where the delay associated with
    obtaining an interpreter would jeopardize the health of the
    patient. Emergency rooms and other entities that regularly
    provide health care services in medical emergencies, would,
    however not be exempt from the requirement to provide
    interpreter and translation services without undue delay.
        Grantees would also be required to: ensure that appropriate
    clinical and support staff receive ongoing education and
    training in linguistically appropriate service delivery; ensure
    the linguistic competence of bilingual providers; offer and
    provide appropriate language services at no additional charge
    to each LEP patient at all points of contact, in a timely
    manner during all hours of operation; notify Medicare
    beneficiaries of their right to receive language services in
    their primary language; post signage in the languages of the
    commonly encountered group or groups present in the
    organization's service area; and ensure that primary language
    data are collected for recipients of language services (if the
    recipient of language services is a minor or is incapacitated,
    the primary language of the parent or legal guardian would be
    collected and utilized).
        Grantees would be required to provide the Secretary with
    reports at the end of each year of the grant. The report would
    include (1) the number of Medicare beneficiaries to whom
    language services are provided; (2) the languages of those
    Medicare beneficiaries; (3) the types of language services
    provided; (4) the type of interpretation; (5) the methods of
    providing language services; (6) the length of time for each
    interpretation encounter; and (7) the costs of providing
    language services.
        LEP Medicare beneficiaries would not be required to pay
    cost-sharing or co-pays for language services provided under
    this demonstration.
        The Secretary would be required to conduct an evaluation of
    the demonstration program and submit a report to the
    appropriate committees of Congress not later than 1 year after
    the completion of the program. The report would include an
    analysis of the patient outcomes and costs of furnishing care
    to the LEP Medicare beneficiaries participating in the project
    compared to those not participating; the effect of delivering
    culturally and linguistically appropriate services on
    beneficiary access to care, utilization of services, efficiency
    and cost-effectiveness of health care delivery, patient
    satisfaction, and health outcomes; and recommendations
    regarding the extension of the project to the entire Medicare
    program.
        This provision would not limit existing obligations of
    recipients of federal financial assistance under title VI of
    the Civil Rights Act of 1964. An amount of $16 million would be
    authorized to be appropriated for each fiscal year of the
    demonstration program.

    Sec. 1223. IOM report on impact of language access services

                Current Law
        Refer to current law under Section 1221.
                Proposed Law
        Under this provision, the Secretary of HHS would be
    required to enter into an arrangement with the Institute of
    Medicine (IOM) under which the IOM would prepare a report on
    the impact of language access services on the health and health
    care of limited English proficient populations. The report
    would be issued not later than 3 years after the date of the
    enactment of the Act.
        The report would include recommendations on the development
    and implementation of policies and practices by health care
    organizations and providers for limited English proficient
    patient populations, a description of the effect of providing
    language access services on quality of health care and access
    to care and reduced medical error, and a description of the
    costs associated with, or savings related to, the provision of
    language access services.

    Sec. 1224. Definitions

                Current Law
        None.
                Proposed Law
        This provision provides the following definitions to be
    applied in sections 1221 through 1223.
        The term bilingual would mean a person who has a sufficient
    degree of proficiency in two languages and can ensure that
    effective communication can occur in both languages.
        The term competent interpreter services would be defined as
    a trans-language rendition of a spoken message in which the
    interpreter comprehends the source language and can speak
    comprehensively in the target language to convey the intended
    meaning. The interpreter would be required to know health and
    health-related terminology.
        The term competent translation services would mean a trans-
    language rendition of a written document in which the
    translator comprehends the source language and can write
    comprehensively in the target language to convey the meaning
    intended in the source language. The translator would be
    required to know health and health-related terminology.
        The term effective communication would mean an exchange of
    information between the provider of health care or health care-
    related services and the LEP recipient of such services that
    enables the LEP individual to access, understand, and benefit
    from health care or health care-related services.
        The terms interpreting/interpretation would be defined as
    the transmission of a spoken message from one language into
    another, faithfully, accurately, and objectively.
        The term health care services would mean services that
    address physical as well as mental health conditions in all
    care settings.
        The term health care-related services would be defined as
    human or social services, programs or activities that provide
    access, referrals or links to health care.
        The term language access would mean the provision of
    language services to an LEP individual designed to enhance that
    individual's access to, understanding of or benefit from health
    care or health care-related services.
        The term language services would be defined as the
    provision of health care services directly in a non-English
    language, interpretation, translation, and non-English signage.
        The term limited-English proficient (LEP) would be defined
    as an individual who speaks a primary language other than
    English and who cannot speak, read, write or understand the
    English language at a level that permits the individual to
    effectively communicate with clinical or nonclinical staff at
    an entity providing health care or health care related
    services.
        The term Medicare beneficiary would mean an individual
    entitled to benefits under Medicare part A or enrolled in
    Medicare part B.
        The term Medicare program would mean the programs under
    parts A through D of title XVIII of the Social Security Act
    (SSA).
        The term service provider would be defined as all
    suppliers, providers of services, or entities under contract to
    provide coverage, items or services under any part of title
    XVIII of the SSA.

                     Subtitle C--Miscellaneous Improvements

    Sec. 1231. Extension of therapy caps exceptions process

                Current Law
        Current law places two annual per beneficiary payment
    limits for all outpatient therapy services provided by non-
    hospital providers. For 2009, the annual limit on the allowed
    amount for outpatient physical therapy and speech-language
    pathology combined is $1,840. There is a separate limit for
    occupational therapy of $1,840. The Secretary was required to
    implement an exceptions process for 2006, 2007, and the first
    half of 2008 for cases in which the provision of additional
    therapy services was determined to be medically necessary.
    Section 141 of the Medicare Improvements for Patients and
    Providers Act of 2008 (MIPPA, P.L. 110-275) extended the
    exceptions process for therapy caps through December 31, 2009.
                Proposed Law
        The provision would extend the exceptions process for
    therapy caps for 2 years, through December 31, 2011.

    Sec. 1232. Extended months of coverage of immunosuppressive drugs for
            kidney transplant patients and other renal dialysis provisions

                Current Law
        To be eligible for Medicare, one must be (1) 65 years or
    older and eligible to receive Social Security; (2) under 65,
    permanently disabled, and have received Social Security
    disability insurance payments for at least 2 years; (3) have
    Amyotrophic Lateral Sclerosis (ALS-Lou Gehrig's disease); or
    (4) have end-stage renal disease (ESRD).
        Coverage for beneficiaries with ESRD generally begins in
    the fourth month of dialysis treatments or the month of a
    kidney transplant. After receiving a kidney transplant,
    individuals are prescribed immunosuppressive drugs to reduce
    the risk of their immune system rejecting the new organ. These
    drugs generally need to be taken for the rest of the
    individual's life.
        Under Medicare Secondary Payer (MSP) rules, Medicare is
    prohibited from making payments for any item or service when
    payment has been made or can reasonably be expected to be made
    by a third party payer. For individuals with Medicare
    entitlement based solely on ESRD, MSP rules apply for those
    covered by an employer-sponsored group plan, regardless of the
    employer size or current employment status. Any group health
    plan coverage these beneficiaries receive through their
    employer or their spouse's employer is the primary payer for
    the first 30 months of ESRD benefit eligibility. After 30
    months, Medicare becomes the primary insurer.
        If a beneficiary already had Medicare because of age or
    disability before the onset of end-stage renal disease, or if
    an individual became eligible for Medicare because of age or
    disability after receiving a transplant paid for by Medicare,
    Medicare will continue to pay for immunosuppressive drugs with
    no time limit. However, if a beneficiary qualifies for Medicare
    only because of kidney failure, Medicare, together with
    coverage of the immunosuppressive drugs, ends 36 months after
    the month of the successful transplant. After that period,
    kidney recipients must pay for immunosuppressive drugs through
    private insurance, public or pharmaceutical programs, or pay
    out-of-pocket until they reach 65 and qualify for Medicare
    because of age.
        Individuals with ESRD are eligible for all Part B Services.
    Part B covers their dialysis services, drugs, and biologicals,
    including erythropoiesis stimulating agents, diagnostic
    laboratory tests, and other items and services furnished to
    individuals for the treatment of ESRD.
        Dialysis services are offered in three outpatient settings:
    hospital-based facilities, independent facilities, and the
    patient's home. There are two methods for payment. Under Method
    I, facilities are paid a prospectively set amount, known as the
    composite rate, for each dialysis session, regardless of
    whether services are provided at a facility or in the patient's
    home. Beneficiaries electing home dialysis may choose not to be
    associated with a facility and may make independent
    arrangements with a supplier for equipment, supplies, and
    support services. Payment to these suppliers, known as Method
    II, is made on the basis of reasonable charges.
        The Medicare Improvements for Patients and Providers Act of
    2008 (MIPPA, P.L. 110-275) requires the Secretary to implement
    a bundled payment system, making a single payment for Medicare
    renal dialysis services, to be phased in over 4 years beginning
    January 1, 2011. The bundled payment will include (1) items and
    services included in the composite rate as of December 31,
    2010; (2) erythropoiesis stimulating agents for the treatment
    of ESRD; (3) injectable biologicals and medications that were
    paid for separately under Part B (before bundling) and any oral
    equivalent to such medications; and (4) diagnostic laboratory
    tests and other items and services furnished to individuals for
    the treatment of ESRD. Dialysis facilities will have the
    opportunity to opt out of the phase-in and be paid under the
    new bundled system starting in 2011. The new law also creates a
    quality incentive payment program that ties payments to certain
    quality measures including anemia management, dialysis
    adequacy, patient satisfaction, and bone mineral metabolism.
                Proposed Law
        Patients who receive a kidney transplant must continue
    taking immunosuppressive drugs for the rest of their lives in
    order to avoid rejecting the new organ. Once a patient stops
    taking the drugs, his or her body will almost immediately
    reject the transplanted kidney and the patient either needs
    another kidney transplant or requires dialysis treatments for
    the rest of his or her life. Because a recurrence of kidney
    failure again entitles the beneficiary to Medicare, these costs
    are incurred by the Medicare program. To remedy this problem,
    and to improve the quality of life of these patients, this
    provision removes the 36-month limit on entitlement to Medicare
    with respect to immunosuppressive therapies to ensure that
    transplant patients continue to receive the drugs they need.
        This provision would amend SSA title II (Old Age, Survivors
    and Disability Insurance) to (1) continue entitlement to
    prescription drugs used in immunosuppressive therapy furnished
    to an individual who receives a kidney transplant for which
    payment is made under Medicare, and (2) extend Medicare
    secondary payer requirements for ESRD beneficiaries.
        It would also amend title XVIII (Medicare) of SSA to apply
    special rules to kidney transplant recipients who receive
    additional coverage for immunosuppressive drugs whose
    eligibility for benefits would end but for application of this
    section. Such individuals would be deemed to be enrolled under
    Medicare Part B and would be responsible for the full amount of
    the applicable premiums, deductibles, and co-insurance payments
    that are not covered under the Medicare savings program.
        This section also includes a technical clarification that
    oral drugs furnished to individuals for treatment of ESRD are
    included in the bundled payment. This authority exists under
    current law.
        The provision specifies that oral drugs that are not the
    oral equivalent of an intravenous drug would be included in the
    drugs and biologicals provided as part of the renal dialysis
    services covered by Medicare. The provision also would allow
    providers of renal dialysis services to make an election with
    respect to 2011, 2012, or 2013, prior to the first date of such
    year, to be excluded from the phase in of the prospective rate
    (or the remainder of the phase in) and be paid entirely based
    on the prospective rate. Additionally, the provision changes
    the performance standards of ESRD providers from the ``lesser
    of'' to the ``greater of'' the performance of such provider or
    facility or a performance standard based on the national
    performance rates for such measures in a period determined by
    the Secretary.

    Sec. 1233. Advance care planning consultation

                Current Law
        Section 1866(f) of Title XVIII of the SSA requires certain
    institutional providers and prepaid plans that participate in
    Medicare to follow specified policies and procedures in regard
    to advance directives. Specifically, it requires such entities
    to furnish written information regarding an individual's rights
    under state law to make decisions concerning medical care,
    including the right to accept or refuse medical or surgical
    treatment and the right to formulate advance directives; to
    furnish the written policies of the entity respecting the
    implementation of such rights; to document in a prominent part
    of the individual's medical record whether or not the
    individual executed an advance directive; not to condition the
    provision of care or otherwise discriminate against an
    individual based on whether or not the individual has executed
    an advance directive; to ensure compliance with requirements of
    state law (whether statutory or as recognized by the courts of
    the state) respecting advance directives at facilities of the
    provider or organization; and to provide (individually or with
    others) for education for staff and the community on issues
    concerning advance directives.
        Hospitals and nursing homes must provide this information
    to individuals at the time of admission; home health agencies
    must provide it in advance of the individual coming under the
    care of such agencies; hospice providers must provide this
    information at the time of the initial receipt of hospice care;
    and prepaid health plans must provide it to individuals upon
    enrollment. Medicare-certified providers that do not comply
    with these requirements may have payments withheld by the
    Secretary. State laws that allow for an objection on the basis
    of conscience for any health care provider or any agent of such
    provider which, as a matter of conscience, cannot implement an
    advance directive, supersede these requirements.
        The Medicare Improvements for Patients and Providers Act of
    2008 (MIPPA, P.L. 110-275) added end-of-life planning to the
    initial preventive physical exam that Medicare beneficiaries
    receive upon enrollment in Medicare. MIPPA also defines ``end-
    of-life'' planning to mean verbal or written information
    regarding: an individual's ability to prepare an advance
    directive in the case that an injury or illness causes the
    individual to be unable to make health care decisions; and
    whether or not the physician is willing to follow the
    individual's wishes as expressed in an advance directive.
        The Physician Quality Reporting Initiative (PQRI), the
    voluntary individual reporting program that provides an
    incentive payment to eligible professionals (EPs) who
    satisfactorily report data on quality measures for covered
    Medicare Physician Fee Schedule (PFS) services, is established
    by section 1848(k)(1) of the SSA. PQRI requires eligible
    professionals to report on certain quality measures in order to
    receive an incentive payment equal to 2.0% of covered
    professional services. Participation in PQRI is voluntary. The
    PQRI program is not specific to end-of-life care, but it does
    include several geriatrics measures, including one measure
    which specifically addresses advance care plans. This measure
    aims to assess whether a patient has an advance care plan or
    surrogate decision maker documented in their medical record.
        CMS was mandated by the Balanced Budget Act of 1997 (P.L.
    105-33) to develop and organize activities to educate
    beneficiaries about the Medicare program. Specifically, the Act
    mandated that CMS establish a toll-free helpline, mail written
    information to beneficiaries on Medicare and their options to
    enroll in private plans, create a Medicare website, and support
    a community outreach program to help beneficiaries and their
    caregivers make informed health care decisions. CMS conducts
    these activities as part of its National Medicare and You
    Education Program (NMEP). The Medicare & You Handbook is one
    component of the agency's NMEP program. The Handbook, which is
    produced in English and Spanish, is updated on an annual basis
    and mailed to beneficiaries every fall. Handbooks are mailed
    monthly to newly eligible beneficiaries.
                Proposed Law
        This provision adds an advanced care planning consultation
    as a Medicare benefit and makes other changes intended to
    promote patient-centered decision-making about medical care
    options. Advanced planning consultations are designed to assist
    patients make informed decisions about the full range of life
    sustaining treatment options available and to ensure that
    treating physicians are fully aware of patients' wishes. The
    provision does not require any beneficiary to receive such
    consultations and does not prescribe or restrict the advanced
    care treatment options available to any beneficiary.
        The provision would amend Section 1861 of Title XVIII of
    the SSA under Medicare to add new language concerning an
    advance care planning consultation and add a new subsection
    describing these consultations. It would amend Section
    1848(j)(3) to provide payment to physicians for an advance care
    planning consultation under Medicare. The provision would also
    expand the physician quality reporting initiative for end of
    life care. The Medicare & You Handbook would be updated to
    include an explanation of various end-of-life care planning
    terms and resources.
        The term ``advance care planning consultation'' would mean
    a consultation between the individual and an individual's
    physician, nurse practitioner or physician assistant as
    specified regarding advance care planning. Such consultation
    would be covered not more than once every five years, with some
    exceptions. Medicare's initial preventative physical
    examination would not be considered an advance care planning
    consultation for purposes of applying the 5-year limitation.
    Such consultation would be authorized to be conducted more
    frequently if there is a significant change in an individual's
    health.
        Such a consultation would be required to include an
    explanation by the practitioner of advance care planning;
    advance directives and their uses; role and responsibilities of
    a health care proxy; the continuum of end-of-life care services
    and supports available and Medicare benefits that are
    available. Practitioners would be required to provide a list of
    national and state-specific resources to assist consumers and
    their families with advance care planning. The advance care
    planning consultation would also be required to include an
    explanation of orders regarding life sustaining treatment or
    similar orders as specified. This requirement would apply to
    consultations furnished in a state in which all legal barriers
    for such orders have been addressed and that has a program in
    effect as specified. Such consultation is authorized to include
    the formulation of an order regarding life sustaining treatment
    or similar order.
        The term ``order regarding life sustaining treatment''
    would mean, with respect to an individual, an actionable
    medical order relating to the treatment of that individual that
    (1) is signed and dated by a physician or another health care
    professional as specified and is in a form that permits it to
    stay with the individual and be followed by health care
    professionals and providers across the continuum of care; (2)
    effectively communicates the individual's preferences regarding
    life sustaining treatment; (3) is uniquely identifiable and
    standardized within a given locality, region, or state (as
    identified by the Secretary); and (4) may incorporate any
    advance directive if executed by the individual.
        The level of life treatment indicated may range from an
    indication for full treatment to an indication to limit some or
    all or specified interventions. The provision would modify
    Section 1848(j)(3) of the SSA (concerning definitions for
    physicians' services) to include Medicare payment for
    physicians' services with respect to an advance care planning
    consultation. It would amend Section 1862(a)(1) of the SSA
    (concerning exclusions from coverage and Medicare as secondary
    payer) to add that no Medicare payment would be authorized for
    expenses incurred in the case of an advance care planning
    consultation which is performed more frequently than covered
    under such section.
        The provision would amend Section 1848(k)(2) of the SSA to
    add new language that would require the Secretary, for the
    purposes of reporting data on quality measures for covered
    professional services furnished during 2011 and any subsequent
    year, to include quality measures on end of life care and
    advanced care planning that have been adopted or endorsed by a
    consensus-based organization, if available and appropriate.
    Such measures would be required to measure both creation and
    adherence to orders for life-sustaining treatment. The
    Secretary would be required to publish these proposed measures
    in the Federal Register and provide for a period of public
    comment before finalization.
        No later than 1 year after the date of enactment, the
    Secretary would be required to update the online version of the
    Medicare & You Handbook to include an explanation of advance
    care planning and advance directives, including living wills,
    durable power of attorney, orders of life-sustaining treatment,
    and health care proxies. It would also be updated to include a
    description of federal and state resources available to assist
    individuals and their families with advance care planning and
    advance directives, including available state legal service
    organizations to assist individuals with advance care planning,
    including those organizations that receive funding pursuant to
    the Older Americans Act of 1965; website links or addresses for
    state-specific advance directive forms; and any additional
    information, as determined by the Secretary. The Secretary
    would also be required to include the above information in all
    paper and electronic versions of the Medicare & You Handbook
    that are published on or after the date that is 1 year after
    the date of enactment.

    Sec. 1234. Part B special enrollment period and waiver of limited
            enrollment penalty for Tricare beneficiaries

                Current Law
        Since 2001, military retirees and their eligible dependents
    become eligible for Tricare for Life at the same time they
    become eligible for Medicare. Tricare for Life functions
    similarly to a supplemental insurance policy to Medicare and
    provides coverage for authorized services not covered by
    Medicare. Enrollment in Medicare Part B is required for access
    to Tricare for Life. Prior to the legislation creating Tricare
    for Life, many retirees had not enrolled in Part B, believing
    that they would always have access to military medical
    facilities. With the establishment of Tricare for Life and the
    concomitant need to enroll in Medicare Part B, there was
    concern over the potential imposition of significant penalties
    for late enrollment in Part B. Subsequent legislation (Section
    625 of the Medicare Prescription Drug, Improvement, and
    Modernization Act of 2003 (MMA, P.L. 108-173) waived the Part B
    enrollment penalty for eligible retirees who enrolled in Part B
    prior to December 31, 2004.
                Proposed Law
        The provision will simplify enrollment in Medicare for
    retired members of the armed forces and provide a grace period
    for such individuals who have not yet enrolled in Medicare.
        This provision creates a special 12-month enrollment period
    in which military retirees (or their eligible dependents) who
    have not yet enrolled in Medicare Part B can enroll in Part B,
    thus becoming eligible for Tricare for Life, without incurring
    a late enrollment penalty. The provision would apply to
    elections made on or after the date of enactment of the Act.
        This provision would also require the Secretary of HHS to
    establish a method for providing rebates for late enrollment
    penalties that were charged to certain disabled and end-stage
    renal disease (ESRD) beneficiaries who enrolled during or after
    January 2005 and before the month of enactment of this Act.

    Sec. 1235. Exception for use of more recent tax year in case of gains
            from sale of primary residence in computing part B income-
            related premium

                Current Law
        Physician and outpatient services provided under Part B are
    financed through a combination of beneficiary premiums,
    deductibles, and federal general revenues. In general, Part B
    beneficiary premiums equal 25% of estimated program costs for
    the aged, with federal general revenues accounting for the
    remaining 75%.
        Beginning in 2007, higher-income enrollees pay a higher
    percentage of Part B costs according to a sliding scale.
    Beneficiaries with incomes above $85,000 for and individual
    (and $170,000 for a couple) pay 35% to 80% of the standardized
    Part B costs depending on their income reported to the IRS.
        For purposes of determining the income-related premium,
    beneficiaries experiencing major life events may apply to use a
    more recent tax year for determination of the income-related
    premium.
                Proposed Law
        This provision treats the sale of a primary residence as a
    major life event for purposes of qualifying for the use of a
    more recent tax year. This modification would apply to premiums
    and payments for years beginning with 2011.

    Sec. 1236. Demonstration program on use of patient decisions aids

                Current Law
        Current law does not explicitly address patient decision
    aids, which are information tools to help patients understand
    health care options, and make informed choices that take into
    account their lifestyle, preferences, and beliefs. A related
    concept is shared decision making (referred to by many other
    names as well), meaning the cooperation of providers and
    patients in making health care decisions.
        Section 646 of the Medicare Prescription Drug, Improvement,
    and Modernization Act of 2003 (MMA, P.L. 108-173) requires the
    Secretary to carry out a Medicare quality demonstration
    program, which would, among other things, encourage shared
    decision making. Eligible entities include physician groups,
    integrated health systems, or regional coalitions of the same.
    Projects approved under this demonstration are expected to
    achieve significant improvements in safety, effectiveness,
    efficiency, patient-centeredness (i.e., shared decision
    making), timeliness, and equity, the six aims for quality
    improvement identified by the Institute of Medicine. Two
    demonstrations have been approved and will begin in 2009. Two
    others are in the final review process.
        In addition, under their general authorities, the Agency
    for Healthcare Research and Quality (AHRQ) and Centers for
    Disease Control and Prevention (CDC) conduct research on the
    application and use of shared decision making, including the
    use of patient decision aids.
                Proposed Law
        This provision would require the Secretary to conduct a
    Medicare demonstration program to determine if using patient
    decision aids would improve beneficiaries' understanding of
    their medical treatment options. The program would enroll not
    more than 30 eligible providers, with preference given to
    providers that have documented experience, and the necessary
    information technology infrastructure and training, in using
    patient decision aids. Eligible providers would be required to
    provide follow-up counseling visits after beneficiaries have
    viewed decision aids, to address questions about subsequent
    medical care and the beneficiary's preferences. The Secretary
    would have to provide for the development of one or more
    billing codes and reimbursement for the follow-up counseling.
    Eligible providers would be responsible for the costs of
    selecting, purchasing, and delivering patient decision aids,
    and reporting data on quality and outcome measures.
        To carry out the program, the Secretary would be required
    to use funds from the Federal Supplementary Medical Insurance
    Trust Fund, and would be authorized to waive requirements under
    SSA Titles XI (general and administrative provisions) and XVIII
    (Medicare). Within 12 months of program completion, the
    Secretary would be required to report to Congress regarding the
    effects of the program on health quality, utilization of health
    care services, and quality of life; and any recommendations for
    legislation and administrative action.
        Eligible providers would be (a) a primary care practice;
    (b) a specialty practice; (c) a multispecialty group practice;
    (d) a hospital; (e) a rural health clinic; (f) a Federally
    Qualified Health Center (FQHC); (g) an integrated delivery
    system; (h) a state cooperative entity that includes the state
    government and at least one other health care provider which is
    set up for the purpose of testing shared decision making and
    patient decision aids. The provision would define ``patient
    decision aid'' to mean ``an educational tool (such as the
    Internet, a video, or a pamphlet) that helps patients (or, if
    appropriate, the family caregiver of the patient) understand
    and communicate their beliefs and preferences related to their
    treatment options, and to decide with their health care
    provider what treatments are best for them based on their
    treatment options, scientific evidence, circumstances, beliefs,
    and preferences''; and ``shared decision making'' would be
    defined to mean ``a collaborative process between patient and
    clinician that engages the patient in decision making, provides
    patients with information about trade-offs among treatment
    options, and facilitates the incorporation of patient
    preferences and values into the medical plan.''

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

    Sec. 1301. Accountable care organization pilot program

                Current Law
        No current provision. In April 2005, the Centers for
    Medicare and Medicaid Services (CMS) initiated the Physician
    Group Practice demonstration, which offers 10 large practices
    the opportunity to earn performance payments for improving the
    quality and cost-efficiency of health care delivered to
    beneficiaries in fee-for-service Medicare.
                Proposed Law
        The Physician Group Practice (PGP) demonstration program
    has shown promise in incentivizing physicians and other
    providers to reduce health care costs and improve quality. The
    ACO pilot program in the legislation builds on progress that
    has been made to date in the PGP demonstration and gives CMS a
    flexible platform on which to continue to test, adjust, and
    expand the shared savings concept as an alternative to fee-for-
    service payment.
        A new section 1866E would be added to the Social Security
    Act (SSA) to establish the accountable care organization (ACO)
    pilot program. The Secretary would conduct a pilot program to
    test different payment incentive models intended to reduce
    growth in Medicare costs while improving health outcomes. The
    pilot would promote accountability for services provided to a
    Medicare patient population, coordinate Medicare's Part A and B
    items and services, encourage investment in infrastructure and
    the redesign of care processes, and reward high quality,
    efficient physician practices.
        The Secretary would set specific goals for the number of
    ACOs, participating practitioners, and patient served in the
    initial tests under the pilot program to ensure that the
    program has sufficient size and scope to test the approach in a
    variety of settings, including urban, rural and underserved
    areas and, subject to certain qualifications, disseminate the
    approach rapidly under a national basis. To the extent that the
    Secretary finds a qualifying ACO to be successful in improving
    quality and reducing costs, the Secretary would attempt to
    attract at least 10% of all eligible providers to act as ACOs
    and implement such mechanisms and reforms within 5 years of
    enactment. If the Secretary further finds such ACO models to be
    successful, the Secretary would seek to implement such
    mechanisms and reforms on as large a geographic scale as
    practical and economical.
        A qualifying accountable care organization (qualifying ACO)
    would be a group of physicians who are organized, at least in
    part, for the purpose of providing physician services and meet
    other specified standards. A qualifying ACO could include other
    practitioners such as nurse practitioners or physician
    assistants, a hospital or multiple hospitals, or any other
    provider or supplier (furnishing Medicare covered services)
    that are affiliated with the ACO under an arrangement
    structured to coordinate patient care. A qualifying ACO would
    meet the following requirements: (1) have a legal structure
    that would allow the group to receive and distribute incentive
    payments; (2) include a sufficient number of primary care
    physicians (as determined by the Secretary); (3) report on
    required quality measures in the specified form, manner, and
    frequency (which may be for the group, for providers of
    services, and suppliers or both); (4) report required data to
    monitor and evaluate the pilot program; (5) provide notice to
    applicable beneficiaries regarding the pilot program; (6)
    contribute to a best practices network or website to share
    strategies on quality improvement, care coordination, and
    efficiency; (7) utilize patient-centered processes of care, and
    (8) meet other criteria determined to be appropriate by the
    Secretary.
        Organizations qualifying as ACOs may include independent
    practice association or other medical practice arrangements
    which already provide services to Medicare beneficiaries
    through fee-for-service Medicare or Medicare Advantage. An ACO
    may continue to provide services to Medicare Advantage
    enrollees in addition to providing services to enrollees in
    fee-for-service Medicare through the ACO program.
        Specific payment incentive models to be tested include: a
    performance target model, a partial capitation model, and other
    payment models.
        Under the performance target model, a qualifying ACO would
    receive an incentive payment if expenditures for applicable
    beneficiaries are less than a target spending level or a target
    rate of growth. The incentive payment would be made only if
    savings are greater than would result from normal variation in
    Medicare expenditures for Part A and B items and services. In
    general the Secretary would establish a base amount increased
    to the current year by an adjustment factor. The base amount
    would equal the average total payments (or allowed charges)
    under Parts A and B for applicable beneficiaries for whom the
    qualifying ACO furnishes items and services. The base amount
    may include Medicare Part D drugs and services if deemed
    appropriate. The adjustment factor would equal an annual per
    capita amount that reflects changes in expenditures from the
    base period to the current year. The factor could be determined
    as an amount or rate, determined on a national, regional, local
    or organization-specific basis, and may be determined on a per
    capita basis. It could also include a risk adjustment factor as
    determined by the Secretary. The base amount would be
    periodically recalculated.
        A qualifying ACO that meets or exceeds annual quality and
    performance targets for a year would receive an incentive
    payment equal to a portion of the amount by which Medicare
    payments are estimated to be below the performance target
    (i.e., Medicare savings). The Secretary could establish a cap
    on incentive payments for a year for a qualifying ACO.
    Incentive payments to qualifying ACOs would be limited to
    ensure that the aggregate expenditures do not exceed the amount
    that the Secretary estimates would be expended for such ACO for
    such beneficiaries if the pilot program were not implemented.
        The Secretary would be able to incorporate reporting
    requirements, incentive payments, and penalties related to the
    physician quality reporting initiative (PQRI), electronic
    prescribing, electronic health records, and other similar
    physician payment initiatives under section 1848 of the SSA.
    Alternative criteria than would otherwise apply could be used
    when determining whether to make these payments so as to
    streamline administration of the overlapping monitoring and
    reporting requirements for ACOs and fee-for-service Medicare.
    Also, these incentive payments would not be included in the
    aggregate expenditure test described previously or in the
    performance target model.
        Under a partial capitation model, a qualifying ACO would be
    at financial risk for some, but not all, of the Part A and B
    items and services. The Secretary would be able to limit a
    partial capitation model to ACOs that are highly integrated
    systems of care and to ACOs capable of bearing risk. Payments
    under the partial capitation model would be established in a
    manner that does not result in spending more for such ACO for
    such beneficiaries than would otherwise be expended if the
    pilot were not implemented. Partial capitation would not
    constrain beneficiaries' to seeing any particular provider;
    beneficiaries would retain the ability to choose their doctor
    or practitioner and could leave the ACO at any time.
        The Secretary may develop other payment models that meet
    the goals of this pilot program to improve quality and
    efficiency. Payments under these models would be established in
    a manner that does not result in spending more for such ACO for
    such beneficiaries than would otherwise be expended if the
    pilot were not implemented.
        An applicable beneficiary would be an individual is
    enrolled under part B and entitled to Part A benefits; is not
    enrolled in a Medicare Advantage plan under part C or a PACE
    (Program of All-Inclusive Care for the Elderly) program under
    Section 1894 of the SSA; and meets other appropriate criteria.
        The Secretary would monitor data on Medicare expenditures
    and quality of services including a period of time after an
    applicable beneficiary discontinues receiving services through
    a qualifying ACO.
        The pilot program would begin no later than January 1,
    2012. An agreement with a qualifying ACO under this pilot would
    cover a multi-year period of between 3 and 5 years. The
    Secretary would be able to waive Medicare provisions and the
    general provisions established under Title XI of the SSA only
    insofar as necessary for implementation of this section.
        The Secretary would be required to report performance
    results to qualifying ACOs under the pilot program at least
    annually. There would be no administrative or judicial review
    of the (1) elements, parameters, scope, and duration of the
    pilot program; (2) the selection of qualifying ACOs for the
    pilot program; (3) the establishment of targets, measurement of
    performance, determinations with respect to whether savings
    have been achieved and the amount of savings; (4)
    determinations regarding whether, to whom, and in what amounts
    incentive payments are paid; and (5) decisions about the
    extension of the program with successful ACOs, expansion of the
    program to additional ACOs or transitional extension of the
    existing physician group practice demonstration project. Also,
    Chapter 35 of Title 44 of the United States Code (concerning
    the coordination of federal information policy) would not apply
    to this pilot.
        The Secretary would evaluate the payment incentive model
    for each qualifying ACO to assess the pilot's impact on
    beneficiaries, providers of services, suppliers and the
    program. The evaluation would be publicly available within 60
    days of the date of completion of such report. The OIG would
    monitor the operation of ACOs under the pilot program with
    regard to violations of the Stark self referral prohibition
    (Section 1877 of the SSA).
        No later than 2 years after the date the first pilot
    agreement is established, and every 2 years thereafter for six
    years, the Secretary would report to Congress on the use of
    authorities under the pilot program and its impact on
    expenditures, access, and quality. Subject to monitoring of the
    qualifying ACO, the Secretary would be able to extend the
    duration of the agreement if (1) the ACO receives incentive
    payments with respect to any of the first 4 years of the pilot
    agreement and is consistently meeting quality standards or (2)
    the ACO is consistently exceeding quality standards and is not
    increasing spending under the program. The Secretary would be
    able to terminate an agreement if the ACO did not receive
    incentive payments or consistently failed to meet quality
    standards in any of the first 3 years under the program.
        Subject to the evaluation of the pilot, the Secretary would
    be able to enter into agreements with additional qualifying
    ACOs to further test and refine payment incentive models. The
    Secretary would be able issue regulations to implement on a
    permanent basis the components of the pilot program that are
    beneficial to Medicare. However, to do so, the Chief Actuary of
    the CMS would be required to certify that the expansion of the
    program's components would result in estimated spending that
    would be less than what spending would otherwise be estimated
    to be in the absence of such expansion.
        The Secretary would be able to enter into an agreement with
    an organization participating in the physician group practice
    demonstration as a qualifying ACO. Participation as a
    qualifying ACO would be subject to rebasing and other
    appropriate modifications, until the pilot program under this
    section is operational.
        The Secretary would be able to create separate incentive
    arrangements (including using multiple years of data, varying
    thresholds, varying shared savings amounts, and varying shared
    savings limits) for different categories of qualifying ACOs to
    reflect natural variations in data availability, variation in
    average annual attributable expenditures, program integrity,
    and other matters the Secretary deems appropriate.
        The Secretary would be able to limit a qualifying ACO's
    exposure to high cost patients in order to encourage the
    participation of smaller accountable care organizations in the
    pilot.
        Nothing in this section would be construed as preventing a
    qualified ACO from entering into an arrangement with an
    Independence at Home medical practice or for providing home
    based services for the treatment of beneficiaries who are
    eligible for that program. Nothing in this section would be
    construed as preventing qualifying ACOs participating in the
    pilot program from negotiating similar contracts with private
    payers.
        The Secretary would not be able to enter into an agreement
    with an entity to provide health care items or services under
    the pilot program, or with an entity to administer the program,
    unless such entity guarantees that it will not deny, limit, or
    condition the coverage or provision of benefits under the
    program, for individuals eligible to be enrolled under such
    program, based on any health status-related factor described in
    section 2702(a)(1) of the Public Health Service Act, including
    health status, medical condition, claims experience, receipt of
    health care, medical history, genetic information, evidence of
    insurability, and disability.
        Providers participating in the accountable care
    organization (ACO) pilot program would have the option of
    pursuing separate target growth rate for purposes of Medicare's
    physician fee schedule (as amended under Section 1121) that is
    applicable only that organization. No later than January 1,
    2012, the Secretary would develop a method that would (1) allow
    each ACO to have its own Medicare Part B expenditure targets
    and updates that would be consistent with the methodologies
    described above, and (2) provide that the target growth rate
    applicable to other physicians would not apply to physicians to
    the extent that their services are furnished through the ACO.
    This method would apply beginning with 2012. In determining the
    expenditure targets and updates for physicians in the ACO pilot
    program, the Secretary could apply the difference in the update
    on a claim-by-claim or lump sum basis and such a payment would
    be taken into account under the pilot program.
        Nothing in this section would be construed to compel an
    organization to use that organization-specific target growth
    rate methodology.
        The program management account of CMS would be appropriated
    $25 million for FY2010 through FY2014 and $20 million in FY2015
    for the purposes of administering and carrying out the pilot
    program, but not for payments for Medicare covered items and
    services or for incentive payments.

    Sec. 1302. Medical home pilot program

                Current Law
        The Tax Relief and Health Care Act of 2006 (P.L. 109-432),
    as modified by the Medicare Improvements for Patients and
    Providers Act of 2008 requires the Secretary to establish a
    three-year demonstration in up to 8 states (with urban, rural
    and underserved areas) to redesign the health care delivery
    system to provide targeted, accessible, continuous and
    coordinated family-centered care to high need Medicare
    populations with chronic or prolonged illnesses requiring
    regular medical monitoring, advising, or treatment.
        Over 83% of Medicare beneficiaries have a chronic illness
    and over 95% of total spending in Medicare is linked to
    chronically ill patients. The medical home concept envisions a
    health care system where patient care is coordinated and
    integrated through a provider-guided multidisciplinary team
    enabled by a transformed practice setting. The practice would
    manage patient-centered care across a variety of settings
    according to the needs of the patient through the promotion of
    continuous care relationships as well as application of the
    chronic care model, use of evidence based-medicine, care
    coordination, and patient empowerment. The idea has been
    described as early as 1967 by the American Academy of
    Pediatrics' Council on Pediatric Practice. The model has proven
    to be successful in improving outcomes for patients with
    chronic illnesses through improved care-coordination. Many
    demonstration programs have demonstrated long term cost-savings
    as well.
                Proposed Law
        This provision establishes a pilot program that builds on
    the current medical home model program, as modified by MIPPA,
    and allows for a broader paradigm beyond the model proposed by
    the National Committee for Quality Assurance (NCQA). It directs
    the Secretary to establish ``a community-based medical home
    model'' in addition to the ``independent patient-centered
    medical home model.'' Studies have demonstrated that such
    alternative models using community care teams within the
    medical home can achieve cost savings and quality improvements.
        A new section 1866E would be added to SSA to establish the
    medical home pilot program for the purpose of evaluating the
    feasibility and advisability of reimbursing qualified patient-
    centered medical homes for furnishing medical home services to
    high need beneficiaries in a variety of areas, including urban,
    rural, and underserved areas.
        The pilot program would evaluate two medical home models
    (1) the independent patient-centered medical home model and (2)
    the community-based medical home model.
        Independent Patient-Centered Medical Home. Patient-centered
    medical home services would be those services that (1) provide
    beneficiaries with direct, ongoing access to primary care or
    principal care provided by a physician or nurse practitioner;
    (2) coordinate the care provided to a beneficiary by a team of
    individuals at the practice level across office, institutional
    and home settings led by a primary care or principal physician
    or nurse practitioner; (3) provide for all the patient's health
    care needs or take responsibility for appropriately arranging
    care with other qualified providers for all stages of life; (4)
    provide continuous access to care and communication with
    participating beneficiaries; (5) provide support for patient
    self-management, proactive, and regular patient monitoring,
    support for family caregivers, and coordination with community
    resources; (6) integrate readily accessible, clinically useful
    information on participating patients; and (7) implement
    evidence-based guidelines and apply such guidelines to the
    identified needs of beneficiaries over time and with the
    intensity needed by such beneficiaries.
        ``Primary care'' would mean health care that is provided by
    a physician or nurse practitioner who practices in the field of
    family medicine, general internal medicine, geriatric medicine,
    or pediatric medicine. ``Principal care'' means integrated,
    accessible health care that is provided by a physician who is a
    medical subspecialist that addresses the majority of the
    personal health care needs of patients with chronic conditions
    and for whom the subspecialist assumes care management.
        Nothing in this provision would prevent a nurse
    practitioner or a physician assistant from leading or
    participating in a patient centered medical home so long as all
    of the pilot program requirements are met and the nurse
    practitioner or physician assistant is acting consistently with
    state law.
        Under the independent patient-centered medical home model,
    the Secretary would make payments for medical home services
    furnished by an independent patient-centered medical home to
    targeted high need beneficiaries. An independent patient-
    centered medical home would be a physician-directed or nurse-
    practitioner-directed practice that is qualified to provide
    beneficiaries with patient-centered medical home services and
    meets such other requirements as the Secretary may specify. A
    targeted high need beneficiary would be a high need beneficiary
    who, based on a chronic disease risk score as specified by the
    Secretary, is generally within the upper 50th percentile of
    Medicare beneficiaries.
        The Secretary would be required to determine an appropriate
    method of ensuring that beneficiaries have agreed to
    participate in the pilot program. The pilot program would begin
    no later than 6 months after the date of the enactment of this
    section. The Secretary would review alternative models for
    standard setting and qualification and develop a process that
    (1) establishes standards to enable medical practices to
    qualify as patient-centered medical homes; and (2) provides for
    the review and certification of medical practices as meeting
    such standards.
        The Secretary would establish a methodology for the payment
    for medical home services furnished by independent patient-
    centered medical homes. Under the payment methodology, the
    Secretary would adjust payments to medical homes based on
    beneficiary risk scores to ensure that higher payments are made
    for higher risk beneficiaries. Moreover, the Secretary shall
    pay independent patient-centered medical homes a monthly fee
    for each targeted high need beneficiary who receives medical
    home services through such medical home. The monthly fee would
    be paid on a prospective basis. The amount of the monthly fee
    would depend upon the clinical work and practice expenses
    involved in providing the service; allow for differential
    payments based on capabilities of the independent patient-
    centered medical home; and use appropriate risk-adjustment in
    determining the per beneficiary per monthly payment in a manner
    that ensures that higher payments are made for higher risk
    beneficiaries.
        The pilot program would be designed to include the
    participation of physicians in practices with fewer than 10
    full-time equivalent physicians, as well as physicians in
    larger practices, particularly in underserved and rural areas,
    as well as federally qualified community health centers, and
    rural health centers. A physician in a group practice that
    participates in the Accountable Care Organizations pilot
    program established in section 1866D would not be eligible to
    participate in this pilot program, unless the pilot program is
    expanded and made permanent.
        Community-Based Medical Home. Under the community-based
    medical home model (the ``CBMH model''), the Secretary would
    make payments for the furnishing of medical home services by a
    community-based medical home to a high need beneficiary. A CBMH
    would be an appropriately certified nonprofit community-based
    or state-based organization that provides beneficiaries with
    medical home services under the supervision of and in close
    collaboration with the primary care or principal care physician
    or nurse practitioner or physician assistant designated by the
    beneficiary as his or her community-based medical home
    provider. A CBMH would employ community health workers,
    including nurses or other non-physician practitioners, lay
    health workers, or other appropriate persons that assist the
    primary or principal care physician or nurse practitioner or
    physician assistant in chronic care management activities, such
    as teaching self-care skills, providing transitional care
    services, and developing care plans. A CBMH would meet such
    other requirements as the Secretary may specify. For this
    model, a ``high need beneficiary'' would be an individual with
    multiple chronic illnesses who requires regular medical
    monitoring, advising, or treatment. The Secretary would
    establish a process (1) to determine the necessary
    qualifications for community-based or state-based organizations
    to function as community-based medical homes; and (2) to
    provide for the review and assessment of these qualifications
    pursuant to criteria to be established by the Secretary.
        The CBMH pilot program would start no later than 2 years
    after the date of the enactment of this section. Each
    demonstration site under the pilot program would operate for a
    period of up to 5 years after the initial implementation phase.
    In selecting sites for the CBMH model, the Secretary would give
    preference to applications from geographic areas that propose
    to coordinate health care services for chronically ill
    beneficiaries across a variety of health care settings,
    practices with fewer than 10 physicians, rural health clinics,
    and rural health clinics. Preference may also be given to
    applications for models that include the collaboration of other
    payors to provide medical homes services; or to states that
    propose to use the medical home model to coordinate health care
    services for chronically ill individuals enrolled under Title
    XIX of the Social Security Act across a variety of health care
    settings.
        The Secretary would establish a methodology for the payment
    for medical home services furnished under the CBMH model. Under
    such payment methodology, the Secretary would make two separate
    monthly payments for each high need beneficiary as follows: one
    monthly payment to a community-based or state-based
    organization and one monthly payment to the primary or
    principal care practice for such beneficiary. The payments
    would be made on a prospective basis. The amount of the monthly
    fee would depend upon the clinical work and practice expenses
    involved in providing the service and would include an
    appropriate risk-adjustment to determine the monthly per
    beneficiary payment amount.
        The Secretary would be able to make available initial
    implementation funding to a community-based or state-based
    organization or a state participating in the pilot. The entity
    would provide a detailed implementation plan that includes how
    such funds will be used.
        The Secretary would evaluate the pilot program to determine
    the extent to which medical homes result in improvements in the
    quality and coordination of health care services; reduction in
    health disparities; reductions in preventable hospitalizations;
    prevention of readmissions; reductions in emergency room
    visits; improvement in health outcomes; increased patient
    satisfaction; improved efficiency of care; and reductions in
    health care expenditures. The evaluation would also examine the
    feasibility and advisability of reimbursing medical homes for
    medical home services under Medicare on a permanent basis. No
    later than 60 days after the date of completion of the
    evaluation, the Secretary would submit to Congress and make
    available to the public a report on the findings of the
    evaluation.
        Subject to the results of the evaluation, the Secretary
    would be able to issue regulations to implement, on a permanent
    basis, one or more models, if, and to the extent that such
    model or models, are beneficial to Medicare beneficiaries. The
    Secretary would not be able to issue such regulations unless
    the Chief Actuary of CMS certifies that the expansion of the
    components of the pilot program would result in estimated
    Medicare spending that would be no more than the level of
    spending that the Secretary estimates would otherwise be spent
    in the absence of such expansion.
        During any month, the Secretary would not be able to make
    payments under more than one model or through more than one
    medical home under any model for the furnishing of medical home
    services to an individual. Also, payments made under this pilot
    are in addition to, and have no effect on the amount of,
    payment for evaluation and management services made under this
    title.
        Chapter 35 of Title 44, United States Code would not apply
    to the pilot.
        For purposes of operational costs associated with the pilot
    program (including the design, implementation, technical
    assistance for and evaluation of such program), in addition to
    funds otherwise available, $6 million for each of fiscal years
    2010 through 2014 would be transferred from the Federal
    Supplementary Medical Insurance Trust Fund (Part B trust fund)
    to the CMS Program Management Account. Amounts appropriated
    under this paragraph for a fiscal year would be available until
    expended. In addition to funds otherwise available, $200
    million for each fiscal year 2010 through 2014 for payments for
    patient centered medical home services and $125 million for
    each fiscal year 2012 through 2016 for CBMH services would be
    available for CMS from the Part B trust fund. Amounts available
    under this paragraph for a fiscal year would be available until
    expended.
        In addition to funds otherwise available, $2.5 million for
    each of fiscal years 2010 through 2012 would be available to
    CMS from the Part B trust fund for initial implementation
    costs. Amounts available under this paragraph for a fiscal year
    would be available until expended.
        In addition to funds otherwise available for payment of
    medical home services, there would also be available the amount
    established for the existing Medicare Medical Home
    Demonstration for the independent patient-centered medical home
    model. The Medicare Medical Home Demonstration project is
    repealed. The amendment made by this section would apply to
    services furnished on or after the date of the enactment of
    this Act.

    Sec. 1303. Independence at home pilot program

                Current Law
        The Department of Veterans Affairs has been implementing a
    Home Based Primary Care (HBPC) program since 1972. HBPC
    provides comprehensive, interdisciplinary primary care in the
    homes of veterans with complex medical, social, and behavioral
    conditions for whom routine clinic-based care is not effective.
    HBPC targets frail, chronically ill veterans who require
    interdisciplinary health care teams, continuity, coordination
    of care, and the integration of diverse services to cover their
    complex medical, social, rehabilitative, and behavioral care
    needs. These veterans need comprehensive, longitudinal home
    care services as they age to maximize function, minimize
    institutionalization, and maintain quality of life. HBPC
    currently operates at over 130 locations in 48 states and
    Puerto Rico, and has shown substantial reductions in hospital
    days, nursing home days, and total costs of care.
                Proposed Law
        The Secretary would be required to conduct a Medicare pilot
    program, beginning no later than January 1, 2012, 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 to certain
    high-cost, chronically ill Medicare beneficiaries. The pilot
    would test whether such a model, 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, would
    result in reductions in preventable hospitalizations;
    reductions in preventable readmissions; reductions in emergency
    room visits; improvements in health outcomes; improvements in
    the efficiency of care, such as by reducing duplicative
    diagnostic and laboratory tests; reductions in Medicare costs;
    and improvements in beneficiary and family caregiver
    satisfaction, among others.
        The Secretary would enter into agreements with qualifying
    Independence at Home Medical Practices, legal entities
    comprised of an individual physician or nurse practitioner or
    group of physicians and nurse practitioners who are certified
    or have experience and training in providing home-based primary
    care services to high cost chronically ill beneficiaries. The
    provision would not prohibit Practices from including
    participating practitioners that are affiliated with the
    medical practice under an arrangement structured so that such
    provider or practitioner would participate in the pilot program
    and share in any of its savings.
        Practice teams, comprised of physicians, nurses, physician
    assistants, pharmacists, and other health and social services
    staff, as appropriate, would make in-home visits and carry out
    plans of care tailored to the beneficiary's chronic conditions
    to achieve the pilot program's objectives. The teams would also
    report the clinical and quality of care outcomes as determined
    by the Secretary. The Secretary would design the pilot program
    to include the participation of physician and nurse
    practitioner practices with fewer than 10 full-time equivalent
    physicians, as well as physicians in larger practices,
    particularly in underserved rural areas. A home-based primary
    care team could be led by a nurse practitioner or physician
    assistant, if he or she complies with the requirements of this
    provision and acts consistently with state law.
        Practices would be expected to spend at least 5% less than
    a target spending level or a target rate of growth. A practice
    could receive 80% of savings in excess of 5% if Medicare
    expenditures for applicable beneficiaries are at least 5%
    greater than would result from normal variation in expenditures
    for items and services covered under Medicare parts A and B
    (and part D to the extent the Secretary decides to include such
    costs). Target spending levels, savings thresholds, and limits
    on shared savings amounts for each practice may be established
    by the Secretary, and would be based upon the size of the
    practice, characteristics of the enrolled individuals, and
    other factors the Secretary would determine to be appropriate.
        Practices could receive interim payments for geriatric
    assessments and monthly care coordination services, as
    determined by the Secretary. But those payments, or a fraction
    of them, may be recouped by the Secretary in the event that the
    practice does not achieve the required savings so as to ensure
    that no practice receives more payments under the pilot program
    than Medicare otherwise would have paid for the services in the
    absence of the pilot program. To participate, a practice would
    be required to demonstrate to the Secretary that it is able to
    assume financial risk for the 5% savings requirement. The
    Secretary must limit payments for shared savings to each
    practice so that aggregate expenditures for applicable
    beneficiaries, including shared savings payments, would not
    exceed the amount that would have been expended for such
    practice if the pilot program had not been implemented.
        An applicable beneficiary would be defined as an individual
    who:
              (A) Is enrolled under Medicare part B and entitled to
            benefits under part A;
              (B) Is not enrolled in a Medicare Advantage plan C or
            a Program for All-Inclusive Care for the Elderly
            program;
              (C) Is in the top 20% of Medicare patient health risk
            scores;
              (D) Has two or more chronic illnesses, including
            congestive heart failure, pulmonary disease, ischemic
            heart disease, stroke, Alzheimer's disease, among
            others specified in the provision, which would result
            in high Medicare costs when in combination with one or
            more of the specified diseases;
              (E) Had a non-elective hospital admission within the
            past 12 months;
              (F) Has received acute or subacute rehabilitation
            services;
              (G) Has two or more functional dependencies requiring
            the assistance of another person (e.g., bathing,
            dressing, toileting, walking, or feeding); and
              (H) Fulfills other criteria as the Secretary
            determines appropriate.
        The Secretary would be required to publish eligibility
    requirements for beneficiaries that are sufficiently clear to
    be understood by beneficiaries and the individuals providing
    services to them, and the Secretary would be required to
    determine a method to ensure that beneficiaries' agreement to
    participate in a Practice is voluntarily. Beneficiaries who do
    agree to participate do not relinquish access to any Medicare
    benefits as a condition of receiving services from a practice.
        Agreements with practices under the program could cover a
    3-year period. No physician or nurse practitioner participating
    in the accountable-care organization pilot program or the
    medical home pilot program would be eligible to participate in
    this pilot program.
        The Secretary would be required to give preference, in
    selecting practices, to medical practices in high costs areas
    of the country, that have experience in furnishing health care
    services to applicable beneficiaries in the home, and that use
    electronic medical records, health information technology, and
    individualized plans of care. The Secretary could waive certain
    provisions in the Social Security Act to implement this pilot
    program.
        To the extent practicable, at least two unaffiliated
    practices would be established in the 13 highest cost states
    and the District of Columbia, and in 13 additional states that
    are representative of other regions of the United States and
    include medically underserved rural and urban areas, as
    determined by the Secretary.
        The Secretary would be required to provide an annual
    evaluation of each practice, which it would be required to make
    publicly available within 60 days of the completion of the
    report, to assess whether it achieved the minimum savings of 5%
    and other goals of the program, and can terminate an agreement
    with a practice if the practice did not meet those goals.
        The Secretary would also be required to submit to Congress
    and make publicly available, no more than 2 years after the
    date the first agreement is entered into, and every second year
    thereafter during the pilot program, a report on best practices
    under the pilot program, and the impact of best practices on
    expenditures, access, and quality.
        Subject to the evaluation, the Secretary may enter into
    additional agreements with practices to further test and refine
    models with respect to qualifying practices. If the practice
    models are beneficial to Medicare, as determined by the
    Secretary, and if the Chief Actuary of the CMS certifies that
    the model would result in estimated spending that would be less
    than without the expansion, the Secretary may issue regulations
    to implement, on a permanent basis, the independence at home
    practice model.
        For purposes of administering and carrying out the pilot
    program, the provision would appropriate to the Secretary for
    the CMS Program Management Account $5 million for each of
    fiscal years 2010 through 2014 to administer and carry out the
    pilot program (other than for payments for items and services
    furnished under Medicare, shared savings and monthly fees, or
    other related payments such as interim payments).

    Sec. 1304. Payment incentive for selected primary care services

                Current Law
        Section 1833(m) of the Social Security Act provides bonus
    payments for physicians who furnish medical care services in
    geographic areas that are designated by the Health Resources
    and Services Administration (HRSA) as primary medical care
    health professional shortage areas (HPSAs) under section
    332(a)(1)(A) of the Public Health Service (PHS) Act. In
    addition, for claims with dates of service on or after July 1,
    2004, psychiatrists furnishing services in mental health HPSAs
    are also eligible to receive bonus payments.
        The bonus payment equals 10% of what would otherwise be
    paid under the fee schedule. HPSAs may be designated as having
    a shortage of primary medical care, dental or mental health
    providers. They may be urban or rural areas, population groups
    or medical or other public facilities.
                Proposed Law
        The provision would establish payment incentives in
    Medicare to promote primary care furnished by primary care
    practitioners. For such services furnished on or after January
    1, 2011, by a primary care practitioner, a payment incentive of
    5% would be allowed (or 10% if the practitioner provides the
    services predominately in an area that is designated as a
    primary care health professional shortage area) and would be
    paid from the Supplementary Medical Insurance Trust Fund.
        Primary care services would be defined to mean physicians'
    services as defined in section 1848(j)(5)(A) as well as
    services furnished by another health care professional that
    would be described above if furnished by a physician. A primary
    care practitioner would be defined as (1) a physician or other
    health care practitioner (including a nurse practitioner) who
    specializes in family medicine, general internal medicine,
    general pediatrics, geriatrics, or obstetrics and gynecology
    and has allowed charges for primary care services that account
    for at least 50% of the physician's or practitioner's total
    allowed charges under section 1848, as determined by the
    Secretary for the most recent period for which data are
    available, or (2) a physician assistant who is under the
    supervision of a practitioner described above.
        There would be no administrative or judicial review
    respecting (1) any determination or designation of the primary
    care services payment incentive; (2) the identification of
    services as primary care services for the purpose of this
    payment incentive; or (3) the identification of a practitioner
    as a primary care practitioner for the purposes of this payment
    incentive.
        The primary care services incentive payments would not be
    taken into account in determining the additional payments for
    physicians in health professions shortage areas or in physician
    scarcity areas. Furthermore, any bonus payment to physicians in
    health professions shortage areas or physician scarcity areas
    would not be taken into account in computing incentive payments
    for primary care services, nor would the primary care incentive
    payments be taken into account in determining the amounts that
    would otherwise be paid to physicians providing outpatient
    critical access hospital (CAH) services.

    Sec. 1305. Increased reimbursement rate for certified nurse-midwives

                Current Law
        In general, Medicare pays 80% of the reasonable charges
    (the lesser of the actual charge for the services or the amount
    determined by the fee schedule) for physician services covered
    under Medicare Part B. However, Medicare payments for services
    performed by certified nurse-midwives to Medicare beneficiaries
    are currently limited to no more than 65% of the fee schedule
    amount for the same service performed by a physician.
                Proposed Law
        In order to increase access to women's health services for
    Medicare beneficiaries, the provision increases the
    reimbursement for nurse-midwife services from 65% of the fee
    schedule to 100%. The modification would apply to services
    furnished on or after January 1, 2011.

    Sec. 1306. Coverage and waiver of cost-sharing for preventive services

                Current Law
        In general, Medicare law authorizes the Secretary to cover
    services for the diagnosis and treatment of illness, while
    coverage of preventive services (i.e., services provided in the
    absence of illness) has required legislation. Section 1861 of
    the SSA requires coverage of a number of specified preventive
    services under Part B (often with specified conditions for
    coverage) in language interspersed throughout the section.
    There is no definition of ``preventive services'' in the law
    that refers to them collectively. Also, in Section 101 of the
    Medicare Improvements for Patients and Providers Act of 2008
    (P.L. 110-275), Congress provided administrative authority for
    the Secretary to add coverage of new preventive services, under
    certain conditions.
        Section 1833(a) of the SSA establishes coinsurance for the
    beneficiary, requiring Medicare to cover 80% of the costs of
    covered services under Part B, with specified exceptions.
    Section 1833(b) establishes an annual deductible for which the
    beneficiary is responsible. These sections have been amended
    over the years to waive coinsurance and/or the deductible for
    many, but not all, covered preventive services.
                Proposed Law
        In order to increase access to and utilization of
    preventive services in Medicare, this section eliminates co-
    insurance and the application of any deductible for such
    services. Subsection (a) of this section would add a new
    subsection to SSA Section 1861, which would define Medicare
    covered preventive services to mean a specified list of
    currently covered services, and colorectal cancer screening
    services regardless of the code applied, as provided in Section
    1307 of this bill. The list would also include any new services
    that were covered under the Secretary's administrative
    authority. Coverage would be subject to all conditions and
    limitations that apply to each listed service under current
    law.
        With respect to Medicare covered preventive services (as
    defined by this bill), subsection (b) of this section would
    amend Section 1833(a) of the SSA to require Medicare to pay
    100% of their allowed charges. It would also amend several
    additional SSA sections to require the waiver of coinsurance
    for specified sigmoidoscopy and colonoscopy services, and, in
    outpatient hospital settings, for diagnostic mammograms and
    Medicare clinical preventive services. This subsection would
    also amend Section 1833(b) of the SSA to waive the application
    of the deductible for Medicare covered preventive services.
    Finally, it would amend the SSA to remove the authority of
    providers to charge coinsurance when providing Medicare covered
    preventive services.
        The amendments made by this section would apply to services
    furnished on or after January 1, 2011. The Secretary would be
    required, within 12 months of enactment, to report to Congress
    regarding barriers faced by beneficiaries in accessing
    abdominal aortic aneurysm screening and other recommended
    preventive services, and to provide educational resources to
    patients and physicians regarding risk factors for abdominal
    aortic aneurysm.

    Sec. 1307. Waiver of deductible for colorectal cancer screening tests
            regardless of coding, subsequent diagnosis, or ancillary tissue
            removal

                Current Law
        Section 1833(a) of the SSA establishes coinsurance for the
    beneficiary, requiring Medicare to cover 80% of the costs of
    covered services under Part B, with specified exceptions.
    Section 1833(b) of the SSA requires the application of an
    annual deductible, for which the beneficiary is responsible,
    for some Part B services. Under current law, coinsurance is
    applied to colorectal cancer screening services, but the
    deductible is not.
                Proposed Law
        Current law prohibits the application of the Medicare Part
    B deductible for screening colonoscopies. If, however, a
    patient has a screening colonoscopy and the physician finds
    polyps that need to be removed during the screening exam, it is
    relabeled a diagnostic procedure and the deductible is applied.
    This provision would amend Sections 1833(a) and 1833(b) of the
    SSA (as amended by Section 1306 of this bill) to ensure that a
    screening colonoscopy avoids the deductible and the coinsurance
    regardless of whether the procedure becomes diagnostic. This
    provision would apply to items and services furnished on or
    after January 1, 2011.

    Sec. 1308. Excluding clinical social worker services from coverage
            under the Medicare skilled nursing facility prospective payment
            system and consolidated payment

                Current Law
        The majority of services provided to beneficiaries in a
    Medicare covered skilled nursing facility (SNF) stay are
    included in the bundled prospective payment made to the SNF.
    Certain services have been specifically excluded from SNF
    consolidated billing. In these instances, Medicare will pay the
    entity or practitioner providing the service directly.
    Currently, the items and services provided by a clinical social
    worker are included in the SNF consolidated billing.
                Proposed Law
        In order to improve access to mental health services for
    Medicare beneficiaries in nursing facilities, items and
    services provided by clinical social workers to Medicare
    beneficiaries in a SNF would receive separate Medicare payment
    on or after July 1, 2011. This treatment would be equivalent to
    the billing rules for psychiatrists and psychologists employed
    under current law.

    Sec. 1309. Coverage of marriage and family therapist services and
            mental health counselor services

                Current Law
        Section 1861(s)(2) of the SSA (42 U.S.C. 1395x(s)(2))
    defines services covered under the term ``medical and other
    health services.'' These services include medical supplies,
    hospital services, diagnostic services, outpatient physical
    therapy services, rural health clinic services, home dialysis
    services and supplies, antigens and physician assistant and
    nurse practitioner services. Marriage and family therapists and
    mental health counselors are not included under current law.
                Proposed Law
        In states that have licensed or certified marriage and
    family therapists and mental health counselors, these
    practitioners provide mental health services to people under
    age 65. Few states did so when Medicare was first created in
    1965. This provision updates Medicare coverage by allowing them
    to treat Medicare beneficiaries as well, subject to state law.
        The proposal would add two subcategories of services to be
    covered under the term ``medical and health services.'' These
    are (1) marriage and family therapists, and (2) mental health
    counselors.
        The proposal would stipulate the required qualifications
    for a marriage and family therapist, and mental health
    counselor in Medicare. It would define these providers'
    services as the diagnosis and treatment of mental illnesses, as
    permitted by his or her state license, if no other provider or
    facility is also paid for those services. The proposal would
    add a payment provision for marriage and family therapists, and
    mental health counselors. The amount paid would be 80% of the
    lesser of the actual charge for services or 75% of the amount
    that would be paid for a psychologist's services. The proposal
    would require the Secretary to consider confidentiality issues
    while developing criteria allowing for direct payment of the
    therapist and medical information sharing with the patient's
    primary care physician or nurse practitioner. The proposal
    would exclude marriage and family therapists and mental health
    counselors from the prospective payment system for skilled
    nursing facilities. The proposal would include marriage and
    family therapy services and mental health counseling services
    in the scope of services that rural health clinics and
    federally qualified health centers can provide to Medicare
    beneficiaries.

    Sec. 1310. Extension of physician fee schedule mental health add-on

                Current Law
        By law, every five years CMS examines Medicare billing
    codes under the physician fee schedule to determine whether
    they are overvalued or undervalued. Subsequent to the most
    recent evaluation, Medicare increased the rates for the codes
    used by physicians to bill for ``evaluation and management''
    (E/M) services (face-to-face visits with patients), effective
    January 1, 2007. To maintain budget neutrality, rates for
    certain other codes, including some used to bill for
    psychotherapy services, were reduced.
        The Medicare Improvements for Patients and Providers Act of
    2008 (MIPPA; P.L. 110-275) increased Medicare payments under
    the fee-schedule for psychotherapy services by 5% beginning on
    July 1, 2008, and ending on December 31, 2009. Psychiatric
    therapeutic procedures that involve insight oriented, behavior
    modifying, or supportive psychotherapy or interactive
    psychotherapy furnished in an office or other outpatient
    facility setting or in an inpatient hospital or residential
    care facility are paid at this higher amount.
                Proposed Law
        In order to maintain access to mental health services in
    Medicare, this proposal would extend the increased payments
    provided by MIPPA for psychotherapy services for an additional
    two years (ending December 31, 2011).

    Sec. 1311. Expanding access to vaccines

                Current Law
        Medicare Part B covers influenza, pneumococcal, and, for
    individuals at increased risk, hepatitis B vaccinations. This
    coverage includes both the costs of these vaccines and their
    administration by recognized providers. Medicare Part D covers
    all vaccines licensed by the FDA, and their administration,
    when prescribed by recognized providers.
        This split coverage arrangement is burdensome for patients
    and providers and potentially dangerous. For vaccines covered
    by Part D, beneficiaries may have to fill the vaccine
    prescription at the pharmacy and carry it to the physicians'
    office for administration.
                Proposed Law
        This provision transfers coverage for all vaccines to Part
    B, simplifying the program and improving access for
    beneficiaries.
        Under this provision, coverage of vaccines currently
    covered by Part D would be transferred to Medicare Part B. Part
    B coverage vaccine coverage would include all federally
    recommended vaccines, defined as any licensed vaccine that is
    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). The provision would also include all federally
    recommended vaccines in the suite of Medicare covered
    preventive services defined under section 1306 of this Act. The
    provision would apply to vaccines administered on or after
    January 1, 2011. Payment rates for vaccines under Medicare Part
    B would be based on 106% of the vaccines' Average Sales Price,
    with the exception of influenza vaccine. Payment rates for
    influenza vaccine would remain unchanged from current law, at
    95% of the Average Wholesale Price.

    Sec. 1312. Recognition of certified diabetes educators as certified
            providers for purposes of Medicare diabetes outpatient self-
            management training services

                Current Law
        Diabetes Self Management Training (DSMT) is covered under
    Medicare Part B pursuant to Section 1861(qq) of the SSA. DSMT
    means educational and training services furnished to an
    individual with diabetes by a ``certified provider,'' in an
    outpatient setting, by an individual or entity who meets
    specified quality standards. Certification of the need for such
    services is required by the treating physician or qualified
    non-physician practitioner. A certified provider for the
    purpose of providing DSMT services is a physician, or other
    individual or entity designated by the Secretary that, in
    addition to providing diabetes outpatient self-management
    training services, provides other items or services for which
    payment may be made under this title.
                Proposed Law
        Diabetes self-management training teaches patients how to
    manage diabetes to avoid and minimize subsequent health
    problems. This proposal would amend Section 1861(qq) of the SSA
    to designate certain certified diabetes educators as certified
    providers of covered DSMT services.
        Under the proposal, a ``certified diabetes educator'' is an
    individual who: (1) is licensed or registered as a health care
    professional by the state in which the services are performed;
    (2) specializes in teaching individuals with diabetes to
    develop the necessary skills and knowledge to manage the
    individual's diabetic condition; and (3) is certified as a
    diabetes educator by a recognized certifying body. A
    ``recognized certifying body'' means (1) the National
    Certification Board for Diabetes Educators, or (2) a certifying
    body for diabetes educators that is recognized by the Secretary
    as authorized to grant certification of diabetes educators for
    purposes of this proposal, pursuant to standards established by
    the Secretary, if the Secretary determines that such board or
    body meets the following requirements: (1) it is incorporated
    and registered to do business in the United States; and (2) it
    requires, as a condition of certification, that an individual:
    (A) has a qualifying credential in a specified health care
    profession; (B) has professional practice experience in DSMT
    that includes a minimum number of hours and years of experience
    in such training; (C) has successfully completed a national
    certification examination offered by such entity; and (D)
    periodically renews certification status following initial
    certification.
        Amendments made by this proposal would apply to outpatient
    DSMT services furnished on or after the first day of the first
    calendar year that is at least six months after the date of
    enactment.

                               TITLE IV--QUALITY

                 Subtitle A--Comparative Effectiveness Research

    Sec. 1401. Comparative effectiveness research

                Current Law
        The need for more and better information about which
    clinical strategies work best and under what conditions has
    been widely recognized by clinicians, patients, researchers and
    policy makers. Most recently, comparative effectiveness
    research was addressed in the Medicare Prescription Drug,
    Improvement, and Modernization Act of 2003 (MMA, P.L. 108-173)
    and the American Recovery and Reinvestment Act (ARRA, P.L. 111-
    5). Section 1013 of the MMA authorizes the Agency for
    Healthcare Research and Quality (AHRQ) to conduct and support
    research on the outcomes, comparative clinical effectiveness,
    and appropriateness of health care items and services. In ARRA
    Congress provided $1.1 billion for comparative effectiveness
    research, with $400 million going to the National Institutes of
    Health and $300 million to the Agency for Health Care Research
    and Quality to support comparative effectiveness research
    efforts at those agencies and $400 million to the Office of the
    Secretary to (1) conduct, support, or synthesize research that
    compares the clinical outcomes, effectiveness, and
    appropriateness of items, services, and procedures that are
    used to prevent, diagnose, or treat diseases, disorders, and
    other health conditions; and (2) encourage the development and
    use of clinical registries, clinical data networks, and other
    forms of electronic health data that can be used to generate or
    obtain outcomes data.
                Proposed Law
        The provision would establish a Center for Comparative
    Effectiveness Research within the Agency for Healthcare
    Research and Quality under title XI of the Social Security Act.
    The Center would conduct, support, and synthesize research with
    respect to the outcomes, effectiveness, and appropriateness of
    health care services and procedures in order to identify the
    manner in which diseases, disorders, and other health
    conditions can most effectively and appropriately be prevented,
    diagnosed, treated, and managed clinically.
        The duties of the Center would be to (1) conduct, support,
    and synthesize research relevant to the comparative
    effectiveness of the full spectrum of health care items,
    services, and systems, including pharmaceuticals, medical
    devices, medical and surgical procedures, and other medical
    interventions; (2) conduct and support systematic reviews of
    clinical research, including original research conducted
    subsequent to the date of the enactment of this section; (3)
    continuously develop rigorous scientific methodologies for
    conducting comparative effectiveness studies, and use such
    methodologies appropriately; (4) submit to the Comparative
    Effectiveness Research Commission (see below), the Secretary,
    and Congress relevant reports produced by the Center or a
    grantee or contractor of the Center; and (5) encourage, as
    appropriate, the development and use of clinical registries and
    the development of clinical effectiveness research data
    networks from electronic health records, post-marketing drug
    and medical device surveillance efforts, and other forms of
    electronic health data.
        The Center could secure information necessary to enable it
    to carry out its duties directly from any department or agency
    of the United States. Upon request of the Center, the head of
    that department or agency would furnish the information to the
    Center on an agreed upon schedule. In order to carry out its
    functions, the Center would (1) utilize existing information,
    both published and unpublished, where possible, collected and
    assessed either by its own staff or under other arrangements;
    (2) carry out, or award grants or contracts for, original
    research and experimentation, where existing information is
    inadequate; and (3) adopt procedures allowing any interested
    party to submit information for the Center or the Commission's
    to use in making reports and recommendations. The Comptroller
    General would have unrestricted access to all deliberations,
    records, and nonproprietary data of the Center and Commission,
    immediately upon request, and both the Center and the
    Commission would be subject to periodic audit by the
    Comptroller General.
        The Secretary would establish an independent Comparative
    Effectiveness Research Commission to oversee and evaluate the
    activities carried out by the Center to ensure that the
    Center's activities result in highly credible research and
    information produced from such research. The duties of the
    Commission would include the following:
              (1) Determine national priorities for research to be
            conducted, supported or synthesized by the center, and
            in making such determinations consult with a broad
            array of public and private stakeholders, including
            patients and health care providers and payers;
              (2) Monitor the appropriateness of use of the
            Comparative Effectiveness Research Trust Fund (CERTF)
            (described below) with respect to the timely production
            of comparative effectiveness research determined to be
            a national priority;
              (3) Identify highly credible research methods and
            standards of evidence for such research to be
            considered by the Center;
              (4) Review the methodologies developed by the Center;
              (5) Not later than one year after the date of the
            enactment, enter into an arrangement under which the
            Institute of Medicine of the National Academy of
            Sciences would conduct an evaluation and report on
            standards of evidence for such comparative
            effectiveness research;
              (6) Support forums to increase stakeholder awareness
            and permit stakeholder feedback on the efforts of the
            Center to advance methods and standards that promote
            highly credible research;
              (7) Make recommendations for policies that would
            allow for public access of data produced under this
            section, in accordance with appropriate privacy and
            proprietary practices, while ensuring that the
            information produced through such data is timely and
            credible;
              (8) Appoint a clinical perspective advisory panel for
            each national research priority, which would consult
            with patients and advise the Center on research
            questions, methods and evidence gaps in terms of
            clinical outcomes for the specific research inquiry to
            be examined with respect to such priority to ensure
            that the information produced from such research is
            clinically relevant to decisions made by clinicians and
            patients at the point of care;
              (9) Make recommendations for the priority for
            periodic reviews of previous comparative effectiveness
            research and studies conducted by the Center;
              (10) Routinely review processes of the Center with
            respect to such research to confirm that the
            information produced by such research is objective,
            credible, consistent with standards of evidence
            established under this section, and developed through a
            transparent process that includes consultations with
            appropriate stakeholders; and
              (11) Make recommendations to the Center for the broad
            dissemination of the findings of research conducted and
            supported under this section that enables clinicians,
            patients, consumers, and payers to make more informed
            health care decisions that improve quality and value.
        The members of the Commission would consist of the Director
    of the Agency for Healthcare Research and Quality, the Chief
    Medical Officer of the Centers for Medicare and Medicaid
    Services, and 15 additional members who would represent broad
    constituencies of stakeholders, including clinicians, patients,
    researchers, third-party payers, and consumers of federal and
    state beneficiary programs. At least 9 of the 17 members would
    be practicing physicians, healthcare practitioners, consumers,
    or patients. The members of the Commission would represent a
    broad range of perspectives and collectively would have
    experience in epidemiology, health services research,
    bioethics, decision sciences, health disparities, and
    economics. To ensure a diverse representation of the healthcare
    community, at least one member would represent each of the
    following: (1) patients, (2) healthcare consumers, (3)
    practicing physicians, including surgeons, (4) other healthcare
    practitioners engaged in clinical care, (5) employers, (6)
    public payers, (7) insurance plans, and (8) clinical
    researchers who conduct research on behalf of pharmaceutical or
    device manufacturers. No more than 3 of the members of the
    Commission could be representatives of pharmaceutical or device
    manufacturers and these representatives could only be clinical
    researchers as described in (8).
        The Secretary would appoint the members of the Commission;
    in considering candidates for appointment to the Commission,
    the Secretary could consult with the Government Accountability
    Office and the Institute of Medicine of the National Academy of
    Sciences. The Secretary would designate a member of the
    Commission, at the time of appointment, as Chairman and a
    member as Vice Chairman for that term of appointment, except
    that in the case of vacancy of the Chairmanship or Vice
    Chairmanship, the Secretary could designate another member for
    the remainder of that member's term. The Chairman would serve
    as an ex officio member of the National Advisory Council of the
    Agency for Healthcare Research and Quality. Of the members
    first appointed, 8 would be appointed for a term of 4 years,
    and 7 would be appointed for a term of three years.
    Subsequently, each member of the Commission would be appointed
    for a term of four years.
        To enhance effectiveness and coordination, the Secretary
    would be encouraged, to the greatest extent possible, to seek
    coordination between the Commission and the National Advisory
    Council of the Agency for Healthcare Research and Quality.
        The bill includes provisions to protect against potential
    conflicts of interest. In appointing the members of the
    Commission or a clinical perspective advisory panel, the
    Secretary or the Commission, respectively, would take into
    consideration any financial interest and develop a plan for
    managing any identified conflicts. When considering an
    appointment to the Commission or a clinical perspective
    advisory panel, the Secretary or the Commission would review
    the expertise of the individual and the financial disclosure
    report filed by the individual pursuant to the Ethics in
    Government Act of 1978 for each individual under consideration
    for the appointment, so as to reduce the likelihood that an
    appointed individual would later require any pertinent waivers.
        Prior to a meeting of the Commission or a clinical
    perspective advisory panel, each member of the Commission or
    the clinical perspective advisory panel who is a full-time
    government employee or special government employee would
    disclose any relevant financial interests to the Secretary. A
    member of the Commission or a clinical perspective advisory
    panel could not participate with respect to a particular matter
    considered in a meeting of the Commission or the clinical
    perspective advisory panel if the member (or an immediate
    family member of the member) were to have a financial interest
    that could be affected by the advice given to the Secretary
    regarding the matter, excluding interests exempted in
    regulations issued by the Director of the Office of Government
    Ethics as too remote or inconsequential to affect the integrity
    of the services of the government officers or employees to
    which such regulations apply. The Secretary could grant a
    waiver if the Secretary were to determine it necessary to
    afford the Commission or a clinical perspective advisory panel
    the essential expertise of the member. The waiver would permit
    such a member to participate as a voting or non-voting member
    with respect to a particular matter under consideration in a
    Commission or a clinical perspective advisory panel meeting.
    The number of waivers granted to members of the Commission
    could not exceed one-half of the total number of members for
    the Commission. However, no voting member of any clinical
    perspective advisory panel would be in receipt of a waiver, and
    no more than two nonvoting members of any clinical perspective
    advisory panel would be serving under waiver. For purposes of
    determining conflict of interest under this section, the term
    ``financial interest'' would mean a financial interest under
    section 208(a) of title 18, United States Code.
        While serving on the business of the Commission (including
    travel time), a member of the Commission would be entitled to
    compensation at the per diem equivalent of the rate provided
    for level IV of the Executive Schedule, and while serving away
    from home and the member's regular place of business, a member
    could be allowed travel expenses, as authorized by the Director
    of the Commission.
        The Commission would transmit a copy of each report
    submitted to the Secretary and would make the reports available
    to the public.
        The Commission could (1) appoint an executive director
    (subject to the approval of the Secretary) and other personnel
    as federal employees under section 2105 of title 5, United
    States Code as may be necessary to carry out its duties
    (without regard to the provisions of Title 5, United States
    Code, governing appointments in the competitive service); (2)
    seek assistance and support from appropriate federal
    departments and agencies as might be required in the
    performance of its duties; (3) enter into contracts or make
    other arrangements for the conduct of the work of the
    Commission, as may be necessary; (4) make advance payments, and
    other payments that 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 it were to deem necessary with respect to the
    internal organization and operation of the Commission.
        Any research conducted, supported, or synthesized by the
    Center would (1) be required to meet certain transparency,
    credibility and access conditions; (2) consider advice given by
    clinical perspective advisory panels; (3) consider stakeholder
    input; and (4) take into account potential differences across
    subgroups of populations. To ensure transparency, credibility,
    and access, the research would meet the following conditions:
    (1) the establishment of the agenda and the conduct of the
    research would be insulated from inappropriate political or
    stakeholder influence; (2) the methods of conducting the
    research would be scientifically based; (3) all aspects of the
    prioritization of research, conduct of the research, and
    development of conclusions based on the research would be
    transparent to all stakeholders; (4) the process and methods
    for conducting such research would be publicly documented and
    available to all stakeholders; and (5) throughout the process
    of the research, the Center would provide opportunities for all
    stakeholders involved to review and provide public comment on
    the methods and findings of such research.
        The research would meet a national research priority as
    determined above and would consider advice given to the Center
    by the clinical perspective advisory panel for the national
    research priority.
        The Commission would consult with patients, health care
    providers, health care consumer representatives, and other
    appropriate stakeholders with an interest in the research
    through a transparent process recommended by the Commission.
    Specifically, where deemed appropriate by the Commission, the
    consultation would include (1) recommending research priorities
    and questions, (2) recommending research methodologies, and (3)
    advising on and assisting with efforts to disseminate research
    findings. The Secretary would designate a patient ombudsman who
    would serve as an available point of contact for any patients
    with an interest in proposed comparative effectiveness studies
    by the Center and ensure that any comments from patients
    regarding proposed comparative effectiveness studies are
    reviewed by the Commission.
        Research falling under the activities of this Center would
    (1) be designed, as appropriate, to take into account the
    potential for differences in the effectiveness of health care
    items and services used with various subpopulations such as
    racial and ethnic minorities, women, different age groups
    (including children, adolescents, adults, and seniors), and
    individuals with different co-morbidities; and (2) seek, as
    feasible and appropriate, to include members of such
    subpopulations as subjects in the research.
        The proposal would require public access to comparative
    effectiveness information. Not later than 90 days after receipt
    by the Center or Commission, as applicable, of a relevant
    report made by the Center, Commission, or clinical perspective
    advisory panel under this section, the appropriate information
    contained in the report would be posted on the official public
    Internet site of the Center and of the Commission, as
    applicable. For purposes of this section, a relevant report
    would be each of the following submitted by the Center or a
    grantee or contractor of the Center: (1) any interim progress
    report as deemed appropriate by the Secretary, (2) stakeholder
    comments, and (3) a final report.
        To disseminate and assist in the incorporation of
    comparative effectiveness information, the Center would provide
    for the dissemination of appropriate findings produced by
    research supported, conducted, or synthesized under this
    section to health care providers, patients, vendors of health
    information technology focused on clinical decision support,
    appropriate professional associations, and federal and private
    health plans, and other relevant stakeholders. In disseminating
    such findings the Center would (1) convey findings of research
    so that they are comprehensible and useful to patients and
    providers in making health care decisions; (2) discuss findings
    and other considerations specific to certain sub-populations,
    risk factors, and co-morbidities as appropriate; (3) include
    considerations such as limitations of research and what further
    research may be needed, as appropriate; (4) not include any
    data that the dissemination of which would violate the privacy
    of research participants or violate any confidentiality
    agreements made with respect to the use of data under this
    section; and (5) assist the users of health information
    technology focused on clinical decision support to promote the
    timely incorporation of such findings into clinical practices
    and promote the ease of use of such incorporation.
        The Center would develop protocols and strategies for the
    appropriate dissemination of research findings in order to
    ensure effective communication of the findings and the use and
    incorporation of the findings into relevant activities for the
    purpose of informing higher quality and better decisions
    regarding medical items and services. In developing and
    adopting the protocols and strategies, the Center would consult
    with stakeholders concerning the types of dissemination that
    would be most useful to the end users of information and could
    provide for the utilization of multiple formats for conveying
    findings to different audiences, including dissemination to
    individuals with limited English proficiency.
        The provision would establish a number of reporting
    requirements:
         Beginning not later than one year after the date
    of the enactment, the Director of the Agency of Healthcare
    Research and Quality and the Commission would submit an annual
    report on the activities of the Center and the Commission and
    research conducted under this section to Congress. Each report
    would include a discussion of the Center's compliance with the
    requirements for inclusion of subpopulations in research,
    including any reasons for lack of compliance.
         Not later than December 31, 2011, the Secretary
    would submit to Congress an annual recommendation for a fair
    share per capita amount described below for purposes of funding
    the CERTF.
         Not later than December 31, 2013, the Secretary,
    in consultation with the Commission, would submit to Congress a
    report on all activities conducted or supported under this
    section as of such date. The report would include an evaluation
    of the overall costs of such activities and an analysis of the
    backlog of any research proposals approved by the Commission
    but not funded.
        The proposal would establish the Health Care Comparative
    Effectiveness Research Trust Fund (``CERTF'') under the
    Internal Revenue Code (the ``Code'') to carry out the
    proposal's provisions relating to comparative effectiveness
    research. For fiscal year 2010 and in each subsequent fiscal
    year, amounts in the CERTF under section 9511 of the Internal
    Revenue Code of 1986 would be available to the Secretary to
    carry out this section without the need for further
    appropriations and without fiscal year limitation.
        Nothing in this section would be construed to permit the
    Commission or the Center to mandate coverage, reimbursement, or
    other policies for any public or private payer.
        For information regarding the establishment and financing
    the Comparative Effectiveness Research Trust Fund, see section
    1802.
        The bill includes several limitations on the use of
    comparative effectiveness research. The proposal includes a
    rule of construction stating that nothing in the section would
    be construed to permit the Commission or the Center to mandate
    coverage, reimbursement or other policies for any public or
    private payer. A separate provision states that in no case
    could any research conducted, supported, or developed by the
    Center, the Commission, or the Federal Coordinating Council for
    Comparative Effectiveness Research be used by the federal
    government to deny or ration care. In addition, CMS could not
    use federally funded clinical comparative effectiveness
    research data to make coverage determinations for medical
    treatments, services, or items under the Medicare program on
    the basis of cost.
        This section specifies that the work performed by the
    Commission or the Center should be performed in close
    collaboration with the specialty colleges and academies of
    medicine because these organizations have important expertise
    to be considered when formulating a research agenda. In
    addition, these same organizations are critical to the
    dissemination of new research.

                     Subtitle B--Nursing Home Transparency

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

    Sec. 1411. Required disclosure of ownership and additional disclosable
            parties information

                Current Law
        In general, Medicare and Medicaid require that skilled
    nursing facilities (SNF) and nursing facilities (NFs) be
    administered in a manner that maintains residents' well-being
    and safety. SNFs and nursing facilities are also required to
    report certain changes in ownership or controlling interest; in
    those individuals who are officers, directors, agents or
    managing employees; in the corporation, association or other
    company responsible for facility management; or when a change
    occurs in the SNF or nursing facility administrator position.
    SNFs and nursing facilities also are required to disclose
    ownership and other information as a condition of
    participation, and of certification or re-certification. In
    general, administrators must meet standards established by the
    Secretary.
        Under Title XI of the Social Security Act, Section 1124, a
    person is considered to have an ownership or controlling
    interest, directly or indirectly, when (1) they own 5% or more
    of an entity, or they hold a whole or part of any mortgage,
    deed of trust, note or other obligation secured by the entity
    (nursing facility) or any property or assets that equal 5% of
    the total property; (2) are an officer or director of the
    entity, if the entity is organized as a corporation; or (3) are
    a partner in the entity if it is organized as a partnership. To
    a limited extent as determined feasible by the Secretary,
    nursing facility entities also are required to report other
    ownership and control interests for any persons named as owners
    or having a control interest.
                Proposed Law
        In recent years it has become clear that, when nursing home
    quality problems arise, state and federal regulators are
    increasingly unable to effectively and quickly investigate
    complex webs of interlocking corporate relationships and
    identify and hold accountable nursing home owners and others
    who are responsible for these quality of care problems. Current
    disclosure and reporting rules for nursing homes are
    inadequate, failing to require that nursing homes divulge key
    ownership and non-ownership relationships with persons and
    entities that are in a position to control the resources and
    operations essential to good resident care are inadequate. The
    proposed provisions in Section 1411, which call for nursing
    homes to divulge those persons and entities that are in a
    position to make decisions about the operation, management and
    financing of services for resident care, will restore a measure
    of appropriate public accountability.
        This provision would amend Section 1124 to require SNFs and
    nursing facilities to make available upon request by the
    Secretary, the Health and Human Services Office of the
    Inspector General (OIG), the state where the entity is located,
    and the state long-term care ombudsman, information on
    ownership (including direct and indirect ownership),
    information on additional disclosable parties and information
    describing the governing body and organizational structure of
    the facility. SNFs and nursing facilities would be required to
    update disclosure information whenever changes occur.
    Information would need to be made available to the Secretary,
    OIG, the state where the entity is located, the state long-term
    care ombudsman and members of the public upon request until
    such time as this information became available publicly in
    accordance with final regulations promulgated by the Secretary.
        In addition, SNFs and nursing facilities would be required
    to post prominent notices in facility lobbies that ownership
    and additional disclosable party information are available upon
    request.
        Facilities would be required to disclose the identity of
    and information on (1) each member of a facility's governing
    body including their name, title, date of start, and period of
    service for each SNF or nursing facility; (2) each person or
    entity who is an officer, director, member, partner, trustee,
    or managing employee, including their name, title, and period
    of service; (3) each person or entity who is an additional
    disclosable party; and (4) the organizational structure and
    relationship of the organizational entities to each SNF or
    nursing facility and each other for each ownership and
    governing individual or entity.
        To the extent practicable, the Secretary may allow SNFs and
    nursing facilities, in a manner specified by the Secretary, to
    submit information using existing reporting mechanisms on
    ownership interest, governance, and organizational structure if
    they already report such information to other oversight
    agencies, such as to the Internal Revenue Services (IRS) using
    Form 990, the Securities and Exchange Commission, the
    Secretary, or through information otherwise submitted to any
    other federal agency.
        Ownership or controlling interest would include direct or
    indirect interests through any number of intermediate entities
    and would include owners 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, if the ownership interest is at least 5%.
        Not later than two years after enactment, the Secretary
    would promulgate final regulations requiring SNFs and nursing
    facilities to report, in a standardized format, information
    about ownership, governing board, and organizational structure.
    The final regulations would require that as a condition of
    participation and payment, SNFs and nursing facilities certify
    that reported information is current and accurate. These
    regulations would take effect 90 days after the Secretary
    published the final regulations in the Federal Register.
        The Secretary would provide technical assistance and
    guidance to states on how to adopt and implement the reporting
    requirements in the standardized format. This provision would
    not reduce, diminish, or alter any existing facility reporting
    requirements.
        The following definitions would apply to this provision:
        (A) ``Additional disclosable party'' would be any
    individual or entity who (i) exercises operational, financial,
    or managerial control over the facility or any part of the
    facility or provides policies or procedures for any facility
    operations 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 of at least 5% of
    the total value of such real property; (iii) lends funds or
    provides a financial guarantee to the facility of at least
    $50,000; or (iv) provides management or administrative
    services, management or clinical consulting services, or
    accounting or financial services to the facility. Individuals
    such as janitors, landscapers, or security guards, or routine
    vendors who are independent third parties, and who do not or do
    not have the ability to directly or indirectly exercise
    operational or directional control over the facility are not
    intended to be considered additional disclosable parties under
    subparagraph (6)(A)(iv).
        (B) The facility is defined as a ``disclosing entity'',
    which is a SNF operating under Medicare or a nursing facility
    operating under Medicaid.
        (C) ``Managing employees'' include any employee, such as a
    general manager, business manager, administrator, director, or
    consultant, who directly or indirectly manages, advises, or
    supervises any element of a SNF or nursing facility's
    practices, finances, or operations.
        (D) ``Organizational structure'' consists of the following:
    (a) the corporations, the officers, directors, and shareholders
    of corporations, who own at least 5% of the corporation; (b)
    the limited liability companies, the ownership interest of
    members and managers of limited liability companies (including
    the percentage owned by each member and manager); (c) the
    general partnerships, the general partners, the limited
    partnerships, the general and limited partners who own at least
    10% of the partnership; (d) a trust, the trustees of the trust;
    (e) an individual, contact information for the individual; (f)
    and any other person or entity, as the Secretary determines
    appropriate.
        Within one year of publication of the final regulations in
    the Federal Register, the Secretary shall make ownership
    disclosure and additional disclosable party information for SNF
    and nursing facilities available to the public as determined by
    the Secretary.

    Sec. 1412. Accountability requirements

                Current Law
        There are no comparable requirements in current law for
    SNFs and nursing facilities to implement compliance and ethics
    training programs for their employees.
                Proposed Law
        For more than a decade the HHS Office of Inspector General
    and other federal agencies charged with responsibility for
    enforcement of federal law have emphasized the importance of
    compliance plans. Yet not all nursing homes have voluntarily
    implemented compliance and ethics programs. This section would
    require that nursing homes develop such programs.
        In addition, this section proposes that nursing homes
    develop Quality Assurance and Performance Improvement (QAPI)
    programs, which are vital for health care providers of all
    types. QAPI programs are designed to make health care
    organizations recognize and establish comprehensive systems
    that aim to deliver patient-centered care encompassing all
    individuals in an organization, from board to bedside, in an
    environment that promotes and demonstrates measurable improved
    outcomes for patients and families.
        Within two years of the effective date of this provision,
    the Secretary, in consultation with the HHS OIG, would
    promulgate regulations for effective compliance and ethics
    programs for operating organizations. These regulations may
    include a model compliance program, and would permit the design
    of the compliance and ethics programs to vary depending on an
    organization's size. Larger operating organizations would have
    more formal and rigorous programs with established written
    policies and procedures to guide employees. Regulations also
    would specifically address requirements for employees and
    managers of multi-nursing home chains.
        Thirty-six months after enactment of this provision, SNFs
    and nursing facilities would be required to have complied with
    regulations developed by the Secretary governing the operation
    of compliance and ethics programs. The compliance and ethics
    programs would need to be effective in preventing and detecting
    criminal, civil, and administrative violations and in promoting
    quality of care. Regulations may vary with the size of the
    organization, such that larger organizations have a more formal
    and rigorous program. Operating organizations (entities that
    operate SNFs and nursing facilities) would be required to
    comply with the compliance and ethics programs regulations, and
    corporate-level management of multi-unit nursing home chains
    would be specifically required to comply with the requirements
    of compliance and ethics programs.
        Section 1635 of this Act also requires compliance program
    for Medicare and Medicaid providers. To prevent redundancy and
    to ensure that nursing homes and SNFs have effective compliance
    and ethics programs in place, the requirements of this section
    for nursing facilities and SNFs are intended to supersede the
    requirements in Section 1635.
        Within three years after promulgation of final regulations,
    the Secretary would be required to evaluate the compliance and
    ethics programs and submit a report to Congress to determine if
    the compliance and ethics programs led to changes in deficiency
    citations, quality performance, or other patient care quality
    metrics. The Secretary's report to Congress would include
    recommendations to change the requirements of the compliance
    and ethics program, as the Secretary determined appropriate.
        Compliance and ethics programs would need to be reasonably
    designed, implemented, and enforced to be generally effective
    in preventing and detecting civil, criminal, and administrative
    violations as well as in promoting quality of care, and would
    include the following required components:
              (1) Compliance standards and procedures that would
            guide employees and other agents and would reduce
            criminal, civil, and administrative violations as
            defined under this Act;
              (2) Responsibility by senior individuals within
            operating organizations for overseeing compliance with
            the standards and procedures the entity establishes for
            their compliance and ethics program. These individuals
            would have resources and authority to assure
            compliance;
              (3) Diligence in ensuring that individuals who are at
            risk for engaging in criminal, civil, or administrative
            violations under this Act are not delegated
            responsibility for implementing or monitoring an
            organization's compliance and ethics program;
              (4) Effective communication of standards and
            procedures to employees (and other agents), through
            training programs or explanatory publications that
            practically illustrate what is required;
              (5) Assurance that the standards for their compliance
            and ethics programs are met by using procedures to
            detect criminal, civil, and administrative violations
            of this Act. Organizations can use procedures such as
            monitoring and auditing systems as well as installing a
            reporting system that enables employees (and other
            agents) to report violations by others without fear of
            retribution;
              (6) Appropriate disciplinary mechanisms that are
            consistently followed to enforce the compliance and
            ethics program standards. Operating organizations also
            must demonstrate that they have used, where
            appropriate, disciplinary measures for individuals
            failing to detect offenses;
              (7) Appropriate mechanisms to respond to detected
            offenses and strategies to prevent future similar
            offenses, including repayment of any funds to which an
            organization was not entitled, and modification of
            compliance and ethics programs to detect criminal,
            civil, and administrative violations;
              (8) Periodic reassessment of their compliance and
            ethics program standards to ensure that the programs
            continue to be effective as the organization and
            facilities change.
        Before December 31, 2011, the Secretary would be required
    to establish and implement a quality assurance and performance
    improvement (QAPI) program. The QAPI program would include
    multi-unit chains. Under the QAPI program, the Secretary would
    establish facility standards and provide technical assistance
    to SNFs and nursing facilities on the development of best
    practices to meet the QAPI standards through regulation. Within
    one year after the Secretary promulgates such regulations, SNFs
    and nursing facilities would be required to submit plans to the
    Secretary describing how they will meet the QAPI standards and
    implement best practices.
        The Comptroller General of the Government Accountability
    Office (GAO) would be required to conduct a study that examined
    the following: (1) the extent to which corporations that
    operate large numbers of SNFs and nursing facilities are
    undercapitalized, taking into account ownership type (including
    private equity and control interests) are undercapitalized; (2)
    the effects of undercapitalization on quality of care,
    including staffing and food costs; and (3) options to address
    undercapitalization issues, such as requirements for surety
    bonds, liability insurance, or minimum capitalization. Within
    18 months after this provision became effective, GAO would
    submit a report to Congress.

    Section 1413. Nursing home compare Medicare website

                Current Law
        There is no requirement in current law for Medicare's
    Nursing Home Compare website. The Nursing Home Compare website
    was developed by the Centers for Medicare and Medicaid Services
    (CMS) and launched in November 2002. The website was intended
    to bolster the agency's efforts to improve SNF and nursing
    facility quality of care and to make information on nursing
    home quality more accessible for long-term care consumers and
    their families. Since its launch, CMS has enhanced the website
    by adding or improving quality measures and website navigation.
    Medicare Nursing Home Compare includes national data on all
    nursing facilities that participate in Medicare and Medicaid.
    The data featured on Nursing Home Compare includes facility
    ratings, selected results from survey and certification
    inspections, and limited staffing information on SNFs and
    nursing facilities.
                Proposed Law
        The federal nursing home quality website, Nursing Home
    Compare, is visited annually by tens of thousands of
    individuals looking for reliable, accurate information about a
    suitable facility for a loved one. While Nursing Home Compare
    is already a valuable resource, nursing home resident and their
    families would benefit from additional information
        This section requires that the Secretary ensure that the
    Nursing Home Compare website (or a successor website) contain
    additional information, in searchable form and displayed in a
    manner that is prominent, easily accessible, and clearly
    understandable for consumers, for SNFs and nursing facilities.
    This information must include:
              (1) Information on ownership and affiliated parties
            as would be required under Section 1411 , Required
            Disclosure of Ownership and Affiliated Parties
            Information, that identifies SNF and SNF facility
            chains' ownership, governing boards, and organizational
            structure;
              (2) Information on CMS's Special Focus Facility
            facilities (or a successor program), including the
            names and locations of facilities that since the
            previous quarter that were: (a) newly enrolled in the
            program; (b) enrolled but failed to significantly
            improve; (c) enrolled and significantly improved; (d)
            graduated from the program; and (e) have closed
            voluntarily or been terminated by the Secretary;
              (3) Staffing data for each facility, including
            resident census, hours of care provided per resident
            per day, staff turnover, and tenure. These data would
            need to be displayed in formats that are clearly
            understandable to consumers and would permit them to
            compare staffing differences between facilities. This
            staffing information also would need to assist
            consumers in comparing an individual facility's
            staffing with state and national facility averages by
            providing: (a) concise explanations of how to interpret
            data (i.e., plain English explanations of how to
            interpret data on nursing home staff hours per resident
            day), (b) differences between staffing categories and
            their associated training requirements, (c) the
            relationship between staff levels and quality of care,
            and (d) an explanation that residents with greater care
            needs can require greater staff levels or more staff
            training;
              (4) Links to state websites where state survey and
            certification program information can be found,
            including Form 2567 state inspection reports (or
            successor forms) and facility correction plans or other
            facility responses, along with information to guide
            consumers in interpreting and understanding survey and
            certification reports;
              (5) The standardized complaint form developed by the
            Secretary under Section 1415, which includes an
            explanation of how complaint forms are used and how to
            file a complaint with states' LTC ombudsman programs
            and survey and certification programs;
              (6) Summary information on the number, type,
            severity, and outcome of substantiated complaints; and
              (7) The number of adjudicated criminal violations by
            the nursing facility or crimes committed by nursing
            facility employees (a) that were committed inside a
            facility; (b) for crimes or violations committed
            outside a facility, the instances where these were
            elder abuse, neglect, exploitation, criminal sexual
            abuse of an elder, or other violations that resulted in
            serious bodily injury; and (c) the number of civil
            monetary penalties levied against the facility,
            employees, contractors, and other agents.
        The modifications of Nursing Home Compare described in this
    section would become effective within one year after enactment,
    except that the Secretary would ensure that Ownership and
    Affiliated Parties, and Accountability Information as described
    in Section 1411, would be included on the website within one
    year of the date when those requirements were implemented.
        The Secretary is further directed to undertake, within one
    year after enactment, a process to review and modify the
    Nursing Home Compare website that would address the accuracy,
    clarity of presentation, timeliness, and comprehensiveness of
    the information reported on the website, and modify or revamp
    the website in accordance with the Secretary's findings. This
    website review process would include consultation with state
    LTC ombudsman programs, consumer advocacy groups, provider
    stakeholder groups, and representatives of programs or groups
    the Secretary determines appropriate.
        To improve the public's access to timely information on
    state survey and certification inspections, states would be
    required to submit information, including any enforcement
    actions, to the Secretary not later than the date when the
    state nursing home surveyors sent that information to
    facilities. Corrections to prior information submitted to the
    state also would need to be submitted to the Secretary in a
    timely manner. The Secretary is directed to update the Nursing
    Home Compare website with the information from states' survey
    and certification inspections as expeditiously as practicable,
    but at least quarterly. This requirement would be required
    within one year after this provision became effective.
        The Secretary is also directed to conduct a Special Focus
    Facility program for enforcement of requirements for SNFs and
    nursing facilities that the Secretary identified as having
    substantially failed to meet applicable requirements of this
    provision. Under the Special Focus Facility program, the
    Secretary would conduct a survey of each facility in the
    program at least every six months.
        Within one year of the effective date of this provision,
    SNFs and nursing facilities would be required to make available
    for any individual's review reports on surveys, certifications,
    and complaint investigations for the past three years and to
    post notices in prominent and accessible facility areas that
    these reports are available for inspection. These reports would
    need to exclude information identifying complainants or
    residents.
        The Secretary would be required to provide guidance to
    states on how to establish Internet links to Form 2567 state
    inspection reports (or successor forms), complaint
    investigation reports, and facilities' correction plans or
    other responses to Form 2567. This information would be
    available on the state website for SNFs and nursing facilities.
    These reports also would be required to exclude information
    that identifies complainants or residents. In addition, the
    Secretary shall, if possible, include such reports on Nursing
    Home Compare.
        States would be required to maintain a consumer-oriented
    website that provided useful information on all SNF and nursing
    facilities operating within that state. The information on each
    facility would include Form 2567 state inspection reports (or
    successor forms), complaint investigation reports, facilities'
    plans of correction, and other information as determined useful
    by the Secretary or the state for consumers to use in assessing
    the quality of LTC options and the quality of care in
    individual facilities.

    Section 1414. Reporting of expenditures

                Current Law
        No comparable provisions are in current law that require
    SNFs or nursing facilities to report expenditures.
                Proposed Law
        Experts on nursing home quality have determined that the
    vast majority of nursing homes fail to provide adequate
    staffing to provide proper care for residents. This provision
    would make it possible for policymakers and other interested
    parties to accurately determine and analyze how much funding a
    facility or chain dedicates to staffing.
        Within one year of the effective date of this provision,
    the Secretary would consult with private sector accountants
    with knowledge of SNF cost reports to re-design cost report
    forms to separately capture wages and benefit expenditures for
    direct care staff.
        Beginning with cost reports submitted three years after the
    effective date of this provision, SNFs would need to separately
    report direct care staff wages and benefits including breaking
    out, at a minimum, data for registered nurses, licensed
    professional nurses, certified nurse assistants, and other
    medical and therapy staff.
        Within 30 months (2\1/2\ years) of the effective date of
    this provision, the Secretary, in consultation with OIG, the
    Medicare Payment Advisory Commission (MedPAC), and other
    experts identified by the Secretary, would categorize SNF's
    newly collected annual expenditure data for each facility,
    regardless of payment source, into the following functional
    accounts: spending on direct care services, including nursing,
    therapy, and medical services; spending on indirect care,
    including housekeeping and dietary services; capital assets,
    including building and land costs; and administrative services
    costs. The Secretary would establish procedures to make the
    expenditure data submitted under this provision, readily
    available to interested parties upon request, subject to
    requirements established by the Secretary.
        The Subcommittee on Health of the House Committee on Ways
    and Means heard testimony recommending the creation of cost
    centers as a way to improve nursing home financial
    accountability at a hearing held on November 15, 2007. This
    provision would make it possible for policymakers and other
    interested parties to accurately determine and analyze how much
    funding a facility or chain dedicates to one of the most
    important aspects of resident care--staffing. Medicare cost
    reports do not currently capture this information, with the
    result that facilities may, if they wish, easily save money by
    making decisions to cut staff. While research has established
    that staffing levels below a certain threshold are detrimental
    to good resident care, no consensus among policymakers has yet
    been achieved about the level of staffing that should be in
    place to assure good or optimal care. This new source of data
    on what facilities spend on staffing, in conjunction with
    Section 1416, which improves data on staffing levels, will
    improve the quality and transparency of data on staffing levels
    and funding and ease analyses of the relationship between
    spending on staffing, staffing levels, and quality of care.

    Section 1415. Standardized complaint form

                Current Law
        There are no provisions in current law requiring use of a
    standardized complaint form. Oversight of nursing homes is a
    shared federal-state responsibility. Based on statutory
    requirements, CMS defines standards that nursing homes must
    meet to participate in the Medicare and Medicaid programs and
    contracts with states to assess whether homes meet these
    standards through annual surveys and complaint investigations.
    A range of statutorily defined sanctions is available to CMS
    and the states to help ensure that homes maintain compliance
    with federal quality requirements. CMS also is responsible for
    monitoring the adequacy of state survey activities.
        Every nursing home receiving Medicare or Medicaid payment
    must undergo a standard survey not less than once every 15
    months, and the statewide average interval for these surveys
    must not exceed 12 months. During a standard survey, separate
    teams of surveyors conduct a comprehensive assessment of
    federal quality-of-care and fire safety requirements. In
    contrast, complaint investigations generally focus on a
    specific allegation regarding resident care or safety.
        The quality-of-care component of a survey focuses on
    determining whether (1) the care and services provided meet the
    assessed needs of the residents and (2) the home is providing
    adequate quality care, including preventing avoidable pressure
    sores, weight loss, and accidents. Nursing homes that
    participate in Medicare and Medicaid are required to
    periodically assess residents' care needs in 17 areas, such as
    mood and behavior, physical functioning, and skin conditions,
    in order to develop an appropriate plan of care. Such resident
    assessment data are known as the minimum data set (MDS). To
    assess the care provided by SNF and nursing facilities,
    surveyors select a sample of residents and (1) review data
    derived from the residents' MDS assessments and medical
    records; (2) interview nursing home staff, residents, and
    family members; and (3) observe care provided to residents
    during the course of the survey. CMS establishes specific
    investigative protocols for state survey teams--generally
    consisting of RNs, social workers, dieticians, and other
    specialists--to use in conducting surveys. These procedural
    instructions are intended to make the on-site surveys thorough
    and consistent across states.
        Complaint investigations provide an opportunity for state
    surveyors to intervene promptly if problems arise between
    standard surveys. Complaints may be filed against a home by a
    resident, the resident's family, or a nursing home employee
    either verbally, via a complaint hotline, or in writing.
    Surveyors generally follow state procedures when investigating
    complaints but must comply with certain federal guidelines and
    time frames. In cases involving resident abuse, such as
    pushing, slapping, beating, or otherwise assaulting a resident
    by individuals to whom their care has been entrusted, state
    survey agencies may notify state or local law enforcement
    agencies that can initiate criminal investigations. States must
    maintain a registry of qualified nurse aides, the primary
    caregivers in nursing homes, that includes any findings that an
    aide has been responsible for abuse, neglect, or theft of a
    resident's property. The inclusion of such a finding
    constitutes a ban on nursing home employment.
                Proposed Law
        Currently, there is inadequate documentation by the federal
    government and by states of the number and type of complaints
    that residents and families file, the processes used to examine
    these complaints, and how and if they are resolved. Section
    1415 is designed to address these flaws by requiring states to
    establish more standardized, uniform processes and procedures
    for handling and addressing complaints, and in so doing, to
    improve resident care. This section also puts in place
    whistleblower protections for nursing home employees who bring
    a serious quality or safety issue to the attention of
    supervisors or owners.
        The Secretary would be required to develop a standardized
    complaint form for SNF and nursing facility residents or their
    representatives to use in filing complaints on SNFs and nursing
    facilities to state survey and certification agencies and state
    LTC ombudsman programs. States would be required to make the
    new standardized complaint form available on request to SNF
    residents, people acting on behalf of residents, and employees
    or representatives of SNF and nursing facility employees.
        States also would be required to establish a complaint
    resolution process that ensures that SNF and nursing facility
    residents, their representatives, or employees are not denied
    access to residents or retaliated against for complaining, in
    good faith, about quality of care or other issues in a
    facility, regardless of whether residents, their
    representatives or employees used the standardized form or some
    other method to submit their complaint. The state complaint
    resolution procedures would be required to include procedures
    to ensure accurate tracking of complaints, determine the likely
    severity of the complaint, investigate complaints, and ensure
    that the identity of complainants would be kept confidential
    and deadlines for responding to complaints and procedures that
    would enable a complainant to track the complaint and
    investigation.
        The complaint resolution process would be required to
    include whistleblower protection prohibitions against
    retaliation to ensure that SNF and nursing facility employees
    would not be penalized, discriminated, or retaliated against
    because they or anyone they requested to act on their behalf,
    in good faith, complained about the quality of care, services
    provided, or other issues related to quality of care or service
    in a nursing facility. This retaliatory prohibition applies
    regardless of whether employees used the new standard or some
    other complaint method. This protection against retaliatory
    actions extends to any aspect of complainants' employment,
    including discharge, promotion, compensation, terms,
    conditions, or employment privileges, or termination of a
    contract for services. SNFs would not be permitted to file
    complaints or reports with state professional disciplinary
    agencies against current or former employees because they (or
    their agents), acting in good faith, submitted complaints about
    quality of care or services in their employers' facility.
        SNF and nursing facility employees who believed they were
    penalized, discriminated, or retaliated against, or lost
    service contracts because they submitted a quality of care
    complaint against a SNF, would be able to seek remedy in an
    appropriate U.S. district court. U.S. district courts would
    have jurisdiction to grant complete relief, regardless of
    citizenship or amount in question, but not limited to
    injunction, such as reinstatement, compensatory damages
    (reimbursement of lost wages, compensation, and benefits),
    costs of litigation (including attorney's and expert witnesses'
    fees), exemplary damages, and other relief deemed proper by the
    court.
        SNF and nursing facility employees' rights under this
    provision would not be diminished by contract or other
    agreement and would not diminish greater protection through
    other federal or state laws, contracts, or agreements. Nothing
    in this provision would prevent a resident, an agent acting on
    their behalf, or an employee from submitting a complaint in any
    manner and not necessarily by using the standardized complaint
    form. SNFs and nursing facilities would be required to
    conspicuously post in an appropriate location a sign as
    specified by the Secretary that identifies employees' rights to
    bring complaints against the facility. Individuals would be
    considered to be acting in good faith when submitting
    complaints if they believe that (1) their complaint is true and
    (2) a violation has or may have occurred related to Medicare
    provisions of the Social Security Act. These amendments would
    apply one year after the effective date of this provision.

    Section 1416. Ensuring staffing accountability

                Current Law
        No comparable provisions are in current law for SNF and
    nursing facilities to report staff levels that are derived from
    payroll data in a uniform format.
                Proposed Law
        Experts on nursing home quality have determined that the
    vast majority of nursing homes fail to provide adequate
    staffing to provide proper care for residents. This provision
    would improve and standardize the reporting of nursing home
    staffing levels. The additional reporting on staffing levels
    would help policymakers and families better assess the impact
    of staffing on quality of care, and determine which nursing
    homes are adequately staffed.
        Within two years after the effective date of this
    provision, SNFs and nursing facilities would be required to
    electronically submit to the Secretary direct care staffing
    information, including agency and contract staff. In developing
    specifications and direct care staffing data requirements, the
    Secretary would consult with state long-term care ombudsman
    programs, consumer advocacy groups, provider stakeholder
    groups, employees and their representatives, and other parties
    deemed appropriate by the Secretary. The direct care staffing
    specifications would be based on payroll and other verifiable
    data provided by SNFs and nursing facilities to the Secretary
    in a uniform format, and reporting on contract staff would be
    separate from information on employees. Specifications would
    include (1) work categories of certified employees, including
    registered nurses, licensed practical nurses, licensed
    vocational nurses, certified nursing assistants, therapists, or
    other medical personnel; (2) resident census data and
    information on resident case mix; (3) an established reporting
    schedule; and (4) employee tenure and turnover, as well as
    hours of care provided by each certified employee category, per
    resident per day.

                         Part 2--Targeting Enforcement

    Section 1421. Civil money penalties

                Current Law
        Under Medicaid law, states have authority either by
    regulation or law to impose money penalties of up to $10,000
    for each day of noncompliance, deny payments, appoint temporary
    management to bring facilities into compliance, and close
    facilities if nursing facilities fail to meet state plan
    requirements or have deficiencies that jeopardize residents'
    health or safety. State expenses for enforcement may be funded
    under the proper and efficient state plan administration
    provision of the Medicaid Statute (Title XIX of the Social
    Security Act). States also have authority to establish reward
    programs for nursing facilities that deliver the highest
    quality care to medical assistance patients and fund these
    incentive rewards programs under Medicaid's proper and
    efficient administration provisions.
                Proposed Law
        Multiple reports issued by the Government Accountability
    Office have suggested that the penalties originally legislated
    as part of the 1987 Nursing Home Reform Act, and which took
    effect in 1994, may not be having a significant deterrent
    effect for several reasons.
        The provisions in this section are designed to update and
    more effectively target civil money penalties (CMPs) authority
    by focusing higher penalties on serious quality of care and
    safety deficiencies that cause harm to residents, that put
    their health in immediate jeopardy, or that are life-
    threatening. Other modifications would allow facilities that
    self-report and promptly correct deficiencies to receive a 50%
    reduction in their CMP. Finally, the section aims to make more
    timely collection of CMPs by allowing the federal government
    and states to collect fines following an initial independent
    dispute resolution process and to escrow these funds, pending
    the results of any further appeals.
        For SNFs and nursing facilities, the Secretary--and for
    nursing facilities, the states--would have the authority to
    impose per instance or per day civil money penalties for each
    instance or each day of noncompliance (as determined
    appropriate by the Secretary). The amounts of the per instance
    CMPs would be the following: (1) in the case where a deficiency
    is the direct proximate cause of a resident's death, the
    penalty would not exceed $100,000; (2) in each case where a
    facility is cited for a resident's actual harm or immediate
    jeopardy, an amount equal to or greater than $3,050, but not
    more than $25,000; and (3) in each case of any other
    deficiency, penalty amounts per deficiency would range from not
    less than $250 to not more than $3,050. The amount of the
    applicable per day CMPs would be the following: (1) an amount
    equal to or greater than $3,050 up to $25,000 where facilities
    were cited for deficiencies that caused actual harm or
    immediate jeopardy to residents; and (2) an amount between $250
    and $3,050 for each case of any other deficiency.
        Subject to limitations where reductions are prohibited if
    SNFs and nursing facilities self-report and promptly correct
    deficiencies within 10 calendar days after imposition of a CMP,
    the Secretary--or the state if applicable--may reduce the
    amount of the imposed CMP by up to 50%. The Secretary--or the
    state if applicable--would be prohibited from reducing CMPs for
    SNFs where the Secretary had previously reduced a penalty for
    that facility in the last year, with respect to a repeat
    deficiency. The Secretary--or the state if applicable--would be
    prohibited from reducing CMPs for other deficiencies: (1) where
    the deficiency was found to result in a pattern of harm or
    widespread harm that immediately jeopardizes residents' safety
    or health; or (2) where a deficiency resulted in the death of a
    patient.
        Aggregate CMP reductions would not be permitted to exceed
    35% on the basis of self-reporting, on the basis of a waiver or
    an appeal, or on the basis of both a waiver and an appeal. In
    collecting CMPs, the Secretary--or the state if applicable--
    must provide for the facility to participate in an independent
    informal dispute resolution process that generates a written
    record prior to penalty collection, and cannot impose
    additional per-day penalties during the pendency of the dispute
    resolution process; may provide an escrow account for fees to
    be held beginning on the earlier of 90 days after fees are
    imposed or the date the informal resolution process was
    completed and may provide that penalty fees are held in escrow
    accounts until appeals are resolved.
        To implement independent information dispute resolution
    (IIDR), the Secretary shall promulgate regulations pursuant to
    notice and comment rulemaking under the Administrative
    Procedures Act. Such regulations shall allow IIDR to be
    conducted by an independent state agency (including an umbrella
    agency, such as the Health and Human Services Commission), a
    Quality Improvement Organization, or the state survey agency,
    so long as the participants in IIDR are not involved in the
    initial decision to cite the deficiency and impose the remedy.
    Whoever is authorized to conduct IIDR must not have any
    conflicts of interest. The regulations may address the type of
    IIDR available to SNFs and NFs (desk review or in-person
    meeting) and the circumstances of each; may determine whether
    and when attorneys may represent the parties before IIDR; and
    may limit the duration of in-person meetings, depending on the
    scope and severity of deficiencies and other factors as
    determined by the Secretary.
        As under current informal dispute resolution (IDR)
    processes, facilities may challenge only the factual basis of
    the deficiency. They may not challenge issues related to
    surveyors' compliance with the survey process or the scope and
    severity of the deficiencies. Also as under current IDR
    processes, states and the Secretary retain the right to reject
    the IIDR recommendations and to cite deficiencies and to impose
    remedies, as the states and the Secretary determine
    appropriate. Finally, any person shall have the right to attend
    and participate in the conference.
        In situations where appeals are resolved in favor of
    facilities, the Secretary--or the state if applicable--may
    provide, if escrow accounts are established, that penalty fees
    would be returned to facilities with interest; and may provide,
    when facility appeals are unsuccessful, that some portion of
    penalty amounts are used to support state LTC ombudsman
    activities and to protect residents, including residents who
    reside in facilities that voluntarily or involuntarily close or
    are decertified.
        The activities funded with CMPs may include using the
    penalty funds to offset costs of relocating residents to home-
    and community-based settings and other facilities, as well as
    projects to support resident and family councils and other
    consumer quality of care involvement (including joint training
    of staff and surveyors, technical assistance for facilities
    under quality assurance programs, the appointment of temporary
    management, and other activities approved by the Secretary).
        Provisions of the Social Security Act, Section 1128A
    (except subsections (a) and (b)) and provisions that require a
    hearing prior to imposing CMPs, also would apply to the CMPs
    described here.
        The CMP amendments would apply one year after the effective
    date of the provision.

    Section 1422. National independent monitor pilot program

                Current Law
        No comparable provisions are in current law for a national
    independent monitor program.
                Proposed Law
        Promising work pioneered by the HHS OIG in the context of
    agreements with nursing home chains that have chronic, severe
    quality and safety problems, and which agree to a system of
    close monitoring by independent contractors with expertise to
    undertake ``root cause analyses'' provide a model for CMS, as
    the principal regulatory agency, to develop a similar mechanism
    of oversight.
        Within one year of the effective date of this provision,
    the Secretary in consultation with OIG would establish a pilot
    program to develop, test, and implement use of an independent
    monitor to oversee interstate and large intrastate SNF and
    nursing facility chains. The Secretary would select SNF and
    nursing facility chains to participate in a pilot independent
    monitor program from among those chains that apply to
    participate. The pilot independent monitor program would be
    conducted over two years. The pilot independent monitor program
    would commence within one year of the effective date of this
    provision.
        The Secretary shall select chains to participate in the
    pilot program based on criteria selected by the Secretary,
    including chains with one or more facilities in CMS's Special
    Focus Facility program (or a successor program) or one or more
    facilities with a record of repeated serious safety and quality
    of care deficiencies.
        An independent monitor that enters into a contract to
    participate in the pilot program would have the following
    responsibilities: conduct periodic reviews and root-cause
    deficiency analyses of chains to assess their compliance with
    state and federal laws and regulations; sustained oversight of
    chains (whether public or private) to involve chain owners and
    principal partners in facilitating compliance with state and
    federal laws and regulations applicable to facilities; analyze
    management structure, expenditure distribution, and nurse staff
    levels of facilities of the chain compared to resident census,
    staff turnover rates, and tenure; report findings and
    recommendations with respect to reviews, analyses, and
    oversight to the chain and facilities in the chain, to the
    Secretary and to relevant states; and publish the results of
    these reviews, analyses, and oversight.
        Within 10 days of a chain receiving a finding (of
    deficiency) from the independent monitor, the chain would be
    required to submit a report to the independent monitor (1) that
    outlines corrective actions the chain will take to address the
    independent monitor's recommendations or (2) indicates that the
    chain will not implement the recommendations and why it will
    not do so.
        Within 10 days after receiving the chain's response-report,
    the independent monitor would be required to submit a report
    containing the monitor's final recommendations to: the chain,
    the chain's facilities, the Secretary, and the state or states
    where the facilities in question operate.
        The chain would be responsible for a portion of the costs
    associated with the appointment of the pilot program
    independent monitors. The chain would pay their portion of the
    costs to the Secretary. The Secretary would determine the
    amount and procedures for collecting the independent pilot
    program costs. The Secretary would have authority to waive
    provisions of the Medicare and Medicaid statutes (Titles XVIII
    and XIX of the Social Security Act) if necessary to implement
    the independent monitor pilot program. Appropriations necessary
    to carry out the independent monitor pilot program would be
    authorized.
        The OIG would evaluate the independent monitor program
    within six months of completion of the program. The OIG would
    submit a report to Congress on the independent monitor program
    that included recommendations for legislative and
    administrative action.

    Section 1423. Notification of facility closure

                Current Law
        Medicare and Medicaid law identifies patients' rights and
    SNF and nursing home requirements in ensuring residents are
    aware of their rights. Residents have specific discharge and
    transfer rights, which include advance notification in cases
    where facilities close.
                Proposed Law
        When nursing homes close, residents and their families are
    left to quickly find an alternative setting for care, a task
    that can be challenging under a tight timeframe and if there is
    limited availability or variable quality in neighboring
    institutions. This provision ensures that residents and their
    families have proper advance notice of a closure, and that
    residents are relocated prior to closure.
        SNF and nursing facility administrators would be required
    to issue written notification of intent to close to the
    Secretary, LTC Ombudsman programs in the state where facilities
    are located, facility residents, and facility residents' legal
    representatives or other responsible parties. SNF and nursing
    facility administrators would need to provide 60 days' notice
    of their pending closure or, if closed by the Secretary, within
    the time frame specified by the Secretary. SNF and nursing
    facility administrators would be required not to admit new
    patients on or after written notice of planned closure; and to
    include in the closure notices the plans to transfer and
    adequately relocate facility residents by a specified date
    prior to closure that has been approved by the state, and which
    also would include assurances that residents will be
    transferred to the most appropriate facilities or settings in
    terms of quality, services, and location as determined by
    residents' needs, best interests, and preferences.
        The state would ensure that before SNFs and nursing
    facilities close, all residents would be relocated to
    alternative settings, such as home- and community-based
    settings or other facilities, taking into consideration the
    needs and best interests of each resident. The Secretary may
    determine the appropriate payment and whether and for how long
    to continue payments to closing facilities during the period
    after the notification of impending closure is submitted and
    the date when residents are transferred to other facilities or
    alternative settings. The notification of facility closure
    amendments would apply one year after the effective date of the
    provision.

                        Part 3--Improving Staff Training

    Section 1431. Dementia and abuse prevention training

                Current Law
        Under Medicare law, the Secretary establishes SNF
    requirements for nurse aide training and competency evaluation
    programs and requirements for states to follow in evaluating
    and re-evaluating these training programs. Similarly under
    Medicaid law, the Secretary establishes nursing facility
    requirements for nurse aide training and competency evaluation
    programs and requirements for states to follow in evaluating
    and re-evaluating these training programs.
                Proposed Law
        This provision would add dementia and abuse prevention
    training to staff training requirements for SNF and nursing
    facilities. The Secretary would revise initial nurse aide
    training, competency, and evaluation program requirements to
    include dementia management and patient abuse prevention
    training. If determined to be appropriate, the Secretary also
    may include dementia management training and patient abuse
    prevention in ongoing nurse aide training, competency, and
    evaluation program requirements. The dementia and abuse
    prevention training amendments would apply one year after the
    effective date of the provision.
        It has been reported that the majority of older nursing
    home residents have some form of psychiatric illness, with
    dementia affecting 1 out of 5 residents. Timely recognition and
    intervention are key to the optimal care of older adults with
    dementia. Requiring appropriate training so that nursing home
    staff are best equipped to manage the care of these patients is
    important to ensuring good quality of care. This provision will
    direct the Secretary to include dementia and abuse prevention
    training of nursing home staff.

    Section 1432. Study and report on training required for certified nurse
            aides and supervisory staff

                Current Law
        Medicare and Medicaid law have provisions that govern
    training for nurse aides for both SNF and nursing facilities.
    These laws require the Secretary to establish requirements for
    nurse aide training and competency evaluation programs as well
    as parameters for states to use in monitoring these programs.
                Proposed Law
        Certified nurse aides and supervisory staff are typically
    the primary caregivers in a skilled nursing facility. It is
    important to know whether existing training requirements are
    sufficient to ensure appropriate care for the patient
    population in these facilities.
        The Secretary would be required to conduct a study within
    two years of the effective date of this provision on the
    content of certified nurse aide and supervisory staff training
    in SNFs and nursing facilities. The report shall include the
    following: whether the 75 hours of initial nurse aide training
    required should be increased and if so, what the required
    number of initial training hours should be recommended
    (including dementia related training); and whether the 12 hours
    per year of ongoing nurse aide training should be increased and
    what content changes are recommended. In assessing the number
    of hours of initial nurse aide training required, the Secretary
    would consult with states that already have increased the
    number of hours of initial training above 75 hours. Within two
    years from the effective date of this provision, the Secretary
    would be required to submit a report to Congress on the
    certified nurse aide and supervisory training requirements. The
    report would include recommendations for legislative and
    administrative action.

    Section 1433. Qualification of director of food services of a Medicaid
            nursing facility

                Current Law
        Medicaid law requires that participating nursing homes
    provide dietary services that assure that the meals meet the
    daily nutritional and special dietary needs of each resident.
    Federal regulation requires the facility to employ a qualified
    dietitian either full-time, part-time, or on a consultant
    basis. If a qualified dietitian is not employed full-time, the
    facility must designate a person to serve as the director of
    food service who receives frequently scheduled consultation
    from a qualified dietitian. A qualified dietitian is defined as
    one who is registered by the Commission on Dietetic
    Registration of the American Dietetic Association, or on the
    basis of education, training, or experience in identification
    of dietary needs, planning, and the implementation of dietary
    programs.
                Proposed Law
        The provision would require that the full-time director of
    food services of the facility, if not a qualified dietitian, be
    accredited as a Certified Dietary Manager meeting the
    requirements of the Certifying Board for Dietary Managers, or
    as a Dietetic Technician, Registered meeting the requirements
    of the Commission on Dietetic Registration, or have equivalent
    military or academic qualifications, as specified by the
    Secretary of HHS. This provision would take effect on the date
    that is 180 days after enactment.

                        Subtitle C--Quality Measurements

    Section 1441. Establishment of national priorities for quality
            improvement

                Current Law
        There are no provisions in current law that require the
    development of national priorities for performance improvement
    (directed either at the Secretary of Health and Human Services
    or the Agency for Healthcare Research and Quality).
        Section 1890 of the Social Security Act, however, requires
    the Secretary to identify and have in effect a contract with a
    consensus-based entity, such as the National Quality Forum, to
    perform the following duties: (1) synthesize evidence and
    convene stakeholders to make recommendations, with respect to
    activities conducted under this Act, on an integrated national
    strategy and priorities for health care performance measurement
    in all applicable settings; (2) provide for the endorsement of
    standardized health care performance measures; (3) establish
    and implement a process to ensure that endorsed measures are
    updated or retired based on new evidence; (4) promote the
    development of electronic health records that facilitate the
    collection of performance measurement data; and (5) report
    annually to Congress.
        The National Quality Forum has been awarded this contract
    and recently released its first report, Improving Healthcare
    Performance: Setting Priorities and Enhancing Measurement
    Capacity, in fulfillment of this statutory requirement.
                Proposed Law
        This provision would amend Title XI of the Social Security
    Act, as amended by section 1401(a), by adding a new Part E--
    Quality Improvement--Establishment of National Priorities for
    Performance Improvement. Specifically, it would add a new
    section 1191 to establish national priorities for performance
    improvement.
        This section would require the Secretary to establish and
    periodically update (not less frequently than triennially)
    national priorities for performance improvement. Specifically,
    it would require the Secretary, when establishing and updating
    national priorities, to solicit and consider recommendations
    from multiple outside stakeholders.
        This provision would require, with respect to the national
    priorities for performance improvement, the Secretary to give
    priority to areas in the delivery of health care services that
    (1) address a large burden of disease, as specified; (2) have
    the greatest potential to decrease morbidity and mortality in
    the United States, as specified; (3) have the greatest
    potential for improving the performance, affordability, and
    patient-centeredness of health care; (4) address health
    disparities across groups and areas; and (5) have the potential
    for rapid improvement due to existing evidence or standards of
    care.
        For the purposes of this Section: (1) consensus-based
    entity would mean an entity with a contract with the Secretary
    under Section 1890 of the Social Security Act; and (2) quality
    measure would mean a national consensus standard for measuring
    the performance and improvement of population health, or of
    institutional providers of services, physicians, and other
    health care practitioners in the delivery of health care
    services.
        This provision would require the Secretary to provide for
    the transfer, from the Federal Hospital Insurance Trust Fund
    and the Federal Supplementary Medical Insurance Trust Fund, of
    $2 million for each of the fiscal years 2010 through 2014. It
    would also authorize the appropriation of $2 million for each
    of the fiscal years 2010 through 2014 from any funds in the
    Treasury not already appropriated.
        It is the Committee's intent that the priorities
    established by the Secretary will have wide applicability and
    help direct health improvement activities across the nation's
    health care system.

    Section 1442. Development of new quality measures; GAO evaluation of
            data collection process for quality measurement

                Current Law
        Section 1110(a)(1) of Title XI of the Social Security Act
    provides general authority to appropriate such sums as may be
    necessary for making grants to States and public and other
    organizations and agencies for research that will help improve
    the administration and effectiveness of the programs carried
    out under the Social Security Act, among other things.
        The Agency for Healthcare Research and Quality (AHRQ) has
    significant existing statutory authorities with respect to the
    development of quality measures. Specifically, the Agency's
    mission, among other things, is to promote health care quality
    improvement by conducting and supporting research that develops
    and presents scientific evidence regarding all aspects of
    health care, including methods for measuring quality and
    strategies for improving quality (Section 901 of the PHSA).
        Section 912 of the Public Health Service Act (PHSA)
    requires AHRQ to provide support for public and private efforts
    to improve health care quality, and that the role of the Agency
    shall specifically include the ongoing development, testing,
    and dissemination of quality measures, including measures of
    health and functional outcomes and the compilation and
    dissemination of health care quality measures developed in the
    private and public sector. To comply with this last
    requirement, the Agency has established the National Quality
    Measures Clearinghouse, an online resource that compiles and
    catalogues quality measures.
        Finally, Section 917 of the PHSA requires AHRQ to
    coordinate all research, evaluations, and demonstrations
    related to health services research, quality measurement and
    quality improvement activities undertaken and supported by the
    Federal Government.
                Proposed Law
        This section would amend Part E of Title XI of the Social
    Security Act, as added by section 1441, by adding two new
    sections: section 1192: development of new quality measures,
    and section 1193: GAO evaluation of data collection process for
    quality measurement.
        Robust, accurate, and appropriate measures of health care
    quality are a critical component of improving the delivery
    system and health outcomes. It is difficult to develop and
    implement strategies to improve patient health without such
    measures, but in many cases measures do not exist or have yet
    to be fully developed. In other cases, measures do exist but
    need to be updated or modernized. Putting additional resources
    into quality measure development will speed the development of
    new measures and address shortcomings of existing measures.
        Section 1192. This section would require the Secretary to
    enter into agreements with qualified entities to develop
    quality measures for the delivery of health care services in
    the United States. The Secretary would be authorized to carry
    out these agreements by contract, grant, or otherwise. In
    addition, this Section would require the Secretary to seek
    public input and take into consideration recommendations of the
    consensus-based entity with a contract with the Secretary under
    Section 1890(a) of the Social Security Act. The Secretary would
    be required, as specified, to determine areas in which quality
    measures for assessing health care services in the United
    States are needed.
        Quality measures developed under these agreements would be
    required to be designed (1) to assess outcomes and functional
    status of patients; (2) to assess the continuity and
    coordination of care and care transitions, as specified; (3) to
    assess patient experience and patient engagement; (4) to assess
    the safety, effectiveness, and timeliness of care; (5) to
    assess health disparities as specified; (6) to assess the
    efficiency and resource use in the provision of care; (7) to
    the extent feasible, to be collected as part of health
    information technologies supporting better delivery of health
    care services; (8) to be available free of charge to users for
    the use of such measures; and (9) to assess delivery of health
    care service to individuals regardless of age.
        This provision would also require the Secretary to make
    proposed quality measures available to the public; would
    authorize the Secretary to use amounts made available under
    this Section to fund the testing of proposed quality measures
    by qualified entities, as specified; and would authorize the
    Secretary to use amounts made available under this Section to
    fund the updating, by consensus-based entities, of quality
    measures that have been previously endorsed by such an entity
    as new evidence is developed (consistent with Section
    1890(b)(3) of the Social Security Act).
        Grants would be authorized to be made under this Section
    only if an application for the grant would be submitted to the
    Secretary as specified and the Secretary would be required to
    ensure, before entering into agreements with qualified
    entities, that the entity is a public, nonprofit or academic
    institution with technical expertise in the area of health
    quality measurement.
        For purposes of carrying out this section, the Secretary
    would be required to provide for the transfer, from the Federal
    Hospital Insurance Trust Fund and the Federal Supplementary
    Medical Insurance Trust Fund, of $25 million each year from
    fiscal years 2010 through 2014. In addition, this section would
    authorize the appropriation of $25 million for each of the
    fiscal years 2010 through 2014 from any funds in the Treasury
    not otherwise appropriated.
        Section 1193. This Section would require the Comptroller
    General of the United States to conduct periodic evaluations of
    the implementation of the data collection processes for quality
    measures used by the Secretary.
        It would require the Comptroller General to determine: (1)
    whether the system for the collection of data for quality
    measures provides for validation of data as relevant and
    scientifically credible; (2) whether data collection efforts
    under the system use the most efficient and cost-effective
    means in a manner that minimizes administrative burden on
    persons required to collect data and that adequately protects
    the privacy of patients' personal health information and
    provides data security; (3) whether standards under the system
    provide for an opportunity for physicians and other clinicians
    and institutional providers of services to review and correct
    findings; and (4) the extent to which quality measures are
    consistent with requirements for quality measures developed
    under this Act, as specified, or result in direct or indirect
    costs to users of such measures.
        This section would require the Comptroller General to
    report to Congress and to the Secretary on the findings and
    conclusions of the results of each such evaluation.

    Section 1443. Multi-stakeholder pre-rulemaking input into selection of
            quality measures

                Current Law
        None.
                Proposed Law
        The Medicare program is increasingly making use of health
    care quality measures in administration of its payment systems.
    As the program continues to evolve, the Committee expects this
    trend will continue and that a larger portion of provider
    payments will eventually become linked to performance on such
    measures. For instance, the Accountable Care Organization pilot
    program in section 1301 of this legislation will make extensive
    use of quality measures.
        Given the greater reliance on quality measures within
    Medicare, the process for selecting such measures should be an
    open and collaborative one. This section provides the Medicare
    program with a process for engaging with a wide array of
    stakeholders and interested parties, including patient advocacy
    organizations, employers, private purchasers, and providers.
    Such engagement will help ensure that Medicare selects the most
    appropriate measures for each of its payment systems and
    promote consistent use of measures among other stakeholders.
        This section would amend section 1808 of the Social
    Security Act by adding a new subsection (d): Multi-Stakeholder
    Pre-Rulemaking Input into Selection of Quality Measures.
        The new subsection would require the Secretary, not later
    than December 1 before each year (beginning with 2011), to
    publish a list of measures being considered for selection for
    quality measurement by the Secretary in rulemaking with respect
    to payment systems under Title XVIII of the Social Security
    Act, as specified. This section would also require the
    consensus-based entity that has entered into a contract under
    section 1890 of the Social Security Act to convene multi-
    stakeholder groups to provide recommendations on the selection
    of individual or composite quality measures, for use in public
    reporting of performance information or in public health care
    programs. The section would also require the consensus-based
    entity, not later than February 1 of each year (beginning with
    2011), to transmit to the Secretary the recommendations of
    these multi-stakeholder groups, as specified.
        This section would require the consensus-based entity, in
    convening multi-stakeholder groups, to provide for an open and
    transparent process for the activities conducted pursuant to
    such convening. This process would have to ensure that the
    selection of representatives of multi-stakeholder groups
    includes provision for public nominations for, and the
    opportunity for public comment on, such selection. This section
    would require the respective proposed rule to contain a summary
    of the recommendations made by the multi-stakeholder groups
    under this section, as well as other comments received
    regarding the proposed measures, and the extent to which such
    proposed rule follows such recommendations and the rationale
    for not following such recommendations.
        The provision would define the term ``multi-stakeholder
    groups'' to mean, with respect to a quality measure, a
    voluntary collaborative of organizations representing persons
    interested in or affected by the use of such quality measure,
    such as the following: (1) hospitals and other institutional
    providers; (2) physicians; (3) health care quality alliances;
    (4) nurses and other health care practitioners; (5) health
    plans; (6) patient advocates and consumer groups; (7)
    employers; (8) public and private purchasers of health care
    items and services; (9) labor organizations; (10) relevant
    departments or agencies of the United States; (11)
    biopharmaceutical companies and manufacturers of medical
    devices; (12) licensing, credentialing, and accrediting bodies.
        For purposes of carrying out this section, the Secretary
    would be required to provide for the transfer, from the Federal
    Hospital Insurance Trust Fund and the Federal Supplementary
    Medical Insurance Trust Fund under, of $1 million each year
    from fiscal years 2010 through 2014. In addition, this section
    would authorize the appropriation of $1 million for each of the
    fiscal years 2010 through 2014 from any funds in the Treasury
    not otherwise appropriated.

    Section 1444. Application of quality measures

                Current Law
        Section 1886(b)(3)(B)(vii) of the Social Security Act
    requires hospitals to submit specified quality data to the
    Secretary in order to receive a full annual payment update.
    Section 1886(b)(3)(B)(viii)(V) provides that beginning with
    payments in fiscal year 2008, the Secretary shall add
    additional quality measures that reflect consensus among
    affected parties and, to the extent feasible and practicable,
    shall include measures set forth by one or more national
    consensus building entities.
        Section 1833(t)(17)(A)(i) of the Social Security Act
    requires hospitals to submit data on outpatient quality
    measures to the Secretary in order to receive a full outpatient
    department (OPD) fee schedule increase. In addition, section
    1833(t)(17)(C)(i) requires the Secretary to develop measures
    that reflect consensus among affected parties, and to the
    extent feasible and practicable, to include measures set forth
    by one or more national consensus building entities.
        Section 1848(k) of the Social Security Act requires the
    Secretary to implement a system for the reporting by eligible
    professionals of data on specified quality measures. Section
    1848(k)(2)(C)(i) requires that for 2010 and subsequent years,
    the quality measures specified under this section will be such
    measures selected by the Secretary from measures that have been
    endorsed by the consensus-based entity with a contract under
    section 1890(a) of the Social Security Act. Section
    1848(k)(2)(C)(ii) provides an exception in the case of a
    specified area or medical topic for which feasible and
    practical measures have not been endorsed, stipulating that
    such measures may be used as long as due consideration has been
    given to measures that have been endorsed or adopted by a
    consensus organization.
        Section 1881(h)(1) of the Social Security Act requires
    renal dialysis facilities to meet (or exceed) a total
    performance score, based on quality measures as specified, in
    order to receive full payment for services furnished on or
    after January 1, 2012. In addition, section 1881(h)(2)(B)
    requires the Secretary to specify measures that have been
    endorsed by the consensus-based entity with a contract under
    section 1890(a), and authorizes the Secretary, where endorsed
    measures are not available, to use such measures provided that
    due consideration has been given to measures that have been
    endorsed or adopted by a consensus organization.
        Section 1890 of the Social Security Act requires the
    Secretary to identify and have in effect a contract with a
    consensus-based entity, such as the National Quality Forum, to
    perform certain duties. Included in these, at section
    1890(b)(2) of the Social Security Act, is a requirement that
    the consensus-based entity provide for the endorsement of
    standardized health care performance measures, as specified.
                Proposed Law
        To the extent feasible, the Medicare program should use
    measures of health quality that have been endorsed by a
    consensus-based organization, such as the National Quality
    Forum. The use of endorsed measures will help ensure that
    Medicare is utilizing the most appropriate and robust measures,
    while also using measures that have widespread support among
    various health care stakeholders.
        Generally, this section places requirements on the
    Secretary when selecting quality measures for use in existing
    quality programs for inpatient, outpatient, physician and renal
    dialysis services. These requirements relate to the endorsement
    of quality measures. However, the Committee recognizes it is
    critical that the Medicare program maintain its independence
    and retain the flexibility to use non-endorsed measures when it
    deems necessary.
        Specifically, this section would amend section
    1886(b)(3)(B) of the Social Security Act to require the
    Secretary to select measures for purposes of reporting data for
    inpatient hospital services furnished during fiscal year 2012
    and each subsequent year, that have been endorsed by the
    consensus-based entity with a contract with the Secretary under
    section 1890 of the Social Security Act. If feasible and
    practical measures were not available, the Secretary would be
    authorized to select a non-endorsed measure, providing the
    Secretary gives due consideration to endorsed or adopted
    measures. The Secretary would be required to submit non-
    endorsed measures to the entity for consideration for
    endorsement, and if the entity were to not endorse the measure,
    and the Secretary were to continue to use the measure, the
    Secretary would be required to include the rationale for its
    continued use in rulemaking. This section would also amend
    section 1833(t)(17) of the Social Security Act to require that
    the provisions added to section 1886 (above) would also apply
    to quality measures for covered outpatient department services.
        This section would also amend sections 1848(k)(2)(C)(ii)
    and 1881(h)(2)(B)(ii) of the Social Security Act, to require
    the Secretary to submit non-endorsed measures for physicians'
    services and renal dialysis services, respectively, to the
    consensus-based entity for consideration for endorsement. It
    would further require the Secretary, if the measure does not
    gain endorsement and if the Secretary continues to use the
    measure, to provide a rationale for continued use in
    rulemaking.
        This section would, by amending section 1890(b)(2) of the
    Social Security Act, require the consensus-based entity with a
    contract with the Secretary in section 1890 to explain the
    reasons underlying non-endorsement of a given measure, and to
    provide suggestions about changes to such measure that might
    make such a measure potentially endorsable.
        This section would apply to quality measures applied for
    payment years beginning with 2012 or fiscal year 2012, as the
    case may be.

    Section 1445. Consensus-based entity funding

                Current Law
        Section 1890 of the Social Security Act requires the
    Secretary to identify and have in effect a contract with a
    consensus-based entity, such as the National Quality Forum, to
    perform the following duties: (1) synthesize evidence and
    convene stakeholders to make recommendations, with respect to
    activities conducted under this Act, on an integrated national
    strategy and priorities for health care performance measurement
    in all applicable settings; (2) provide for the endorsement of
    standardized health care performance measures; (3) establish
    and implement a process to ensure that endorsed measures are
    updated or retired based on new evidence; (4) promote the
    development of electronic health records that facilitate the
    collection of performance measurement data; and (5) report
    annually to Congress.
        Section 1890(d) of the Social Security Act provides for $10
    million to fund the activities of the consensus-based entity
    under contract in this section for each of fiscal years 2009
    through 2012.
                Proposed Law
        This provision is needed to provide funding available under
    CMS's current contract with the National Quality Forum to cover
    additional expenses related to implementation of section 1441
    of this legislation, regarding multi-stakeholder input on the
    selection of quality measures.
        This section would amend section 1890(d) of the Social
    Security Act to provide for $10 million only for fiscal year
    2009, and $12 million for each of the fiscal years 2010 through
    2012.

    Section 1446. Quality indicators for care of people with Alzheimer's
            disease

                Current Law
        No provision.
                Proposed Law
        This provision would required the Secretary of HHS, acting
    through the Agency for Healthcare Research and Quality (AHRQ),
    to develop either directly or with commissioned projects, a
    core set of quality indicators for the provision of medical
    services to people with Alzheimer's disease and other dementias
    and a plan for implementing the indicators to measure the
    quality of care provided for people with these conditions by
    physicians, hospitals, and other medical, residential, and home
    care agencies and providers.
        The Secretary would be required to submit a report to the
    Committees on Energy and Commerce and Ways and Means of the
    United States House of Representatives and the Committees on
    Finance and Health, Education, and Pensions of the United
    States Senate setting forth the status of their efforts to
    implement the above mentioned requirements.

    Section 1447. Study on five star quality rating system

                Current Law
        The Nursing Home Compare website was developed by the
    Centers for Medicare and Medicaid Services (CMS) and launched
    in November 2002. The website was intended to bolster the
    agency's efforts to improve SNF and nursing facility quality of
    care and to make information on nursing home quality more
    accessible for long-term care consumers and their families.
    Medicare Nursing Home Compare includes national data on all
    nursing facilities that participate in Medicare and Medicaid.
    The data in Medicare Nursing Home Compare include facility
    ratings, selected results from survey and certification
    inspections, and staffing information on all Medicare and
    Medicaid SNFs and nursing facilities. Since its launch, CMS has
    enhanced the website by adding or improving quality measures
    and website navigation.
        The Nursing Home Compare website includes a quality rating
    system that gives each nursing home a rating of between 1 and 5
    stars. Nursing homes with 5 stars are considered to have much
    above average quality; nursing homes with 4 stars are
    considered to be above average quality; nursing homes with 3
    stars are considered to be average; nursing homes with 2 stars
    are considered to be below average and nursing homes with 1
    star are considered to be much below average.
                Proposed Law
        The Comptroller of the United States is required to conduct
    a study on the Five-Star Quality Rating System (or a successor
    program) established by CMS and to submit the results of this
    study, together with recommendations, not later than 1 year
    after the date of enactment to Congress and the Secretary of
    HHS.
        The study would be required to do the following:
              (1) Determine whether the composite star rating
            should be eliminated in favor of a multi-dimensional
            system under which a star rating is assigned to each
            individual domain;
              (2) Determine whether an appeals process should be
            implemented for the Five Star Rating System to address
            situations in which questionable, inaccurate, or
            incomplete data has been identified;
              (3) Evaluate the appropriateness of any weighting
            methodology used to adjust quality measures, including
            an assessment of whether such methodology is validated,
            whether it takes into account resident characteristics,
            the appropriateness of the weighting of individual
            quality measures, and whether the accuracy of
            information to consumers would be enhanced if the
            standard survey were weighted more heavily than the
            complaint survey;
              (4) Assess the appropriateness of the case-mix
            adjustment methodology used to evaluate staffing
            levels, along with the appropriateness of the staffing
            levels established by CMS, to achieve a 5-star rating
            given the absence of any existing federal nursing home
            staffing guidelines or Medicare funding to support
            these staffing levels;
              (5) If the Comptroller General determines that such
            target staffing levels are appropriate, evaluate, in
            consultation with the Secretary of Health and Human
            Services, the cost of modifying the Medicare Skilled
            Nursing Facility Resource Utilization Groups to reflect
            the costs to facilities of providing staffing at these
            target levels;
              (6) Evaluate how best to represent resident/consumer
            satisfaction under the rating system, and review
            approaches to report other facility-specific
            characteristics to enable consumers to better identify
            facilities that will meet their individual needs;
              (7) Evaluate the impact of the rating system on
            Medicare skilled nursing facilities and Medicaid
            nursing facilities, including a review of potential
            problems associated with inaccurate or incomplete data
            and other unanticipated consequences reported by
            facilities; and
              (8)  Assess whether the national program should be
            suspended and replaced with a pilot program testing
            potential nursing home quality rating systems in a
            limited number of States.

               Subtitle D--Physician Payments Sunshine Provision

    Section 1451. Reports on financial relationships between manufacturers
            and distributors of covered drugs, devices, biologics, or
            medical supplies under Medicare, Medicaid, or CHIP and
            physicians and other health care entities and between
            physicians and other health care entities

                Current Law
        Under section 1128B(b) of the Social Security Act, referred
    to as the federal anti-kickback statute, it is a felony for a
    person to knowingly and willfully offer, pay, solicit, or
    receive anything of value (i.e., ``remuneration'') in return
    for a referral or to induce generation of business reimbursable
    under a federal health care program. The statute prohibits the
    offer or payment of remuneration for patient referrals, as well
    as the offer or payment of anything of value in return for
    purchasing, leasing, ordering, or arranging for, or
    recommending the purchase, lease, or ordering of any item or
    service that is reimbursable by a federal health care program.
    Persons found guilty of violating the anti-kickback statute may
    be subject to a fine of up to $25,000, imprisonment of up to
    five years, and exclusion from participation in federal health
    care programs for up to one year. However, a number of
    statutory and regulatory ``safe harbors'' to the anti-kickback
    statute protect various business arrangements from prosecution.
    Safe harbors include certain types of investment interests,
    personal services and management contracts, referral services,
    space rental or equipment rental arrangements, warranties,
    discounts, and employment arrangements. In 2003, OIG issued
    ``Compliance Program Guidance for Pharmaceutical
    Manufacturers'' (68 Federal Register 23731), which stated that
    pharmaceutical companies and their employees and agents often
    engage in a number of arrangements that offer benefits to
    physicians or others in a position to make or influence
    prohibited referrals under the anti-kickback statute. Examples
    of remunerative arrangements between pharmaceutical
    manufacturers and parties in a position to influence referrals
    that were cited by OIG included entertainment, recreation,
    travel, meals, or other benefits in association with
    information or marketing presentations, as well as gifts,
    gratuities, and other business courtesies. OIG indicated these
    arrangements potentially implicate the anti-kickback statute if
    any one purpose of the arrangement is to generate business for
    the pharmaceutical company.
        Under section 1877 of the Social Security Act, the federal
    prohibition on physician self-referrals, if a physician (or an
    immediate family member of a physician) has a ``financial
    relationship'' with an entity, the physician may not make a
    referral to the entity for the furnishing of designated health
    services (DHS) for which payment may be made under Medicare or
    Medicaid, and the entity may not present (or cause to be
    presented) a claim to the federal health care program or bill
    to any individual or entity for DHS furnished pursuant to a
    prohibited referral. ``Financial relationship'' is defined as
    either an ownership or investment interest or a compensation
    arrangement. An ownership or investment interest may be equity,
    debt, or other means; however, section 1877(c) specifies that
    an ownership interest does not include certain investment
    securities which may be purchased on terms generally available
    to the public and meet additional requirements, or that are
    shares of certain regulated investment companies. A
    compensation arrangement means an arrangement involving
    remuneration between a physician or an immediate family member
    of such physician and an entity. Section 1877(f) requires an
    entity that provides covered services for which payment may be
    made under Medicare to report to the Secretary information on
    the entity's ownership, investment, and compensation
    arrangements, including the covered items and services provided
    by the entity, and the names and unique physician
    identification numbers of all physicians who have an ownership
    or investment interest in, or a compensation arrangement with
    the entity, or whose immediate relatives have such an ownership
    or investment interest or compensation relationship with the
    entity.
        Multiple states and the District of Columbia have enacted
    legislation requiring pharmaceutical and other companies to
    disclose gifts and payments made to physicians and other
    entities. These state laws generally require annual disclosures
    to the states of such gifts and payments. Certain categories of
    gifts and payments are exempted from reporting requirements
    under most of the state laws. For example, state laws may
    exempt product samples intended for free distribution to
    patients and gifts worth less than a certain amount. While
    companies may make a voluntary disclosure of these gifts and
    other payments, there are currently no similar federal
    reporting requirements.
                Proposed Law
        The bill would add a new Section 1128H of the Social
    Security Act to create certain reporting requirements
    applicable to manufacturers or distributors of a drug, device,
    biological, or medical supply for which payment may be made
    available under Medicare, Medicaid, or the State Children's
    Health Insurance Program, as well as hospitals or other
    entities that bill Medicare.
        Under the section, beginning in 2011, a manufacturer or
    distributor that provides a payment or other transfer of value
    to a covered recipient (e.g., a physician, a pharmacist, a
    hospital, a medical school, or a group purchasing organization)
    or a recipient's designee would be required to annually submit
    specified information to the Secretary regarding the
    recipients, any payments or other transfers of value, and
    information about a provided drug sample. Payments or transfers
    of value include, among other things, gifts, food, or
    entertainment, travel or trips, honoraria, research funding or
    grants, education or conference funding and consulting fees,
    profit distribution, stock or stock option grant, or any
    ownership or investment interest held by a physician in a
    manufacturer (subject to exclusion), but do not include
    payments or transfers of five dollars or less, a loan of a
    covered device for a short-term trial period for evaluation
    purposes, items or services provided under a contractual
    warranty where the terms are specified in a purchase or lease
    agreement, items given to a patient who is not acting in a
    professional capacity, in-kind items for the provision of
    charity care, a dividend or other profit distribution from or
    ownership or investment interest in a publicly traded security
    and mutual fund, compensation paid by a manufacturer or
    distributor to an employee who works solely for a manufacturer
    or distributor, and any discount or cash rebate. The
    information submitted must include the aggregate amount of all
    payments or transfers of value from manufacturers to covered
    recipients, regardless of whether such payments or transfers
    were individually disclosed. If a manufacturer or distributor
    provides a payment to another entity or individual at the
    request of or designated on behalf of a covered recipient, the
    manufacturer or distributor must disclose the payment or
    transfer under the name of the covered recipient.
        Section 1128H would allow manufacturers and distributors to
    delay submission of their reports to the Secretary of payments
    and transfers of value made to covered recipients pursuant to
    certain services furnished as part of a product development
    agreement, or in connection with a clinical investigation of a
    new drug, device, biological, or medical supply. The
    information subject to delayed reporting would be considered
    confidential and would not be subject to disclosure under the
    Freedom of Information Act or other similar federal, state, or
    local law until or after the date on which the information is
    made available to the public.
        Manufacturers and distributors that fail to submit the
    required information in a timely manner in accordance with
    regulations would be subject to a civil monetary penalty of at
    least $1,000 but not more than $10,000 for each payment or
    transfer of value not reported, up to a maximum of $150,000 for
    each annual submission of information. Any manufacturer or
    distributor that knowingly fails to submit information would be
    subject to a civil monetary penalty of at least $10,000 but not
    more than $100,000 for each payment or transfer of value, and
    may not exceed $1 million or, if greater, 0.1% of the total
    annual revenue of the manufacturer or distributor.
        Each hospital or other health care entity, excluding a
    Medicare Advantage organization, that bills the Secretary under
    Medicare Part A or Part B would have to report on the ownership
    shares (other than shares generally available to the public or
    shares of certain regulated investment companies as described
    in Section 1877(c) of the Social Security Act) of each
    physician and the physician's immediate family members.
    Hospitals and other entities that fail to submit the required
    information in a timely manner in accordance with regulations
    would be subject to a civil monetary penalty of at least $1,000
    but not more than $10,000 for each ownership or investment
    interest not reported. Any hospital or other entity that
    knowingly fails to submit information would be subject to a
    civil monetary penalty of at least $10,000 but not more than
    $100,000 for each ownership or investment interest not
    reported. The total amount of civil monetary penalties imposed
    with respect to each annual submission of information may not
    exceed $1 million or, if greater, 0.1% of the total annual
    revenue of the entity. All funds collected by the Secretary
    under section 1128H from the imposition of civil monetary
    penalties would be used to carry out the requirements of the
    section.
        The section would require the Secretary to establish
    procedures no later than September 30, 2011, and on June 30
    each year after to ensure public availability of the submitted
    information through an Internet website that is searchable, has
    a clear and understandable format, and that meets various other
    requirements. Manufacturer and distributors, hospitals, and
    other entities that would be subject to reporting requirements
    under 1128H would be responsible for the accuracy of the
    information that is submitted to the Secretary and made
    available on the website. The Secretary would be required to
    establish procedures to ensure that a covered recipient has an
    opportunity to submit corrections to these entities the
    manufacturer with regard to information made public with
    respect to the covered recipient. Under such procedures, the
    corrections must be transmitted to the Secretary. Information
    relating to drug samples and national provider identification
    numbers would not be made available to the public by the
    Secretary, but may be made available outside of the Department
    of Health and Human Services for research or legitimate
    business purposes pursuant to data use agreements.
        Under the section, if a state attorney general has provided
    notice to the Secretary of the intent to proceed on a specific
    case and the Secretary has had an opportunity to bring an
    action and has declined to do so, the attorney general of a
    state would be permitted to bring an action against a
    manufacturer or distributor in the state for a violation of the
    section.
        Section 1128H would require the Secretary to submit a
    report to Congress no later than April 1 of each year,
    beginning in 2011, that includes information submitted in the
    preceding year by manufacturers and distributors and a
    description of any enforcement actions taken to carry out the
    section (including penalties imposed during the preceding
    year). The Secretary would also be required to submit to
    Congress a report on the results of the Disclosure of Physician
    Financial Relationships surveys required pursuant to section
    5006 of the Deficit Reduction Act of 2005. This report would be
    submitted to Congress not later than 6 months after the date
    such surveys are collected and would be made publicly available
    on an Internet website of the Department of Health and Human
    Services. In addition, no later than April 1 of each year,
    beginning in 2011, the Secretary would be required to submit to
    states a report that includes information submitted by
    manufacturers and distributors in the preceding year, as well
    as other information.
        Additionally, beginning on January 1, 2011, Section 1128H
    would preempt any law or regulation of a state or its political
    subdivision that requires a manufacturer or distributor to
    disclose or report information regarding a payment or other
    transfer of value to a covered recipient, in accordance with
    the section. However, the section would not preempt state laws
    or regulations under which (A) the disclosure or reporting of
    information is not of the type required to be disclosed or
    reported under Section 1128H, (B) the information reported is
    required to be disclosed or reported to a federal, state, or
    local governmental agency for public health surveillance,
    investigation, or other public health purposes or health
    oversight purposes, or (C) the state requires the discovery or
    admissibility of the information in a criminal, civil, or
    administrative proceeding.

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

    Section 1461. Requirement for public reporting by hospitals and
            ambulatory surgical centers on health care-associated
            infections

                Current Law
        Current law does not, in general, require the reporting of
    health care-associated infections (HAIs), although such
    reporting is required in a number of states. Several provisions
    in current federal law have established programs that are
    somewhat related.
        First, Section 5001(c) of the Deficit Reduction Act (P.L.
    109-171) requires the Secretary, by regulation, to identify
    certain preventable conditions that are not present on
    admission, and that therefore are acquired in the health care
    facility. Medicare Part A reimbursement is not provided for the
    care of these secondary conditions. This provision is
    implemented in CMS's annual Inpatient Prospective Payment
    System (IPPS) rule for hospitals. At this time, listed
    conditions include some that are unrelated to infection (such
    as incompatible blood transfusions, and trauma resulting from
    falls in the facility), as well as specific types of catheter-
    associated and surgical site infections. The rules explain that
    some other infections (such as infection with methicillin-
    resistant Staph. aureus, or MRSA) are not included because,
    among other things, it can be hard to determine, in an
    individual patient, whether an infection is associated with
    health care or was acquired previously.
        Also, two voluntary CMS reporting programs established
    under current law may capture information related to HAIs. The
    Physician Quality Reporting Initiative (PQRI), established
    under Section 101(b) of the Tax Relief and Healthcare Act of
    2006 (P.L. 109-432), provides incentive payments to physicians
    who report certain quality measures, which include instances of
    catheter-associated or surgical site infection. Information
    from this program is not publicly reported. The Reporting
    Hospital Quality Data for Annual Payment Update (RHQDAPU)
    Program, originally established under section 501(b) of the
    Medicare Prescription Drug, Improvement, and Modernization Act
    of 2003 (MMA, P.L. 108-173), requires participating hospitals
    to report quality data to CMS in order to receive a full annual
    payment update. Selected measures are publicly reported on the
    CMS Hospital Compare website. However, regarding infections,
    this program uses process measures (e.g., antibiotics were used
    properly in surgical patients) rather than outcome measures
    (e.g., a patient developed a surgical site infection).
        The Health Information Technology for Economic and Clinical
    Health (HITECH) Act, which was incorporated into the American
    Recovery and Reinvestment Act of 2009 (P.L. 111-5), created a
    new Title XXX in the PHS Act to promote the widespread adoption
    of health information technology (HIT). Among its provisions,
    the HITECH Act established a process for the development of
    interoperability standards that support the nationwide
    electronic exchange of health information among doctors,
    hospitals, patients, health plans, the federal government, and
    other health care stakeholders.
                Proposed Law
        HAIs are a result of treatment in a healthcare service
    setting such as a hospital or an ambulatory surgery center, but
    secondary to the patient's original condition. Studies have
    shown that such infections have been increasing over the past
    few years due to factors such as increasing drug resistance of
    bacteria and improper infection control measures. Surveillance
    is critical as a public health measure so as to identify and
    respond to emerging threats, and over 20 states now have
    mandatory reporting for health facilities on health care-
    associated infections. These efforts have provided the
    infrastructure for effective interventions which can virtually
    eliminate certain types of health care-associated infections.
        This section would establish a new SSA Section 1138A
    requiring the Secretary to provide, by regulation, that in
    order to participate in Medicare and Medicaid, hospitals and
    ambulatory surgical centers would have to report certain health
    care-associated infections that develop in the facility. The
    Secretary would specify the types of information that must be
    reported, and develop reporting protocols through the Centers
    for Disease Control and Prevention (CDC), assuring that such
    protocols are coordinated with systems established under the
    HITECH Act. The Secretary would be required: to establish
    procedures regarding the validity of reported data to assure
    appropriate comparisons between facilities; to promulgate,
    through the Director of CDC, regulations to carry out this
    section, within one year of enactment; and to post information
    from the system on the HHS website in a manner that permits
    comparisons by facility and by patient demographic
    characteristics.
        This section would also require the Secretary annually to
    report to Congress on specified aspects of the program, and
    would provide that this section should not be construed as
    preempting or otherwise affecting state laws relating to the
    disclosure of information on HAIs or patient safety procedures
    for a hospital or ambulatory surgical center. It would also
    define an HAI and its relationship to the receipt of care, and
    would clarify that for the purposes of this section, hospitals
    include critical access hospitals.
        This provision would provide that for hospitals and
    ambulatory surgical centers, reporting requirements would take
    effect when specified by the Secretary, but not later than 2
    years after enactment. Within 18 months of enactment, the
    Comptroller General would be required to report to Congress
    regarding the reporting program, and the Secretary would be
    required to report to Congress regarding the appropriateness of
    expanding reporting requirements to include additional
    information, such as health care worker immunization rates.

                  TITLE V--MEDICARE GRADUATE MEDICAL EDUCATION

    Sec. 1501. Distribution of unused residency positions

                Current Law
        With certain exceptions, the Balanced Budget Act of 1997
    (BBA, P.L. 105-33) limited the number of allopathic and
    osteopathic residents for which Medicare would reimburse a
    teaching hospital at the level reported in its cost report
    ending on or before December 31, 1996. The limit does not
    include dental or podiatry residents. The Medicare Prescription
    Drug, Improvement and Modernization Act of 2003 (P.L. 108-173,
    MMA) authorized the redistribution of up to 75% of each
    teaching hospital's unused resident positions to hospitals
    seeking to increase their medical residency training programs.
    Any adjustments made to teaching hospitals' resident limits
    would be permanent. Rural teaching hospitals with less than 250
    beds were exempt from the redistribution of any of their
    unfilled positions. Under the redistribution program, teaching
    hospitals were allowed to request up to an additional 25 full
    time equivalent (FTE) positions for direct graduate medical
    education (DGME) and indirect medical education (IME) payments.
    Hospitals were required to demonstrate the likelihood that the
    redistributed positions would be filled within 3 cost reporting
    periods beginning July 1, 2005. MMA required that the unused
    slots be redistributed according to specific priorities: rural
    hospitals, urban hospitals located in areas with a population
    of one million or less, specialty training programs that are
    the only specialty program in a state, and all other hospitals.
    The redistribution was effective for portions of cost reporting
    periods starting July 1, 2005. The redistributed resident slots
    have different IME and DGME payment formulas from those used to
    reimburse hospitals' previous residents.
                Proposed Law
        The Secretary would reduce the otherwise applicable
    resident limit for a hospital that has residency positions that
    were unused. Unused positions would be established when a
    hospital's reference residence level is less than its otherwise
    applicable resident limit. The reduction would be effective for
    portions of cost reporting periods occurring on or after July
    1, 2011. Hospitals that are members of the same affiliated
    group would be subject to redistribution. The Secretary would
    adjust the determination of available slots for affiliated
    hospitals depending upon the extent that these hospitals could
    demonstrate that they are filling any additional residents
    slots allocated to other hospitals through an affiliation
    agreement. 90% of unused slots would be redistributed to
    qualifying hospitals. The increase in resident training
    positions would be distributed to qualifying hospitals not
    later than July 1, 2011.
        A hospital's reference residence level would be established
    as the highest resident level of any of the 3 most recent cost
    reporting periods (ending before the date of enactment).
    Hospital cost reports that had been settled or those that had
    been submitted, subject to audit, would be used to establish
    the residence level. Also, upon timely request, a hospital's
    reference resident level could be increased to reflect an
    expansion or planned expansion of an existing residency
    training program that is not reflected on the most recent
    settled or submitted cost report. The increase would occur
    after audit and would include the previous redistribution of
    unused resident positions that occurred under MMA. The
    Secretary would be authorized to determine an alternative
    resident reference level for hospitals that submit a timely
    request for an increase in their reference resident level due
    to a planned expansion before the start of the 2009-2010
    academic year. A hospital's resident reference level would be
    increased to the extent that its level was increased because of
    the prior redistribution of resident slots.
        The Secretary would be required to increase the otherwise
    applicable resident limit for each qualifying hospital that
    submits a timely application by such number for portions of
    cost reporting periods that occur on or after July 1, 2011. The
    aggregate number of increases in resident limits may not exceed
    the estimated aggregate reduction in resident limits. In no
    case would more than 20 FTE additional residents be made
    available to a qualifying hospital.
        A hospital that qualifies for an increase in its otherwise
    applicable resident limit would be required to ensure that the
    number of primary care residents is maintained at its base
    level of primary care residents increased by the number of
    additional primary care residents provided to the hospital. The
    hospital would have to assign all additional resident positions
    for primary care residents. The hospital's residency programs
    in primary care would have to be fully accredited or, if not
    yet in operation as of the base year, the hospital would have
    to be actively applying for such accreditation for the program.
    A hospital's base level of primary care residents is the level
    of such residents in a base period determined without regard to
    whether such positions were in excess of the otherwise
    applicable resident limits. Hospitals receiving positions would
    be required to maintain records and periodically report on the
    number of primary care residents in its training programs. As a
    condition of continuing payment for a cost reporting period,
    the hospitals would be required to maintain the base level of
    positions at not less than the sum of the level of primary care
    resident positions before receiving additional positions plus
    the number of additional positions.
        When determining which qualifying hospitals would receive
    an increase in their otherwise applicable resident limit, the
    Secretary would take into account the demonstrated likelihood
    that a hospital would fill the positions within the first 3
    cost reporting periods beginning on or after July 1, 2011.
    Also, the Secretary would distribute the resident slots based
    on the following criteria: (1) the hospital had a reduction in
    the resident training positions under this section; (2) the
    hospital has a 3-year primary care residency training program,
    such as family practice and general internal medicine; (3) the
    hospital has formal arrangements, as determined by the
    Secretary, that place greater emphasis upon training in
    federally qualified health centers, rural health clinics, and
    other nonprovider settings and to hospitals that receive
    additional disproportionate share hospital payments and
    emphasize training in an outpatient department; (4) the
    hospital has resident training positions in excess of its
    otherwise applicable resident level as of July 1, 2009; (5) the
    hospital has formal arrangements that place greater emphasis on
    training in a health professional shortage area or health
    professional needs area; or (6) the hospital is in a state with
    a low resident-to-population ratio (including a greater
    preference for those states with lower resident-to-population
    ratios).
        The per resident amounts (PRAs) for the resident positions
    distributed under this provision would equal the hospitals'
    PRAs for primary and nonprimary care positions for the purposes
    of calculating direct graduate medical payments. The indirect
    medical education adjustment for the resident positions
    distributed under this provision would be computed in the same
    fashion as the hospital's existing resident positions.
                Reasons for Change
        The healthcare system is increasingly uncoordinated and
    complex, but a solid primary care workforce can help to support
    a well-coordinated and integrated delivery model. Despite clear
    advantages of a strong primary care workforce, the number of
    primary care slots and medical students choosing primary care
    as a specialty has decreased over the past decade. This is the
    case even though the total amount of the physician workforce
    has remained stable. Studies have recently shown that while 35%
    of the current physician workforce is in primary care, 21% to
    24% of graduating medical students choose primary care medicine
    as a career specialty. According to the Council of Graduate
    Medical Education (COGME), since the Graduate Medical Education
    (GME) cap was put in place in 1996, primary care internal
    medicine positions in the annual student match have fallen 57%,
    primary care pediatric positions have fallen by 34%, and family
    medicine positions have fallen by 18%. Over the past ten years,
    nearly all of the graduate medical expansion in teaching
    hospitals has been in subspecialty medicine. Family practice
    residency programs and three-year training programs that
    emphasize a generalist training have decreased or have closed
    as well.
        In its May 2009 report, COGME stated that graduate medical
    education should be realigned to meet society's evolving
    healthcare needs. COGME recommended an emphasis on training
    more primary care physicians, training residents capable of
    practicing in innovative delivery care models such as patient-
    centered medical homes and accountable care organizations, and
    increasing the accountability of graduate medical education's
    role in public health. Similarly, in its June 2009 report,
    MedPAC's recognized that residents will best learn the skills
    needed to provide high-quality, efficient care when medical
    education occurs in settings where such care is actually
    performed. MedPAC will explore policies in future work linking
    medical education incentives to delivery system reforms. This
    policy is intended to increase training of primary care
    physicians in a broader array of settings in order to meet the
    future healthcare needs of the American public.
        The Committee notes that some policymakers point to earlier
    COGME reports to argue for the need for more Medicare-funded
    residency slots. However, COGME now recognizes that earlier
    calls for increased residency slots focused on the growth in
    medical schools, and failed to take into account the fact that
    GME positions already exceed allopathic medical school slots by
    30%. For instance, in 2007-2008, the United States graduated
    about 17,500 allopathic students but had more than 25,000 first
    year residency positions. COGME points out that first-year
    residency positions grew eight percent from 2002 and 2007 and
    this expansion will accommodate increases in medical school
    production. The shortcoming is not in the number of medical
    residents being trained, but that nearly all of this expansion
    is in subspecialty training, resulting in a drop in primary
    care physicians.
        The legislation increases primary care physicians by
    directing the Secretary to redistribute residency positions
    that have been unfilled for the prior 3 cost reports and
    directs those slots for training of primary care physicians.
    Special preference will be given to programs that saw a
    reduction in their slots under this section, have formal
    arrangements to train residents in ambulatory settings or
    shortage areas, operate three-year primary care residency
    programs, currently operate residency programs over their cap,
    or are located in states with low resident-to-population
    ratios. Primary care physicians are trained in three-year
    general medicine, pediatrics or family practice residency
    programs. Within this universe of residency programs are a
    select number of programs that place emphasis on a generalist
    curriculum (such as family practice programs) and are referred
    to as ``three-year primary care residency training programs,''
    as compared to the ``categorical'' or basic programs where a
    resident will then go on to specialize. This provision directs
    the Secretary to give preference to these ``three-year primary
    care'' programs. The increase in resident training positions
    would be distributed to qualifying hospitals not later than
    July 1, 2011.
                Effective Date
        Cost reporting periods beginning on or after July 1, 2011.

    Sec. 1502. Increasing training in nonprovider settings

                Current Law
        Medicare reimburses the direct costs of graduate medical
    education (DGME) for approved residency training programs
    without regard for the setting where the residents' activities
    relating to patient care are performed as long as the hospital
    incurs all, or substantially all, of the costs for the training
    program in that setting. Through regulation, CMS has defined
    all, or substantially all costs, as 90% of resident stipends
    and fringe benefits and costs associated with a supervising
    physician. As presently administered, however, a hospital
    cannot include the time spent by residents working at a non-
    hospital site if it incurs all, or substantially all, of the
    costs for only a portion of the residents in that program at
    the non-hospital site.
        Section 1886(k) provides for payment to qualified
    nonhospital providers, such as FQHCs and rural health clinics,
    for their direct costs of medical educations if those costs are
    incurred in the operation of an approved medical residency
    training program.
                Proposed Law
        Effective for cost reporting periods beginning on or after
    July 1, 2009, all time spent by a resident would count towards
    the determination of an FTE resident with respect to Medicare's
    direct graduate education payment, without regard to the
    setting where the activities are performed, if the hospital
    incurs the costs of the stipends and the fringe benefits of the
    resident during the time the resident spends in that setting.
    Any hospital claiming payment for the time spent in a
    nonprovider setting would be required to maintain and make
    available necessary records regarding the amount of time and
    this amount in comparison to the amounts of time in a specified
    base year.
        Effective for discharges on or after July 1, 2009, all the
    time spent by a resident inpatient care activities in a
    nonprovider setting would be counted towards the determination
    of an FTE resident with respect to Medicare's indirect medical
    education payment if the hospital incurs the costs of the
    stipends and fringe benefits of the resident during the time
    spent in that setting. The Office of the Inspector General
    (OIG) would be required to analyze the resident data to assess
    the extent to which there is an increase in time spent by
    medical residents training in nonprovider settings. No later
    than 4 years after the date of enactment, the OIG would submit
    a report to Congress on its analysis and assessment.
        The Secretary would conduct a demonstration project where
    an approved teaching health center would be eligible for direct
    medical education payments for its own direct cost of graduate
    medical education activities for primary care residents as well
    as for the direct costs of such graduate medical education
    activities of its contracting hospital for such residents.
    Under the project, an approved teaching health center would
    contract with an accredited teaching hospital to carry out the
    inpatient responsibilities of the primary care residency
    program. The center would be responsible for payment of the
    hospital's costs of the salary and fringe benefits for
    residents. The hospital's full-time equivalent resident amount
    would not affect the contracting hospital's resident limit. The
    contracting hospital would not reduce the number of residents
    in its primary care residency training program. An approved
    teaching health center would be a nonprovider setting, such as
    a federally qualified health center or rural health clinic that
    develops and operates an accredited primary care residency
    program for which funding would be available if the hospital
    were to operate the program.
                Reason for Change
        MedPAC and COGME have recommended that physicians be
    trained at alternative care settings such as ambulatory
    settings. COGME called for a ``broadening of the definition of
    the training venue'' and emphasized preparing a physician
    workforce for outpatient care, where most of the health care
    takes place, and to consider placing physicians at community
    health centers, rural health clinics, and physician offices.
    Residents should also be exposed to patient care coordination
    in a variety of health care settings. Teaching hospitals face
    considerable financial incentives and regulatory barriers that
    discourage them from rotating residents to nonhospital
    settings.
        The intent of this legislation is to decrease the
    regulatory barriers so that residents can increase their
    training in nonprovider care settings (settings outside of the
    acute care hospital). This policy modifies the rules that
    govern when hospitals can receive indirect medical education
    (IME) and direct graduate medical education (DGME) funding for
    residents who train in nonprovider settings so that any time
    spent by the resident in a nonprovider setting shall be counted
    for the purposes of calculating graduate medical education
    payments if the hospital incurs the costs of the residents'
    salaries and fringe benefits. A study by OIG shall assess the
    impact of this policy on increasing physician training in
    nonprovider settings.
        The changes are effective for discharges on or after July
    1, 2009, and the OIG is required to report to Congress within 4
    years after the date of enactment.
        A demonstration project is established to allow community
    health centers and other nonprovider entities to host an
    approved primary care residency program and receive DGME for
    itself and for the hospital that it will contract with to
    provide the inpatient training. This demonstration project will
    inform the Secretary and Congress on the feasibility of a
    nonprovider entity hosting a residency program in which it is
    the lead contracting entity with a hospital and inform possible
    alternative payment methodologies for nonhospital teaching
    sites. The Committee recognizes the importance of training in
    non-provider settings. Due to the fact that patients in the
    ambulatory setting are more likely to be healthier and younger
    than a hospital setting, any movement to train residents in the
    outpatient setting will direct Medicare dollars in ways that
    are not as focused on Medicare patients. In part, this is why
    the Committee believes it prudent to test multiple innovative
    strategies that will promote ambulatory training in order to
    inform future policy on the financing of graduate medical
    education. This demonstration project only addresses DGME
    payments and will promote training in ambulatory settings,
    consistent with COGME and MedPAC recommendations. It will also
    help ensure that primary care physicians are optimally prepared
    to deliver health services to Medicare and non-Medicare
    beneficiaries (and in particular pre-Medicare beneficiaries) to
    promote preventive care and reduce preventable
    hospitalizations.
                Effective date
        Cost reporting periods beginning on or after July 1, 2009.

    Sec. 1503. Rules for counting resident time for didactic and scholarly
            activities and other activities

                Current Law
        Medicare pays teaching hospitals the costs of approved
    medical residency training programs through two mechanisms: an
    indirect medical education (IME) adjustment within the
    inpatient prospective payment system (IPPS) and direct graduate
    medical education (DGME) payments made outside of IPPS. Certain
    non-patient care activities that are part of an approved
    training program are not allowable for DGME or IME payment
    purposes. With respect to training that occurs in hospital
    settings, Medicare does not include the time that residents
    spend in non-patient care activities, including didactic
    activities, when calculating IME payments. With respect to
    training that occurs in nonhospital settings, Medicare would
    not count the time that residents spend in non-patient care
    activities, including didactic activities, when calculating
    DGME or IME payments.
                Proposed Law
        When calculating DGME payments, Medicare would count the
    time that residents in approved training programs spend in
    certain non-direct patient care activities in a nonhospital
    setting that is primarily engaged in furnishing patient care.
    The term ``nonprovider setting that is primarily engaged in
    furnishing patient care'' would be a nonprovider setting in
    which the primary activity is the care and treatment of
    patients as defined by the Secretary. Reimbursable nonpatient
    care activities would include didactic conferences and seminars
    but would not include research that is not associated with the
    treatment or diagnosis of a particular patient. In addition,
    Medicare would count all the vacation, sick leave, and other
    approved leave spent by resident in an approved training
    program as long as the leave time does not extend the program's
    duration.
        When calculating IME payments, Medicare would adopt the
    same rules about counting residents' leave time. Medicare would
    also include all the time spent by residents in approved
    training programs on certain nonpatient care activities
    (including didactic conferences and seminars, but not in
    certain research activities that are not associated with the
    treatment or diagnosis of a particular patient) if the hospital
    is an IPPS hospital, a hospital paid under the IPPS for Puerto
    Rico, is a hospital paid under a state specific hospital
    reimbursement system, or is a provider-based hospital
    outpatient department.
        Except as otherwise provided, these provisions would be
    effective for cost reporting periods beginning on or after
    January 1, 1983. The provisions affecting DGME would apply to
    cost reporting periods on or after July 1, 2008. The provisions
    affecting IME would apply to cost reporting periods on or after
    October 1, 2001. This section would not affect the
    interpretation of the law in effect prior to that date. The
    provisions would not be implemented in a manner that would
    require reopening of any settled hospital cost reports where
    there is not a jurisdictionally proper appeal pending on IME
    and DGME payments as of the date of enactment.
        Subsection (a)(1)(B) pertaining to direct graduate medical
    education is effective for cost reporting periods beginning on
    or after July 1, 2008. Subsection (b) pertaining to indirect
    medical education is effective for cost reporting periods
    beginning on or after October 1, 2001. All other provisions are
    effective for cost reporting periods beginning on or after
    January 1, 1983.
                Reason for Change
        While in residency training, physicians need to learn
    critical evidenced-based medicine and participate in scholarly
    activities related to the management of their patients. Time
    devoted during residency training in didactic and scholarly
    activities broadens residents' clinical knowledge base and
    improves their ability to deliver quality and efficient care.
    The policy modifies current rules to allow for inclusion of
    didactic and scholarly activities and other activities such as
    research related to the care of their patients in counting
    toward the determination of full-time equivalency for the
    purposes of calculating graduate medical education payments.
    This provision seeks to eliminate the financial disincentive
    for hospitals to facilitate residents' participation in these
    activities and training in ambulatory settings. The provisions
    affecting IME would apply to cost reporting periods on or after
    October 1, 2001, and the provisions affecting DGME would apply
    to cost reporting periods on or after July 1, 2008.

    Sec. 1504. Preservation of resident cap positions from closed and
            acquired hospitals

                Current Law
        With certain exceptions, the Balanced Budget Act (BBA) of
    1997 limited the number of allopathic and osteopathic residents
    for which Medicare would reimburse a teaching hospital at the
    level reported in its cost report ending on or before December
    31, 1996. If a teaching hospital closes (defined as withdrawing
    participation in the Medicare program), CMS permits a temporary
    cap increase to other teaching hospitals to accommodate
    residents suddenly displaced from the closed hospital. Upon
    completion of their training, the residency slots cease to
    exist.
        A hospital with a newly established residency program may
    receive an adjustment to its full-time equivalent (FTE) cap
    (which otherwise would be zero) if it establishes one or more
    new medical residency training programs, but only for new
    programs established within 3 academic years after residents
    begin training in the first new program. CMS recently put forth
    a final rule on July 31, 2009, that clarifies that a ``newly
    established'' residency program for Medicare GME purposes is
    not a program that existed previously at another hospital. In
    determining that a program is truly new, CMS will use certain
    ``supporting factors,'' such as whether the program director,
    teaching staff, and residents are different. CMS will also
    consider whether the program relocated from a hospital that
    closed, and whether that program is part of any existing
    hospital's FTE cap determination. If the program did relocate
    from a closed hospital and that program is not part of any
    existing hospital's FTE cap determination, then even if there
    are significant similarities between the program in terms of
    the program director, teaching staff, or residents, CMS could
    consider the program that was transferred from the closed
    hospital to be new for Medicare DGME and IME, since there would
    be no danger that an FTE cap adjustment to reflect a new
    program would result in duplicative residency slots.
        CMS also has established certain regulations governing
    Medicare's provider enrollment requirements that determine
    under which circumstances providers can bill the Medicare
    program including those involved in change of ownership (CHOW)
    transactions. Very generally, in order to acquire a teaching
    hospital's resident cap under a CHOW transaction, the acquiring
    entity must retain the original provider agreement of the
    provider it is acquiring. However, the acquiring entity would
    also assume all liabilities associated with that provider
    agreement.
        Starting August 29, 2005 (the day after Hurricane Katrina),
    hospitals were permitted to form emergency affiliation
    agreements if located in federally declared disaster areas,
    starting the first day of a Section 1135 emergency period.
    Under 42 Code of Federal Regulations (CFR) 413.79, a home
    hospital located in such an area that experiences at least a
    20% decline in inpatient occupancy can temporarily transfer its
    resident cap to a host hospital.
                Proposed Law
        The Secretary would promulgate regulations to establish a
    process where the FTE residency cap slots in a hospital with an
    approved medical residency program that closes on or after a
    date that is 2 years before the date of enactment could be used
    to increase the otherwise applicable residency limit for other
    hospitals in the State. The increase in residency programs
    would be distributed to one or more hospitals in the State in a
    manner specified by the Secretary. This process would be
    consistent with any recommendations submitted by the senior
    health official designated by the chief executive officer of
    the state in question, provided that the recommendations are
    not submitted later than 180 days after the date of a hospital
    closure. In cases where a hospital closed before date of
    enactment, the time limit would be 180 days from the date of
    enactment. The aggregate number of increased residency limits
    in the state would equal the number of FTE resident cap slots
    from the hospital(s) that closed. These provisions would not
    affect any temporary adjustment to a hospital's FTE resident
    cap established under 42 CFR 413.79 as in effect on the date of
    enactment.
                Reason for Change
        When hospitals close, the residency slots previously
    associated with those hospitals are no longer eligible for
    further Medicare reimbursement once the existing residents
    complete their training. This occurs regardless of any
    continued need for those residency slots to meet current or
    future workforce needs in the community or state. This
    provision allows for continued funding of the residency slots
    of closed hospitals at other hospitals within the state.
    Recommendations from the senior health official of the state
    will assist the Secretary in understanding the state's current
    and future workforce needs to inform her determination of which
    hospitals receive upward adjustments or new residency caps.

    Sec. 1505. Improving accountability for approved medical residency
            training

                Current Law
        Medicare will reimburse teaching hospitals for the direct
    and indirect costs associated with an approved teaching program
    accredited by an independent entity, such as the Accreditation
    Council for Graduate Medical Education or the American
    Osteopathic Association. Medicare has never linked its payments
    to promoting or fostering any goals in medical education or
    accountability measures.
                Proposed Law
        Certain goals of medical residency training programs would
    be established. Specifically, resident training would be
    designed so that physicians would be able to: (1) work
    effectively in various health care delivery settings, such as
    nonprovider settings; (2) coordinate patient care within and
    across relevant settings; (3) understand the relevant cost and
    value of various diagnostic and treatment options; (4) work
    effectively in inter-professional and multi-disciplinary teams
    in provider and nonprovider settings; (5) identify systematic
    errors in health care delivery and implement solutions for such
    errors; and (6) be meaningful electronic health record users.
        GAO would be required to evaluate the extent to which
    medical residency training programs are meeting the above
    workforce goals in a range of residency programs, including
    primary care and other specialties; and have the appropriate
    faculty expertise to teach the topics required to achieve such
    goals. A report on the results of the study would be submitted
    to Congress no later than 18 months after the date of the
    enactment. The study would include recommendations with respect
    to the development of curriculum requirements and an assessment
    of the accreditation processes of the Accreditation Council for
    Graduate Medical Education (ACGME) and the American Osteopathic
    Association (AOA) and effectiveness of these processes in
    meeting the residency program goals established in this
    section.
                Reason for Change
        MedPAC recommends that the residency training experience
    should encourage physicians to increase care coordination and
    assume greater accountability for quality of care. Graduate
    medical education should train a future physician workforce
    exposed to innovative delivery models that would support more
    integration. A MedPAC-sponsored study conducted by RAND pointed
    out that the curricula of residency training programs fall
    short of recommendations by the Institute of Medicine and other
    experts on items such as formal training or experience in
    multidisciplinary teamwork, cost-awareness in clinical
    decision-making, comprehensive health information technology,
    and patient care in nonhospital settings. Residents should be
    trained in innovative delivery systems that will support
    coordinated care and enhance an integrated approach. The
    Accreditation Council for Graduate Medical Education has also
    included similar goals for residency programs to improve the
    training of residents. The COGME report calls for ``making
    accountability for the public's health the driving force for
    graduate medical education.'' The report further states that
    the $10 billion spent annually on GME should have parameters on
    how our physician workforce should be trained and the type of
    training residents should receive. This policy is intended to
    highlight broad goals, consistent with MedPAC recommendations,
    for residency programs to improve their accountability. The
    Comptroller General will undertake a study to assess: (1) the
    extent to which residency programs are meeting these goals and
    (2) the accreditation processes of ACGME and AOA and
    effectiveness of these processes in promoting the workforce
    goals established in this section.

                          TITLE VI--PROGRAM INTEGRITY

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

    Sec. 1601. Increased funding and flexibility to fight fraud and abuse

                Current Law
        The Health Care Fraud and Abuse Control (HCFAC) account
    funds activities to fight healthcare fraud. The HCFAC program
    along with the Medicare Integrity Program (MIP) were both
    established by the Health Insurance Portability and
    Accountability Act of 1996 (HIPAA, P.L. 104-191), which sought
    to increase and stabilize federal funding for healthcare anti-
    fraud activities. Specifically, HCFAC funds are directed to the
    enforcement and prosecution of healthcare fraud. MIP funding
    supports the program integrity activities undertaken by CMS
    contractors.
        For HCFAC, HIPAA appropriated funds to the Department of
    Health and Human Services, the Department of Justice (DOJ), and
    the Federal Bureau of Investigation (FBI) for anti-fraud
    activities undertaken for fiscal years 1997 through 2003. Funds
    are appropriated to the Account from the Medicare Part A Trust
    Fund in amounts as the Secretary and the Attorney General
    certify are necessary to support audits, investigations,
    evaluations, and prosecutions related to healthcare fraud. For
    HHS and DOJ, the legislation authorized an amount, beginning at
    $104 million for FY1997, equal to the limit for the preceding
    year increased by 15%. Within this amount, the legislation
    authorized minimum and maximum appropriations for the HHS OIG.
    The maximum OIG appropriation increased from $70 million in
    FY1997 to $160 million in FY2003. For each fiscal year after
    2003, the amount was capped at the 2003 level. In December
    2006, Congress passed the Tax Relief and Health Care Act of
    2006 (TRHCA, P.L. 109-432), which extended the mandatory annual
    appropriation for HCFAC to 2010. For fiscal years 2007 through
    2010, the mandatory annual appropriation is the limit for the
    preceding year plus the percentage increase in the consumer
    price index for all urban consumers (CPI-U). For years after
    FY2010, the annual appropriation remains at the FY2010 level.
        The MIP program authorizes the Secretary of HHS to enter
    into contracts with private organizations to conduct program
    integrity activities such as provider audits and medical review
    of claims. The largest share of the HIPAA appropriation was
    dedicated to the MIP program. Funding for MIP increased from
    $440 million in FY1997 to $720 million in FY2003. For fiscal
    years 2004 and 2005, the annual MIP appropriation remained at
    the FY2003 level. In 2005, Congress passed the Deficit
    Reduction Act (DRA, P.L. 109-171), which raised funding for the
    MIP program by $112 million for FY2006 to implement program
    integrity and oversight activities for the Medicare
    prescription drug benefit. This increased the annual MIP
    appropriation from $720 million to $832 million for FY2006
    only. Congress did not increase funding for MIP in TRHCA.
    Therefore the mandatory annual appropriation for MIP remains at
    $720 million.
                Proposed Law
        The Congressional Budget Office has estimated that every
    dollar of increased funding for HCFAC results in a $1.75 return
    on investment. The provision would increase funding for HCFAC
    by $100 million annually beginning with FY2011, to allow for
    the implementation of new provisions in the legislation and
    providing new tools for CMS under current laws. Funding would
    be appropriated to HHS, DOJ, and MIP in the same manner as is
    currently appropriated in statute. Funding allocated to MIP
    would be authorized for HCFAC activities as well as MIP
    activities, ending the requirement that such funding be
    distributed solely to private organizations to conduct program
    integrity activities. Funding for both HCFAC and MIP would be
    available without further appropriation until expended.

               Subtitle B--Enhanced Penalties for Fraud and Abuse

    Sec. 1611. Enhanced penalties for false statements on provider or
            supplier enrollment applications

                Current Law
        Medicare statute provides the Secretary with general
    authority to prescribe regulations for the efficient
    administration of the Medicare program. Under this authority,
    the Center for Medicare and Medicaid Services (CMS) has
    implemented regulations requiring Medicare providers and
    suppliers to submit an application to enroll in the Medicare
    program and receive billing privileges. Providers and suppliers
    must resubmit and recertify the accuracy of their enrollment
    information every 5 years. Private contractors handle Medicare
    enrollment activities such as processing and reviewing
    applications. CMS may deny enrollment of a provider or supplier
    in Medicare or revoke a provider's billing privileges for the
    following reasons: non-compliance with enrollment requirements,
    exclusion from participation in federal health care programs,
    conviction of a felony, or the submission of false or
    misleading information on the enrollment application.
        Medicaid statute delegates the administration of the
    Medicaid program to the states. There is considerable variation
    in how states administer their provider enrollment processes.
    State Medicaid agencies determine whether a provider or
    supplier is eligible to participate in the Medicaid program by
    providing for written agreements with providers and suppliers.
    Written agreements require that providers and suppliers
    maintain specific records, disclose certain ownership
    information, and grant access to federal and state auditors to
    books and records.
        Section 1128A(a) of the Social Security Act (SSA)
    authorizes the imposition of Civil Monetary Penalties (CMPs)
    and assessments on a person, including an organization, agency,
    or other entity, who engages in various types of improper
    conduct with respect to federal health care programs. Under
    section 1128A(a)(1)(D) of the Act, a person who knowingly
    presents or causes to be presented a claim to federal or state
    agencies that the Secretary determines is for an item or
    service furnished during a period when the person was excluded
    from participation in the federal health care program under
    which the claim was made is subject to a civil monetary penalty
    of up to $10,000 for each item or service furnished, and an
    assessment of up to three times the amount claimed for each
    item or service.
                Proposed Law
        This provision would subject providers and suppliers
    applying to enroll or renewing enrollment in federal health
    care programs to CMPs for providing false information on an
    enrollment application. Medicaid managed care plans, MA plans,
    and PDP plans would also be subject to CMPs for providing false
    information on applications to participate in federal health
    care programs.
        Specifically, the provision would provide that a person who
    knowingly makes or causes to be made any false statement,
    omission, or misrepresentation of a material fact on an
    application, agreement, bid, or contract to participate or
    enroll as a provider of services or supplier under a federal
    health care program would be subject to a CMP of $50,000 for
    each violation. In addition to providers and suppliers, the
    provision would also apply to Medicaid managed care
    organizations, Medicare Advantage (MA) organizations and MA
    plans, Prescription Drug Plan (PDP) sponsors and plans, and
    providers and suppliers that participate in these Medicare or
    Medicaid plans. In addition, such a person may be subject to an
    assessment of not more than three times the amount claimed as
    the result of the false statement, omission, or
    misrepresentation.
        The provision would also eliminate the requirement for a
    determination by the Secretary when a person knowingly presents
    or causes to be presented a claim for an item or service
    furnished during a period when the person was excluded under
    federal law from the federal health care program under which
    the claim was made.

    Sec. 1612. Enhanced penalties for submission of false statements
            material to a false claim

                Current Law
        Section 1128A(a) of the Social Security Act authorizes the
    imposition of CMPs and assessments on a person, including an
    organization, agency, or other entity, who engages in various
    types of improper conduct with respect to federal health care
    programs. This penalty authority includes penalties against a
    person who knowingly presents or causes to be presented false
    or fraudulent claims. This section generally provides for CMPs
    of up to $10,000 for each item or service claimed, $15,000 or
    $50,000 under other circumstances, and an assessment of up to
    three times the amount claimed.
                Proposed Law
        The bill would create a new SSA section 1128A(a)(9)
    providing that persons who knowingly make, use, or cause to be
    made or used any false statement or record material to a false
    or fraudulent claim submitted for payment to a federal health
    care program would be subject to a civil monetary penalty of
    not more than $50,000 for each violation.

    Sec. 1613. Enhanced penalties for delaying inspections

                Current Law
        The Secretary is required to provide for the annual
    auditing of the financial records of at least \1/3\ of MA
    plans. Each contract with a MA plan is required to provide that
    the Secretary have the right to inspect or evaluate the
    quality, appropriateness and timeliness of services performed
    under the contract. Contracts must also provide the Secretary
    with right to audit any plan's books and records related to the
    plan's ability to bear risk or to the services performed,
    including determinations of amounts payable under the contract.
                Proposed Law
        The bill would create a new SSA section 1128A(a)(10)
    providing that persons who fail to grant timely access, upon
    reasonable request (as defined by the Secretary in
    regulations), to the Office of the Inspector General (OIG), for
    the purpose of audits, investigations, evaluations, or other
    statutory functions of the OIG, be subject to CMPs of $15,000
    for each day of failure. The provision would also modify the
    contractual requirements for MA plans to allow the Secretary to
    conduct timely audits and inspections of MA plans. These
    provisions are designed to facilitate more timely and efficient
    audits, investigations, and evaluations by the OIG, and more
    rapid and enhanced audits of MA plans by the Secretary.

    Sec. 1614. Enhanced hospice program safeguards

                Current Law
        Medicare statute mandates the establishment of minimum
    health and safety standards that must be met by providers
    participating in the Medicare and Medicaid programs (i.e.
    hospitals, hospices, nursing homes, and home health agencies).
    In order to receive payment, providers and suppliers must meet
    these health and safety standards, often referred to as
    Conditions of Participation (CoPs). Generally, state agencies,
    under contract with CMS, survey providers to determine
    compliance with CoPs. Alternatively, a provider can be deemed
    to meet these requirements if an approved national
    accreditation body has accredited it. If a provder has been
    found to be non-compliant with its CoPs, CMS has the authority
    to impose certain sanctions, including revoking the provider's
    participation agreement. States also have the authority to
    impose sanctions on Medicare and Medicaid participating
    facilities found to be non-compliant with CoPs.
                Proposed Law
        This provision would create new tools and penalties for the
    Secretary to use in improving quality of care in hospices.
    Under current law, the only options available to the Secretary
    are program exclusions for hospices. The provision would add a
    new SSA section 1819A that would require the Secretary to
    develop and implement intermediate sanctions to apply to
    hospices that, based on a determination by the Secretary,
    demonstrate a substandard quality of care and fail to meet such
    other requirements as the Secretary may find necessary in the
    interest of the health and safety of the individuals provided
    care and services by the agency or organization involved. The
    sanctions may include CMPs of up to $10,000 for each day of
    non-compliance or in the case of a per instance penalty not
    more than $25,000, a denial of all or part of future Medicare
    or Medicaid payments to which the hospice is entitled (which
    would terminate upon the Secretary's finding that the hospice
    program no longer demonstrated substandard quality and met
    other requirements as determined by the Secretary), requiring
    the appointment of managers to oversee the operation of the
    hospice program, correction plans, and staff training. The
    sanctions could be imposed in addition to those imposed under
    state or federal law and would not be construed as limiting
    other available remedies. The Secretary would have until
    January 1, 2012, to develop and implement the sanctions.
        By July 1, 2011, the Secretary would be required to create
    the specific procedures and conditions under which the relevant
    sanctions would apply, including the amount of any fines and
    severity of the sanctions. The conditions would be required to
    minimize the time between the identification of deficiencies
    and imposition of sanctions, and would provide for more severe
    fines for repeated deficiencies. The due process protections
    provided in the CMP law (SSA section 1128A), such as written
    notice and the right to a hearing, would apply in the same
    manner to the imposition of a CMP for hospices.
        This provision would also require the Secretary to take
    immediate action to correct any identified deficiencies that
    immediately jeopardize the health and safety of patients being
    cared for in a hospice. The action would consist of either
    appointing managers to oversee the operations of the hospice or
    terminating the hospice's participation in federal health care
    programs. The Secretary would be authorized to impose
    additional remedies if necessary. If the Secretary determines
    that identified deficiencies do not immediately jeopardize the
    patients' health and safety, the Secretary, in lieu of
    terminating the provider's participation in the program, may
    impose other intermediate sanctions. If after a period of
    intermediate sanctions, the deficiencies have not been
    corrected, the Secretary would be required to terminate the
    provider's participation in federal health programs. The
    Secretary would also be authorized to impose CMPs on hospice
    providers for any former days of non-compliance with federal
    health and safety standards.
        These provisions would also apply to hospice programs
    participating in Medicaid and CHIP.

    Sec. 1615. Enhanced penalties for individuals excluded from program
            participation

                Current Law
        SSA section 1128A(a) authorizes the imposition of CMPs and
    assessments on a person, including an organization, agency, or
    other entity, who engages in various types of improper conduct
    with respect to federal health care programs, including the
    imposition of penalties against a person who knowingly presents
    or causes to be presented false or fraudulent claims. This
    section generally provides for CMPs of up to $10,000 for each
    item or service claimed, $15,000 or $50,000 under other
    circumstances, and an assessment of up to 3 times the amount
    claimed.
                Proposed Law
        This provision would create new penalties for individuals
    that are excluded from program participation but order or
    prescribe program items or services. The bill would create a
    new SSA section 1128A(a)(11) providing that a person who orders
    or prescribes an item or service, including without limitation
    home health care, diagnostic and clinical lab tests,
    prescription drugs, durable medical equipment, ambulance
    services, physical or occupational therapy, or any other item
    or service, during a period when the person has been excluded
    from participation in a federal health care program, and the
    person knows or should know that a claim for such item or
    service will be presented to such a program, be subject to a
    civil monetary penalty of up to $50,000 for each order or
    prescription. This amendment would apply to violations
    committed on or after January 1, 2010.

    Sec. 1616. Enhanced penalties for provision of false Information by
            Medicare Advantage and part D plans

                Current Law
        MA plans enter into contracts with the Secretary to
    participate in the Medicare program. The Secretary has the
    authority to impose sanctions and CMPs on MA plans that violate
    the terms of the contract. Among the violations are failing to
    provide medically necessary care; imposing excess beneficiary
    premiums; expelling or refusing to re-enroll beneficiaries;
    discouraging or denying enrollment among eligible individuals
    expected to require future medical services; misrepresenting or
    falsifying information; failing to comply with balance billing
    requirements; interfering with a provider's advice to
    beneficiaries; and contracting with providers excluded from the
    Medicare program. For violations related to discouraging or
    denying enrollment or misrepresenting information provided to
    the Secretary, the Secretary can impose a maximum penalty of
    $100,000. For all other violations, the maximum penalty is
    $25,000. The Secretary has the authority to impose additional
    penalties for imposing excess beneficiary premiums and engaging
    in activities that discourage enrollment.
                Proposed Law
        This new provision is designed to increase penalties for
    the provision of false information by MA and Part D plans.
    Under the new provision, MA and part D plans that misrepresent
    or falsify information will be subject to penalties of up to
    three times the amount claimed by a plan or plan sponsor based
    on the misrepresentation or falsified information. The
    provision would apply to violations committed on or after
    January 1, 2010.

    Sec. 1617. Enhanced penalties for Medicare Advantage and part D
            marketing violations

                Current Law
        MA plans enter into contracts with the Secretary to
    participate in the Medicare program. The Secretary has the
    authority to impose sanctions and CMPs on MA plans that violate
    the terms of the contract. Among the violations are failing to
    provide medically necessary care; imposing excess beneficiary
    premiums; expelling or refusing to re-enroll beneficiaries;
    discouraging or denying enrollment among eligible individuals
    expected to require future medical services; misrepresenting or
    falsifying information; failing to comply with balance billing
    requirements; interfering with a provider's advice to
    beneficiaries; and contracting with providers excluded from the
    Medicare program. For violations related to discouraging or
    denying enrollment or misrepresenting information provided to
    the Secretary, the Secretary can impose a maximum penalty of
    $100,000. For all other violations, the maximum penalty is
    $25,000. The Secretary has the authority to impose additional
    penalties for imposing excess beneficiary premiums and engaging
    in activities that discourage enrollment.
                Proposed Law
        This provision is designed to reduce marketing abuses by
    Medicare Advantage and Part D plans by increasing the number of
    violations subject to the imposition of sanctions and CMPs by
    the Secretary. Beginning January 1, 2010, plans that: (1)
    enroll individuals in a MA or Part D plan without their consent
    (except Part D dual eligibles), (2) transfer an individual from
    one plan to another for the purpose of earning a commission or
    without consent of the individual, (3) fail to comply with
    marketing requirements, including CMS guidance, or (4) employ
    or contract with an individual or entity that commits a
    violation would be subject to sanctions imposed by the
    Secretary. Sanctions would apply to any employee or agent of a
    MA or Part D plan, or any provider or supplier who contracts
    with a MA or Part D plan.

    Sec. 1618. Enhanced penalties for obstruction of program audits

                Current Law
        The OIG has discretion to exclude an entity or individual
    from a federal health program for a conviction related to the
    obstruction of a health care fraud investigation.
                Proposed Law
        This provision is designed to strengthen the OIG's ability
    to conduct health care fraud investigations, by expanding the
    OIG's permissive exclusion authority to include a conviction
    related to the obstruction of an audit related to health care
    fraud as well as an investigation or audit related to the use
    of funds received from any health care program. The provision
    would apply to violations committed on or after January 1,
    2010.

    Sec. 1619. Exclusion of certain individuals and entities from
            participation in Medicare and State health care programs

                Current Law
        Section 1128 of the Social Security Act provides that the
    Secretary (and through delegation, OIG) has the authority to
    exclude individuals and entities from participation in federal
    health care programs under a variety of circumstances.
    Exclusion is mandatory for those convicted of certain criminal
    offenses, and generally the exclusion cannot be for a period of
    less than five years. OIG also has permissive authority to
    exclude an individual or entity from a federal health program,
    which includes the discretion to determine whether and for how
    long the exclusion will be imposed. A permissive exclusion may
    be imposed under numerous circumstances, including conviction
    of certain misdemeanors relating to fraud, theft, embezzlement,
    breach of fiduciary duty or other financial misconduct; a
    conviction based on an interference with or obstruction of an
    investigation into a criminal offense; and revocation or
    suspension of a health care practitioner's license for reasons
    bearing on the individual's or entity's professional
    competence, professional performance, or financial integrity.
        Under 42 C.F.R. 1001.1901, unless and until an excluded
    individual or entity is reinstated into a federal health care
    program, no payment will be made by a program for any item or
    service furnished by the individual or entity, or at the
    medical direction or on the prescription of a physician or
    other authorized individual who is excluded when the person
    furnishing such item or service knew or had reason to know of
    the exclusion.
                Proposed Law
        The bill would amend section 1128(c) to clarify the effect
    of an exclusion of an individual or entity on payment made
    under a federal health care program. The section would provide
    that payment cannot be made from any federal health care
    program with respect to an item or service furnished (1) by an
    excluded individual or entity, or (2) at the medical direction,
    or on the prescription of an authorized individual (e.g., a
    physician) when the person submitting a claim for the item or
    service knew or had reason to know of an individual's
    exclusion. Despite this prohibition, the bill would permit
    payment to be made for emergency items or services (not
    including items or services furnished in an emergency room of a
    hospital) that are furnished by these individuals and entities.
    For purposes of this section, as well as sections 1128A and
    1128B (dealing with civil and criminal penalties in federal
    health care programs), an item or service would be considered
    furnished if the individual or entity directly or indirectly
    provided, ordered, manufactured, distributed, prescribed, or
    otherwise supplied the item or service regardless of how the
    item or service was paid for by a federal health care program
    or to whom such payment was made.
        Section 1128(c) would also provide that if a person
    eligible for benefits under Medicare or Medicaid submits a
    claim for payment for items or services furnished by an
    excluded individual or entity, and the eligible person did not
    know or have reason to know that such individual or entity was
    excluded, then payment must be made for the items or services.
    In this case, the Secretary must notify the eligible person of
    the exclusion of the individual or entity, and payment must not
    be made for items or services furnished by an excluded
    individual or entity to an eligible person after a reasonable
    time after this notification.
        The section would also provide that if a claim for payment
    for items or services furnished by an excluded individual or
    entity is submitted by an individual or entity other than a
    person eligible for benefits under Medicare or Medicaid or that
    excluded individual or entity itself, and the Secretary
    determines that the individual or entity that submitted the
    claim took reasonable steps to learn of the exclusion and
    reasonably relied upon inaccurate or misleading information
    from the relevant federal health care program or its
    contractor, the Secretary may waive repayment of the amount
    paid in violation of the exclusion to the individual or entity
    that submitted the claim. If a federal health care program
    contractor provided inaccurate or misleading information
    resulting in the waiver of an overpayment under this section,
    the Secretary must take appropriate action to recover the
    improperly paid amount from the contractor.

             Subtitle C--Enhanced Program and Provider Protections

    Sec. 1631. Enhanced CMS program protection authority

                Current Law
        CMS has implemented regulations requiring providers and
    suppliers to complete an application to enroll in the Medicare
    program and receive billing privileges. As part of the
    enrollment process, providers and suppliers are required to
    submit information necessary to verify identity and state
    licensure. CMS reserves the right to perform on-site
    inspections of a provider or supplier to verify compliance with
    standards. If enrollment requirements are not met, CMS may
    revoke Medicare billing privileges. Providers and suppliers
    must resubmit and recertify the accuracy of their enrollment
    information every 5 years. CMS may deny a provider's or
    supplier's enrollment in Medicare or revoke a provider's
    billing privileges for the following reasons: non-compliance
    with enrollment requirements, exclusion from participation in
    federal health care programs, conviction of a felony, or the
    submission of false or misleading information on the enrollment
    application.
        CMS manual instructions require that Medicare contractors
    query the following databases prior to approving an application
    for enrollment in Medicare: Qualifier.net, the Medicare
    Exclusions Database (List of Excluded Individuals/Entities or
    LEIE), and the Government Services Administration (GSA)
    debarment list. All Medicare contractors are required to query
    these databases when enrolling providers in the program.
        Medicaid beneficiaries may obtain services from any
    Medicaid participating provider recognized by the state. In
    addition, Medicaid beneficiaries enrolled in primary care case
    management system, a Medicaid managed care organization, or
    similar entities must not restrict the choice of a qualified
    provider of family planning services and supplies (with some
    other exceptions). States are not required to provide Medicaid
    coverage for such services when offered by persons or entities
    convicted of felonies.
                Proposed Law
        This provision is designed to give the Secretary new
    authority to protect the Medicare program from providers who
    may commit waste, fraud, and abuse. The provision would add a
    new section 1128G to the SSA that would authorize the
    Secretary, in cases where there is a significant risk of fraud,
    to subject providers and suppliers to enhanced screening,
    oversight, or a moratorium on enrollment. The provision would
    take effect on January 1, 2011. The Secretary would determine
    what constitutes a significant risk of fraud by reviewing
    complaints, reports, referrals from law enforcement or other
    sources, and the results from data analysis, trend information,
    or claims review. Risk could be determined with respect to a
    single category of providers or suppliers or a single category
    of providers or suppliers operating within a specific
    geographic area.
        This provision would apply to providers or suppliers
    initially enrolling in Medicare, Medicaid, or CHIP as well as
    those renewing their enrollment. The Secretary would be
    authorized to require states to implement these program
    safeguards as a requirement in their Medicaid or CHIP state
    plans. State CHIP plans would also be required to include their
    procedures for enforcing these requirements. Any actions taken
    or determinations made by the Secretary in imposing these
    requirements would not be subject to judicial review.
    Additionally, states would be allowed to conduct enhanced
    oversight activities beyond those required by the Secretary.
        This provision would require the Secretary to establish
    procedures for screening and enhanced oversight. Screening
    procedures may include licensing board checks, reviews against
    the LEIE, background checks, and unannounced pre-enrollment or
    other site visits. During periods of enhanced oversight
    (between 30 days and one year) the Secretary would be
    authorized to take certain actions against providers, including
    required or unannounced site visits or inspections, prepayment
    review, enhanced review of claims, and other actions as
    specified by the Secretary. The Secretary would be allowed to
    extend these periods to more than one year if necessary.
        In instances where the Secretary determinates that there is
    a risk of serious ongoing fraud, the Secretary would have the
    authority to impose a moratorium on enrolling providers within
    a category of providers and suppliers, including a category
    within a specific geographic area. Moratoriums could not be
    imposed if the Secretary makes a determination that the
    moratorium would adversely impact access to care. Medicaid
    providers would be prohibited from providing coverage for
    services delivered by providers under a moratorium.

    Sec. 1632. Enhanced Medicare, Medicaid, and CHIP program disclosure
            requirements relating to previous affiliations

                Current Law
        In order to receive payment from Medicare, providers must
    enroll in the Medicare program. CMS regulations mandate that
    enrollment applications contain information necessary to
    uniquely identify the provider (i.e. proof of business name,
    social security number, or Tax ID number) and include
    documentation necessary to verify licensure or eligibility to
    furnish Medicare covered items or services. Persons who sign
    the enrollment applications are required to have an ownership
    or control interest in the provider or supplier. Upon initial
    enrollment in the program, the signature on the enrollment
    application must be that of an authorized official. A delegated
    official may sign renewal or updated applications. CMS has the
    authority to perform on-site inspections of a provider to
    verify enrollment information and determine compliance with
    Medicare enrollment requirements. CMS has established an
    Internet database called the Provider Enrollment, Chain and
    Ownership System (PECOS) for providers to submit enrollment
    information.
        Medicaid statute delegates the administration of the
    Medicaid program to the states. There is considerable variation
    in how states' administer their provider enrollment processes.
    State Medicaid agencies determine whether a provider or
    supplier is eligible to participate in the Medicaid program by
    providing for written agreements with providers and suppliers.
    Written agreements require that providers and suppliers
    maintain specific records, disclose certain ownership
    information, and grant access to federal and state auditors to
    books and records.
                Proposed Law
        Providers or suppliers that have previous affiliations with
    entities that have had past problems with the Medicare or
    Medicaid program may themselves present increased waste, fraud,
    and abuse risks. This provision allows the Secretary to screen
    for and take these previous affiliations into account.
    Providers or suppliers submitting applications for enrollment
    or renewing enrollment in Medicare, Medicaid, or CHIP after
    January 1, 2011, would be required to disclose information
    related to any current or previous affiliation (within the last
    10 years) with providers or suppliers that have uncollected
    debt, or with persons or entities that have been suspended or
    excluded, been placed on payment suspension, or had their
    billing privileges revoked. The Secretary would have the
    authority to apply program safeguards to providers and
    suppliers, such as enhanced screening of claims, required or
    unannounced site visits and inspections, additional reporting
    requirements, and surety bonds, if the Secretary determines
    that certain affiliations pose a risk of fraud, waste, and
    abuse. The provision would also provide the Secretary with the
    authority to deny enrollment in Medicare, Medicaid, or CHIP in
    instances when at least one affiliation or affiliations poses a
    serious risk of fraud, waste, or abuse.

    Sec. 1633. Required inclusion of payment modifier for certain
            evaluation and management services

                Current Law
        Evaluation and management services include certain primary
    care services, hospital inpatient medical services,
    consultations, other visits, preventive medicine visits,
    psychiatric services, emergency care facility services, and
    critical care services.
                Proposed Law
        The provision would improve the ability of the Secretary to
    screen for waste, fraud, and abuse by requiring the Secretary
    to establish a payment modifier for evaluation and management
    services that result in the ordering of additional services
    (i.e. lab tests), prescription drugs, durable medical
    equipment, or other services determined by the Secretary to be
    at high risk of fraud, waste, and abuse. The Secretary would be
    authorized to require providers and suppliers to report the
    payment modifier on claims.

    Sec. 1634. Evaluations and reports required under Medicare Integrity
            Program

                Current Law
        Medicare statute authorizes the establishment of the
    Medicare Integrity Program (MIP). MIP requires the Secretary to
    enter into contracts with private entities to conduct a variety
    of program integrity activities for the Medicare program
    including auditing providers, reviewing claims for medical
    necessity, and identifying and investigating alleged fraud. MIP
    was established along with the HCFAC program by HIPAA, which
    sought to increase and stabilize federal funding for health
    care anti-fraud activities.
        The Medicaid Integrity Program is modeled after Medicare's
    MIP program. The Medicaid Integrity Program provides HHS with
    dedicated resources to promote Medicaid integrity to contract
    with entities to reduce fraud, waste, and abuse and to add 100
    full-time equivalent staff. Annual reports to Congress on
    program accomplishments and use of funds are required. In
    addition, the Secretary is required to develop comprehensive 5-
    year plans for the program.
                Proposed Law
        The new provision is designed to increase the
    accountability and effectiveness of MIP contractors. For the
    contract year beginning in 2011, this provision would require
    MIP contractors to assure the Secretary that they will conduct
    periodic evaluations of the effectiveness of their activities.
    Annual reports would be required to be submitted to the
    Secretary. A similar provision with respect to the Medicaid
    Integrity Program would be included in Section 1752 of this
    bill.

    Sec. 1635. Require providers and suppliers to adopt programs to reduce
            waste, fraud, and abuse

                Current Law
        Since 1998, the OIG has been issuing a series of compliance
    guidance documents for providers participating in federal
    health care programs to assist in preventing fraud, waste, and
    abuse. The purpose of the documents is to encourage health care
    providers to adopt compliance programs and internal control
    measures to monitor their adherence to applicable rules,
    regulations, and requirements. The adoption of these programs
    is not mandatory. There is no current law explicitly directing
    health care providers to adopt compliance programs.
                Proposed Law
        This provision would require providers and suppliers to
    establish compliance programs to reduce fraud, waste, and
    abuse, supplementing the ability of the Secretary and law
    enforcement authorities to uncover program waste, fraud, and
    abuse. Providers and suppliers that do not meet requirements
    for establishing these programs would be subject to certain
    sanctions. The provision would also authorize the Secretary to
    conduct a pilot program, prior to mandating these requirements
    to all providers, to test the establishment of compliance
    programs for providers that the Secretary has determined to be
    a high risk for fraud, waste, and abuse.
        The Secretary, in consultation with the OIG, would be
    required to establish the core requirements for provider
    compliance programs. Requirements may include written policies,
    procedures, and standards of conduct; a designated compliance
    officer and compliance committee; training and education on
    fraud, waste and abuse for employees and contractors; a
    confidential mechanism (i.e. hotline) for receiving compliance
    questions and reports; guidelines for enforcing standards;
    internal monitoring and auditing procedures applicable to
    providers and contractors; and procedures for (1) ensuring
    prompt responses to detected and potential offenses, (2)
    developing corrective action initiatives, and (3) returning all
    identified Medicare, Medicaid, and CHIP overpayments. The
    Secretary would be required to develop a timeline for the
    establishment of these requirements and the date by which
    providers and suppliers would be required to have a compliance
    program in place.
        The CMS Administrator would have the authority to assess
    whether or not a provider or supplier has met these
    requirements and impose a CMP of up to $50,000 for each
    violation. The Secretary would have the authority to impose
    other intermediate sanctions, such as corrective action plans
    and additional monitoring, on providers and suppliers for
    failing to meet these requirements. The provision would also
    give the Secretary the authority to disenroll a Medicare
    provider or supplier, or impose a CMP or intermediate sanction,
    on any provider or supplier who fails to establish a compliance
    program.
        The provisions of this section would not apply to
    individual physicians or skilled nursing facilities, although
    nursing facilities would be required to develop compliance
    programs under Section 1412 of this Act.

    Sec. 1636. Maximum period for submission of Medicare claims reduced to
            not more than 12 months

                Current Law
        Medicare statute requires that payments only be made,
    except in certain circumstances, to Medicare eligible providers
    and only if a written request for payment is filed within three
    calendar years after the year in which the services were
    provided. The Secretary is authorized to reduce this period to
    no less than one year if it deems it necessary for the
    efficient administration of the program.
        As established by CMS regulations, in general, the time
    limit on submitting a claim for payment is the close of the
    calendar year after the year in which the services were
    furnished. For services furnished in the first nine months of
    the year, claims must be submitted on or before December 31 of
    the following year. For services furnished in the last three
    months of a calendar year, claims must be submitted to the
    contractor on or before December 31 of the second year
    following the year services were furnished.
                Proposed Law
        The provision is designed to reduce the ability of Medicare
    providers to game the system by testing payment systems to
    determine which payments are or are not approved, and tailor
    filings to prevent waste, fraud, and abuse from being
    identified. The provisions would reduce the time period for
    filing a written request for payment from three calendar years
    to one calendar year for services provided under Medicare Parts
    A and B. The Secretary would have the authority to specify
    exceptions to this one year period. The provision would
    eliminate the current statutory requirement that the Secretary
    must give Medicare Part A and B eligible providers at least one
    year to submit a claim for payment. The provision would also
    add a new requirement for MA and PDP plans. Contracts with MA
    organizations and PDP sponsors would be required to mandate
    that any provider under contract with, in partnership with, or
    affiliated with the MA organization or PDP sponsor ensure that
    a written request for payment be submitted no later than one
    calendar year after the date the services were furnished. The
    Secretary would have the authority to specify exceptions to
    this one-year period.
        The provision would apply to services furnished on or after
    January 1, 2011.

    Sec. 1637. Physicians who order durable medical equipment or home
            health services required to be Medicare-enrolled physicians or
            eligible professions

                Current Law
        Medicare statute defines eligible professional as a
    physician, certain types of practitioners (i.e. physician
    assistant, nurse practitioner, clinical social worker, and
    others), a physical or occupational therapist, qualified speech
    language pathologist, or a qualified audiologist.
        CMS has implemented regulations requiring Medicare
    providers and suppliers to submit an application to enroll in
    the Medicare program in order to receive billing privileges.
    Providers and suppliers must resubmit and recertify the
    accuracy of their enrollment information every 5 years. CMS may
    deny a provider or supplier's enrollment in Medicare or revoke
    a provider's billing privileges for the following reasons: non-
    compliance with enrollment requirements, exclusion from
    participation in federal health care programs, conviction of a
    felony, or the submission of false or misleading information on
    the enrollment application.
        In order to receive payment from Medicare, physicians are
    required to certify that specified services (i.e. inpatient
    psychiatric services, post-hospital extended care services, and
    home health services) meet certain conditions. In the case of
    home health services, physicians are required to certify that
    such services were required because the individual was confined
    to his home and needs skilled nursing care or physical, speech,
    or occupational therapy; a plan for furnishing services to the
    individual has been established; and such services were
    provided under the care of a physician.
        In the case of DME, the Secretary is authorized to require,
    for specified covered items, that payment be made for items and
    services only if a physician has communicated to the supplier a
    written order for the item.
                Proposed Law
        Beginning January 1, 2010, this provision would require
    physicians who order durable medical equipment or home health
    services to be a Medicare eligible professional or enrolled in
    the Medicare program. The Secretary would have the authority to
    extend these requirements to other Medicare items and services,
    including covered Part D drugs, based on a determination that
    such application would help to reduce the risk of fraud, waste,
    and abuse.

    Sec. 1638. Requirement for physicians to provide documentation on
            referrals to programs at high risk of waste and abuse

                Current Law
        OIG has ``permissive'' authority to exclude an entity or an
    individual from a federal health program under numerous
    circumstances, including failing to supply documentation
    related to payment for items and services.
                Proposed Law
        This provision would assist investigations by improving the
    quality of documentation required by those who order or request
    payment for program areas that are at risk of waste, fraud, and
    abuse. Beginning January 1, 2010, the Secretary would have the
    authority to disenroll, for no more than one year, a Medicare
    enrolled physician or supplier that fails to maintain and
    provide access to written orders or requests for payment for
    DME, certification for home health services, or referrals for
    other items and services as specified by the Secretary, to the
    Secretary. Medicare providers would be required to maintain and
    provide access to documentation relating to written orders or
    requests for payment for DME, certifications for home health
    services, or referrals for items and services as specified by
    the Secretary, to the Secretary. The provision would also
    extend the OIG's permissive exclusion authority to include
    individuals or entities that order, refer, or certify the need
    for health care services that fail to provide adequate
    documentation to the Secretary to verify payment.

    Sec. 1639. Face-to-face encounter with patient required before
            physicians may certify eligibility for home health services or
            durable medical equipment under Medicare

                Current Law
        Home health services are covered under Medicare Parts A and
    B. In order to receive payment from Medicare, physicians are
    required to certify and re-certify that specified services
    (i.e. inpatient psychiatric services, post-hospital extended
    care services, and home health services) meet certain
    conditions. In the case of home health services, physicians are
    required to certify that such services were required because
    the individual was confined to his home and needs skilled
    nursing care or physical, speech, or occupational therapy; a
    plan for furnishing services to the individual has been
    established; and such services were provided under the care of
    a physician.
        In the case of DME, the Secretary is authorized to require,
    for specified covered items, that payment be made for items and
    services only if a physician has communicated to the supplier a
    written order for the item.
                Proposed Law
        This provision would require that after January 1, 2010,
    physicians have a face-to-face encounter (including through
    telehealth and other than with respect to encounters that are
    incident to services involved) with the individual prior to
    issuing a certification or re-certification for home health
    services or durable medical equipment as a condition for
    payment under Medicare Parts A and B. The provision would also
    apply to physicians making home health certifications in
    Medicaid and CHIP. Physicians must document that they had the
    face-to-face encounter with the individual during the 6-month
    period preceding the certification, or other reasonable
    timeframe as determined by the Secretary. This section is meant
    to be compatible with the National Coverage Provision, PHYS-
    004, subsection H, which states that in medically underserved
    areas, physicians may send physician extenders (physician
    assistants or nurses) to see patients in their homes without
    personal or direct supervision by the physician, and the
    physician may then bill that service as a physician service.
        The Secretary would be authorized to apply the face-to-face
    encounter requirement to other Medicare items and services
    based upon a finding that doing so would reduce the risk of
    waste, fraud, and abuse.

    Sec. 1640. Extension of testimonial subpoena authority to program
            exclusion investigations

                Current Law
        Section 1128 of the SSA provides that the Secretary (and
    through delegation, OIG) has the authority to exclude
    individuals and entities from participation in federal health
    care programs under a variety of circumstances. Exclusion is
    mandatory for those convicted of certain criminal offenses, and
    generally the exclusion cannot be for a period of less than
    five years. OIG also has permissive authority under numerous
    circumstances to exclude an individual or entity from a federal
    health program, including the discretion to determine whether
    and for how long an exclusion will be imposed.
                Proposed Law
        The provision is designed to increase the ability of the
    Secretary to conduct program investigations, applying the
    subpoena provisions contained in section 205(d) and (e) of the
    SSA with respect to the Secretary's program exclusion
    authority. The Secretary would be able to issue subpoenas and
    require the attendance and testimony of witnesses and the
    production of any other evidence that relates to matters under
    investigation or in question by the Secretary. The Secretary
    would also have the ability to delegate this authority to the
    OIG and the Administrator of CMS for the purposes of a program
    exclusion investigation. Certain requirements regarding the
    serving of subpoenas and compensation for subpoenaed witnesses
    may apply. This section would also provide for judicial
    enforcement of subpoenas, including in cases where a person
    refuses to obey a properly served subpoena. This provision
    would apply to investigations beginning on or after January 1,
    2010.

    Sec. 1641. Required repayments of Medicare and Medicaid overpayments

                Current Law
        The Secretary is authorized to enter into contracts with
    private entities to conduct administrative functions, including
    audits of Medicare participating providers and suppliers to
    identify alleged overpayments. These entities are generally
    referred to as Medicare program integrity or MIP contractors.
        Medicare statute specifies that identified overpayments to
    providers or suppliers that are not paid within 30 days of the
    date of the overpayment determination will accrue interest on
    the balance of the overpayment at the rate applicable to late
    payments established by the Secretary of the Treasury. The
    Secretary is required to enter into repayment plans with
    providers for which payment within 30 days would constitute a
    financial hardship. In the case of a provider or supplier for
    which an overpayment has been identified seeks a
    reconsideration (the 2nd level of the Medicare appeals
    process), the Secretary is prohibited from recouping the
    overpayment until a decision on the reconsideration has been
    rendered.
                Proposed Law
        This provision would require the repayment of overpayments
    identified by Medicare and Medicaid participating providers,
    including private health plans. The term ``overpayment'' would
    be defined as any funds that a person receives or retains under
    Medicare or Medicaid of which they are not entitled. Person
    would be defined as any ``person'' including a provider of
    services, supplier, Medicaid managed care organization, MA
    organization, or PDP sponsor. Any person who knows of an
    overpayment would be required to report and return the
    overpayment, along with notification for the reason for the
    overpayment, to the Secretary, the state, an intermediary, a
    carrier, or a contractor. ``Knows'' under this provision means
    that a person with respect to information has actual knowledge
    of the information, acts in deliberate ignorance of the truth
    or falsity of the information, or acts in reckless disregard of
    the truth or falsity of the information. An overpayment is
    defined as funds that a person receives or retains under
    Medicare, Medicaid, or CHIP to which the person, after
    applicable reconciliation, is not entitled. The reference to
    applicable reconciliation in this definition refers to
    reconciliations procedures already be in place for the relevant
    programs and payments, and is not intended to create any new
    required reconciliation procedures or rights to reconciliation
    or appeal. Overpayments would be required to be reported and
    returned within 60 days of the date the person knows of the
    overpayment. Overpayments retained after the 60 days would
    create an obligation as defined in USC section 3729(b)(3) of
    title 31. If it is determined that the reason for the
    overpayment was related to fraud, repayment would not limit the
    provider or supplier's liability for additional administrative
    obligations such as interest, fines, specialties, or civil and
    criminal sanctions.

    Sec. 1642. Expanded application of hardship waivers for OIG exclusions
            to beneficiaries of any Federal health care program

                Current Law
        Under SSA section 1128, the Secretary (and, through
    delegation, OIG) has the authority to exclude individuals and
    entities from participation in federal health care programs.
    Exclusions from federal health programs are mandatory under
    certain circumstances, and permissive in others (i.e., OIG has
    discretion in whether to exclude an entity or individual). For
    purposes of section 1128, the term ``federal health care
    program'' means (1) any plan or program that provides health
    benefits, whether directly, through insurance, or otherwise,
    which is funded directly, in whole or in part, by the United
    States government other than the health insurance program under
    chapter 89 of title 5, United States Code (governing health
    insurance for federal employees); or (2) any state health care
    program, as defined by the Social Security Act.
        Subject to exceptions, in the case of a mandatory
    exclusion, the minimum period of exclusion cannot be less than
    five years. However, under SSA section 1128(c)(3)(B), upon the
    request of a federal health care program administrator who
    determines that the exclusion would impose a hardship on
    individuals entitled to benefits under Medicare Part A or
    enrolled under Medicare Part B (or both), the Secretary may
    waive the exclusion under certain circumstances with respect to
    that program, in the case of an individual or entity that is
    the sole community physician or sole source of essential
    specialized services in a community.
                Proposed Law
        This new provision would increase the ability of the
    Secretary to use discretion to protect beneficiaries in cases
    where providers are subject to program exclusion. Under SSA
    section 1128(c)(3)(B), the Secretary would, in accordance with
    the requirements of the section, be able to waive a mandatory
    exclusion period where a hardship is imposed on beneficiaries
    of other federal health care programs, in addition to Medicare
    Part A and Part B beneficiaries.

    Sec. 1643. Access to certain information on renal dialysis facilities

                Current Law
        None.
                Proposed Law
        This provision is designed to allow additional oversight of
    financial relationships that may exist between medical
    directors and dialysis organizations, and the extent to which
    these may affect prescribing decisions. This provision would
    require End State Renal Disease Facilities to provide the
    Secretary with access to information relating to any ownership
    or compensation arrangement between the facility and the
    medical director of such facility or between the facility and
    any physician for the purposes of an audit or evaluation.

    Sec. 1644. Billing Agents, Clearinghouses, or Other Alternate Payees
            Required to Register Under Medicare

                Current Law
        CMS has implemented regulations requiring Medicare
    providers and suppliers to submit an application to enroll in
    the Medicare program in order to receive billing privileges.
    Providers and suppliers must resubmit and recertify the
    accuracy of their enrollment information every 5 years. The
    enrollment application requires that providers and suppliers
    include the names, addresses, and tax ID numbers for billing
    agencies on their applications.
                Proposed Law
        This provision is designed to reduce waste, fraud, and
    abuse by providing for registration of financial intermediaries
    that handle payments for Medicare providers. Beginning January
    1, 2012, this provision would require billing agencies,
    clearinghouses, or other payees that submit claims on behalf of
    a health care provider to register with the Secretary in a form
    and manner as determined by the Secretary. A similar provision
    is put in place with respect to the Medicaid program by section
    1759 of this Act.

    Sec. 1645. Conforming civil monetary penalties to False Claims Act
            amendments

                Current Law
        SSA section 1128A(a) authorizes the imposition of civil
    monetary penalties (CMPs) on any person, including an
    organization, agency, or other entity, who engages in various
    types of improper conduct with respect to federal health care
    programs. Under 1128A(a)(1), CMPs may be imposed on any person
    who knowingly presents or causes to be presented to certain
    government officers, employees, agents, or agencies certain
    false or fraudulent claims for items or services. As defined by
    section 1128A(i), an item or service includes any particular
    item, device, medical supply, or service purportedly provided
    to a patient and listed in an itemized claim for payment. A
    claim is defined by this section as an application for payments
    for items and services under a federal health care program.
        Section 1128A generally provides for monetary penalties of
    up to $10,000 for each item or service claimed, and $15,000 or
    $50,000 under other circumstances, as well as additional
    assessments. Under Section 1128A(a)(4), certain persons
    excluded from participating in Medicare or a state health care
    program who retain a direct or indirect ownership or control
    interest in an entity that is participating in Medicare or a
    state health care program and know or should know of the action
    constituting the basis for the exclusion, or who are an officer
    or managing employee of such an entity, may be subject to civil
    penalties.
        SSA section 1128A(c)(1) provides that the Secretary may
    initiate a proceeding to determine whether to impose a civil
    monetary penalty, assessment, or exclusion under the section
    only as authorized by the Attorney General pursuant to
    procedures agreed upon by them. The Secretary may not initiate
    an action with respect to any claim, request for payment, or
    other occurrence described in this section later than six years
    after the date the claim was presented, the request for payment
    was made, or the occurrence took place.
        The federal False Claims Act (FCA), codified at 31 U.S.C.
    Sec. Sec. 3729-3733, provides for judicial imposition of CMPs
    and damages for the knowing submission of false claims to the
    United States government. The recently enacted Fraud
    Enforcement and Recovery Act of 2009 (FERA), P.L. 111-21, made
    several amendments to the False Claims Act that, according to
    legislative history, were intended to clarify the meaning of
    several provisions of the FCA in light of judicial
    interpretations of the statute that were said to run contrary
    to congressional intent and limit the scope of the law. Among
    the changes made by FERA, the Act removed a requirement under
    30 U.S.C. 3729(a)(1) that provided that in order for liability
    to attach, a false claim must be presented ``to an officer or
    employee of the United States Government or a member of the
    Armed Forces of the United States.'' In addition, FERA expanded
    the definition of the term ``claim'' to include to include
    ``any request or demand, whether under a contract or otherwise,
    for money or property and whether or not the United States has
    title to the money or property, that . . . is made to a
    contractor, grantee, or other recipient, if the money or
    property is to be spent or used on the Government's behalf or
    to advance a Government program or interest, and if the
    Government provided or has provided any portion of the money or
    property requested or demanded.''
                Proposed Law
        This provision is designed to conform and ensure
    consistency between the OIGs CMP authority and the recently
    amended False Claims Act. Similar to FERA, the bill would amend
    section 1128A(a)(1) to remove the requirement for presentment
    of a claim to a government officer, employees, agents, or
    agencies in order to be liable for CMPs. The bill would also
    expand the reach of section 1128A(a)(4), under which a person
    excluded from participating in a federal health care program
    (in addition to Medicare or a state health care program) who
    retains ownership in an entity participating in the program, or
    is an officer or managing employee of such an entity, would be
    subject to CMPs. The bill would create a new section
    1128A(a)(12), which would impose CMPs on a person who conspires
    to commit a violation of section 1128A. Persons violating
    section 1128A(a)(12) would be subject to a penalty of up to
    $50,000 for violations of the section and an additional
    assessment of no more than three times the total amount that
    would otherwise apply. In addition, a new section 1128A(a)(13)
    would provide that a person who knowingly makes, uses, or
    causes to be made or used, a false record or statement material
    to an obligation to pay or transmit money or property to a
    federal health care program, or knowingly conceals or knowingly
    and improperly avoids or decreases an obligation to pay or
    transmit money or property to a federal health care program can
    be subject to CMPs. Penalties under this section would be up to
    $50,000 for each false record or statement, concealment,
    avoidance, or decrease. Persons would also be subject to an
    assessment of no more than three times the total amount of the
    obligation under certain circumstances.
        Under section 1128A(c)(1), the Secretary could initiate a
    proceeding to determine whether to impose a civil monetary
    penalty, assessment, or exclusion for an occurrence up to ten
    years, instead of six, after the occurrence took place.
        The bill would also amend certain definitions in section
    1128A(i). For example, under 1128(i)(2), the definition of a
    claim would be broadened to include any application, request,
    or demand, whether under contract, or otherwise, for money or
    property for items and services under a federal health care
    program, whether or not the United States or a State agency has
    title to the money or property, that is presented or caused to
    be presented to a government officer, employee, agent or
    agency. A claim under this section would also include
    applications, requests, or demands made to a contractor,
    grantee, or other recipient, if the money or property is to be
    spent or used on the federal health care program's behalf or to
    advance a federal health care program interest, and if the
    federal health care program (1) provides or has provided any
    portion of the money or property requested or demanded; or (2)
    will reimburse such contractor, grantee, or other recipient for
    any portion of the money or property which is requested or
    demanded. In addition, an ``item or service'' would include,
    without limitation, any medical, social, management,
    administrative, or other item or service used in connection
    with or directly or indirectly related to a federal health care
    program.

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

    Sec. 1651. Access to information necessary to identify waste and abuse

                Current Law
        Statutory OIGs consolidate responsibility for audits and
    investigations within a federal agency. The Inspector General
    Act of 1978 and its amendments of 1988 granted inspectors
    general substantial independence and powers to carry out their
    mandate to combat waste, fraud, and abuse. In carrying out
    their functions, IGs have relatively unlimited authority,
    including subpoena power, to access all records and information
    of an agency.
        Every contract with a PDP or MA-PD (Medicare Advantage
    Prescription Drug Plan) is required to provide the Secretary
    with the right to inspect and audit any books and records of
    the plan related to costs. Officers, employees, and HHS
    contractors may use information obtained or disclosed during an
    audit for the purposes of conducting the audit only.
                Proposed Law
        The provision would establish that the Attorney General has
    access to Medicare and Medicaid claims and payment data,
    facilitated by the HHS OIG and in consultation with CMS or the
    owner of any such data. Access would be required to be carried
    out for the purposes of law enforcement activity and in a
    manner consistent with any applicable disclosure, privacy, and
    security laws, including the HIPAA and Privacy Act of 1974, and
    subject to any statutory information systems security
    requirements in statute or mandated by the Secretary. Nothing
    in this section shall be construed as setting forth an
    exclusive avenue for obtaining data in civil and criminal fraud
    investigations. Nor does the section apply to state attorneys
    general.

    Sec. 1652. Elimination of duplication between the Healthcare Integrity
            and Protection Data Bank and the National Practitioner Data
            Bank

                Current Law
        Medicare statute requires the Secretary to develop and
    maintain a national health care fraud and abuse data collection
    program for the reporting of adverse actions taken against
    health care providers or suppliers. The OIG issues regulations
    implementing the Health Care Integrity and Protection Data Bank
    (HIPDB). The statute requires the following types of health
    care related adverse actions to be reported: civil judgments,
    federal or state criminal convictions, actions taken by federal
    or state licensing agencies, and provider exclusions from
    Medicare and Medicaid. Only final adverse actions are
    reportable to the HIPDB. Administrative fines, citations,
    corrective action plans, and other personnel actions are not
    reportable except under certain circumstances. Settlements, in
    which a finding of liability has not been established, are also
    not reportable. Both federal and state government agencies as
    well as health plans are required to report to the HIPDB.
    Health plans that fail to report are subject to a civil
    monetary penalty of $25,000. The Secretary is authorized to
    charge fees to access information in the database. However,
    fees cannot apply to requests from federal entities. HIPDB
    cannot duplicate the reporting requirements established for the
    National Practitioner Data Bank.
        Title IV of the Health Care Quality Improvement Act of
    1986, as amended, established the National Practitioner Data
    Bank (NPDB). The NPDB collects and releases data related to the
    professional competence of physicians, dentists, and certain
    healthcare practitioners. The types of information included in
    the NPDB are medical malpractice claims payments, certain
    adverse licensure actions, adverse clinical privileging
    actions, adverse professional society membership actions, and
    exclusions from Medicare and Medicaid. The statute defines the
    entities eligible to report and query the databank. Malpractice
    payers that fail to report are subject to a civil monetary
    penalty. Section 1921 of the Social Security Act expanded the
    scope of reporting requirements for the NPDB to encompass
    additional adverse licensure actions and actions taken by state
    licensing and certification agencies, peer review
    organizations, and private accreditation organizations. Section
    1921 also required that actions taken against all health care
    practitioners be included in the databank. States are required
    to have a system for reporting adverse actions to the NPDB. The
    Health Resources and Services Administration (HRSA) within HHS
    oversees both databases.
                Proposed Law
        This provision is designed to establish a timeline for the
    process already underway of consolidation of existing waste,
    fraud, and abuse data sources, ensuring the efficient use of
    resources and greater access to data necessary for preserving
    program integrity. Upon enactment of this Act, this provision
    would require the Secretary to establish a process to terminate
    the HIPDB. The Secretary would be required to ensure that the
    information that was formerly collected in the HIPDB is
    transferred to the NPDB.
        Requirements pertaining to the establishment of the HIPDB,
    such as rules for reporting information, the types of
    information that are reported, and rules for disclosure, would
    all apply to the NPDB upon termination of the HIPDB. The
    provision would eliminate the OIG's responsibility for
    reporting adverse actions to the database. After the Secretary
    certifies that the transition of information from the HIPDB to
    the NIPD is complete, any fees charged by the Secretary for
    access to the database would apply to federal agencies. The
    Department of Veterans Affairs (VA) would be exempted from
    these charges for one year. The transition would be funded from
    the fees collected to access the database and from additional
    amounts as necessary from the annual HCFAC appropriation
    available to the Secretary and the OIG. Funding would be
    available for one year after the enactment date of this
    legislation.

    Sec. 1653. Compliance with HIPAA privacy and security standards

                Current Law
        The HIPAA Privacy and Security Rules were promulgated by
    HHS pursuant to sections 262(a) and 264 of the Health Insurance
    Portability and Accountability Act of 1996 (HIPAA) to establish
    national standards for the privacy and security of protected
    health information.
        The HIPAA Privacy and Security Rules apply primarily to
    covered entities--health plans, health care clearinghouses, and
    health care providers who transmit financial and administrative
    transactions electronically. Failure to comply with these
    regulations may result in civil or criminal penalties for
    covered entities. The HITECH Act, enacted as part of the
    American Recovery and Reinvestment Act, extends civil and
    criminal liability to business associates of covered entities
    for violations that occur on or after February 17, 2010.
    Business associates are defined as persons who perform, or
    assist in the performance of a function or activity involving
    the use or disclosure of individually identifiable health
    information on behalf of a covered entity. Examples of business
    associates include persons who perform legal, actuarial,
    accounting, consulting, data aggregation, management,
    administrative, accreditation, or financial services to or for
    such covered entity where the provision of the service involves
    the disclosure of individually identifiable health information
    from such covered entity or arrangement, or from another
    business associate of such covered entity or arrangement, to
    the person.
        The HIPAA Privacy Rule governs the disclosure of protected
    health information (PHI)--that is, individually identifiable
    health information ``created or received by a [covered
    entity]'' that ``[r]elates to the . . . health or condition of
    an individual'' or to the provision of or payment for health
    care. A covered entity is permitted to use or disclose PHI
    without patient authorization for treatment, payment, or health
    care operations. For other purposes, a covered entity may only
    use or disclose PHI with patient authorization subject to
    certain exceptions. Exceptions permit the use or disclosure of
    PHI without patient authorization or prior agreement for public
    health, judicial, law enforcement, and other narrow purposes.
    The HIPAA Privacy Rule also requires covered entities and
    business associates to provide an accounting of certain
    disclosures; to make reasonable efforts to disclose only the
    minimum information necessary; to safeguard PHI from
    inappropriate use or disclosure; and to provide a notice of
    their privacy practices. Individuals also have a right to
    review and obtain copies of their PHI and to request
    corrections.
        The HIPAA Security Rule applies only to PHI in electronic
    form (EPHI), and requires a covered entity or business
    associate to maintain administrative, technical, and physical
    safeguards to ensure the confidentiality, integrity, and
    availability of all EPHI the covered entity creates, receives,
    maintains, or transmits.
        The HITECH Act will also impose a breach notification
    requirement that is triggered when unsecured PHI or EPHI is
    compromised. This requirement is applicable to both covered
    entities and business associates and will become effective 30
    days after HHS issues final regulations implementing this
    requirement.
        The Privacy Act of 1974 generally prohibits disclosures of
    records contained in a system of records maintained by a
    federal agency without the written request or consent of the
    individual to whom the record pertains. A system of records is
    a group of records under the control of an agency from which
    information is retrieved by the name of the individual or by
    some identifier assigned to the individual, such as a Social
    Security Number. The Privacy Act contains certain statutory
    exceptions, and a list of agency systems of records, including
    the routine uses of those records, is published in the Federal
    Register.
                Proposed Law
        The provision would mandate compliance with HIPAA privacy
    and security requirements and the Privacy Act of 1974 in
    carrying out the provisions of this subtitle.

                          TITLE VII--MEDICAID AND CHIP

                     Subtitle A--Medicaid and Health Reform

    Sec. 1701. Eligibility for individuals with income below 133\1/3\
            percent of the Federal poverty level

                Current Law
        Medicaid provides federal matching funds to states for the
    costs of covered health and long-term care services furnished
    to eligible low-income individuals. In order to qualify for and
    be entitled to these federal matching funds, states must cover
    certain groups, such as pregnant women and children under age 6
    with family incomes at or below 133% of the federal poverty
    level (FPL). These are known as ``mandatory'' groups. In
    addition, states may extend Medicaid coverage to certain
    groups, such as pregnant women and children under 6 with family
    incomes above 133% of FPL. These are known as ``optional''
    groups, and states are entitled to receive federal matching
    funds for the costs of covered services to these populations.
    In 2009, 133% of FPL is $14,404 per year for an individual and
    $29,326 for a family of four.
        There is one group of low-income people for whom federal
    Medicaid law does not allow states to receive federal Medicaid
    matching funds, regardless of their degree of impoverishment.
    These are adults who are not elderly, not disabled, not
    pregnant, and not parents of dependent children; they are
    sometimes referred to as ``childless adults.'' The only way in
    which states may receive federal Medicaid matching funds for
    the costs of providing health or long-term care services to
    these individuals is under a section 1115 demonstration waiver
    granted by the Secretary of HHS.
                Proposed Law
        The bill would add two new mandatory eligibility groups to
    Medicaid effective January 1, 2013. A new ``non-traditional''
    group would consist of individuals under age 65 who do not meet
    existing categorical requirements for eligibility (e.g.,
    childless adults) with family income up to 133\1/3\% of FPL.
    States would determine income using methodologies and
    procedures specified by the Secretary of HHS in consultation
    with the Health Choices Commissioner. The purpose of the
    consultation would be to align as closely as possible the
    income eligibility determinations for Medicaid with the income
    eligibility determinations for affordability credits in the
    Exchange. For the same reason, the non-traditional Medicaid
    eligibles would not be subject to an assets or resource test.
        A new ``traditional'' group would consist of individuals
    under age 65 with family income up to 133\1/3\% of FPL who meet
    the existing categorical requirements for eligibility (e.g.,
    children, pregnant women, parents with dependent children, and
    individuals with disabilities) but do not meet income
    eligibility rules (standards, methodologies, and procedures) in
    effect in their state as of June 16, 2009. As in the case of
    non-traditional Medicaid eligibles, these traditional Medicaid
    eligibles would not be subject to an assets or resource test,
    even if the state applied such an eligibility requirement on or
    before June 16, 2009.
        The federal Medicaid matching rate for the cost of covered
    services furnished to both the new non-traditional and
    traditional groups of Medicaid-eligible individuals would be
    100% in 2013 and 2014, and 90% thereafter. This matching rate
    would apply to the cost of services for these new groups in
    every state, whether or not a state currently covers some or
    all of this population under a section 1115 waiver or only with
    state funds.
        Section 205(d)(1) of the bill provides that children born
    in the United States who are not otherwise eligible for
    acceptable coverage at birth are deemed to have enrolled in
    Medicaid as a non-traditional Medicaid eligible for the first
    60 days of life. (Acceptable coverage is defined in section
    202(d)(2) of the bill.) The costs of care incurred by state
    Medicaid programs during this period would be matched by the
    federal government at a 100% rate in 2013 and 2014, then 90%
    thereafter. Section 205(d)(2) of the bill provides that if, at
    the end of the 60-day period, a newborn does not have
    acceptable coverage, the newborn will continue to be deemed a
    non-traditional Medicaid eligible until the child obtains other
    acceptable coverage or the child is determined to be eligible
    for Medicaid. This section provides that the cost of care
    during this continuation period would be matched by the federal
    government at a 100% rate in 2013 and 2014, then 90%
    thereafter.
        The bill would prohibit a state from requiring non-
    traditional Medicaid eligibles to enroll in a Medicaid managed
    care organization (MCO) or primary care case management program
    (PCCM) until the state demonstrates, to the satisfaction of the
    Secretary, that the MCO or PCCM has the capacity to meet the
    health, mental health, and substance abuse needs of such
    individuals, whether through its provider network or through
    other arrangements. The purpose of this requirement is to avoid
    a repetition of the waste of federal Medicaid funds that has in
    the past occurred when Medicaid populations have been required
    to enroll in MCOs that do not have adequate capacity to furnish
    the services for which they are receiving capitation payments.
        The effective date of this section would be the first day
    of fiscal year 2013; it would apply to all items and services
    furnished on or after that date.

    Sec. 1702. Requirements and special rules for certain Medicaid eligible
            individuals

                Current Law
        There are no provisions in current Medicaid law relating to
    the Health Choices Administration or the Health Insurance
    Exchange established by the bill.
                Proposed Law
        The bill provides assistance to low-income individuals in
    affording health coverage through Medicaid or through
    affordability credits within the Health Insurance Exchange. In
    order to minimize procedural and bureaucratic barriers to such
    assistance, the bill requires coordination between the Health
    Choices Commissioner and the various state Medicaid programs.
    The purpose is to ensure a ``single portal'' to coverage--i.e.,
    whether an individual initially seeks coverage through a
    Medicaid eligibility site or through the Exchange, the
    individual's application will be promptly processed and the
    individual will be enrolled in the coverage appropriate to his
    or her family income without the need to reapply at a different
    venue.
        To this end, section 205(e)(3) of bill directs the Health
    Choices Commissioner, in consultation with the Secretary of
    HHS, to enter into a Medicaid memorandum of understanding (MOU)
    with each state Medicaid agency in order to coordinate
    enrollment in and implementation of Medicaid and the Exchange.
    This section of the bill imposes a reciprocal requirement on
    state Medicaid programs, as a condition of receiving federal
    matching funds, to enter into a Medicaid MOU with the Health
    Choices Commissioner to coordinate the implementation of
    Medicaid and the Exchange in order to ensure the enrollment of
    Medicaid-eligible individuals in acceptable coverage.
        The MOU would implement a number of requirements designed
    to maximize participation in Medicaid by eligible individuals.
    First, state Medicaid programs would be required to accept
    without further determination the enrollment of non-traditional
    Medicaid eligible individuals who are determined eligible for
    Medicaid by the Exchange. Any redeterminations of eligibility
    by the state Medicaid agency would have to be consistent in
    periodicity with the periodicity for redeterminations of
    eligibility for affordability credits in the Exchange.
        State Medicaid programs would also be required to accept
    without further determination the enrollment of an individual
    determined by the Commissioner to be a traditional Medicaid
    eligible individual. As in the case of non-traditional Medicaid
    eligibles, the state would conduct redeterminations of
    eligibility for these individuals consistent with the
    periodicity of the redeterminations of eligibility for
    affordability credits in the Exchange.
        If the Commissioner determines that a state Medicaid agency
    has the capacity to make determinations of eligibility for
    affordability credits, then the MOU would provide for the state
    Medicaid agency to perform that function, and the Commissioner
    must reimburse the state Medicaid agency for the costs of
    conducting such determinations. Under this arrangement, the
    state Medicaid agency must make an eligibility determination
    for affordability credits for any Exchange-eligible individual
    who requests such a determination. If the state Medicaid agency
    determines that an Exchange-eligible individual is not eligible
    for affordability credits, the agency must forward the
    information on the basis of which such determination was made
    to the Commissioner. Errors by the state Medicaid agency in
    making eligibility determinations for affordability credits
    would not be included in the calculation of erroneous excess
    payments for purposes of Medicaid or CHIP.
        The Committee expects that, consistent with the
    requirements described above, these Medicaid MOUs will be
    tailored to the operational circumstances of both the Medicaid
    program and the Exchange in each state. Neither the
    Commissioner nor the state Medicaid agencies have the authority
    to modify or vitiate any state Medicaid plan requirement under
    federal law in the MOU.
        Section 205(d)(1) of the bill provides that children born
    in the United States who are not otherwise eligible for
    acceptable coverage at birth are deemed to have enrolled in
    Medicaid as a non-traditional Medicaid eligible for the first
    60 days of life. Section 205(d)(2) of the bill provides that
    if, at the end of the 60-day period, a newborn does not have
    acceptable coverage, the newborn will continue to be deemed a
    non-traditional Medicaid eligible until the child obtains other
    acceptable coverage or the child is determined to be eligible
    for Medicaid. This section of the bill requires that the state
    Medicaid agency conduct a Medicaid eligibility determination
    for such newborns within the first 60 days after birth. In
    order to avoid any loss of coverage, it also deems newborns who
    are not otherwise covered under acceptable coverage at the end
    of the 60-day period to be eligible for Medicaid as a
    traditional Medicaid eligible (with federal matching rates
    appropriate to this eligibility group) until the child either
    obtains acceptable coverage or is otherwise determined eligible
    for Medicaid.

    Sec. 1703. CHIP and Medicaid maintenance of eligibility

                Current Law
        State participation in the Medicaid program and in the
    Children's Health Insurance Program (CHIP) is voluntary. States
    that elect to participate in either program must meet certain
    federal statutory requirements in order to receive federal
    matching funds for the allowable costs they incur in purchasing
    covered items and services on behalf of program beneficiaries.
    All states currently participate in both programs. The Medicaid
    program is permanent. The CHIP program expires on September 30,
    2013.
        Within federal requirements, states have flexibility to
    determine which eligibility standards, methodologies, and
    procedures they use in administering their programs. The of the
    American Recovery and Reinvestment Act of 2009, P.L. 111-5,
    provides an increase in federal Medicaid matching rates for
    states during the period October 1, 2008, through December 31,
    2010. Under the American Recovery and Reinvestment Act (ARRA)
    maintenance of eligibility requirement, a state is not eligible
    for the increased federal matching payment if its Medicaid
    eligibility standards, methodologies, or procedures are more
    restrictive than those in effect as of July 1, 2008. The
    Centers for Medicare & Medicaid Services has issued
    administrative guidance implementing this requirement (SMD #09-
    005, August 19, 2009).
                Proposed Law
        The bill would require states, as a condition of receiving
    federal Medicaid funds, to maintain eligibility standards,
    methodologies, or procedures under their CHIP programs
    (including those operating under section 1115 waivers) that are
    no more restrictive than those in effect as of June 16, 2009.
    This requirement would not prohibit states with stand-alone
    CHIP programs from limiting the acceptance of applications or
    imposing numerical limitations or waiting lists in order to
    limit its CHIP spending in a fiscal year to amounts for which
    federal CHIP matching funds are available for that fiscal year.
        The Committee expects that, in implementing this
    requirement, the Secretary will issue guidance parallel to that
    set forth in the August 19, 2009, guidance implementing the
    ARRA Medicaid maintenance of eligibility requirement. The
    purpose of this requirement is to ensure that low-income
    children and pregnant women who qualify for CHIP under current
    eligibility rules will continue to qualify for coverage until
    the Health Insurance Exchange is operational. The maintenance
    of eligibility requirement does not prohibit states from
    raising their CHIP eligibility standards or liberalizing their
    CHIP eligibility methodologies or procedures in order to cover
    more low-income children.
        In order to ensure low-income children and pregnant women a
    seamless transition from coverage under CHIP to coverage in the
    Exchange, the CHIP maintenance of eligibility requirement would
    apply from the first quarter after enactment to the CHIP MOE
    termination date. This date is the later of January 1, 2013,
    the day on which the Exchange becomes operational, or the day
    after which both of the following determinations have been
    made; first, the Health Choices Commissioner has determined
    that the Exchange has the capacity to support CHIP enrollees
    who are eligible for the Exchange; and second, the Secretary of
    HHS has determined that comparable coverage is available
    through the Exchange and that procedures have been established
    for transferring CHIP enrollees into acceptable coverage
    without interruption of coverage and without interruption of a
    written plan of treatment. For this purpose, comparable
    coverage means that benefits standards in the Exchange are at
    least comparable to the benefits standards provided to children
    under an average state CHIP plan as in effect in 2011. A CHIP
    enrollee is a child or pregnant women who is eligible for CHIP
    coverage or would be eligible but for acceptable coverage (as
    defined in section 202(d)(2) of the bill).
        The bill also includes a Medicaid maintenance-of-
    eligibility requirement. Under this requirement, a state is not
    eligible for federal Medicaid matching payments in any calendar
    quarter beginning after enactment if the state has in effect
    Medicaid eligibility standards, methodologies, or procedures
    under the state's Medicaid plan (or under any section 1115
    Medicaid waiver) that are more restrictive than the eligibility
    standards, methodologies or procedures under the state's
    Medicaid plan (or waiver) as in effect on June 16, 2009. The
    Committee expects that, in implementing this requirement, the
    Secretary will follow the August 19, 2009, guidance
    implementing the ARRA Medicaid maintenance of eligibility
    requirement. This Medicaid MOE requirement does not prohibit
    states from changing their Medicaid eligibility standards or
    methodologies or procedures so as to make them less restrictive
    and thereby cover more low-income families and individuals. The
    bill requires the Secretary to extend any section 1115 Medicaid
    waiver, including the availability of federal Medicaid matching
    funds under such a waiver, for as long as necessary for a state
    to meet the maintenance of eligibility requirement.
        The Secretary of HHS has granted a section 1115 waiver to
    the State of Vermont that limits coverage for certain
    individuals to payment of premium or cost-sharing subsidies for
    individual or group health insurance coverage only. The bill
    directs the Secretary to allow the State to amend the waiver to
    apply more restrictive standards, methodologies, or procedures
    to such individuals only and clarifies that such an amendment
    would not violate the maintenance of eligibility requirement.
        Under section 242 of the bill, individuals who are not
    enrolled in an employer plan and are not eligible for Medicaid
    may qualify for affordability credits to assist in the purchase
    of health insurance coverage in the Exchange if their family
    income is below 400% of the federal poverty level (FPL). No
    assets or resource test will apply. In general, individuals and
    families with incomes at or below 133% of FPL will be eligible
    for Medicaid, and those with incomes above that level (but
    below 400% of FPL) who are not eligible for Medicaid under the
    MOE requirement will be eligible for affordability credits in
    the Exchange.
        In order to align eligibility determinations for Medicaid
    with those for affordability credits so as to minimize
    administrative burden and cost, the bill prohibits state
    Medicaid programs from applying assets or resource tests in
    determining eligibility for certain populations effective on
    the day the Exchange becomes operational (January 1, 2013).
    This prohibition applies to both initial Medicaid eligibility
    determinations and redeterminations of new or existing
    eligibles.
        The populations that would not be subject to assets or
    resource tests include the following mandatory populations: (1)
    individuals who are receiving benefits under Title IV-A
    (Temporary Assistance for Needy Families, TANF) or Title IV-E
    (Foster Care or Adoption Assistance); (2) pregnant women,
    infants, and children under age six with family income at or
    below 133% of FPL; (3) children ages 6 through 18 with family
    incomes at or below 100% FPL. They also include the following
    optional populations: (1) pregnant women, infants, and children
    with family income exceeding 133% FPL; (2) children ages 6
    through 18 with family incomes above 100% FPL; (3) parents who
    would be eligible if their work-related child care costs were
    paid from their earnings; (4) optional targeted low-income
    children under CHIP; (5) independent foster care adolescents.
    Finally, these populations include parents and children in
    families who meet the eligibility standards under the AFDC
    programs that were in effect in their states on July 16, 1996,
    and those who qualify under less restrictive income and
    resource methodologies applied by their state. States could
    continue to apply assets or resources tests to individuals 65
    and over and individuals with disabilities who may require
    long-term care services.
        Section 121 of the bill requires that qualified health
    benefits plans operating in the Exchange must offer coverage
    that at least meets minimum benefits standards adopted by the
    Secretary of HHS. In order to align this minimum benefits
    standard with the floor on benefits in Medicaid, the bill
    modifies the current law state option under section 1937 of the
    Social Security Act relating to benchmark and benchmark-
    equivalent coverage. Effective January 1, 2013, benchmark or
    benchmark-equivalent coverage offered by a state Medicaid
    program would be required to meet at least the minimum benefits
    and cost-sharing standards of a basic plan offered through the
    Exchange. The bill does not alter the current law limitations
    on the populations to which a state may offer benchmark or
    benchmark-equivalent coverage. Nor does it modify the current
    law requirement that, with respect to children under 21,
    benchmark or benchmark-equivalent coverage include Early and
    Periodic Screening, Diagnostic, and Treatment (EPSDT) services.

    Sec. 1704. Reduction in Medicaid DSH.

                Current Law
        In reimbursing hospitals for covered services furnished to
    Medicaid patients, states must pay adjustments to hospitals
    serving a disproportionate share of low-income patients (DSH
    hospitals). States have flexibility in designating DSH
    hospitals, but must include at least all hospitals meeting
    either of two minimum criteria: (1) a Medicaid inpatient
    utilization rate in excess of one standard deviation above the
    mean rate for the state, or (2) a low-income patient
    utilization rate of 25%. State payments to DSH hospitals
    qualify for federal Medicaid matching funds at the state's
    regular federal matching rate. The amount of federal Medicaid
    matching funds for DSH payments available to each state in any
    fiscal year is capped; each state's allotment is specified in
    federal statute. Allotments of federal DSH matching funds to
    all states totaled $11.3 billion in FY 2009.
                Proposed Law
        The bill would require the Secretary of HHS to reduce
    federal Medicaid matching payments to states for Medicaid DSH
    by a total of $10 billion over three years: $1.5 billion in
    FY2017, $2.5 billion in FY2018, and $6.0 billion in FY2019.
    This reduction in federal payments would be carried out through
    a DSH Health Reform methodology issued by the Secretary. This
    methodology would impose the largest percentage reductions in
    federal DSH payments on states with the lowest percentages of
    uninsured individuals (determined on the basis of audited
    hospital cost reports) during the most recent year for which
    such data are available and on states that do not target their
    DSH payments on hospitals with high volumes of Medicaid
    inpatients and hospitals that have high amounts of
    uncompensated care (excluding bad debt).
        To give the Congress an opportunity to review the
    Secretary's DSH Health Reform methodology prior to its
    implementation, the bill would require the Secretary to submit
    a report to Congress not later than January 1, 2016, nine
    months before the beginning of FY 2017. The report would
    specify the DSH Health Reform methodology. The bill would also
    require the Secretary to publish a notice in the Federal
    Register setting forth the state-specific DSH allotment (as
    determined by the DSH Health Reform methodology) for FY 2017 by
    January 1, 2016. Similar notices would be required by January
    1, 2017 for the FY 2018 DSH allotments, and by January 1, 2018
    for the FY 2019 DSH allotments. The timing of these reports is
    designed to give the Congress nine months to review the
    proposed allotments for a coming fiscal year and to take any
    needed corrective action before the reductions are implemented.
        The Secretary's report would also discuss the extent to
    which there is a continued role for Medicaid DSH payments in
    light of the effectiveness of the health reforms carried out
    under the bill in reducing the number of uninsured individuals.
    The report would also include recommendations regarding (1) the
    appropriate targeting of Medicaid DSH payments within states
    and (2) the distribution of Medicaid DSH payments among states,
    taking into account the ratio of the amount of DSH funds
    allocated to a state to the number of uninsured individuals in
    such states. In preparing the report, the Secretary would be
    required to consult with community-based health care networks
    serving low-income beneficiaries. The Secretary would also be
    required to coordinate this report with the report on Medicare
    DSH required under section 1112 of the bill (described above).
        Finally, the bill would clarify that a hospital may not be
    defined or deemed to be a Medicaid DSH hospital or an Essential
    Access Hospital, and may therefore not receive Medicaid DSH
    payments for which there is federal matching, unless the
    hospital meets the following requirements: first, the hospital
    must ensure that services in its facilities are provided to
    Medicaid beneficiaries without discrimination on the ground of
    race, color, national origin, creed, source of payment, status
    as a Medicaid beneficiary, or any other ground unrelated to
    such beneficiary's need for the services or the availability of
    the needed services in the hospital; and second, the hospital
    must make arrangements for, and accept, reimbursement for
    services provided to Medicaid beneficiaries. These requirements
    would apply with respect to Medicaid DSH payments made on or
    after July 1, 2010.

    Sec. 1705. Expanded outstationing

                Current Law
        State Medicaid programs must provide for the receipt and
    initial processing of Medicaid eligibility applications for
    low-income pregnant women, infants, and children under age 19
    at locations other than welfare offices. These outstation
    locations must include Medicaid disproportionate share (DSH)
    hospitals and federally-qualified health centers (FQHCs). State
    eligibility workers assigned to outstation locations perform
    initial processing of Medicaid applications including assisting
    applicants in completing the application, providing information
    and referrals, obtaining required documentation to complete
    processing of the application, ensuring that the information
    contained on the application form is complete, and conducting
    any necessary interviews. States must also use applications
    which are other than those used for aid under Temporary
    Assistance for Needy Families (TANF).
                Proposed Law
        There is evidence that the availability of outstation
    locations for submitting applications facilitates Medicaid
    enrollment by eligible individuals. In order to reduce the
    number of individuals who are eligible for Medicaid but not
    enrolled, the bill would require that state Medicaid programs
    provide for the receipt and initial processing of Medicaid
    eligibility applications at outstation locations by all
    applicants, not just low-income pregnant women, infants, or
    children under age 19. This requirement would generally be
    effective July 1, 2010, whether or not final implementing
    regulations are issued.
        Low-income individuals who are not eligible for Medicaid
    but are eligible for affordability credits in the Exchange may
    receive health services at Medicaid DSH hospitals, FQHCs, or
    other outstation locations. In order to facilitate receipt of
    affordability credits by these individuals, the bill would
    require state Medicaid programs to allow individuals to apply
    for affordability credits through these same outstation
    locations. The details of this outstation application process
    would be set forth in the Medicaid memorandum of understanding
    between each state Medicaid agency and the Commissioner of the
    Health Insurance Exchange under section 1702(a) of the bill.

                             Subtitle B--Prevention

    Sec. 1711. Required coverage of preventive services

                Current Law
        States that elect to participate in Medicaid and receive
    federal matching funds must cover certain ``mandatory'' items
    and services. In addition, states may receive federal matching
    funds for the costs of covering certain ``optional'' items and
    services. In the case of eligible children under age 21, states
    must cover Early and Periodic Screening, Diagnostic, and
    Treatment (EPSDT) services, which include a range of preventive
    services for children. States may not impose copayments or
    other cost-sharing on preventive services provided to children
    under age 18 regardless of family income.
        In the case of eligible adults, states may cover preventive
    services, and they may impose cost-sharing on such services for
    adults with incomes above 100% of the Federal Poverty Level.
    For adults with family income between 100 and 150% of FPL,
    cost-sharing cannot exceed 10% of the cost of the item or
    service. For adults with family income above 150% of FPL, cost-
    sharing cannot exceed 20% of the cost of the item or service.
    States may allow providers to withhold services from
    beneficiaries who do not pay their required cost-sharing
    amounts.
        The U.S. Preventive Services Task Force (USPSTF) reviews
    the scientific evidence related to the effectiveness,
    appropriateness, and cost-effectiveness of clinical preventive
    services and issues recommendations to primary care clinicians
    for the provision of services in their practices. The
    recommendations are assigned one of five letter grades. Grade A
    means there is a high certainty that the net benefit is
    substantial. An example is screening all pregnant women for
    tobacco use and providing augmented pregnancy-tailored
    counseling to those who smoke. Grade B means there is high
    certainty that the net benefit is moderate or there is moderate
    certainty that the net benefit is moderate to substantial. An
    example is screening mammography, with or without clinical
    breast examination, every 1-2 years for women aged 40 and
    older. In both Grade A and Grade B recommendations, the USPSTF
    recommends that the clinician offer or provide the service.
                Proposed Law
        The bill would require state Medicaid programs to cover
    preventive services that are not otherwise covered through the
    EPSDT benefit for children under 21 and that the Secretary
    determines are (1) recommended with a grade of A or B by the
    Task Force on Clinical Preventive Services or are vaccines
    recommended by the Director of the Centers for Disease Control
    and Prevention, and (2) appropriate for Medicaid beneficiaries.
    The Task Force for Clinical Preventive Services is the
    statutory successor to the USPSTF established by section
    2301(a) of the bill.
        In order to promote the use of these evidence-based
    clinical services, the bill would prohibit state Medicaid
    programs from imposing any cost-sharing on a preventive
    service, regardless of the family income of the beneficiary.
    Both the requirement for the coverage of preventive services
    and the prohibition against the imposition of cost-sharing on
    such services would take effect July 1, 2010, except in cases
    where the Secretary determines that a state must enact
    legislation in order to amend its state Medicaid plan.
        The bill makes two conforming amendments. It clarifies that
    vaccines covered under the Vaccines for Children (VFC) program
    are those recommended by the CDC Director, rather than an
    advisory committee to the Director. It also strikes the current
    law provision that terminates the VFC program in the event that
    federal law provides for immunization services for all children
    as part of a broad-based reform of the national health care
    system.

    Sec. 1712. Tobacco cessation

                Current Law
        State Medicaid programs may cover prescription drugs. If a
    state Medicaid program elects to do so, as all currently do,
    the state must cover prescription drugs approved by the Food
    and Drug Administration (FDA). States may, however, exclude
    certain classes of FDA-approved drugs from coverage altogether.
    One of these excludable classes is agents when used to promote
    smoking cessation.
                Proposed Law
        The bill would remove agents approved by the FDA for
    purposes of promoting tobacco cessation from the list of
    excludable drugs. Thus, state Medicaid programs that cover
    prescription drugs would be required to cover these products,
    when they are used to promote tobacco cessation. This
    requirement would take effect with respect to drugs and
    services furnished January 1, 2010.

    Sec. 1713. Optional coverage of nurse home visitation services

                Current Law
        Nurse home visitation programs involve registered nurses
    making home visits to low-income, first-time mothers, starting
    during pregnancy and continuing through the child's second
    birthday. The nurses work with the mothers on healthy behaviors
    to improve pregnancy outcomes, parenting skills to improve
    child health and development, and plans for the mother's life.
    Visits are initially weekly, then monthly. There is strong
    research evidence from rigorous random-assignment evaluations
    that these programs improve the health of pregnant mothers,
    reduce emergency room visits, reduce rates of child abuse and
    neglect, and improve school achievement.
        The Medicaid statute does not expressly recognize nurse
    home visitation programs as an optional service. It does,
    however, allow states to cover care coordination or case
    management services that include some of the elements of
    effective nurse home visitation programs. For example, states
    may cover case management services that are targeted to
    specific groups of beneficiaries, such as first-time pregnant
    mothers, and that assist Medicaid-eligible women gain access to
    needed medical, social, educational, and other services.
    Effective nurse home visitation programs involve more than case
    management, however.
                Proposed Law
        The bill would give states the option of covering nurse
    home visitation services at the state's regular matching rate
    beginning on January 1, 2010. The bill defines these services
    as home visits by trained nurses to families with first-time
    pregnant women or a child under age 2, either of whom is
    eligible for Medicaid.
        The content and frequency of the home visitation services
    would be determined by the Secretary based upon evidence that
    the services are effective in one or more of the following
    areas: (1) improving maternal or child health and pregnancy
    outcomes or increasing birth intervals between pregnancies; (2)
    reducing the incidence of child abuse, neglect, and injury,
    improving family stability (including reduction in the
    incidence of intimate partner violence), or reducing maternal
    and child involvement in the criminal justice system; and (3)
    increasing economic self-sufficiency, employment advancement,
    school-readiness, and educational achievement, or reducing
    dependence on public assistance. The Secretary is not required
    to implement this provision by regulation, but may instead
    provide administrative guidance in the form of a letter to
    state Medicaid Directors.
        The bill clarifies that this new state option does not
    alter any current authority in Medicaid or the Child Health
    Insurance Program (CHIP) that enables states to use federal
    matching funds, whether for services or administrative
    activities, to help cover the cost of nurse home visitation
    services for eligible women or children.

    Sec. 1714. State eligibility option for family planning services

                Current Law
        States are required to extend Medicaid coverage to pregnant
    women with family incomes up to 133% of the federal poverty
    level ($14,400 for an individual in 2009). States have the
    option of covering pregnant women with incomes above 133% FPL.
    Coverage is limited to services related to pregnancy (including
    prenatal, delivery, postpartum, and family planning services)
    and to other conditions that may complicate pregnancy and
    extends for 60 days post-partum. In most states, after the 60-
    day post-partum period ends, the mother generally loses her
    Medicaid eligibility because the income eligibility levels for
    parents are lower than 133% of FPL (or higher in those states
    that have raised their eligibility levels).
        Under section 1115 of the Social Security Act, the
    Secretary of HHS has the authority to grant waivers to states
    to enable them to use federal Medicaid funds for populations
    not otherwise eligible. As of 2009, the Secretary had granted
    section 1115 waivers under section 1115 to 27 states to enable
    them to extend coverage for family planning services and
    supplies to low-income women who are not pregnant and are not
    otherwise eligible for Medicaid. In some cases, the waivers
    cover women who would otherwise lose coverage post-partum, in
    other women who have not been previously eligible for Medicaid.
    Many of these waivers have been successful in reducing the
    incidence of unwanted births and improving the health of low-
    income women. The Congressional Budget Office has estimated
    that requiring states to cover family planning services for all
    women between the ages of 15 and 44 with family incomes up to
    200% of FPL would save the federal government $160 million over
    10 years.
                Proposed Law
        The bill would give states the option of extending coverage
    for family planning services and supplies to individuals who
    are not pregnant and whose income does not exceed an income
    eligibility level set by the state that is no higher than the
    highest income eligibility level in the state for pregnant
    women (either under the state's Medicaid or CHIP program). This
    would enable state Medicaid programs to cover family planning
    services and supplies for any individual who would be eligible
    for Medicaid coverage of pregnancy-related care. In determining
    income, the state could, at its option, consider only the
    income of the applicant or beneficiary and disregard the income
    of any family members. The state would not have authority to
    impose a resource or assets test or to prohibit participation
    of any otherwise eligible individual who has individual or
    group health insurance coverage that does not cover family
    planning services and supplies.
        For purposes of this option, family planning services and
    supplies would include medical diagnosis and treatment services
    provided pursuant to a family planning services in a family
    planning setting (including, at state option, testing and
    treatment of sexually transmitted infections). As under current
    law, the federal matching rate for the costs of family planning
    services and supplies would be 90%. The federal matching rate
    for the cost of the medical diagnosis and treatment services
    provided pursuant to a family planning service would be the
    state's regular FMAP. The new option would be effective on
    enactment. The Secretary would not be required to issue
    regulations to implement the provision.
        The bill does not require states to discontinue their
    current section 1115 family planning waivers, nor does it
    prohibit the Secretary from renewing existing waivers or
    granting new ones. The bill facilitates the conversion of
    existing waivers into a state plan amendment under this new
    option by allowing states to do so without modifying their
    existing eligibility policies. Specifically, the bill gives a
    state the ability to continue to use eligibility standards and
    processes, including application procedures and practices, that
    were operational under the state's waiver on or before January
    1, 2007.
        The bill would give states a related option of extending
    coverage for family planning services and supplies to
    presumptively eligible individuals for a limited period of time
    during which the Medicaid application is being processed. The
    purpose of this option is to avoid any delay in the provision
    of services to women at risk of unwanted pregnancy. Under this
    option, the state may designate qualified entities, including
    family planning providers, to accept (and assist an individual
    in filing) applications for coverage, and to make a
    determination that an individual is presumptively eligible for
    Medicaid under the new family planning option. The presumptive
    eligibility period ends when the state Medicaid agency makes an
    eligibility determination with respect to the applicant or (in
    the case of an individual who does not file a timely
    application) the end of the month following the month in which
    the qualified entity made the determination of presumptive
    eligibility, whichever comes first.
        The bill clarifies that, in the case of a state that elects
    the option to provide benchmark or benchmark-equivalent
    coverage under section 1937 of the Social Security Act, the
    coverage must include payment for family planning services and
    supplies for all Medicaid beneficiaries of child-bearing age
    who seek such services and supplies. This requirement applies
    to states that currently offer benchmark or benchmark-
    equivalent coverage under approved state plans as well as
    states that elect to do so in the future.

                               Subtitle C--Access

    Sec. 1721. Payments to primary care practitioners

                Current Law
        State Medicaid programs are required to cover physicians'
    services, but they have flexibility in determining the amounts
    that physicians will be paid for those services either on a
    fee-for-service basis or in managed care organization networks.
    Current law requires that state Medicaid plans provide methods
    and procedures to assure that payments are consistent with
    efficiency, economy, and quality of care and are sufficient to
    enlist enough providers so that care and services are available
    promptly and at least to the extent that such care and services
    are available to the general population in the geographic area.
        There is wide variation in Medicaid fee-for-service payment
    rates for physicians' services from state to state. In 2008,
    state payment rates for physicians' services averaged 72% of
    Medicare's payment rates. In the case of primary care services
    furnished by physicians, Medicaid payment rates averaged 66% of
    Medicare rates, with one state as low as 36% and one as high as
    140%. These low Medicaid payment rates do not provide adequate
    incentives for physicians to participate in Medicaid, limiting
    access to physicians' services by Medicaid beneficiaries. In
    addition, low Medicaid payment rates discourage young
    physicians and other health professionals from entering careers
    in primary care, undermining efforts to address the shortage of
    primary care practitioners in many areas of the country.
                Proposed Law
        The bill would require state Medicaid programs to pay for
    primary care services furnished by physicians at a rate that is
    not less than (1) 80% of the payment rate under Medicare's
    physician fee schedule for services furnished in 2010, (2) 90%
    of such rate for services furnished in 2011, and (3) 100% of
    such rate for services furnished in 2012 and subsequent years.
    States would continue to have the flexibility to pay for
    primary care services (or other physicians' services) at rates
    higher than Medicare.
        The same minimum rate requirement would also apply to
    services furnished by other health care professionals that
    would be primary care services if furnished by a physician. In
    such cases, the Medicare rate would be the rate applicable to
    the health professional, not to the physician.
        This minimum rate requirement would apply to payments for
    primary care services furnished by any participating physician
    or health professional, not just a primary care physician or
    professional such as a pediatrician or nurse practitioner.
    Thus, the requirement would apply to payments for primary care
    services furnished to a Medicaid beneficiary by a specialist or
    sub-specialist, but not to non-primary care services furnished
    by that specialist or sub-specialist.
        Primary care services would be defined as evaluation and
    management services under section 1848(j)(5)(A)(i) of the
    Social Security Act (as added by section 1121(d) of the bill).
    These are services in the category designated Evaluation and
    Management in the Health Care Common Procedure Coding System as
    established and periodically modified by the Secretary of HHS.
        This minimum rate requirement would apply whether a
    physician or health professional is furnishing services to
    Medicaid beneficiaries on a fee-for-service basis, as a primary
    care case manager, or as a member of the network of a Medicaid
    managed care organization (MCO). Medicaid MCOs would be
    required to pay physicians and other health professionals
    (whether in or out of network) for primary care services at
    rates no lower than the minimum rates specified above. In the
    case of MCOs that use compensation arrangements with network
    physicians and health professionals that are not based on fee-
    for-service, such as capitation or partial capitation, the
    compensation would have to be at least the same as the
    compensation the physician or health professional would receive
    were payment to be made on a fee-for-service basis.
        This minimum rate requirement is effective for primary care
    services furnished on or after January 1, 2010. Initially, the
    federal government will finance all of the cost attributable to
    this new requirement. Specifically, for services furnished
    through December 31, 2014, the federal government will pay 100%
    of the increased cost. For services furnished after that date,
    the federal government will pay 90% of the increased cost.
        The cost attributable to this requirement is the amount by
    which the minimum payment rate for a primary care service
    exceeds the payment rate applicable to the service for the
    physician or other health professional (as the case may be)
    under a state's Medicaid program as in effect on June 16, 2009.
        The following hypothetical example illustrates this policy.
    Assume that the Medicare rate for a primary care office visit
    for an established patient in 2012 in the state (or locality)
    will be $70 and that the Medicaid payment in that state (or
    locality) in 2009 for that visit was two thirds of the $60
    Medicare rate in 2009, or $40. Also assume that the state's
    regular federal matching rate is 50% in both years. The minimum
    Medicaid rate the state is required to pay in 2012 is 100% of
    the Medicare rate. Thus, the physician would receive $70 for
    the office visit. Of this amount, the federal government would
    pay $50 (50% of $40, or $20, plus 100% of the $30 difference
    between the 2009 amount and the 2012 Medicare rate, or $30).
    The state would pay $20--the same amount it would have paid had
    its Medicaid rate remained unchanged at $40 per visit between
    2009 and 2012.
        If the state chose to pay the physician more for a service
    than the Medicare rate, the state's regular federal matching
    rate would apply to the costs attributable to amounts above the
    Medicare rate. In the above example, if the state's rate in
    2012 for the primary care visit was $80, the state would pay
    half of the $10 increase above the Medicare rate of $70, and
    the federal government the other half. In total, the federal
    government would pay $55, and the state $25.

    1722. Medical home pilot program

                Current Law
        There is no single definition of medical home. In the
    context of Medicaid, the term has been used to refer to a model
    of primary care in which teams of physicians and other health
    professionals provide comprehensive and coordinated patient-
    centered care for which they are adequately reimbursed. The
    concept of a medical home is not recognized in the Medicaid
    statute, and the federal government currently does not operate
    national or regional medical home demonstrations or pilots
    under Medicaid. The Medicaid Transformation Grants authorized
    by section 1903(z) of the Social Security Act for FY 2007 and
    FY 2008 were used by eight states to provide funding to develop
    information technology infrastructure for medical home
    programs. According to the National Academy of state Health
    Policy, as of June 2009, 31 states were operating medical home
    programs for one or more groups of Medicaid or CHIP
    beneficiaries, often with state funding only.
                Proposed Law
        The bill would require the Secretary of Health and Human
    Services to establish a 5-year medical home pilot program for
    the Medicaid program. This program would parallel (and be
    coordinated with) the Medicare medical home pilot authorized by
    section 1302 of the bill. The program would provide care for
    ``high need'' Medicaid beneficiaries (including medically
    fragile children and high-risk pregnant women). It would apply
    one or more of the models under the Medicare medical home
    pilot: the independent patient-centered medical home model
    described in section 1866F(c) of the Social Security Act and
    the community-based medical home model described in section
    1866F(d)). The pilot could also include a test of other models
    the Secretary approves.
        The bill authorizes higher federal matching rates for the
    administrative costs incurred by states in operating these
    pilots, such as the costs of community care workers. The higher
    rates could reach 90% for the first two years, then 75% of the
    last three. Total additional federal funding for these
    administrative expenditures could not exceed $1.235 billion
    over the five year period of the program. States with pilot
    programs approved by the Secretary would be eligible to receive
    these higher administrative matching rates regardless of
    whether they were operating a medical home program prior to the
    establishment of this pilot program.
        The bill authorizes the Secretary to waive the Medicaid
    statutory requirements of statewideness and comparability in
    order to facilitate these pilot programs. The bill does not
    authorize the Secretary to waive any other Medicaid statutory
    requirements, such as freedom of choice of provider.
        In the case of a model involving medically fragile
    children, the bill would require the Secretary to ensure that
    the patient-centered medical home services received by each
    child provide for continuous involvement and education of the
    parent or caregiver and for assistance to the child in
    obtaining necessary transitional care if a child's enrollment
    ceases for any reason.
        The bill directs the Secretary to conduct an evaluation of
    the pilot program using the criteria specified for purposes of
    the Medicare medical home pilot under section 1866F(e)(1) of
    the Social Security Act and to report the findings to Congress
    and the public.

    Sec. 1723. Translation or interpretation services

                Current Law
        Section 201(b)(2)(A) of the Children's Health Insurance
    Program Reauthorization Act of 2009 (CHIPRA, P.L. 111-3)
    established a 75% federal matching rate for the cost to state
    Medicaid programs of providing language translation or
    interpretation services in connection with the enrollment and
    retention of, and use of services by, children of families for
    whom English is not the primary language.
                Proposed Law
        The bill would extend the 75% federal matching rate for the
    cost of providing language translation or interpretation
    services to all individuals for whom English is not the primary
    language. Allowable costs would include those found necessary
    by the Secretary for services to facilitate the enrollment and
    retention of individuals eligible for Medicaid as well as for
    services to promote access to covered health and long-term care
    services and to address language barriers to the appropriate
    delivery of those services. The provision would take effect
    January 1, 2010; the Secretary would not be required to issue
    implementing regulations.

    Sec. 1724. Optional coverage for freestanding birth center services

                Current Law
        Medicaid pays for more than one in three births in the
    United States. One option other than a hospital birth or a
    homebirth is a freestanding birth center. State Medicaid
    programs have the option of covering clinic services furnished
    by or under the direction of a physician and receiving federal
    matching funds for those costs. However, there is no provision
    in the Medicaid statute that authorizes federal Medicaid
    matching funds for direct payments to freestanding birth
    centers not operated by a physician for providing services to
    eligible pregnant women.
                Proposed Law
        The bill would give state Medicaid programs the option of
    covering freestanding birth center services and other
    ambulatory services offered by a freestanding birth center that
    are otherwise covered under the state Medicaid plan at the
    state's regular federal matching rate. Freestanding birth
    center services are defined as services furnished to an
    individual at a freestanding birth center, including services
    furnished by a licensed birth attendant at the center. A
    freestanding birth center is defined as a health facility that
    is not a hospital and where childbirth is planned to occur away
    from the pregnant woman's residence. A licensed birth attendant
    is defined as an individual who is licensed or registered by
    the state to provide health care at childbirth and who provides
    such care which the individual is legally authorized to perform
    under state law (or 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. This provision would apply to items and services
    furnished on or after the date of enactment; the Secretary
    would not be required to issue regulations to implement this
    option.

    Sec. 1725. Inclusion of public health clinics under the vaccines for
            children program

                Current Law
        Under the Vaccines for Children (VFC) program, Medicaid
    pays the costs of recommended vaccinations for certain low-
    income children. Children who are eligible for vaccines under
    the program--``federally vaccine-eligible children''--include
    children who receive vaccines purchased through the program and
    administered at a federally qualified health center (FQHC) or
    rural health clinic (RHC) and are not insured with respect to
    vaccines.
                Proposed Law
        The bill would expand the definition of federally-vaccine
    eligible children to include children who are not insured with
    respect to a recommended vaccine and are administered the
    vaccine at a public health clinic. The purpose of this change
    is to improve access by low-income children to recommended
    vaccines by expanding the locations at which recommended
    vaccines can be administered to include health clinics operated
    by state or local health departments or hospitals. The
    provision is effective on enactment; the Secretary would not be
    required to issue regulations in order to implement this
    change.

    Sec. 1726. Requiring coverage of services of podiatrists

                Current Law
        State Medicaid programs are required to cover physicians'
    services furnished by a physician as the term ``physician''
    defined in section 1861(r)(1) of the Social Security Act (i.e.,
    a doctor of medicine or osteopathy). The Medicare definition of
    physician at section 1861(r)(3) includes a doctor of podiatric
    medicine, but this does not apply to the Medicaid coverage
    requirement. State Medicaid programs may, however, cover
    podiatry services at their option.
                Proposed Law
        The bill would require state Medicaid programs to cover
    physicians' services furnished by a doctor of podiatric
    medicine with respect to functions he or she is legally
    authorized to perform under state law. This requirement would
    apply to services furnished on or after January 1, 2010, unless
    the Secretary determines that state legislation (other than for
    appropriations) is needed in order for the state Medicaid plan
    to meet the additional requirements of this section. In this
    case the requirement would apply the first day of the first
    calendar quarter after the close of the first regular session
    of the state legislature after enactment.

    Sec. 1726A. Requiring coverage of services of optometrists

                Current Law
        State Medicaid programs have the option of covering
    services furnished by optometrists within their scope of
    practice under state law. States may also cover eyeglasses
    prescribed by an optometrist.
                Proposed Law
        The bill would require state Medicaid programs to cover
    medical and other health services authorized by state law to be
    furnished by optometrists to the extent that the services may
    legally be furnished by an optometrist under state law. An
    optometrist is defined as a doctor of optometry. This
    requirement would apply to services furnished, or other actions
    required, on or after 90 days after enactment, unless the
    Secretary determines that state legislation (other than for
    appropriations) is needed in order for the State Medicaid plan
    to meet the additional requirements of this section. In this
    case the requirement would apply the first day of the first
    calendar quarter after the close of the first regular session
    of the state legislature after enactment.

    Sec. 1727. Therapeutic foster care

                Current Law
        In general, therapeutic foster care programs place children
    and adolescents who have serious emotional and behavioral
    problems with specially trained foster families. Some State
    Medicaid programs have elected to cover therapeutic foster care
    under the optional rehabilitative services benefit.
        In August 2007, the Centers for Medicare & Medicaid
    Services published a proposed rule amending the definition of
    rehabilitative services to exclude therapeutic foster care
    services furnished by foster care providers to children, except
    for medically necessary rehabilitation services that are
    clearly distinct from packaged therapeutic foster care
    services, 72 Federal Register at 45212 (August 13, 2007). The
    Congress imposed a series of moratoria on the implementation of
    this proposed rule through April 1, 2009. Section 5003(d)(3) of
    the American Recovery and Reinvestment Act of 2009 (P.L. 111-5)
    states a Sense of the Congress that the Secretary should not
    promulgate the August 13, 2007 proposed rule as a final rule.
                Proposed Law
        The bill would clarify that nothing in the federal Medicaid
    statute prevents or limits a state Medicaid program from
    covering therapeutic foster care for eligible children in out-
    of-home placements under the rehabilitative services option.
    Therapeutic foster care is defined as a foster care program
    that provides certain services to eligible children and to
    foster parents. For children, those services are: (1)
    structured daily activities that develop, improve, monitor, and
    reinforce age-appropriate social, communications, and
    behavioral skills; (2) crisis intervention and crisis support
    services; (3) medication monitoring; (4) counseling; and (5)
    case management services. For foster parents, those services
    are specialized training and consultation on the management of
    children with mental illnesses and related health and
    developmental problems.

    Sec. 1728. Assuring adequate payment levels for services

                Current Law
        In general, state Medicaid programs have flexibility to
    determine the rates they pay to providers for furnishing
    covered services to eligible individuals. This flexibility is
    bounded by federal statutory requirements. One of these is
    sometimes referred to as the ``equal access'' requirement.
    Specifically, state Medicaid programs must provide methods and
    procedures relating to payment for care and services as may be
    necessary to assure that payments are sufficient to enlist
    enough providers so that care and services are promptly
    available to Medicaid beneficiaries at least to the extent that
    such care and services are available to the general population
    in the geographic area. The Committee heard testimony that
    beneficiary access to covered services has in some states been
    compromised by limited provider participation due to low
    Medicaid payment rates.
                Proposed Law
        The bill would establish a procedure for monitoring and
    enforcing compliance with this equal access requirement. Each
    state would be required to submit to CMS a state Medicaid plan
    amendment that specifies the payment rates the state intends to
    use to pay providers (including facilities and practitioners)
    and managed care organizations for the services it covers in
    the coming year, along with data that will enable the Secretary
    to evaluate the state's compliance with the equal access
    requirement. Such additional data would include how payments to
    Medicaid managed care organizations take into account payment
    rates to providers under the state Medicaid plan.
        The state plan amendment would be due by April 1 prior to
    the year to which the payment rates apply. The Secretary would
    be required to review the state plan amendment within 90 days
    of submission and approve or disapprove it. If the Secretary
    disapproves the amendment, the state would be required to
    submit immediately a revised amendment that brings it into
    compliance with the requirement. The provision is effective on
    enactment; the first year to which this requirement applies
    would be 2011.

    Sec. 1729. Preserving Medicaid coverage for youths upon release from
            public institutions

                Current Law
        In general, federal Medicaid matching funds are not
    available for services delivered to individuals who are
    otherwise eligible for Medicaid but who are living in a public
    institution--that is, an institution that is the responsibility
    of a governmental unit or over which a governmental unit
    exercises administrative control. This includes juvenile
    correctional or residential facilities operated by states or
    localities but not medical facilities that are not linked to a
    public institution. Federal law does not require states to
    terminate Medicaid eligibility when an individual becomes an
    inmate in a public institution, but research indicates that
    many states do so. In such cases, the individual must reapply
    for Medicaid upon release from the institution, a process that
    may take several months, during which time the individual
    typically does not have a source of payment for needed medical
    or behavioral treatment.
                Proposed Law
        The bill would impose three requirements on state Medicaid
    programs with respect to youths who are age 18 or younger and
    enrolled in Medicaid at the time of being incarcerated in a
    public institution and who are age 18 or younger and eligible
    for Medicaid at the time of being released from the
    institution. First, the state Medicaid program is prohibited
    from terminating the youth's Medicaid eligibility during the
    period of incarceration. Second, during the period the youth is
    incarcerated, the state must ensure that the youth receives
    Medicaid services for which federal matching funds are
    available (the state may not claim federal matching funds for
    care or services that are excluded from coverage). Third, on or
    before the date the youth is released, the state shall ensure
    that the youth is enrolled in Medicaid so that the youth can
    access Medicaid-covered services immediately upon leaving the
    institution. The youth would remain enrolled in Medicaid until
    the state determines that he or she is no longer eligible. The
    provision is effective on enactment.

    Sec. 1730. Quality measures for maternity and adult health services
            under Medicaid and CHIP

                Current Law
        Section 401 of the Children's Health Insurance Program
    Reauthorization Act of 2009 (CHIPRA, P.L. 111-3) directs the
    Secretary of HHS to develop (1) an initial core set of health
    care quality child health quality measures for children
    enrolled in Medicaid or CHIP, (2) a standardized format for
    reporting information, and (3) procedures to encourage states
    to use the initial core measurement set to voluntarily report
    information on the quality of pediatric care in these two
    programs. There is no comparable requirement with respect to
    maternity care or services to adults purchased by Medicaid.
        Section 1442 of the bill would add a new section 1192 to
    the Social Security Act that directs the Secretary of HHS to
    enter into agreements with qualified entities to develop
    quality measures for the delivery of health care services in
    the U.S.
        Section 1443 of the bill would add a new section 1808(d) to
    the Social Security Act that sets forth a process for multi-
    stakeholder pre-rulemaking input into the selection of quality
    measures.
                Proposed Law
        The bill would require the Secretary of HHS to develop and
    publish for comment no later than January 1, 2011, a proposed
    set of measures on the quality of maternity care provided under
    both Medicaid and CHIP. The bill would require that the final
    recommended set of maternity care quality measures be published
    no later than July 1, 2011. No later than January 1, 2012, the
    Secretary would be required to develop and publish a
    standardized reporting format for maternity care quality
    measures for use by state Medicaid and CHIP programs to collect
    data from participating managed care entities, providers, and
    practitioners, and to report such measures to the Secretary.
        The bill would require the Secretary to develop quality
    measures that are not otherwise developed under the section
    1192 program established by section 1442 of the bill for
    services purchased by state Medicaid programs for non-elderly
    adults (individuals between the ages of 21 and 64). The
    Secretary would be required to publish such quality measures
    through notice and comment rulemaking. The Secretary would also
    be required to develop and publish a standardized reporting
    format for these quality measures (and for those developed
    under section 1192) for services purchased by state Medicaid
    programs for non-elderly adults. The reporting format must
    enable state administering agencies to collect data from
    participating managed care entities, providers and
    practitioners, and to report such measures to the Secretary.
        The bill sets forth certain requirements with respect to
    the development of these quality measures and reporting
    formats. The Secretary would be authorized (but not required)
    to enter into agreements (by contract, grant or otherwise) with
    public, non-profit or academic institutions with technical
    expertise in health quality measurement to assist in the
    development of these measures and reporting formats. The
    Secretary would be required to obtain the input of stakeholders
    with respect to such quality measures using a process similar
    to that described in new section 1808(d) of the Social Security
    Act as added by section 1143 of the bill. Finally, the bill
    directs the Secretary to coordinate the development of these
    maternity and adult care quality measures with the development
    of child health quality measures.
        To enable the Secretary to carry out these requirements,
    the bill appropriates a total of $40 million for the five-year
    period beginning in FY 2010. These funds would remain available
    until expended.
        The bill directs the Secretary to report annually to the
    Committee on Energy and Commerce and the Senate Finance
    Committee regarding (1) the availability of reliable data
    relating to quality of maternity care provided under the
    Medicaid and CHIP programs, (2) the availability of reliable
    data relating to quality of services provided under Medicaid
    and CHIP programs to adults ages 21 to 64, and (3)
    recommendations for improving the quality of such care and
    services furnished under Medicaid and CHIP. The first report
    would be due January 1, 2013.
        The bill provides that no quality measure developed,
    published or used as a basis of measurement or reporting under
    this section may be used to establish an irrefutable
    presumption regarding either the medical necessity of care or
    the maximum permissible coverage for an individual who is
    receives services under Medicaid or CHIP.

    Sec. 1730A. Accountable care organization pilot program

                Current Law
        Section 1301 of the bill would establish an accountable
    care organization (ACO) pilot program to test different payment
    incentive models to reduce the growth of expenditures and
    improve health outcomes for Medicare beneficiaries. These
    models are intended to promote accountability for a patient
    population, to encourage investment in infrastructure and
    redesigned care processes, and to reward physicians for the
    provision of high quality services and for efficient service
    delivery. The models to be tested are the performance target
    model, the partial capitation model, and other payment models
    developed by the Secretary. There is no provision in current
    Medicaid law for an ACO pilot program.
                Proposed Law
        The bill would require the Secretary of HHS to establish a
    5-year ACO pilot program under Medicaid that applies one or
    more of the payment incentive models tested under the Medicare
    ACO pilot program established under section 1301 of the bill.
    States could apply for approval of an ACO Medicaid pilot
    program. To facilitate these pilot programs, the Secretary
    would be authorized to waive Medicaid requirements relating to
    statewideness and to comparability requirements. (The Secretary
    would not have authority to waive other federal Medicaid
    requirements). The Secretary would also be authorized to
    increase the matching percentages for administrative costs
    incurred by a state in connection the an ACO pilot program from
    the regular 50% matching rate up to 90% for the first two years
    and up to 75% for the next three years.
        The Secretary would be required to evaluate the impact of
    the Medicaid ACO pilot program on beneficiaries, providers, and
    the Medicaid program itself using the same criteria she uses to
    evaluate the Medicare ACO pilot program under section 1301 of
    the bill. The Secretary would be required to submit a report on
    her findings to the Congress within 60 days after completion of
    the evaluation and to make her findings available to the
    public.

                              Subtitle D--Coverage

    Sec. 1731. Optional Medicaid coverage of low-income HIV-infected
            individuals

                Current Law
        With some exceptions, the federal Medicaid statute requires
    state Medicaid programs to cover certain persons with
    disabilities and certain persons age 65 and over who meet the
    income and resources criteria under the Supplemental Security
    Income (SSI) program. In 2009, the income threshold for the
    SSI-related Medicaid eligibility group is $674 per month for an
    individual and $1,011 per month for a couple, and the resources
    threshold is $2,000 for an individual and $3,000 for a couple.
    States are also required to continue Medicaid coverage for
    certain working disabled individuals under age 65 who were
    eligible for SSI and but for their earnings would continue to
    be eligible for SSI. States have the option to allow applicants
    with higher amounts of countable income and assets qualify for
    Medicaid.
        Low-income individuals with HIV infection do not meet the
    SSI standard for disability unless their HIV infection has
    progressed to full AIDS. However, individuals with HIV
    infection may be found to be presumptively disabled if they are
    able to document one or more of a specified listing of
    opportunistic infections, cancers, or conditions. Individuals
    who do not have one of the listed conditions will be unable to
    qualify for Medicaid unless they are able to qualify through
    another category--for example, they are a child under 19 or a
    parent with a dependent child or an individual 65 or over. If
    low-income people with HIV were eligible, Medicaid, which
    generally covers physician and diagnostic services and
    prescription drugs, could help them forestall the progressive
    collapse of their immune system, contracting these conditions,
    or progressing to full AIDS.
        The federal government's share of the costs of most
    Medicaid services is determined by the federal medical
    assistance percentage (FMAP), which varies by state and ranges
    from at least 50% to no more than 83%. A state's share of
    program expenditures is equal to 100% minus its FMAP. States
    that elect to cover Medicaid services for uninsured women
    diagnosed with breast and/or cervical cancer receive an
    enhanced FMAP for the costs of such benefits in which a state's
    share of expenditures is 30% lower than under the regular FMAP
    (e.g., a state with a 50% regular FMAP would receive a 65%
    federal match).
        For the 50 states and the District of Columbia there are no
    limits on federal matching payments for allowable costs
    incurred in operating their Medicaid programs. Medicaid
    programs in the five territories (American Samoa, Guam, the
    Northern Mariana Islands, Puerto Rico, and the Virgin Islands)
    are subject to annual ceilings on federal Medicaid matching
    funds.
                Proposed Law
        The bill would allow states (including the territories) to
    extend Medicaid coverage to individuals who have HIV infection
    with income and resources levels that do not exceed the maximum
    income and resource levels allowed for the state's SSI-related
    Medicaid eligibility groups. These individuals would not have
    to establish presumptive disability or disability for SSI
    purposes. The federal government's share of expenditures for
    this new eligibility group would be determined by the enhanced
    FMAP applicable to the costs of treatment for uninsured women
    diagnosed with breast and/or cervical cancer. The expenditures
    incurred by the territories in covering this eligibility group
    would be matched at the enhanced FMAP without regard to their
    federal Medicaid spending ceilings.
        The provision would apply to calendar quarters beginning on
    or after the date of enactment without regard to whether or not
    final regulations to carry out such amendments have been
    promulgated by such date. Federal Medicaid matching funds would
    not be available for items or services furnished to such
    individuals on or after January 1, 2013, the date on which
    state Medicaid programs will be required to cover all
    individuals with incomes at or below 133% of the federal
    poverty level and the Health Insurance Exchange established by
    the bill would take effect. At that point, depending on their
    incomes, low-income individuals with HIV would be able to
    obtain coverage for physician and diagnostic services and
    prescription drugs either through Medicaid or through the
    Exchange (with financial assistance for the cost of premiums in
    the case of those with incomes below 400% of the federal
    poverty level).

    Sec. 1732. Extending transitional Medicaid Assistance (TMA)

                Current Law
        States are required to continue Medicaid coverage for
    certain low-income families who would otherwise lose coverage
    because of increases in the numbers of hours worked or because
    of increases in earned income. The period of continuation
    extends up to 12 months so long as the family's gross monthly
    earnings (less child care costs) do not exceed 185% of the
    federal poverty level. The purpose of this transitional medical
    assistance (TMA) requirement is to promote the transition of
    low-income families from cash assistance to self-sufficiency by
    reducing the work disincentive that results from the loss of
    Medicaid coverage when the employer does not offer health
    insurance coverage, or offers coverage that the family cannot
    afford. This requirement expires on December 31, 2010.
                Proposed Law
        The bill extends the TMA requirement through December 31,
    2012. Under this extension, families who would otherwise lose
    Medicaid coverage due to increased hours or work or earnings on
    or before that day will be entitled to up to one year of
    continuation Medicaid coverage. This will protect the work
    incentives resulting from the TMA requirement while the bill's
    coverage expansions are implemented. (On January 1, 2013,
    states will be required to offer Medicaid coverage to all
    working families with incomes at or below 133% of FPL, and the
    Health Insurance Exchange will offer coverage for working
    families with incomes above that level (along with assistance
    in purchasing coverage for those with incomes below 400% of
    FPL)).

    Sec. 1733. Requirement of 12-month continuous coverage under certain
            CHIP programs

                Current Law
        Under the Children's Health Insurance Program (CHIP),
    states have three administrative options. They may enroll CHIP-
    eligible low-income children in their Medicaid programs, create
    a stand-alone CHIP program that is separate from Medicaid, or
    use a combination of both approaches.
        Regardless of administrative structure, states are required
    to redetermine eligibility of children enrolled in CHIP at
    least every 12 months. Section 104 of the Children's Health
    Insurance Program Reauthorization Act of 2009 (CHIPRA, P.L.
    111-3) establishes a program of performance bonus payments to
    states that adopt 4 of a list of 7 enrollment and retention
    provisions. One such provision is continuous eligibility for a
    full 12 months for all children under both the state's Medicaid
    and CHIP programs. This allows a child, once determined
    eligible, to remain eligible for a full 12-month period,
    regardless of any intervening change in family income.
                Proposed Law
        The bill would require separate CHIP programs (including
    such programs in states that use a combination Medicaid and
    separate CHIP approach) to implement 12 months of continuous
    eligibility for eligible children with family incomes below
    200% of the federal poverty line. This provision would apply to
    eligibility determinations and to redeterminations made on or
    after January 1, 2010, and would not require the issuance of a
    regulation by the Secretary in order to take effect.

    Sec. 1734. Preventing the application under CHIP of coverage waiting
            periods for certain children

                Current Law
        State CHIP programs are required to have procedures to
    ensure that the coverage provided under the state CHIP program
    does not substitute for coverage under group health plans. One
    anti-substitution procedure that some state CHIP programs use
    is to impose a waiting period on an otherwise eligible child
    applying for CHIP coverage. The waiting period runs for a
    specified number of months after the loss of coverage under a
    group health plan. During this period, the child, although
    eligible for CHIP coverage, is uninsured.
                Proposed Law
        The bill would prohibit state CHIP programs from applying a
    waiting period to delay the enrollment of any of the following
    children: (1) infants and toddlers under two years of age; (2)
    children who have lost health insurance coverage under a group
    health plan or health insurance coverage offered through an
    employer due to (a) termination of employment, (b) a reduction
    in work hours, (c) elimination of an individual's retiree
    health benefits, or (d) termination of an individual's health
    insurance coverage offered through an employer; or (3) children
    in families that demonstrate that the cost of health insurance
    coverage (including the cost of premiums, co-payments,
    deductibles, and other cost sharing) exceeds 10% of the
    family's income. (Family income would be determined in the same
    manner as the state determines family income for purposes of
    eligibility determinations under its CHIP program). This
    prohibition would take effect 90 days after enactment. The
    Secretary would not be required to issue regulations to
    implement this prohibition.

    Sec. 1735. Adult day health care services

                Current Law
        Adult day health care (ADHC) services are a type of long-
    term care service for elderly or disabled individuals who have
    chronic health conditions or cognitive impairments that require
    regular monitoring or treatment. ADHC services provide nursing,
    physical and occupational and speech therapy, personal care,
    dietary and meal, activities, and transportation services
    designed to enable the frail elderly and individuals with
    disabilities to remain in the community and delay entry into a
    nursing facility.
        State Medicaid programs may cover ADHC services under a
    section 1915(c) home- and community-based waiver for
    individuals who require the level of care available in a
    nursing facility. The Medicaid statute does not expressly
    recognize ADHC services as a service that states may cover at
    their option without obtaining a section 1915(c) waiver.
    However, prior to 1994, the federal government had approved
    state plan amendments authorizing 8 state Medicaid programs to
    cover ADHC services, in some cases under the statutory option
    to cover rehabilitative services.
        In August 2007, the Centers for Medicare & Medicaid
    Services published a proposed rule amending the definition of
    the optional rehabilitative services benefit, 72 Federal
    Register at 45201 (Aug. 13, 2007). One effect of this proposed
    rule would have been to disallow federal Medicaid matching
    payments for coverage of ADHC services under the rehabilitative
    services option. Congress imposed a series of moratoria on the
    implementation of this proposed rule through April 1, 2009.
    Section 5003(d)(3) of the American Recovery and Reinvestment
    Act of 2009 (P.L. 111-5) states a ``Sense of the Congress''
    that the Secretary should not promulgate the August 13, 2007,
    proposed rule as a final rule.
                Proposed Law
        The bill would prohibit the Secretary from withholding,
    suspending, disallowing, or otherwise denying federal Medicaid
    matching payments for the costs of adult day health care
    services, day activity and health services, or adult medical
    day care services, as defined under a state Medicaid plan
    approved during or before 1994, if these services are provided
    consistent with the definition in the approved state plan and
    the requirements of the plan. The bill would also prohibit the
    Secretary from withdrawing (by regulation or otherwise) federal
    approval of all or part of any such state Medicaid plan
    relating to the provision of ADHC services. This provision
    would apply to services provided on or after October 1, 2008.

    Sec. 1736. Medicaid coverage for citizens of freely associated states

                Current Law
        The Personal Responsibility and Work Opportunity
    Reconciliation Act of 1996 (PRWORA, P.L. 104-193) prohibits
    noncitizens who are not considered to be ``qualified aliens''
    (e.g., legal permanent residents, asylees, refugees) from
    receiving Medicaid benefits (other than for treatment of an
    emergency medical condition). Citizens of the Freely Associated
    States (i.e., citizens of the Republic of the Marshall Islands
    (RMI), the Federated States of Micronesia (FSM), and the
    Republic of Palau) are not included in the PRWORA definition of
    ``qualified alien'' under PRWORA and are therefore barred from
    receiving non-emergency Medicaid.
        PRWORA also bars ``qualified aliens'' arriving in the
    United States on or after August 22, 1996, from Medicaid
    coverage for the first five years after entry (other than for
    treatment of an emergency medical condition). After an
    individual's 5-year waiting period has run, states have the
    option of extending Medicaid coverage to the individual if he
    or she is otherwise eligible. Section 214 of the Children's
    Health Insurance Reauthorization Act of 2009 (CHIPRA, P. L.
    111-3) allows states to provide Medicaid and CHIP coverage to
    legal immigrant children and pregnant women notwithstanding
    this 5-year bar.
                Proposed Law
        The bill would nullify the PRWORA rules with respect to
    Medicaid coverage of individuals who lawfully reside in the
    United States (including territories and possessions of the
    United States) in accordance with the Compacts of Free
    Association between the Governments of the Federated States of
    Micronesia, the Republic of the Marshall Islands, and the
    Republic of Palau. These individuals would be defined as
    ``qualified aliens'' for purposes of receiving Medicaid
    benefits. They would not be subject to the 5-year bar, and
    states would not have discretion to deny Medicaid coverage on
    the grounds that these individuals are ``qualified aliens.'' If
    these individuals otherwise meet the eligibility requirements
    for Medicaid in the state (or territory or possession) in which
    they reside, they would be entitled to Medicaid benefits.

    Sec. 1737. Continuing requirement of Medicaid coverage of non-emergency
            transportation to medically necessary services

                Current Law
        Federal Medicaid regulations (42 CFR 431.53) require state
    Medicaid agencies to ensure necessary transportation for
    beneficiaries to and from providers, and to describe the
    methods that the agency will use to meet this requirement. The
    purpose of this requirement is to ensure access to covered
    services by low-income beneficiaries, including those in rural
    areas, who live far from their providers and have no personal
    means of transportation, as well by those beneficiaries with
    disabilities who require specialized transportation to access
    their treating providers.
        In December 2007, the Centers for Medicare & Medicaid
    Services (CMS) issued a final rule (72 Federal Register 73635,
    Dec. 28, 2007) that, among other things, modified 42 CFR 431.53
    to exclude from necessary transportation the transportation of
    school-age children between home and school. The Congress
    imposed a series of moratoria on the implementation of this
    rule through July 1, 2009. Just prior to this date, CMS
    rescinded the 2007 final rule on school-based administration
    and transportation (see 74 Federal Register 31183, June 30,
    2009) and revised 42 CFR 431.53 to delete the exclusion for
    transportation of school-aged children between home and school.
                Proposed Law
        The bill would codify non-emergency transportation to
    medically necessary services, consistent with the requirement
    of 42 CFR 431.53 as in effect as of June 1, 2008, as a
    mandatory Medicaid benefit. (On June 1, 2008, the congressional
    moratorium on the December 2007 final rule was in effect,
    nullifying the changes that rule attempted to make in 42 CFR
    431.53; thus the requirement that is being codified is the one
    in place before the December 2007 rule was issued.). The
    provision would apply to non-emergency transportation to
    medically necessary services provided on or after enactment.

    Sec. 1738. State option to disregard certain income in providing
            continued Medicaid Coverage for certain individuals with
            extremely high prescription costs

                Current Law
        State Medicaid programs have the option of extending
    coverage to ``medically needy'' individuals. These are aged or
    disabled individuals, or children and parents, whose countable
    assets are below the state's medically needy resource
    eligibility threshold and who incur high medical expenses
    which, when subtracted from their income, reduce that income to
    an amount below the State's medically needy income eligibility
    threshold.
        There is no authority in current law for state Medicaid
    programs that do not cover the medically needy to offer
    coverage to individuals with rare diseases or conditions who
    incur extremely high prescription drug expenses due to the high
    cost of the orphan drugs (as designated under section 526 of
    the Food, Drug, and Cosmetic Act (21 U.S.C. 360bb)).
                Proposed Law
        The bill gives state Medicaid programs the option of
    covering certain individuals with extremely high prescription
    drug costs attributable to an orphan drug by disregarding a
    specified amount of family income when redetermining Medicaid
    eligibility. Individuals eligible under this option would have
    to (1) have extremely high prescription drug costs and (2) be
    determined otherwise eligible for Medicaid but for family
    income. A state electing this option would be required to
    impose nominal cost-sharing on the drugs purchased by the
    individual and could, at its option, impose additional cost-
    sharing up to a maximum level specified by the Secretary. The
    state would be required to consider an individual's
    reapplication for Medicaid under this option within 30 days of
    the filing of the application.
        An individual would be considered to have extremely high
    prescription drug costs for a 12-month period if he or she: (1)
    is covered through an individual or group health insurance
    policy that has a maximum lifetime limit of at least $1
    million, including prescription drug coverage; (2) has
    exhausted all available prescription drug coverage under the
    policy prior to the beginning of the 12-month period; (3)
    incurs (or is reasonably expected to incur) during the 12-month
    period costs for orphan drugs in excess of $200,000 (adjusted
    annually by the rate of medical inflation after 2010); and (4)
    has an annual family income at the beginning of the period of
    no more than 75% of the costs the individual incurs for orphan
    drugs in excess of $200,000, as adjusted.
        The amount of family income that a state could disregard
    under this option could not exceed the greater of (1) $200,000
    (adjusted annually by the rate of medical inflation after 2010)
    or (2) the cost of orphan drugs incurred (or reasonably
    expected to be incurred) during the 12-month period. The
    provision would take effect on enactment.

                             Subtitle E--Financing

    Sec. 1741. Payments to pharmacists

                Current Law
        Medicaid law requires the Secretary of HHS to establish
    upper limits on the amounts that state Medicaid programs may
    pay pharmacists for multiple source (generic) drugs and receive
    federal matching payments for the costs of such drugs. These
    are known as federal upper limits, or FULs, and they apply to
    aggregate state expenditures for each drug. Prior to January 1,
    2007, the FUL limit was set at 150% of the lowest published
    price (i.e., wholesale acquisition cost, average wholesale
    price or direct price) for each dosage and strength of the
    generic drug products.
        The Deficit Reduction Act of 2005 (DRA; P.L. 109-171)
    established a new limit for FULs, effective January 1, 2007,
    equal to 250% of the average manufacturer price (AMP) of the
    least costly therapeutic equivalent (excluding prompt-pay
    discounts to wholesalers). AMP is the average price paid to the
    manufacturer by wholesalers for drugs distributed to the retail
    pharmacy class of trade. Manufacturers, as a condition of
    Medicaid purchasing their products, must report AMP data to the
    Centers for Medicare & Medicaid Services (CMS).
        Section 203 of Medicare Improvements for Patients and
    Providers Act of 2008 (MIPPA, P.L. 110-275) imposed a
    moratorium on the implementation of the DRA change in FUL
    limits until October 1, 2009. In the interim, FULs are set
    based on the pre-DRA methodology of 150% of the lowest
    published price.
                Proposed Law
        The bill would direct the Secretary to calculate FULs as
    130% of the weighted average (determined on the basis of
    manufacturer utilization of multiple source drugs) of monthly
    average manufacturer prices (AMPs). FULs specified under this
    new formula would apply beginning January 1, 2011. The FULs
    specified under 42 CFR 447.332 as in effect on December 31,
    2006, would continue to apply through December 31, 2010.
        The bill revises the definition of AMP in the Medicaid
    statute, both for purposes of calculating FULs and for
    determining Medicaid rebate amounts. In determining the AMP,
    the Secretary would be required to exclude the following: (1)
    customary prompt-pay discounts extended to wholesalers; (2)
    bona fide service fees paid by manufacturers; (3) reimbursement
    by manufacturers for recalled, damaged, expired, or otherwise
    unsalable returned goods, including reimbursement for cost of
    the goods and reimbursement for the costs associated with
    return goods handling and processing, reverse logistics, and
    drug destruction; (4) sales directly to, or rebates, discounts,
    or other price concessions provided to, pharmacy benefit
    managers (PBMs), managed care organizations (MCOs), health
    maintenance organizations, insurers, mail-order pharmacies
    (such as those operated by PBMs) that are not open to all
    members of the public, or long-term care providers, so long as
    these discounts, rebates, and price concessions are not passed
    through to retail pharmacies; (5) sales directly to, or
    rebates, discounts, or other price concessions provided to,
    hospitals, clinics, and physicians, unless the drug is an
    inhalation, infusion, or injectable drug, or the Secretary
    determines under HHS administrative procedures that it is
    necessary to include these sales, rebates, discounts, and price
    concessions in order to calculate an accurate AMP for the drug;
    and (6) rebates, discounts, and other price concessions
    required under subsections (f) and (g) of section 1860D-2(f) of
    the Social Security Act (as added by section 1181(b) of the
    bill). A determination by the Secretary that it is necessary to
    include certain sales or price concessions to hospitals,
    clinics, and physicians in order to obtain an accurate AMP for
    a drug would not be subject to judicial review.
        The bill requires manufacturers that have entered into
    Medicaid drug rebate agreements with the Secretary to report
    within 30 days after the last day of each month of a rebate
    period, the manufacturer's total number of units used to
    calculate the monthly AMP for each covered drug. The bill
    clarifies that manufacturers are required to submit specified
    AMP pricing information to the Secretary within 30 days of the
    end of each month of a rebate period, rather than within 30
    days of the end of a rebate period.
        The bill authorizes the Secretary to promulgate in an
    expedited manner regulations setting forth the requirements for
    FULs and for the determination of AMPs. These regulations could
    be effective on an interim final basis pending opportunity for
    public comment.
        The bill would eliminate the current law requirement that
    the Secretary post on a website accessible to the public, and
    update on a quarterly basis, the most recently reported AMPs
    for single source drugs and for multiple source drugs.

    Sec. 1742. Prescription drug rebates

                Current Law
        Medicaid law requires prescription drug manufacturers that
    seek to sell any of their products to State Medicaid programs
    to enter into a rebate agreement with the Secretary of HHS.
    Under these agreements, manufacturers must provide state
    Medicaid programs with rebates for the drugs purchased for
    Medicaid beneficiaries on an outpatient basis, and state
    Medicaid programs must cover all drugs (except certain
    statutorily excluded drug classes) marketed by those
    manufacturers. The rebates are shared by the state and federal
    governments in proportion to their respective shares of
    Medicaid drug expenditures. Certain drugs are not subject to
    rebates, including drugs dispensed by Medicaid managed care
    organizations, drugs used on an inpatient basis, and drugs
    dispensed in physicians' or dentists' offices.
        In the case of brand-name prescription drugs, a
    manufacturer's rebate obligation is the sum of two components--
    the basic rebate and an additional rebate. The basic rebate is
    the greater of (1) 15.1% of the average manufacturer price
    (AMP) or (2) the difference between AMP and the best price. The
    AMP is the average price that a manufacturer receives for sales
    in the United States to wholesalers for drugs distributed to
    the retail pharmacy class of trade. The ``best price'' is the
    lowest price available from the manufacturer to any wholesaler,
    retailer, provider, health maintenance organization, or
    nonprofit or governmental entity, subject to certain
    exceptions. The additional rebate is the amount by which a
    drug's AMP exceeds the drug's base period AMP increased by the
    consumer price index.
        Currently, modifications to existing drugs--new dosages or
    formulations, such as extended release versions, sometimes
    referred to as product line extensions--generally are
    considered new products for purposes of reporting AMPs to the
    Secretary. As a result, manufacturers can avoid incurring
    additional rebate obligations by making slight alterations to
    existing products. When new products are released,
    manufacturers can set their base period AMP to any price, so
    they are able to set new higher prices that will not incur
    Medicaid's additional rebates.
                Proposed Law
        The bill would increase the minimum rebate percentage for
    single source and innovator multiple source drugs from 15.1% to
    22.1%. This increase would be effective for rebate periods
    beginning after December 31, 2009.
        The bill would apply a rebate to new formulations of
    existing single source or innovator multiple source drugs.
    Under this provision, the rebate for a line extension of a
    single source or innovator multiple source prescription drug
    that is an oral solid dosage form would be the greater of (1)
    the rebate as calculated under current law (e.g., basic rebate
    plus additional rebate) or (2) a line extension rebate
    calculation. The line extension rebate amount would be product
    of: (1) the AMP for the line extension that is an oral solid
    dosage form; (2) the highest additional rebate (calculated as a
    percentage of AMP) for any strength of the original single
    source or innovator multiple source drug; and (3) the total
    number of units of each dosage form and strength of the line
    extension product paid for by the state Medicaid program during
    the rebate period (as reported by a state). For this purpose,
    the term ``line extension'' means an extended release
    formulation of the drug. This provision would be effective for
    new formulations dispensed to Medicaid beneficiaries after
    December 31, 2009, regardless of when the new formulations came
    to market.

    Sec. 1743. Extension of prescription drug discounts to enrollees of
            Medicaid managed care organizations

                Current Law
        Medicaid law requires prescription drug manufacturers that
    seek to sell any of their products to state Medicaid programs
    to enter into a rebate agreement with the Secretary of HHS.
    Under these agreements, manufacturers must provide state
    Medicaid programs with rebates for the drugs purchased for
    Medicaid beneficiaries on an outpatient basis, and state
    Medicaid programs must cover all drugs (except certain
    statutorily excluded drug classes) marketed by those
    manufacturers. The rebates are shared by the state and federal
    governments in proportion to their respective shares of
    Medicaid drug expenditures.
        Certain drugs are not subject to rebates, including drugs
    dispensed by Medicaid managed care organizations (MCOs) that
    contract on a risk basis with state Medicaid agencies when
    prescription drugs are included in the capitation agreement
    between the state Medicaid agency and the MCO. In states that
    exclude or ``carve out'' prescription drug benefits from their
    contracts with MCOs, the prescriptions for the Medicaid MCO
    enrollees are purchased on a fee-for-service basis and the
    drugs are subject to rebates.
                Proposed Law
        The bill would eliminate the current exemption of drugs
    dispensed by Medicaid MCOs from the Medicaid rebate
    requirements. Manufacturers entering into Medicaid rebate
    agreements with the Secretary of HHS would be required to pay
    rebates on covered outpatient drugs dispensed to Medicaid
    beneficiaries enrolled in a Medicaid MCO if the organization is
    responsible for coverage of such drugs under its risk contract
    with the state Medicaid agency. As with other rebates, the
    manufacturers would pay the rebates owed to the state Medicaid
    agency, not to the MCO.
        In order to implement this requirement, the bill would
    require that all risk contracts between a state Medicaid agency
    and a Medicaid MCO provide that the MCO report to the state
    agency the information the agency needs in order to submit its
    periodic report to the manufacturer regarding the covered
    outpatient drugs dispensed to Medicaid beneficiaries enrolled
    in the MCO for which the manufacturer owes rebates. The
    Secretary would specify the timeliness and frequency with which
    this information would have to be reported to state Medicaid
    agencies by Medicaid MCOs. The bill would require state
    Medicaid agencies to report to the Secretary, on a quarterly
    basis, the total dollar amount of rebates received from
    manufacturers for drugs provided to individuals enrolled in
    Medicaid MCOs for which the organization is responsible for
    coverage.
        This provision would take effect on July 1, 2010, and would
    apply to drugs dispensed on or after that date without regard
    to whether or not final regulations to implement these changes
    have been issued.

    Sec. 1744. Payments for graduate medical education

                Current Law
        Medicare and Medicaid, in paying for inpatient hospital
    services, have historically recognized two components of
    graduate medical education (GME) costs: (1) direct graduate
    medical education or DGME (e.g., resident salaries, teaching
    supervision), and (2) indirect graduate medical education, or
    IME (e.g., higher patient care costs because of additional
    tests ordered by residents). The Medicaid statute requires that
    states use a public process in determining payment rates for
    hospital services and publish their proposed and final rates
    and methodologies, but it does not specify payment for GME or
    IME costs.
        In May 2007, the Centers for Medicare & Medicaid Services
    published a proposed rule to terminate federal Medicaid
    matching funds for the costs of GME, 72 Federal Register at
    28930 (May 23, 2007). Congress imposed a series of moratoria on
    the implementation of this proposed rule through April 1, 2009.
    Section 5003(d)(2) of the American Recovery and Reinvestment
    Act of 2009 (P.L. 111-5) states a ``Sense of the Congress''
    that the Secretary should not promulgate the May 23, 2007,
    proposed rule as a final rule.
        Section 2261 of the bill directs the Secretary of HHS to
    establish a permanent Advisory Committee on Health Workforce
    Evaluation and Assessment that is responsible for making
    recommendations to the Secretary for policies to improve the
    supply, diversity, and geographic distribution of the health
    workforce.
        Section 1505 of the bill specifies goals for approved
    medical residency training programs for purposes of Medicare
    GME payments. The goals are to foster a physician workforce so
    that physicians are trained, among other things, to be able to
    work effectively in various health care delivery settings,
    coordinate patient care within and across settings, and be
    meaningful electronic health records users.
                Proposed Law
        The bill would give state Medicaid programs express
    statutory authority to make payments for the costs of graduate
    medical education, whether provided in or outside of a
    hospital, so long as certain requirements are met. In order to
    receive federal Medicaid matching funds for the costs of GME,
    state Medicaid programs would have to submit information to the
    Secretary annually on total payments for GME and how those
    payments are being used. In addition, state Medicaid GME
    payments would have to be consistent with program goals and
    requirements established by the Secretary by regulation, which
    would take into account the recommendations of the Advisory
    Committee on Health Workforce Evaluation and Assessment. The
    purpose of these requirements is to ensure that federal
    Medicaid matching funds for GME are effectively targeted to
    support national health workforce goals, such as increasing the
    supply of primary care practitioners.
        The information that states would be required to submit to
    the Secretary includes: (1) the institutions and programs
    eligible for receiving the funding, (2) the manner in which
    such payments are calculated, (3) the types and fields of
    education being supported, (4) the workforce or other goals to
    which the funding is being applied, (5) state progress in
    meeting the goals established by the Secretary, and (6) any
    other information the Secretary determines will help inform the
    process of developing goals for approved medical residency
    training programs.
        The bill establishes the following process for developing
    goals for approved medical residency programs. As described
    above, the Secretary would specify the information relating to
    GME that state Medicaid agencies must report as a condition of
    receiving federal Medicaid matching funds for the costs of GME.
    The Secretary would make the information submitted by the
    states available to the Advisory Committee on Health Workforce
    Evaluation and Assessment. Both the Secretary and the Advisory
    Committee would independently review this information, taking
    into account state and local workforce needs. The Advisory
    Committee would then make recommendations to the Secretary.
        By no later than December 31, 2011, the Secretary would
    specify by rule program goals for the use of Medicaid GME
    funds, taking into account the recommendations of the Advisory
    Committee and the Medicare program goals for approved medical
    residency training programs specified by section 1505 of the
    bill. The rule would also specify requirements for the use of
    Medicaid GME funds consistent with these program goals. The
    Committee understands that as of 2005, 11 states linked
    Medicaid GME payments to state policy goals and 17 states
    extended Medicaid GME payments to training programs for health
    professions beyond medical students. The Committee expects
    that, in issuing the rule, the Secretary will consider
    available data regarding the success of state efforts to link
    Medicaid GME payment to workforce and other policy goals and
    consult available survey data regarding State Medicaid GME
    programs. The Secretary is authorized to issue this rule on an
    interim final basis pending revision after an opportunity for
    public comment.
        The provision is effective on enactment and is not to be
    construed to affect GME payments made by a state Medicaid
    agency prior to enactment.

    Sec. 1745. Report on Medicaid payments

                Current Law
        The Administrator of the Centers for Medicare & Medicaid
    Services (CMS) is responsible for implementing the duty of the
    Secretary of HHS to ensure that state Medicaid programs comply
    with federal Medicaid requirements, including those relating to
    the sufficiency of payments to physicians, hospitals, and other
    providers for furnishing covered services to program
    beneficiaries. The Medicaid statute does not require state
    Medicaid programs to report to CMS information regarding
    provider payment rates, methodologies, and justifications.
                Proposed Law
        The bill would require state Medicaid programs to submit to
    the CMS Administrator, on an annual basis, information on
    Medicaid payment rates to providers. The information would
    include, for each class of provider (e.g., hospitals, nursing
    facilities, pharmacies, physicians, etc.), final rates, the
    methodologies used to determine the final rates, and
    justifications for those rates. States would also have to
    provide an explanation of the process used to allow providers,
    beneficiaries and their representatives, and other concerned
    state residents an opportunity to comment on rates,
    methodologies, and justifications before the rates are made
    final. The Committee expects that the Administrator would
    review this information to determine whether states are in
    compliance with applicable federal requirements, including
    those relating to the sufficiency of provider payments.

    Sec. 1746. Reviews of Medicaid

                Current Law
        Federal Medicaid matching payments to state Medicaid
    programs for the costs of covered services are determined by
    the federal medical assistance percentage (FMAP) formula set
    forth in the Medicaid statute. The federal government also
    provides matching funds for administrative costs incurred by
    state Medicaid agencies at specified rates. The Government
    Accountability Office (GAO) has expertise in the FMAP formula
    and administration of the Medicaid program.
                Proposed Law
        The bill would direct the Comptroller General to conduct a
    study regarding federal payments to state Medicaid programs and
    submit a report to the appropriate committees on the effect of
    the following policy changes on the federal government, States,
    providers, and beneficiaries: (1) modifying the federal medical
    assistance percentage (FMAP) by removing the 50% floor, the 83%
    ceiling, or both; and (2) revising the current FMAP formula to
    better reflect state fiscal capacity and state effort to pay
    for health and long-term care services and to better adjust for
    national or regional economic downturns. The report would be
    due no later than February 15, 2011.
        The bill would direct the Comptroller General to conduct a
    study of the administration of the Medicaid program by the
    Department of Health and Human Services, state Medicaid
    agencies, and local government agencies and to submit a report
    to the appropriate committees that would address the following
    issues: (1) the administrative functions, such as survey and
    certification and claims processing, on which federal Medicaid
    funds are expended and the amounts of such expenditures
    (whether spent directly or by contract) for each function; and
    (2) the extent to which federal funds for each administrative
    function are being used effectively and efficiently. The report
    would be due no later than February 15, 2011.

    Sec. 1747. Extension of delay in managed care organization provider tax
            elimination

                Current Law
        The Medicaid statute allows states to use revenues from
    taxes on hospitals, nursing facilities, and other providers to
    fund the state share of Medicaid program costs if the tax meets
    certain requirements. Among the classes of providers that a
    state may tax subject to these requirements is managed care
    organizations (MCOs). Originally this class was limited to
    Medicaid managed care organizations with a risk contract with
    the state Medicaid agency. Section 6051 of the Deficit
    Reduction Act of 2005 (DRA, P.L. 109-171) broadened the
    definition of this class to encompass all managed care
    organizations. Under this revision, the revenues from an MCO
    tax may not be used to fund the state share of Medicaid costs
    unless the tax applies to all MCOs in the state, not just those
    contracting with the state Medicaid program.
        The DRA change was effective February 8, 2006, except in
    states that, as of December 8, 2005, had enacted an MCO tax
    that used the more limited definition of the class of MCOs
    permissible under prior law (i.e., only those contracting with
    Medicaid). The purpose of this exception was to provide the
    excepted states with a grace period to revise their tax laws to
    bring them into conformity with the broader definition of the
    MCO class. This grace period ends on October 1, 2009.
                Proposed Law
        The bill would extend the grace period for states excepted
    from the DRA change in the definition of a permissible MCO
    class from October 1, 2009 to October 1, 2010. This change
    would be effective as if included in the enactment of section
    6051 of P.L. 109-171.

                      Subtitle F--Waste, Fraud, and Abuse

    Sec. 1751. Health care acquired conditions

                Current Law
        Subject to federal rules, states generally establish their
    own payment policies, rates, and reimbursement methodologies
    for Medicaid providers, including inpatient facilities such as
    hospitals, nursing facilities, and intermediate care facilities
    for the mentally retarded (ICF/MRs). Federal regulations
    require that Medicaid provider rates be sufficient to enlist
    enough providers so that covered services are promptly
    available at least to the extent that comparable care and
    services are available to the general population within that
    geographic area.
        In Medicare, hospitals are reimbursed under a prospective
    payment system (PPS), where each admission is classified into a
    Medicare severity adjusted diagnosis-related group (MS-DRG)
    based on the patient's diagnosis and procedures performed. Each
    MS-DRG has a predetermined reimbursement amount. In general, a
    hospital is paid the same amount for an MS-DRG regardless of
    how long patients stay in the hospital or what is required to
    treat the patient. In some situations under Medicare's PPS,
    patients with certain complicating conditions could be
    reclassified into different MS-DRGs where the hospital would
    receive a higher payment.
        To avoid additional hospital payments for complications
    that were acquired during patients' admission, the Deficit
    Reduction Act of 2005 (DRA, P.L. 109-171) required the
    Secretary to initiate a hospital-acquired condition (HAC)
    program for Medicare. In creating the HAC program, the
    Secretary was to select conditions that: (1) were high cost,
    high volume, or both; (2) were identified as complicating
    conditions or major complicating conditions; and (3) were
    reasonably preventable through the application of evidenced-
    based guidelines. Starting October 1, 2007 (FY2008), CMS
    required hospitals to report whether Medicare patients had
    certain conditions when they were admitted. Beginning October
    1, 2008 (FY2009), if the HAC conditions identified by the
    Secretary were coded as present at admission, the conditions
    would not be considered to be acquired during the patient's
    hospital stay, and the case could receive additional MS-DRG
    payment. In addition to the HAC policy, in January 2009, CMS
    issued three national coverage determinations that precluded
    Medicare from paying any amount for certain serious preventable
    medical care errors. (These preventable errors are sometimes
    called ``never events.'' Never events include surgery on the
    wrong body part or mismatched blood transfusions, which can
    cause serious injury or death to beneficiaries, and result in
    increased costs to the Medicare program to treat the
    consequences of the error.)
        For Medicaid, CMS issued guidance to states in July 2008 to
    help states appropriately align Medicaid inpatient hospital
    payment policies with Medicare's HAC payment policies. In the
    guidance, CMS indicated that for patients eligible for both
    Medicare and Medicaid (dual eligibles), hospitals that were
    denied payment under Medicare might attempt to bill Medicaid
    for HACs as the secondary payer. CMS instructed state Medicaid
    agencies to deny payment when dual eligible beneficiaries
    acquired HACs during a hospitalization. CMS also encouraged
    Medicaid agencies to implement policies to deny payment when
    other Medicaid beneficiaries acquired HACs during a
    hospitalization. CMS directed states to several Medicaid
    authorities to deny payment appropriately for HACs, but unlike
    Medicare, DRA did not specifically apply the HAC initiative to
    Medicaid.
                Proposed Law
        This provision would require state Medicaid and CHIP
    programs to deny hospital payments for HACs as well as for
    certain serious preventable errors in medical care (never
    events) determined as non-covered by the Medicare program. In
    addition, states would have permission to identify other
    health-care acquired conditions for non-payment under Medicaid.
    This provision would be effective for hospital discharges that
    occurred on or after January 1, 2010.

    Sec. 1752. Evaluations and reports required under Medicaid Integrity
            Program

                Current Law
        Under the Medicaid Integrity Program (MIP), the Secretary
    is required to contract with eligible entities to conduct
    program integrity activities such as auditing claims for
    payment and identifying overpayments. The MIP program is funded
    at $75 million per year.
                Proposed Law
        The bill would require eligible entities (MIP contractors)
    to conduct periodic evaluations of the effectiveness of their
    MIP contract activities and submit annual reports to CMS
    documenting these evaluations. This reporting requirement would
    be effective for contract years beginning in 2011.

    Sec. 1753. Require providers and suppliers to adopt programs to reduce
            waste, fraud, and abuse

                Current Law
        Section 1635 of the bill would require providers and
    suppliers participating in Medicare (other than physicians and
    skilled nursing facilities) to establish a compliance program
    that contains core elements established by the Secretary of
    HHS. There is no comparable requirement in the Medicaid
    statute.
                Proposed Law
        The bill would require state Medicaid programs to require
    that any participating provider or supplier (other than a
    physician or nursing facility) to establish a compliance
    program that contains core elements established by the
    Secretary for purposes of the Medicare program under section
    1635 of the bill. Those core elements could include (1) written
    policies, procedures, and standards of conduct; (2) a
    designated compliance officer and compliance committee; (3)
    effective fraud, waste, and abuse training and education for an
    entity's employees and contractors; (4) a mechanism, such as a
    hotline, to report waste, fraud, and abuse that is confidential
    or anonymous; (5) disciplinary guidelines to enforce standards;
    (6) internal monitoring and auditing procedures, including
    contractor monitoring and auditing; and (7) procedures for
    ensuring prompt responses when offenses are detected, which
    include development of corrective action initiatives, including
    response to potential offenses, and (8) returning all
    identified overpayments under Medicare, Medicaid and CHIP.
        The bill authorizes the Secretary to conduct a pilot
    program on the application of this requirement with respect to
    a category of providers or services or suppliers (other than
    physicians or skilled nursing facilities) determined to be at
    high risk of waste, fraud, and abuse before requiring all
    providers or services and suppliers (other than physicians or
    skilled nursing facilities) to establish compliance programs.
    State Medicaid programs would be required to align the
    implementation of this requirement with the Secretary's
    implementation of the pilot program.
        The provision would be effective on enactment.

    Sec. 1754. Overpayments

                Current Law
        The Medicaid statute requires that when an overpayment made
    by a state Medicaid agency to a provider or contractor is
    discovered, the agency has 60 days to recover or attempt to
    recover the overpayment. At the end of the 60-day period,
    federal Medicaid matching payments to the state are reduced by
    the federal share of the overpayment, whether or not recovery
    has been made. The only exception is when the state is unable
    to recover because the overpayment (or a portion thereof) is a
    debt that has been discharged in bankruptcy or is otherwise
    uncollectable. The Committee heard testimony from state
    Medicaid administrators that this policy deters states from
    discovering overpayments due to fraud because the recovery of
    funds from fraudulent providers often takes considerably longer
    than 60 days, and during this extended period the federal
    government withdraws the federal funds involved from the state.
                Proposed Law
        In order to encourage state Medicaid agencies to identify
    overpayments due to fraud and seek recovery of the federal and
    state funds involved, the bill would create an exception to the
    60-day recovery rule for such overpayments. In the case of
    overpayments due to fraud, the reduction in federal matching
    payments would not occur until a year after the discovery of
    the overpayment. This provision would apply to overpayments due
    to fraud discovered on or after enactment. The Secretary would
    not be required to issue regulations to implement this
    provision.

    Sec. 1755. Managed care organizations

                Current Law
        The Medicaid statute requires that state Medicaid agencies
    that elect to enter into risk contracts with managed care
    organizations (MCOs) to furnish services to program
    beneficiaries make capitation payments to those MCOs on an
    actuarially sound basis. The statute does not specify a minimum
    medical loss ratio, or share of total premium revenue spent on
    medical claims. The Congressional Budget estimates that in FY
    2010 the federal government will spend $57.4 billion in
    matching funds for Medicaid managed care services.
                Proposed Law
        The bill would require that every risk contract between a
    state Medicaid agency and a Medicaid MCO have a medical loss
    ratio specified by the Secretary that is not less than 85%. The
    Secretary would specify the methodology to be used by State
    Medicaid agencies in determining whether a contracting MCO is
    in compliance with the medical loss ratio. The bill would apply
    a parallel requirement to State CHIP programs that contract
    with MCOs on a risk basis. Neither federal Medicaid or CHIP
    matching funds would be available for expenditures in
    connection with risk contracts or contracting MCOs that are not
    in compliance with this requirement. The purpose of this
    requirement is to ensure that the maximum amount of capitation
    revenues received by an MCO from Medicaid or CHIP programs are
    used to pay providers for furnishing covered services to
    enrolled beneficiaries rather than to pay for MCO
    administrative costs, marketing costs, taxes and other fees, or
    distributions to shareholders. This requirement would apply to
    contracts between state Medicaid or CHIP agencies and MCOs
    entered into or renewed on or after July 1, 2010. The Secretary
    is not required to issue a rule to implement this requirement.
        The bill would require that each risk contract entered into
    between a state Medicaid agency and an MCO require that the MCO
    provide to the state Medicaid agency patient encounter data
    sufficient to identify the physician who delivers services to
    enrollees. To ensure comparability of patient encounter data
    among MCOs within a state and between MCOs in one state and
    those in another, the bill requires the Secretary to specify
    the frequency and level of detail of the patient encounter data
    to be supplied by each MCO. This provision would apply with
    respect to contract years beginning on or after January 1,
    2010. The Secretary would not be required to implement this
    provision by regulation.

    Sec. 1756. Termination of provider participation under Medicaid and
            CHIP if terminated under Medicare or other State plan or child
            health plan

                Current Law
        Subject to certain specified exceptions, the Secretary of
    HHS is required to exclude from participation in any federal
    health care program, including Medicare and Medicaid and CHIP,
    for a specified period of time individuals or entities that
    have been convicted of certain criminal offenses. The Secretary
    also has the authority to exclude for a specified period of
    time individuals or entities that have engaged in certain
    specified conduct. The Medicaid statute requires that state
    Medicaid agencies exclude an individual or entity from the
    Medicaid program, for the period specified by the Secretary,
    when the individual or entity is excluded by the Secretary.
                Proposed Law
        The bill would require state Medicaid programs to terminate
    the participation of any individual or entity in Medicaid if
    the individual or entity is terminated from participation in
    Medicare, any other state Medicaid program, or CHIP. Subject to
    certain specified exceptions, when Medicare provider
    reimbursement is precluded as a result of the termination of
    provider participation for reasons such as those listed above,
    this provision would require states to terminate federal
    financial participation for such providers under Medicaid and/
    or CHIP.
        This provision would be effective for services provided on
    or after January 1, 2011, regardless of whether or not final
    regulations had been promulgated. If the Secretary determines
    that a state requires legislation (other than appropriations
    legislation) to amend its state Medicaid plan, then the state
    would not be considered to be out of compliance with this
    requirement until after the first day of the first calendar
    quarter after the close of the first regular state legislature
    session after enactment. In states with two-year legislative
    sessions, the Secretary would consider each year of the
    legislative session as a separate regular session of the state
    legislature.

    Sec. 1757. Medicaid and CHIP exclusion from participation relating to
            certain ownership, control, and management affiliations

                Current Law
        Titles XI, XIX, and XXI of the Social Security Act specify
    the circumstances under which State Medicaid and Children's
    Health Insurance (CHIP) programs are required to exclude
    providers from participation.
                Proposed Law
        This bill would require state Medicaid and CHIP agencies to
    exclude any individual or entity from participation in Medicaid
    or CHIP for a period if the individual or entity owns,
    controls, or manages an entity that: (1) has overpayments under
    Medicaid or CHIP that have not been repaid and that the
    Secretary or state agency has determined to be delinquent
    during the period; (2) is suspended, excluded from
    participation under, or terminated from participation under
    Medicaid or CHIP during the period; or (3) is affiliated with
    an individual or entity that has been suspended, excluded, or
    terminated from participation in Medicaid or CHIP during the
    period.
        This provision would be effective for services furnished
    under the Medicaid and CHIP programs on or after January 1,
    2011, without regard to whether or not final regulations had
    been promulgated. If the Secretary determines that a state
    requires legislation (other than appropriations legislation) to
    amend its state Medicaid plan, then the state would not be
    considered to be out of compliance with this requirement until
    after the first day of the first calendar quarter after the
    close of the first regular state legislature session after
    enactment. In states with two-year legislative sessions, the
    Secretary would consider each year of the legislative session
    as a separate regular session of the state legislature.

    Sec. 1758. Requirement to report expanded set of data elements under
            MMIS to detect fraud and abuse

                Current Law
        The Medicaid statute requires that state Medicaid programs,
    as a condition of receiving federal matching funds for
    automated data systems, operate a Medicaid Management
    Information System (MMIS) that meets certain specifications.
    For example, an MMIS system must provide for electronic
    transmission of claims data in a format specified by the
    Secretary of HHS.
                Proposed Law
        The bill would require state MMIS systems to transmit to
    the Secretary data elements determined by the Secretary to be
    necessary for the detection of waste, fraud, and abuse. This
    requirement would be effective with respect to state data
    submissions to the Secretary occurring on or after July 1,
    2010.

    Sec. 1759. Billing agents, clearinghouses, or other alternate payees
            required to register under Medicaid

                Current Law
        Section 1644 of the bill would require any agency,
    clearinghouse, or other alternate payee that submits claims to
    Medicare for reimbursement on behalf of a health care provider
    to register with the Secretary. There is no comparable
    requirement in Medicaid law.
                Proposed Law
        The bill would require state Medicaid agencies to require
    that any agent, clearinghouse, or other alternate payee that
    submits claims for Medicaid reimbursement on behalf of a health
    care provider register with the state Medicaid agency and with
    the Secretary in a form and manner that is consistent with the
    Medicare process for the enrollment of providers of services
    and supplies. Federal Medicaid matching funds would not be
    available to the state for any amounts paid to agents,
    clearinghouses, or other alternate payees that fail to
    register.
        This provision would be effective for claims submitted on
    or after January 1, 2012, without regard to whether or not
    final regulations had been promulgated.

    Sec. 1760. Denial of payments for litigation-related misconduct

                Current Law
        The federal government pays 50% of administrative costs
    incurred by states as are found necessary by the Secretary of
    HHS for the proper and efficient administration of the Medicaid
    program. Allowable administrative costs that qualify for
    federal matching include attorneys' fees and other litigation
    expenses incurred by states related to the Medicaid program.
                Proposed Law
        The bill would prohibit the payment of federal Medicaid
    matching funds for any amounts expended on litigation in which
    a court imposes sanctions on a state, its employees, or its
    counsel for litigation-related misconduct. For this purpose,
    litigation includes administrative proceedings that are subject
    to laws and rules of procedure that authorize the imposition of
    sanctions for litigation misconduct. Examples of such
    litigation include state litigation with federal agencies,
    Medicaid contractors, health care providers, or Medicaid
    beneficiaries.
        The bill would also prohibit the payment of federal
    Medicaid matching funds for any amounts to reimburse directly
    (or compensate through a capitation payment or otherwise) a
    managed care entity for payment of legal expenses associated
    with any action in which a court imposes sanctions on the
    managed care entity for litigation-related misconduct. For this
    purpose, litigation includes administrative proceedings that
    are subject to laws and rules of procedure that authorize the
    imposition of sanctions for litigation misconduct. Examples of
    such litigation include litigation with state or federal
    agencies, health care providers or Medicaid beneficiaries.
        Federal Medicaid matching funds would continue to be
    available at a 50% rate for all other litigation costs as the
    Secretary finds necessary for the proper and efficient
    administration of the Medicaid program. The prohibition would
    apply to amounts expended for litigation expenses on or after
    January 1, 2010. The Secretary would not be required to issue
    regulations to implement this prohibition.

    Sec. 1761. Mandatory State use of national correct coding initiative

                Current Law
        The Medicaid statute requires that state Medicaid programs,
    as a condition of receiving federal matching funds for
    automated data systems, operate a Medicaid Management
    Information System (MMIS) that meets certain specifications
    relating to the processing of provider claims for
    reimbursement.
        The Centers for Medicare & Medicaid Services processes
    Medicare Part B claims, including claims for payments for
    physician, laboratory, and radiology services. In 1996, to help
    ensure correct payment of claims for reimbursement, CMS
    implemented the National Correct Coding Initiative (NCCI).
    Under NCCI, CMS contractors use automated pre-payment edits to
    review Medicare claims submitted by Part B providers to detect
    anomalies that indicate a claim has incorrect information and
    should not be paid as submitted.
                Proposed Law
        The bill would require that each state's MMIS system
    incorporate methodologies compatible with Medicare's National
    Correct Coding Initiative (or any successor initiative to
    promote correct coding and to control improper coding leading
    to inappropriate payment) and such other methodologies as the
    Secretary specifies. MMIS systems would have to meet this
    requirement effective for claims filed on or after October 1,
    2010.
        To enable state Medicaid programs to implement this
    requirement, the bill would require the Secretary, by September
    1, 2010, to take the following actions: (1) identify NCCI
    methodologies (or methodologies of any successor initiative)
    that are compatible to claims filed under Medicaid; (2)
    identify those methodologies that should be incorporated into
    claims filed under Medicaid with respect to items or services
    covered under Medicaid for which no national correct coding
    methodologies have been established with respect to Medicare;
    (3) notify states of the coding methodologies identified and
    how states should incorporate those methodologies into their
    Medicaid claims processing systems; and (4) submit a report to
    Congress that includes the notice given to states about the
    methodologies and an analysis that supports the identification
    of the methodologies to be applied to Medicaid claims.
        The provision is effective on enactment. If the Secretary
    determines that a state requires legislation (other than
    appropriations legislation) to amend its state Medicaid plan,
    then the state would not be considered to be out of compliance
    with this requirement until after the first day of the first
    calendar quarter after the close of the first regular state
    legislature session after enactment. In states with two-year
    legislative sessions, the Secretary would consider each year of
    the legislative session as a separate regular session of the
    state legislature.

                    Subtitle G--Payments to the Territories

    Sec. 1771. Payment to the territories

                Current Law
        The five U.S. territories--American Samoa, Guam, the
    Northern Mariana Islands, Puerto Rico, and the Virgin Islands--
    are eligible to participate in the Medicaid program but not on
    the same basis as the states (and the District of Columbia).
    The federal medical assistance percentage (FMAP) in the
    territories is set at 50%, rather than varying with per capita
    income between 50% and 83%, as in the case of the states. Total
    federal Medicaid matching payments in any fiscal year are
    subject to a statutory ceiling specific to each territory; in
    contrast, the federal government shares in the cost of all
    allowable Medicaid expenditures made by states without regard
    to a ceiling. In the case of American Samoa and Northern
    Marianas Islands, the Secretary has broad statutory authority
    to waive or modify almost all federal Medicaid requirements
    that apply to states participating in Medicaid.
        Section 5001(d) of the American Recovery and Reinvestment
    Act of 2009 (ARRA, P.L. 111-5) allows each territory, for the
    period October 1, 2008, through December 31, 2010, a one-time
    choice between (1) an FMAP increase of 6.2 percentage points
    and a 15% increase in its statutory ceiling on federal Medicaid
    spending, or (2) its regular 50% FMAP and a 30% increase in its
    spending ceiling. All five territories have elected the 30%
    increase in their federal Medicaid spending ceiling.
                Proposed Law
        The bill would increase the FMAP for each of the
    territories from FY2011 through FY2019 to the highest FMAP in
    effect in that year for any state. For the first quarter of
    FY2011, this state FMAP would take into account the temporary
    FMAP increases under section 5001(a) and (b)(1) of ARRA. (The
    highest regular FMAP of any state in FY2009 was 75.8%).
        The bill would increase the ceilings on federal Medicaid
    matching payments to each of the territories from FY2011
    through FY2019 by the following amounts:
        For Puerto Rico, for fiscal year 2011, $727.6 million; for
    fiscal year 2012, $775 million; for fiscal year 2013, $850
    million; for fiscal year 2014, $925 million; for fiscal year
    2015, $1 billion; for fiscal year 2016, $1.075 billion; for
    fiscal year 2017, $1.150 billion; for fiscal year 2018, $1.225
    billion; and for fiscal year 2019, $1.396 billion.
        For the Virgin Islands, for fiscal year 2011, $34 million;
    for fiscal year 2012, $37 million; for fiscal year 2013, $40
    million; for fiscal year 2014, $43 million; for fiscal year
    2015, $46 million; for fiscal year 2016, $49 million; for
    fiscal year 2017, $52 million; for fiscal year 2018, $55
    million; and for fiscal year 2019, $58 million.
        For Guam, for fiscal year 2011, $34 million; for fiscal
    year 2012, $37 million; for fiscal year 2013, $40 million; for
    fiscal year 2014, $43 million; for fiscal year 2015, $46
    million; for fiscal year 2016, $49 million; for fiscal year
    2017, $52 million; for fiscal year 2018, $55 million; and for
    fiscal year 2019, $58 million.
        For the Northern Mariana Islands, for fiscal year 2011,
    $13.5 million; for fiscal year 2012, $14.5 million; for fiscal
    year 2013, $15.5 million; for fiscal year 2014, $16.5 million;
    for fiscal year 2015, $17.5 million; for fiscal year 2016,
    $18.5 million; for fiscal year 2017, $19.5 million; for fiscal
    year 2018, $21 million and for fiscal year 2019, $22 million.
        For American Samoa, for fiscal year 2011, $22 million; for
    fiscal year 2012, $23.688 million; for fiscal year 2013,
    $24.688 million; for fiscal year 2014, $25.688 million; for
    fiscal year 2015, $26.688 million; for fiscal year 2016,
    $27.688 million; for fiscal year 2017, $28.688 million; for
    fiscal year 2018, $29.688 million; and for fiscal year 2019,
    $30.688 million.
        The bill would expand the scope of the Secretary's current
    waiver authority with respect to American Samoa and the
    Northern Mariana Islands to include Puerto Rico, the Virgin
    Islands, and Guam. The bill would not alter the current law
    prohibition on waiving the FMAP, the federal spending ceilings,
    or the requirement that payment be made for Medicaid services
    described in section 1905(a) of the Social Security Act.
        The bill directs the Secretary of HHS to submit a report to
    Congress that details a plan for the transition of each
    territory to full parity in Medicaid with the states in FY
    2020. The transition plan must outline the actions that the
    Secretary and the governments of each territory must take by FY
    2020 to ensure parity in financing. The report must include (1)
    a projection of the FMAP for each territory if the FMAP formula
    applicable to the states were applied to the territory; (2)
    recommendations as to whether the federal spending ceilings for
    each territory should be increased any time before fiscal year
    2020 due to any factors that the Secretary deems relevant; (3)
    information about per capita income data that could be used to
    calculate FMAPs for each territory and on how such data might
    differ from the per capita income data used to promulgate FMAPs
    for the states; and (4) recommendations on how the FMAP would
    be calculated for the territories beginning in fiscal year 2020
    to ensure parity with the states.
        The Secretary's initial report would be due to Congress not
    later than October 1, 2013. The Secretary would be required to
    submit subsequent reports to Congress in 2015, 2017, and 2019
    detailing the progress that the Secretary and the governments
    of each territory have made in fulfilling the actions outlined
    to achieve Medicaid parity in the Secretary's plan for
    transition to full parity in FY 2020.
        The bill would require the Secretary provide technical
    assistance to the territories in upgrading their existing
    computer systems in order to anticipate meeting reporting
    requirements necessary to implement the transition plan
    prepared by the Secretary. The costs of this technical
    assistance would not be counted against the federal spending
    ceilings.

                           Subtitle H--Miscellaneous

    Sec. 1781. Technical corrections

        Section 1144 of the Social Security Act. Section 1144(c)(3)
    of the Social Security Act directs the Commissioner of Social
    Security to transmit applications for low-income subsidies
    under Medicare Part D to the appropriate State Medicaid agency
    in order to initiate an application for assistance under the
    Medicare Savings Program. The bill makes technical changes in
    the statutory text to correctly execute this policy. The
    provision is effective as if included in the enactment of
    section 113(b) of P.L. 110-275 (July 15, 2008).
        Section 1935 of the Social Security Act. Section 1935(a)(4)
    of the Social Security Act requires state Medicaid agencies to
    accept data transmitted electronically by the Commissioner of
    Social Security regarding applications for low-income subsidies
    under Medicare Part D and to treat this data as an application
    for assistance under the Medicare Savings Program (MSP). The
    bill clarifies that the date of transmission by the
    Commissioner is the date of filing of the application for MSP
    for purposes of the state Medicaid agency's duty to process
    applications and to furnish medical assistance to eligible
    applicants with reasonable promptness. The provision is
    effective as if included in the enactment of section 113(b) of
    P.L. 110-275 (July 15, 2008).
        Section 605 of CHIPRA. Section 605 of the Children's Health
    Insurance Program Reauthorization Act of 2009 (CHIPRA; P.L.
    111-3) provides that nothing in CHIPRA allows federal payment
    for individuals who are not lawfully residing in the United
    States. The bill makes a technical change to an erroneous
    reference to ``legal residents'' in the statutory text to
    correctly execute this policy.
        Section 1905 of the Social Security Act. Section 1905(a) of
    the Social Security Act defines the term ``medical
    assistance.'' The term is expressly defined to refer to payment
    but has generally been understood to refer to both the funds
    provided to pay for care and services and to the care and
    services themselves. The Committee, which has legislative
    jurisdiction over Title XIX of the Social Security Act, has
    always understood the term to have this combined meaning. Four
    decades of regulations and guidance from the program's
    administering agency, the Department of Health and Human
    Services, have presumed such an understanding and the Congress
    has never given contrary indications.
        Some recent court opinions have, however, questioned the
    longstanding practice of using the term ``medical assistance''
    to refer to both the payment for services and the provision of
    the services themselves. These opinions have read the term to
    refer only to payment; this reading makes some aspects of the
    rest of Title XIX difficult and, in at least one case, absurd.
    If the term meant only payments, the statutory requirement that
    medical assistance be furnished with reasonable promptness ``to
    all eligible individuals'' in a system in which virtually no
    beneficiaries receive direct payments from the state or federal
    governments would be nearly incomprehensible.
        Other courts have held the term to be payment as well as
    the actual provision of the care and services, as it has long
    been understood. The Circuit Courts are split on this issue and
    the Supreme Court has declined to review the question. To
    correct any misunderstandings as to the meaning of the term,
    and to avoid additional litigation, the bill would revise
    section 1905(a) to read, in relevant part: ``The term `medical
    assistance' means payment of part or all of the cost of the
    following care and services, or the care and services
    themselves, or both.'' This technical correction is made to
    conform this definition to the longstanding administrative use
    and understanding of the term. It is effective on enactment.
        Section 1115 of the Social Security Act. Section 1115(a) of
    the Social Security Act authorizes the Secretary of HHS to
    waive compliance with the state Medicaid plan requirements
    under section 1902 of the Act if the Secretary finds the waiver
    necessary to enable a state to carry out a demonstration
    project that is likely to assist in promoting the objectives of
    Title XIX. The section also authorizes the Secretary to approve
    costs for such a demonstration project that would not otherwise
    be eligible for federal Medicaid matching payments under
    section 1903 of the Act. Section 1115(a) does not, however,
    provide statutory authority for either the states or the
    Secretary to use federal funds to provide health or long-term
    care services to low-income individuals independent of the
    usual requirements for the expenditure of funds under Title XIX
    of the Act.
        The bill would clarify that if the Secretary approves a
    Medicaid demonstration project under section 1115(a), the
    demonstration project is to be treated as part of the state's
    Medicaid plan, subject to all of the usual state Medicaid plan
    requirements in section 1902(a) that have not been explicitly
    waived by the Secretary under the demonstration. All of the
    payments for care and services provided on behalf of any
    individuals affected by the demonstration project, including
    payments for ``costs not otherwise matchable'' under section
    1115(a)(2), are medical assistance provided under the State
    Medicaid plan. The individuals affected by the demonstration
    project are individuals receiving medical assistance under the
    state Medicaid plan, and all provisions of Title XIX not
    expressly waived by the Secretary in approving the project
    remain fully applicable to all individuals eligible for or
    receiving benefits under the state Medicaid plan.
        This clarification is effective on enactment.

    Sec. 1782. Extension of QI program

                Current Law
        Medicaid pays Medicare Part B premiums for Medicare
    beneficiaries, referred to as ``qualifying individuals'' (QIs),
    with incomes between 120% and 135% of the federal poverty level
    and assets no greater than $4,000 for an individual and $6,000
    for a couple. The federal government matches 100% of the cost
    of this premium assistance up to an allocation amount specific
    to each state for each fiscal year. To enable states to
    administer the program within a fixed allocation, the Medicaid
    statute sets forth procedures for selecting which eligible
    Medicare beneficiaries receive assistance with their premiums
    and specifies that this assistance is not an individual
    entitlement. The QI program ends in December 2010.
                Proposed Law
        The bill would extend the QI program through December 2012
    and convert the program to an individual entitlement to
    assistance with the cost of Part B premiums. The state
    allocation limits, and the procedures for selecting among
    eligible Medicare beneficiaries within those limits, would be
    removed. The 100% FMAP would continue to apply to the costs of
    this assistance for QIs. The provision would take effect on
    January 1, 2011.

    Sec. 1783. Outreach and enrollment of Medicaid and CHIP eligible
            individuals

                Current Law
        Section 201 of the Children's Health Insurance Program
    Reauthorization Act (CHIPRA, P.L. 111-3) provides $100 million
    over the period FY 2009 through FY 2010 for grants by the
    Secretary of HHS to states, localities, schools, nonprofit
    organizations, and other eligible entities to conduct outreach
    and enrollment efforts to increase the enrollment and
    participation of eligible children in Medicaid and CHIP. Ten
    percent of this amount is set aside for a national enrollment
    campaign to be developed by the Secretary in order to improve
    the enrollment of underserved child populations in Medicaid and
    CHIP. Section 212 of CHIPRA requires state CHIP programs to
    describe the procedures they use to reduce administrative
    barriers to the enrollment of eligible children and pregnant
    women in Medicaid and CHIP.
                Proposed Law
        The bill would require the Secretary of HHS to issue
    guidance regarding (1) standards and best practices for
    conducting outreach to inform eligible individuals about
    coverage under Medicaid or CHIP, (2) providing assistance to
    these individuals for enrollment in the appropriate program,
    and (3) establishing methods or procedures for eliminating
    application and enrollment barriers. The guidance relating to
    outreach and enrollment methods must address address how
    methods such as outstationing of eligibility workers, express
    lane eligibility, presumptive eligibility, continuous
    eligibility, and automatic renewal can be used to specifically
    target vulnerable and underserved populations: children,
    unaccompanied homeless youth, victims of abuse or trauma,
    individuals with mental health or substance related disorders,
    and individuals with HIV/AIDS.
        The bill would require that the Secretary issue this
    guidance not later than 12 months after enactment. Beginning
    two years after enactment, the Secretary would be required to
    review and report to Congress annually on progress in
    implementing targeted outreach, application and enrollment
    assistance, and administrative simplification methods for
    vulnerable and underserved populations.

    Sec. 1784 Prohibitions on Federal Medicaid and CHIP payment for
            undocumented aliens

                Current Law
        The Medicaid statute prohibits federal payments to state
    Medicaid programs for Medicaid services furnished to
    unauthorized aliens (i.e., aliens not lawfully admitted for
    permanent residence or otherwise permanently residing in the
    U.S. under color of law). The statute makes an exception for
    services that are necessary to treat an emergency medical
    condition of an unauthorized alien who otherwise meets Medicaid
    eligibility requirements. The Personal Responsibility and Work
    Opportunity Reconciliation Act of 1996 (PRWORA, P.L. 104-193)
    prohibits noncitizens who are not considered to be ``qualified
    aliens'' (e.g., legal permanent residents, asylees, refugees)
    from receiving Medicaid or CHIP benefits (other than for
    treatment of an emergency medical condition).
                Proposed Law
        The bill provides that nothing in Title VII of Division B
    shall change current prohibitions against federal Medicaid and
    CHIP payments under titles XIX and XXI of the Social Security
    Act on behalf of individuals who are not lawfully present in
    the United States.

    Sec. 1785. Demonstration project for stabilization of emergency medical
            conditions by non-publicly owned or operated institutions for
            mental diseases

                Current Law
        Medicaid does not reimburse for services provided to
    Medicaid beneficiaries receiving care in institutions for
    mental disease (IMD), except to those patients under age 21
    receiving inpatient psychiatric care and individuals age 65 and
    over. The Medicaid statute defines an IMD as a hospital,
    nursing facility, or other institution of more than 16 beds
    that is primarily engaged in providing diagnosis, treatment, or
    care of persons with mental diseases, including medical
    attention, nursing care and related services.
                Proposed Law
        The Secretary of HHS would be required to establish a
    three-year Medicaid demonstration project under which eligible
    states would reimburse IMDs that are not publicly owned or
    operated for services provided to Medicaid eligibles age 21 to
    64 who are in need of medical assistance to stabilize an
    emergency medical condition. The Secretary would select among
    states applying to participate in the project so as to provide
    geographic diversity.
        The bill appropriates $75 million in FY 2010 to carry out
    this demonstration project. These funds would remain available
    for obligation through December 31, 2012. Within this $75
    million total, the Secretary would allocate funds among states
    selected to participate in the program. The Secretary would use
    these funds to pay, on a quarterly basis, the federal share of
    the cost of the project at the state's regular federal matching
    rate, up to the state's allocation. The Secretary could not
    make a matching payment to a state under this project after
    December 31, 2012.
        For purposes of carrying out this demonstration project,
    the bill requires the Secretary to waive the limitation on
    payment for services to Medicaid beneficiaries residing in
    IMDs. The bill authorizes (but does not require) the Secretary
    to waive other requirements of Titles XI and XIX of the Social
    Security Act, including the requirements of statewideness and
    comparability, only to the extent necessary to carry out the
    demonstration project.
        The Secretary would be required to establish a mechanism
    for in-stay review before the third day of inpatient stay to
    determine whether or not an individual with an emergency
    medical condition has been stabilized (i.e., the emergency
    medical condition no longer exists with respect to the
    individual and the individual is no longer dangerous to him or
    herself or others).
        Up to $75 million would be appropriated for fiscal year
    2010. Such funds would remain available for obligation for
    three years through December 31, 2012. The Secretary would be
    required to allocate funds, on a quarterly basis, based on
    their availability and the FMAP formula.
        The bill would require the Secretary to submit annual
    reports to Congress on the progress of the demonstration
    project as well as a final report that includes an evaluation
    of the demonstration's impact on the functioning of the health
    and mental health service system and on Medicaid enrollees. The
    bill specifies certain evaluation measures, including whether
    the project produced a significant reduction in emergency room
    visits or the duration of emergency room stays by Medicaid
    beneficiaries. The Secretary would be required to include in
    the final report a recommendation regarding whether the
    demonstration project should be continued after December 31,
    2012, and expanded on a national basis.

                       TITLE IX--MISCELLANEOUS PROVISIONS

    Sec. 1901. Repeal of the trigger provision

                Current Law
        The Hospital Insurance (HI) and Supplementary Medical
    Insurance (SMI) trust funds are overseen by a board of trustees
    that reports annually to Congress. The Medicare Prescription
    Drug, Improvement, and Modernization Act of 2003 (P.L. 108-173,
    MMA), Subtitle A of title VIII requires the trustees' report to
    include an expanded analysis of Medicare expenditures and
    revenues. Specifically, a determination must be made as to
    whether or not general revenue financing will exceed 45% of
    total Medicare outlays within the next seven years. General
    revenue financing is defined as total Medicare outlays minus
    dedicated financing sources (i.e., HI payroll taxes; income
    from taxation of Social Security benefits; state transfers for
    prescription drug benefits; premiums paid under Parts A, B, and
    D; and any gifts received by the trust funds). MMA requires
    that if an excess general revenue funding determination is made
    for two successive years, the President must submit a
    legislative proposal to respond to the warning. Congress is
    required to consider the proposals on an expedited basis.
    However, passage of legislation within a specific time frame is
    not required.
                Proposed Law
        Because the 45% trigger is an arbitrary threshold with no
    connection to program efficiency or Medicare's long-term
    sustainability, it should not be given preference in setting
    the agenda for consideration of modifications to the program.
        This provision repeals the 45% trigger.

    Sec. 1902. Repeal of the comparative cost adjustment (CCA) program

                Current Law
        The MMA requires the Secretary to establish a program for
    the application of comparative cost adjustment (CCA) in CCA
    areas beginning in 2010. The six-year program will begin
    January 1, 2010, and end December 31, 2015. The program is
    designed to test direct competition among local Medicare
    Advantage (MA) plans, as well as competition between local MA
    plans and fee-for-service Medicare. This program will occur
    only in a limited number of statutorily qualifying areas in the
    country.
        The benchmark for MA local plans in a CCA area will be
    calculated using a formula that weights (1) the projected (fee-
    for-service) FFS spending in an area (with certain adjustments
    for demographics and health status) and (2) a weighted average
    of plan bids.
        For Medicare beneficiaries in traditional Medicare, Part B
    premiums in CCA areas will be adjusted either up or down,
    depending on whether the FFS amount is more or less than the
    CCA area benchmark. If the FFS amount is greater than the
    benchmark, beneficiaries in traditional Medicare FFS will pay a
    higher Part B premium than other FFS beneficiaries in non-CCA
    areas. If the FFS amount is less than the benchmark, the Part B
    premium for FFS beneficiaries will be reduced by 75% of the
    difference. These increases and decreases are subject to a 5%
    limit; that is, adjustments to Part B premiums in CCA areas
    cannot exceed 5% of the national part B premium. Beneficiaries
    in traditional Medicare FFS with incomes below 150% of poverty,
    who qualify for low-income subsidies under the Medicare
    prescription drug program, will not have their Part B premium
    increased.
                Proposed Law
        The CCA demonstration is projected by CBO to increase
    government spending because it incorporates inflated Medicare
    Advantage benchmarks. That runs counter to its goal of
    improving program efficiency. Accordingly, in order to minimize
    waste, the provision repeals the comparative cost adjustment
    program.
        In addition, the provision addresses the problem of
    beneficiaries in fee-for-service Medicare facing changes in
    their Part B premiums resulting from the bidding behaviors of
    private Medicare Advantage.

    Sec. 1903. Extension of gainsharing demonstration

                Current Law
        Section 5007 of the Deficit Reduction Act of 2005 (P.L.109-
    171; DRA) authorizes a gainsharing demonstration to evaluate
    arrangements between hospitals and physicians designed to
    improve the quality and the efficiency of care provided to
    beneficiaries. In the absence of this DRA authority,
    gainsharing arrangements are restricted by the Civil Monetary
    Penalty law. CMS is operating two projects, each consisting of
    one hospital in New York and West Virginia. Although authorized
    to begin on January 1, 2007, the project began on October 1,
    2008, and will end as mandated on December 31, 2009. The
    Secretary was required to submit a report on quality
    improvement and achieved savings as a result of the
    demonstration no later than December 1, 2008. The final report
    on these issues was due on May 1, 2010. The project was
    appropriated $6 million in FY2006 to be available for
    expenditure through FY2010.
                Proposed Law
        The authority to conduct the gainsharing demonstration
    would be extended until September 30, 2011. The due date of the
    quality improvement and achieved savings report would be
    extended from December 1, 2008, to March 31, 2011. The final
    report would be due March 31, 2013, instead of May 1, 2010. An
    additional $1.6 million would be appropriated in FY2010. All
    appropriations would be available for expenditure through
    FY2014.

    Sec. 1904. Grants to States for quality home visitation programs for
            families with young children and families expecting children
            and families expecting children

        and

    Sec. 1905. Improved coordination and protection for dual eligibles

                Current Law
        There are no specific provisions in current law for
    coordination and protection of dual eligibles.
                Proposed Law
        The provision directs the Secretary to create an
    identifiable office or program within CMS to improve
    coordination between Medicare and Medicaid and to improve
    protections for dual eligibles. Dual eligibles would be defined
    as individuals eligible for both Medicare and Medicaid and
    would include those individuals who are eligible for benefits
    under the Medicare Savings Program (MSP). The CMS office or
    program would: (1) review Medicare (Parts A, B, and C) and
    Medicaid policies on enrollment, benefits, service delivery,
    payment, and grievance and appeals processes; (2) identify
    areas of Medicare and Medicaid policies where better
    coordination or protection could improve care and reduce costs
    for duals; and (3) issue guidance to states on how to improve
    coordination and protection for dual eligibles.
        The elements of improved coordination and protection would
    include efforts (1) to simplify access by dual eligibles to
    benefits and services under Medicare and Medicaid; (2) to
    improve care continuity for dual eligibles and ensure safe and
    effective care transitions; (3) to harmonize regulatory
    conflicts between Medicare and Medicaid rules affecting dual
    eligibles; and (4) to improve Medicare and Medicaid's combined
    total cost and quality performance for dual eligibles.
        The Secretary's responsibilities for implementing the CMS
    office or program for coordination and protection for dual
    eligibles would include: (1) examination of Medicare and
    Medicaid payment systems to develop strategies to foster more
    integrated and higher quality care; (2) development of methods
    to facilitate access for dual eligibles to post-acute and
    community-based services and to identify actions to improve
    coordination of community-based care; (3) a study of enrollment
    in MSP (for both Medicare and Medicaid) to identify methods to
    more efficiently and effectively reach and enroll dual
    eligibles; (4) an assessment of communication strategies aimed
    at dual eligibles, including the Medicare website, 1-800-
    MEDICARE, and the Medicare handbook; (5) research and
    evaluation of areas where service utilization, quality, and
    access to cost sharing protection could be improved and an
    assessment of factors relating to enrollee satisfaction with
    services and delivery; (6) collection and dissemination to the
    public of data and a database that describes eligibility,
    benefits, and cost-sharing assistance available to dual
    eligibles by state; (7) monitoring total combined Medicare and
    Medicaid program expenditures in serving dual eligibles and
    making recommendations to optimize total quality and cost
    performance across both programs; and (8) coordination of
    Medicare Advantage plan activities under Medicare and Medicaid.
        Within one year after enactment of this provision and then
    every three years thereafter, the Secretary would be required
    to submit a report to Congress on the progress in improving
    coordination and protection for dual eligibles as described in
    this provision.

    Sec. 1906. Standardized marketing requirements under the Medicare
            Advantage and Medicare prescription drug plans (PDP)

                Current Law
        Medicare Advantage (MA) organizations are required to
    submit marketing brochures and enrollment forms to CMS for
    review and approval at least 45 days before distribution. If
    using CMS model materials, the approval time is reduced from 45
    to 10 days. As part of the review process, CMS must ensure that
    the information provided to beneficiaries is not inaccurate or
    misleading. MA organizations are also required to develop
    marketing materials that provide an adequate description of
    plan benefits, providers, and co-insurance; an explanation of
    the grievance and appeals process; notification of the open
    enrollment period; and a statement indicating that either the
    plan or CMS can terminate the contract, thereby resulting in
    the beneficiary's disenrollment from the plan.
        CMS has also developed standards for regulating the
    marketing conduct of MA organizations. These standards include
    prohibitions against door-to-door soliciting, providing cash or
    other monetary rebates to induce enrollment, and conducting
    misleading or confusing activities, such as claiming that the
    MA organization has been endorsed by CMS or Medicare. Further,
    providers cannot distribute information to beneficiaries
    comparing benefits across plans or allow beneficiaries to
    complete enrollment applications in provider offices.
        Except in instances where the beneficiary initiates
    contact, plans will be prohibited from soliciting beneficiaries
    door-to-door or on the phone. Cross-selling of non-health
    products, providing meals to prospective enrollees, marketing
    or selling plans at educational events or in areas where health
    care is delivered (i.e., physician offices or pharmacies), and
    using sales agents that are not state licensed are also
    prohibited. The Medicare Improvement for Patients and Provides
    Act required that by November 15, 2008, the Secretary establish
    limitations on other plan marketing activities such as co-
    branding, the scope of marketing appointments with prospective
    enrollees, and agent compensation and training. MA plans will
    be required to provide states with information on (1) agent and
    broker terminations and (2) at state request, performance and
    licensing of agents, brokers, and any third party representing
    the plan. After January 1, 2010, MA plans will be required to
    include the plan type in all plan names.
                Proposed Law
        This provision would require the Secretary to request the
    National Association of Insurance Commissioners (NAIC) to
    develop standardized marketing requirements for MA and PDP
    plans and submit a report with the requirements to the
    Secretary no later than 9 months after the enactment date of
    this legislation. The requirements would be required to include
    the prohibitions on marketing activities already included in
    the statute and may prohibit a MA or PDP plan from completing
    any portion of an election form.
        The standardized marketing requirements would also be
    required to include the following standards: (1) standards
    related to fair and appropriate commissions for MA and PDP plan
    agents and brokers, including a prohibition on extra bonuses or
    incentives; (2) standards for the disclosure of commissions;
    and (3) standards related to other forms of compensation.
    Standards would be required to ensure that the compensation
    paid to agents and brokers create incentives for enrolling
    beneficiaries in a plan that best meets their health care
    needs. Standards must also address the conduct of agents
    participating in on-site promotions at facilities that have a
    co-branding relationship with the MA or PDP plan. The NAIC
    would have the discretion to establish other standards related
    to unfair marketing and trade practices.
        If the NAIC develops these standards and submits the
    required report to the Secretary, the Secretary would be
    required to promulgate regulations adopting the NAIC's
    requirements. If the NAIC does not develop or submit a report
    to the Secretary, the Secretary would still be required to
    promulgate regulations for standardized marketing requirements.
    These regulations would have to meet the same requirements
    mandated for the NAIC, and the Secretary would be authorized to
    establish other standards as appropriate. The regulations would
    take effect one year after enactment of this legislation
    beginning with the first open enrollment period. Both the NAIC
    and the Secretary would be required to consult with a working
    group of representatives, selected in a manner that insures
    balanced representation, of MA or PDP plans, consumers groups,
    and other qualified individuals when developing the marketing
    standards.
        With regards to enforcement, the provision would require
    that states report violations of these marketing requirements
    to CMS. The Secretary would then be required to submit an
    annual report to Congress on the enforcement of these
    requirements and any recommendations as appropriate. A list of
    alleged violations reported by a state, MA, or PDP plan and
    their disposition must be included in the report.
        The Secretary would be prohibited from establishing other
    standards that would supersede state laws or regulations that
    enact these marketing requirements. Finally, this provision
    would preempt any provision in the Medicare statute or this
    legislation from: (1) prohibiting a state from conducting a
    market conduct examination, or (2) from imposing sanctions
    against MA or PDP plans or their agents and brokers for
    violations of these requirements. All MA and PDP plans would be
    required to comply with these requirements on the date these
    regulations were implemented.

    Sec. 1907. NAIC recommendations on the establishment of standardized
            benefit packages for Medicare Advantage plan and Medicare
            prescription drug program plan

                Current Law
        No provision.
                Proposed Law
        This provision would require that the Secretary request
    that the NAIC establish a committee to study and make
    recommendations to the Secretary and Congress on the
    establishment and regulation of standardized benefit packages
    for MA and PDP plans.

    Sec. 1908. Application of emergency services laws

                Current Law
        SSA section 1867 requires hospital emergency departments to
    examine and treat any individual who comes to the hospital with
    an emergency medical condition, and any woman who is in labor
    (the Emergency Medical Treatment and Active Labor Act--EMTALA).
    The section requires hospitals to offer treatment, within their
    capacity and with the individual's consent, to stabilize the
    emergency condition, or transfer the individual to another
    medical facility. The section specifies restrictions on
    transferring an individual to another medical facility. It also
    provides for civil penalties for hospitals that do not comply
    with the requirements of this section. This section may not be
    construed to preempt state or local law unless it conflicts
    directly with the specified requirements. In addition, the
    section prohibits discrimination and delay in examining or
    treating the individual with the emergency condition. It
    provides protections to whistleblowers who report violations of
    the requirements of this section.
                Proposed Law
        The provision states that this Act would not relieve health
    care providers of requirements to provide emergency services
    required by EMTALA or other relevant state or federal laws.

    Sec. 1909. Nationwide program for national and State background checks
            on direct patient access employees of long-term care facilities
            and providers

                Current Law
        Section 307 of the Medicare Prescription Drug, Improvement,
    and Modernization Act (MMA) of 2003 (P.L. 108-173) established
    the framework for a program to evaluate national and state
    background checks on prospective employees who have direct
    access to patients of long-term care facilities or providers.
    According to CMS, the program's purpose was to identify
    efficient, effective, and economical procedures for conducting
    background checks. A pilot program was administered by CMS, in
    consultation with the Department of Justice (DoJ). The pilot
    program operated from January 2005 through September 2007 in
    seven States (Alaska, Idaho, Illinois, Michigan, Nevada, New
    Mexico, and Wisconsin) selected by CMS to participate in the
    Background Check Pilot Program.
                Proposed Law
        The provision would require the Secretary to establish a
    nationwide program for national and State background checks on
    direct patient access employees of certain long-term care (LTC)
    facilities or providers and provide federal matching funds to
    states to conduct these activities. Except for certain
    modifications described below, the Secretary would be required
    to carry out the nationwide program under similar terms and
    conditions as the Background Check Pilot program under MMA
    section 307, as specified. The Committee intends that the
    Secretary make relevant changes to the provisions based upon
    lessons learned from the MMA pilot program and that are
    reflected in the legislative language. Under the nationwide
    program, the Secretary would be required to enter into
    agreements with newly participating states, as specified, and
    certain previously participating states, as specified.
        According to the procedures established under the pilot
    program, certain LTC providers would be required to obtain
    state and national criminal history and other background checks
    on their prospective employees through such means as the
    Secretary determines appropriate. To conduct these checks,
    states would utilize a search of state-based abuse and neglect
    registries and specified state and federal databases and
    records, including a fingerprint check. States would also be
    required to describe and test methods that reduce duplicative
    fingerprinting, including the development of a ``rap back''
    capability, as specified. The Committee intends that the
    Secretary implement this provision in a fashion that does not
    result in application fees for potential long-term care
    workers.
        States that enter into an agreement with the Secretary
    would be responsible for monitoring compliance with the
    requirements of the nationwide program and have specified
    procedures in place, including procedures to: (1) conduct
    screening and criminal history background checks; (2) monitor
    compliance by LTC facilities and providers; (3) provide for a
    provisional period of employment of a direct patient access
    employee, as specified; (4) provide procedures for an
    independent process by which a provisional employee or an
    employee may request an appeal, or dispute the accuracy of, the
    information obtained in a background check, as specified; (5)
    provide for the designation of a single state agency with
    specified responsibilities; (6) determine which individuals are
    direct patient access employees; (7) as appropriate, specify
    disqualifying offenses, including convictions for violent
    crimes; and (8) describe and test methods that reduce
    duplicative fingerprinting, as specified.
        States would be required to guarantee (directly or through
    donations from public or private entities) a designated amount
    of non-federal contributions to the program. The federal
    government would provide a match equal to three times the
    amount a state guarantees, except that federal funds would not
    exceed $3 million for newly participating states and $1.5
    million for previously participating states.
        The term ``LTC facility or provider'' would be defined to
    mean the following types of facilities or providers which
    receive payment for services under Medicare or Medicaid:
    skilled nursing facilities; nursing facilities; home health
    agencies; hospice providers; LTC hospitals; providers of
    personal care services; providers of adult day care;
    residential care providers that arrange for, or directly
    provide, LTC services, including certain assisted living
    facilities that provide a nursing home level of care
    established by the Secretary; intermediate care facilities for
    the mentally retarded (ICF/MRs); and other LTC facilities or
    providers of services under Medicare and/or Medicaid that the
    participating State determines appropriate. The term ``direct
    patient access employee'' would be defined to mean any
    individual who has access to a patient or resident of a LTC
    facility through employment or contract and who has duties that
    involve (or may involve) one-on-one contact with a patient or
    resident of a facility or provider, as determined by the state
    for purposes of the nationwide program. Such term does not
    include volunteers unless they have equivalent duties that
    involve (or may involve) one-on-one contact with a patient or
    resident of a LTC facility or provider.
        The HHS Inspector General would be required to conduct an
    evaluation of the nationwide program and submit a report to
    Congress no later than 180 days after completion of the
    national program. The Secretary of the Treasury would be
    required to transfer to HHS an amount specified by the HHS
    Secretary as necessary (not to exceed $160 million) to carry
    out the nationwide program for fiscal years 2010 through 2012.
    Such amounts would be required to remain available until
    expended.

    Sec. 1910. Establishment of Center for Medicare and Medicaid Payment
            Innovation (CMPI) within CMS

                Current Law
        Medicare undertakes research to study test new approaches
    to paying providers, delivering health care services, or
    providing benefits to Medicare beneficiaries. In accordance
    with Medicare's demonstration authority (Section 402 of the
    Social Security Amendments of 1967), demonstration projects are
    required to determine whether or not changes in reimbursement
    would increase the efficiency and economy of health care
    services without adversely affecting quality. Demonstrations,
    which typically run from 1 to 5 years, are conducted in select
    geographic regions and with certain subgroups of beneficiaries.
    CMS requires that all demonstrations be evaluated. If
    successful, administrative or payment changes may be
    implemented nationwide across the Medicare program. For
    example, results from various demonstration studies helped
    facilitate the adoption of the inpatient prospective payment
    system (IPPS) and Medicare managed care. Although
    demonstrations may be initiated by both the agency and
    Congress, the number of congressionally mandated demonstrations
    has increased in recent years and the number of CMS-initiated
    pilots has declined.
        Under the Medicaid program, the SSA authorizes several
    waiver and demonstration authorities to provide states with the
    flexibility to operate their programs outside of program rules.
    Medicaid waivers allow states to experiment with different
    approaches in the delivery of health care services or adapt
    their programs to the special needs of particular geographic
    areas or groups of Medicaid beneficiaries. The primary waiver
    authorities include: Section 1115 Research and Demonstration
    Projects, Section 1915(c) Home and Community-Based Services
    Waivers (HCBS), Section 1915(b) Managed Care/Freedom of Choice
    Waivers, and Section 1915(b)/(c) Waivers. States submit
    proposals outlining proposed waiver projects to CMS for
    approval before implementing these programs. In recent years,
    there has been increased interest among states in waiver
    programs as a means to restructure Medicaid coverage, control
    costs, and increase flexibility.
        Both Medicare and Medicaid demonstrations are currently
    overseen by CMS's Office of Research and Development.
                Proposed Law
        This provision would add a new section (1115A) to the SSA
    to create a Center for Medicaid and Medicaid Payment Innovation
    (CMPI) within the Centers for Medicare and Medicaid Services
    (CMS) to test and evaluate Medicare and Medicaid payment
    models. Payment models would be selected according to their
    likelihood of improving patient care and reducing program
    costs.
        The Director of the CMPI would report to the CMS
    Administrator. Demonstrations carried out under sections 1222
    and 1236 of the AAHCA of 2009 would be conducted by the CMPI in
    accordance with the rules of this provision.
        The Secretary would be required to give preference to
    testing models that address populations for which deficits in
    health care have resulted in poor clinical outcomes or
    avoidable expenditures. CMS staff would determine which payment
    models to test at the CMPI. If determined appropriate, the
    Secretary would be authorized to gather input from outside the
    Center when making decisions. The CMPI would also be required,
    through open door forums or other mechanisms, to consult with
    relevant federal agencies as well as experts in medicine and
    health care management in carrying out its functions. The
    Secretary would have the authority to waive Medicare statutory
    requirements and certain Medicaid rules governing provider
    payments and state plans, but only for purposes of testing of
    models under this section.
        Models to be tested would be expected to reduce program
    costs in either or both programs and enhance the quality of
    care. Unlike current Medicare and Medicaid demonstration
    projects, payment models under the CMPI would not have to
    demonstrate budget neutrality as a condition of participation.
    However, the Secretary would be required to terminate or modify
    a model if the Chief Actuary of CMS certifies that the model
    does not meet one the of the three conditions: (1) improve the
    quality of care without increasing spending under Medicare or
    Medicaid, (2) reduce spending without decreasing the quality of
    care, or (3) improve the quality of care and reduce spending.
    Termination could occur at any time after the testing process
    has begun. The Secretary would be required to evaluate every
    payment model tested. Evaluations must include an analysis of
    the quality of care delivered under the model (using patient
    outcome measures) and changes in spending under Medicare and
    Medicaid. All evaluation results must be made public in a
    timely fashion.
        The Secretary would be authorized to expand the duration
    and scope of a model, which could include nationwide
    implementation, if the Secretary determines that an expansion
    would improve quality without increasing spending under
    Medicare or Medicaid, reduce spending without decreasing
    quality, or improve quality and reduce spending. In the
    Medicaid program, implementation of payment models nationwide
    would be required unless a state demonstrates to the
    satisfaction of the Secretary that implementation would not be
    administratively feasible or appropriate to the state health
    care delivery system. The chief actuary of CMS would also have
    to certify that such an expansion would reduce net program
    spending or at least not increase program spending.
        Judicial and administrative review of the selection,
    design, termination, modification, or expansion of payment
    models would be prohibited under this provision. This includes
    any judicial or administrative review of a determination made
    by either the Secretary or the Chief Actuary necessary for
    expansion. Additionally, United States Code regulations related
    to the Coordination of Federal Information (Chapter 35 of Title
    44) would not apply to the testing, evaluation, or expansion of
    payment models.
        The provision would provide funding in the amount of $350
    million for FY2010 from the Medicare Part B Trust Fund for the
    design, implementation, and evaluation of payment models, as
    well as for additional benefits not otherwise covered under
    Title XI of the SSA. For fiscal years beyond 2010, the amount
    provided would be equal to the previous year's amount increased
    by the annual percentage increase in total Medicare
    expenditures for the previous fiscal year. The provision would
    also provide an additional $25 million, for each fiscal year
    for administrative costs related to the testing of payment
    models in the Medicaid program.
        Beginning in 2012, and at least once every two years, the
    Secretary would be required to submit to Congress a report on
    the activities of the CMPI. Reports would be required to
    include descriptions of the payment models being tested, models
    chosen for expansion, results from evaluations, and
    recommendations for legislative action to facilitate the
    models' development and expansion.

      DIVISION C--PUBLIC HEALTH AND WORKFORCE DEVELOPMENT EXPLANATION OF
                                   DIVISION C

        The Committee has conducted multiple hearings and
    investigations about health insurance and how to get it to all
    Americans. But as valuable as it is, health insurance cannot do
    everything necessary to make our nation healthy. Even if other
    parts of this legislation make it possible for everyone to be
    insured, there will still be a major role for public health.
    Moreover, there will be an ongoing need for funding for these
    public health activities.
        ``Public health'' includes many different things:
         It is working with groups and whole communities to
    improve health, often more effectively than could be done
    between a provider and a patient. Fluoridation of water for a
    town is, for instance, vastly better than simply filling every
    citizen's cavities. Exercise programs to prevent obesity are
    better than having to treat diabetes among people who become
    obese.
         It is tailoring health insurance and health care
    to prevent and diagnose disease early rather than simply
    treating it in its later stages. Immunizations are always
    better than outbreaks. Screening for hypertension is better
    than simply waiting for strokes.
         It is providing for safety-net services where the
    insurance market alone fails to do so. Community health
    centers, HIV-service providers, and family planning clinics
    provide care to people who might not otherwise be able to find
    a provider. Health professions education programs can add to
    the primary care workforce when the market might produce only
    specialists.
         And, least glamorous but crucial, it is the
    infrastructure of daily disease control and health promotion.
    Closing down unsanitary restaurants is better than treating
    food poisoning. Compiling and studying epidemic trends can
    prevent major waves of disease.
        The case might be made be clearer by analogy: No community
    would be well-served if all its homeowners had fire insurance
    but there were no fire departments, firefighters, fire
    hydrants, smoke detectors, or indoor sprinklers. That very
    well-insured town would still burn to the ground. Insurance is
    necessary, but it is nowhere near sufficient.
        The Committee intends to deal with both approaches, with
    insurance and with public health. This requires going beyond
    the investments in divisions A and B of the legislation to
    provide health insurance to enact these provisions of division
    C to make significant public health investments.
        It would be insufficient simply to authorize future
    appropriations for these activities while providing mandatory
    spending for coverage initiatives. While the Committee on
    Appropriations has shown ongoing and great leadership in these
    public health programs, the budget allocations for that
    Committee are too tight to allow significant new initiatives of
    these sorts. Consequently the Committee on Energy and
    Committee, working closely with the Committee on Appropriations
    and the Committee on Budget, has endeavored to provide as firm
    a funding and organizational base for these services as
    possible--because they are essential in making insurance
    efficient and productive and in making the nation healthier.
        This Division of the legislation and this accompanying
    report are laid out in five major parts:
               Title I: Community Health Centers
               Title II: Workforce
               Title III: Prevention and Wellness
               Title IV: Quality and Surveillance
               Title V: Other Public Health Initiatives
        Each deals with an essential complement to health reform.
        Community health centers are a known and valuable part of
    the primary care delivery system. As millions of people are
    newly insured and enter the health care system, CHCs will be a
    first point of call for many of them.
        Moreover, as the system begins to provide basic care to the
    uninsured, it is generally agreed that we have insufficient
    numbers of health professionals--particularly primary care
    providers, nurses, and public health workers. The Workforce
    provisions are intended to help remedy this problem.
        Everyone now seems to agree that the key to better
    investment and quality improvement in the American health care
    system lies in efforts to prevent disease and disability in the
    first place and to manage them if they occur. The Prevention
    and Wellness provisions outline an agenda of strategy,
    research, clinical prevention, community prevention that will
    move the nation to healthier lives.
        The Quality and Surveillance sections establish a Center
    for Quality Improvement and an Assistant Secretary for Health
    Information. The former is to identify, develop, evaluate, and
    disseminate best practices in health care throughout the
    nation. The latter is to coordinate, develop, and disseminate
    the wealth of data that will become available as both new
    initiatives in health information technology and health reform
    come to be.
        Other Public Health Initiatives contains a variety of
    activities, ranging from drug-pricing initiatives to school-
    based health clinics. Each of these deals with incremental
    improvements or corrections, and each plays a part in the
    overall goals of health reform.

    Sec. 2001. Table of contents; references

                Current Law
        No comparable provisions.
                Proposed Law
        Following the table of contents for Division C, this
    provision states that all amendments made in such division are
    to the Public Health Service Act (PHSA).

    Sec. 2002. Public Health Investment Fund

                Current Law
        No comparable provisions.
                Proposed Law
        This provision would establish a Public Health Investment
    Fund, into which the following amounts would be deposited from
    general revenues of the Treasury:
               $4.6 billion for FY2010
               $5.6 billion for FY2011
               $6.9 billion for FY2012
               $7.8 billion for FY2013
               $9.0 billion for FY2014
        Amounts in the Fund would be authorized to be appropriated
    for carrying out various designated provisions in Division C,
    and would be in addition to any other amounts authorized to be
    appropriated for such purposes.
        Amounts in the Fund could be authorized to be appropriated
    only if the following two conditions were met, regarding
    baseline funding: (1) appropriations for a given fiscal year
    are no less than the amounts appropriated in FY2008 for (i) the
    Agency for Healthcare Research and Quality (AHRQ); (ii) the
    National Center for Health Statistics; (iii) the National
    Health Service Corps (NHSC), including the scholarship and loan
    repayment programs; (iv) community health centers; and (v)
    various designated workforce programs under PHSA titles VII and
    VIII; and (2) the amount appropriated to the Prevention and
    Wellness Trust (as would be established in sec. 3111 of this
    legislation) for a given fiscal year is no less than the
    specified amount appropriated to the Prevention and Wellness
    Fund under the American Recovery and Reinvestment Act (P.L.
    111-5) and allocated for evidence-based prevention and wellness
    programs (i.e., $650 million).
        The Committee anticipates working with the Committee on
    Budget to draft language agreeable to both Committees to assure
    that amounts deposited in the Investment Fund by this
    legislation will be included in the budget score for such
    legislation, and that any amounts appropriated under this
    section in any future year, and associated outlays, would not
    count toward the allocations for the Committee on
    Appropriations under future budget resolutions.

                       Title I--Community Health Centers

        Real health reform involves not only an expansion of health
    insurance coverage, but also access to high-quality care for
    patients and communities in need.
        The community health centers (CHCs) program has long met
    this need. Currently, CHCs serve 19 million people in some
    7,000 centers across the United States.
        CHCs offer comprehensive primary and preventive care to
    all, regardless of ability to pay. Numerous studies have
    documented the quality of the care provided by the centers as
    well as their innovative service delivery mechanisms. As a
    result, CHCs are often credited with improving health outcomes
    as well as reducing, or in some cases even eliminating, health
    disparities.
        The centers have also been demonstrated to produce
    significant healthcare cost savings. A 2009 study out of The
    George Washington University School of Public Health (Using
    Primary Care to Bend the Curve: Estimating the Impact of a
    Health Center Expansion on Health Care Costs) indicates that
    expenditures for health center users in 2006 were approximately
    47.9% lower than for non-users. This study also shows that a
    significant expansion in the number of patients served by
    health centers could yield a potential savings for the nation's
    health care system of $212 billion over 10 years, with $59
    billion of that amount attributable to federal Medicaid
    savings.
        Title I is intended to build on the extraordinary work of
    the CHC program and, in turn, to help lay the groundwork for
    many of the health reforms provided for in other divisions of
    this legislation.

    Sec. 2101. Increased funding

                Current Law
        PHSA sec. 330 provides for the general authority for the
    federal community health centers program. Subsection (r) of
    that section authorizes appropriations for such program through
    FY2012.
                Proposed Law
        This provision would amend PHSA sec. 330(r) to reauthorize
    the community health centers program through FY2014, and to
    authorize to be appropriated such sums as may be necessary for
    FY2013 and FY2014.
        The provision also would authorize to be appropriated from
    the Public Health Investment Fund (as would be established in
    sec. 2002 of the legislation) the following amounts:
               $1 billion for FY2010
               $1.5 billion for FY2011
               $2.5 billion for FY2012
               $3 billion for FY2013
               $4 billion for FY2014
        These sums from the Fund are in addition to any other
    amounts authorized to be appropriated from general revenues for
    such purposes.
        The Committee has taken this action to ensure immediate
    access to quality health care services to those most in need.
    It is estimated that with the increased funding provided
    through the legislation, the number of poor, low-income, and
    uninsured people served by these centers could double. Such
    access is critically important as the nation begins to
    implement the health insurance reform measures of the
    legislation (Divisions A and B), but that will not be in full
    effect until 2013.

                              Title II--Workforce

        Improvements in healthcare coverage do not automatically
    translate into access to healthcare services (especially
    primary care services), or produce a healthier nation. To
    achieve these twin goals, there must be a sufficient and
    quality health workforce in place. Experts agree: The United
    States does not meet this standard.
        The American Association of Medical Colleges estimates that
    the nation now faces a shortage of some 11,000 primary care
    providers. The nursing problem is even greater: The U.S. Bureau
    of Labor reported in 2007 that the country's nursing shortage
    will grow to more than one million new and replacement nurses
    by the year 2016. And public health workers--whose numbers have
    never been at adequate levels--fare no better. The Association
    of Schools of Public Health estimates that more than 250,000
    public health professionals will be needed by 2020. Expansions
    in health care coverage will undoubtedly strain this already
    stressed health workforce.
        Better numbers alone, however, will not solve this problem
    completely. A sufficient and quality workforce must also be one
    that is diversified and trained to meet the needs of the U.S.
    population in the 21st century.
        The provisions of title II are designed to address these
    and other related health workforce issues. As well, they are
    expected to have both an immediate and long-term impact on
    enhancing the nation's health workforce--on the one hand,
    building capacity in anticipation of full implementation of the
    health reforms established in other divisions of the
    legislation and, in years ahead, sustaining that capacity such
    that the health care needs of all Americans can be met.

                       Subtitle A--Primary Care Workforce

                     Part 1--National Health Service Corps

    Sec. 2201. National Health Service Corps

                Current Law
        PHSA sections 331, 338A, 338B, and 338I authorize various
    aspects of the National Health Service Corps (NHSC). The NHSC
    supports scholarship and loan repayment programs for medical
    school students, nurse practitioners, nurse midwives, physician
    assistants, dental school students, and allied health
    professionals who, in return, agree to a period of service as a
    primary care provider in a federally-designated health
    professional shortage area (HPSA). NHSC clinicians may fulfill
    their service commitments in health centers, rural health
    clinics, public or nonprofit medical facilities, federal or
    state correctional facilities, or within other community-based
    systems of care.
        PHSA sec. 331(i) authorizes the Secretary to carry out
    demonstration projects through which waivers may be granted to
    individuals fulfilling service obligations under the NHSC Loan
    Repayment Program, allowing them to fulfill this obligation
    through work that is not full time. The sec. also provides the
    criteria to be met to qualify for such a waiver, including
    requirements that the Corps member agree: (1) to extend the
    service obligation in exchange for a waiver; and (2) that the
    part-time service provided by the Corps member not be less than
    16 hours of clinical service per week.
        PHSA sec. 337 establishes the National Advisory Council on
    the NHSC to advise the Secretary. Under PHSA sec. 337(b),
    members of the Council are appointed to non-renewable three-
    year terms.
        PHSA sec. 338B authorizes the Secretary to make payments of
    up to $35,000 for the undergraduate and graduate loans of
    individuals in exchange for each year of obligated service.
        PHSA sec. 338C provides authority for various
    administrative aspects related to periods of obligated service.
    Subsection (a) of that sec. requires individuals to meet their
    service obligation by providing clinical services in their
    medical specialty.
                Proposed Law
        This provision would amend PHSA sec. 331(i) to allow the
    Secretary to grant waivers permitting individuals to satisfy
    either part or all of their NHSC scholarship or loan repayment
    service obligation through clinical practice that is half time.
    To receive such a waiver, an individual must agree to double
    the period of obligated service that would otherwise be
    required (in the case of an NHSC scholarship recipient), or
    accept 50% of the amount that would otherwise be provided for
    full-time service for a period of obligated service of two
    years (in the case of a NHSC loan repayment recipient). The
    provision would also make technical amendments throughout PHSA
    sec. 331(i) to conform to the new half-time option, and would
    define the terms ``half-time'' and ``full-time.''
        The provision would amend PHSA sec. 337(b)(1) to delete
    language that prohibits the reappointment of members to the
    NHSC National Advisory Council.
        The provision would amend PHSA sec. 338B(g)(2)(A) to
    increase the maximum annual loan repayment amount available to
    participating individuals, in exchange for each year of
    obligated service. The amount would be set at $50,000 per year
    through FY2011, which the Secretary would adjust for each
    subsequent fiscal year to reflect inflation. The Committee
    notes that the amount of the loan repayment benefit has not
    been adjusted since 1990. The increased amount provided under
    this provision--including the requirement for an annual
    inflation adjustment--is necessary to ensure that the NHSC is
    able to attract both a sufficient number and a highly qualified
    pool of participants.
        The provision would also amend subsection (a) of PHSA sec.
    338C to permit the Secretary to count teaching as clinical
    practice for up to 20% of a period of obligated service. The
    Committee intends that such teaching take place primarily in
    the ambulatory setting, where NHSC personnel are ideally
    located to train the next generation of primary care providers.
        In making these improvements to the NHSC, the Committee
    also notes the important contribution the Corps continues to
    make in addressing the health care needs of those people living
    in underserved communities. Today, approximately 3,600 primary
    care providers are serving in the Corps, providing services to
    almost 3.8 million individuals.
        But as this vulnerable population grows older, there is an
    increasing need and demand for services provided by geriatric
    health professionals as is the case throughout the nation's
    health care system. The Committee is supportive, then, of the
    recent decision by the Corps to include geriatric health
    professionals among those eligible for participation in either
    the scholarship or loan repayment program in all qualifying
    disciplines, including mental and behavioral health. Indeed,
    the Committee would encourage the Health Resources and Services
    Administration (HRSA) to take all appropriate steps to inform
    potential NHSC applicants about these new Corps opportunities.

    Sec. 2202. Authorization of appropriations

                Current Law
        PHSA sec. 338(a) provides for an authorization of
    appropriations to carry out the NHSC program for each fiscal
    year through FY2012. PHSA sec. 338H(a) provides for an
    authorization of appropriations to support the NHSC scholarship
    and loan repayment programs for each fiscal year through
    FY2012.
                Proposed Law
        This provision would amend PHSA sec. 338 to authorize to be
    appropriated ``such sums as may be necessary'' for each of
    FY2010 through FY2014.
        The provision would also amend PHSA sec. 338 to add a new
    subsection at the end to authorize to be appropriated the
    following sums from the Public Health Investment Fund (as would
    be established in sec. 2002 of the legislation):
               $63 million for FY2010
               $66 million for FY2011
               $70 million for FY2012
               $73 million for FY2013
               $77 million for FY2014.
        These sums from the Fund are in addition to any other
    amounts authorized to be appropriated from general revenues for
    such purposes.
        Funds made available through PHSA sec. 338 are intended for
    use in support of NHSC field placement activities, including
    travel and transportation costs of NHSC assignees and training
    and education.
        In addition, this provision would amend PHSA sec. 338H to
    authorize to be appropriated ``such sums as may be necessary''
    for the NHSC scholarship and loan repayment programs for each
    of FY2013 and FY2014.
        The provision would also authorize the following sums to be
    appropriated from the Public Health Investment Fund (as would
    be established in sec. 2002 of this legislation):
               $254 million for FY2010
               $266 million for FY2011
               $278 million for FY2012
               $292 million for FY2013
               $306 million for FY2014
        These sums from the Fund are in addition to any other
    amounts authorized to be appropriated from general revenues for
    such purposes. Funds made available through PHSA sec. 338H are
    intended for use for NHSC recruitment activities, including
    scholarship awards and loan repayment.
        These increases in authorization levels are consistent with
    the action taken by the Congress under the American Recovery
    and Reinvestment Act of 2009 (P.L. 111-5). Under that law, HRSA
    was provided with sufficient resources to double the number of
    health professionals participating in the NHSC--to some 8,000
    individuals--over the next two years, ensuring that HRSA's
    targeted field strength could be met. The funding increases
    provided under this provision will allow HRSA to sustain this
    doubling effort, an initiative that is especially important to
    ensure that there is an adequate supply of primary care
    professionals available to make access to health services a
    reality under the health insurance reform improvements made
    under other parts of this legislation (Divisions A and B).

                Part 2--Promotion of Primary Care and Dentistry

    Sec. 2211. Frontline health providers

                Current Law
        PHSA sections 331, 338A, 338B, and 338I authorize the NHSC.
    The NHSC supports scholarship and loan repayment programs for
    medical school students, nurse practitioners, nurse midwives,
    physician assistants, dental school students, and allied health
    professionals who, in return, agree to a period of service as a
    primary care provider in a federally designated health
    professional shortage area (HPSA).
        PHSA sec. 332 authorizes HPSA designation by the Secretary
    and includes provisions related to the NHSC. Under this
    section, the Secretary may designate an area an HSPA on the
    basis of a: (1) rational delivery area for health services; (2)
    population group; or (3) type of health facility. All federally
    qualified health centers and all rural health clinics are
    deemed to be designated as HPSAs.
        These efforts are focused exclusively on primary care
    providers--in the case of the Corps, only primary care
    providers can participate; in the case of HPSA designation,
    only the availability of primary care providers is measured. In
    each instance, the breadth and depth of the need for health
    services in an area is not necessarily captured. Indeed, there
    are many communities in which the need for medical specialists
    is even more significant than the call for primary care
    providers.
                Proposed Law
        This provision would amend PHSA title III (General Powers
    and Duties of Public Health Service) to add at the end a new
    subpart XI--``Health Professional Needs Areas''--and to
    establish in such subpart a new Frontline Health Provider
    Program. The new program would be modeled on the NHSC loan
    repayment program and is designed to complement that program.
    (The NHSC scholarship program intentionally was not replicated.
    This action was taken by the Committee to eliminate any
    potential competition for qualified applicants between the NHSC
    and the new Frontline Health Provider Program.)
        The purpose of the program is twofold: (1) to create
    incentives to attract health care professionals to provide
    health services in areas which do not meet the threshold
    requirements of a HPSA (as specified in PHSA sec. 332), but
    which, nonetheless, are in great need of such services; and (2)
    to attract into service those health care professionals for
    whom scholarship and loan repayment programs have not
    previously been available. Among such providers are general
    surgeons and certain pediatric subspecialists such as pediatric
    rheumatologists whose services are now in great demand.
        This provision would create new PHSA sections, including:
        Sec. 340H. In General. In this section, the Secretary would
    be required to establish a Frontline Health Providers loan
    repayment program, to address unmet health care needs in health
    professional needs areas under sec. 340I (below).
        The Secretary would be authorized to designate an area, a
    population or a facility as a ``health professional needs
    area.'' To qualify as such, the following criteria would have
    to be met:
               In the case of an area, the area must be a
            rational area for the delivery of health services
               The area, population, or facility must have
            an insufficient capacity of health professionals, or
            high needs for health services, including services to
            address health disparities
               With respect to the delivery of primary
            health services, the area, population, or facility must
            not include a HPSA (as designated under PHSA sec. 332),
            except where the need for such services is not being
            met
        In evaluating an area, population, or facility for
    potential HPSA designation, the Secretary would be guided by
    the criteria currently being used by HRSA for measuring
    ``insufficient capacity'' and ``high needs.'' While some
    variation will be necessary, it is the intent of the Committee
    that these terms have consistent conceptual meaning across
    various HRSA-administered programs.
        It is also the Committee's intent that HPSAs be made
    eligible for the placement of Frontline Health Providers.
    Today, there are many HPSAs whose health care needs are not
    fully met despite the availability of NHSC personnel in their
    area. And some HPSAs do not get NHSC placement at all. The
    Committee anticipates that this problem will continue even with
    the NHSC expansion authorized in this legislation. Thus,
    regardless of their NHSC status, HPSAs that can meet the test
    for unmet health care needs should be eligible to have NHSC
    personnel serve in their area.
        Eligibility for participation would be based upon an
    individual's educational status or professional expertise.
    Thus, an individual must:
               Hold a degree from, or be enrolled as a
            full-time student in one of a number of specified
            health professions schools or training programs listed
            in PHSA sec. 799B; and
               Be a physician, physician assistant, nurse
            practitioner, clinical nurse specialist, certified
            registered nurse anesthetist, certified nurse midwife,
            clinical social worker, clinical psychologist,
            registered dietitian or nutritional professional,
            physical or occupational therapist, qualified speech-
            language pathologist, qualified audiologist,
            respiratory therapist, medical technologist, or
            radiologic technologist.
        Individuals with a degree from a school of public health
    are explicitly excluded from participating in the new Frontline
    Health Providers Program. Sec. 2231 of this legislation
    establishes a new Public Health Service Corps under which
    financial assistance (through scholarship and loan repayment
    programs) is made available to both public health students and
    public health professionals. To avoid any duplication of effort
    such individuals are not eligible for the Frontline Health
    Providers Program.
        For purposes of this section, the term ``health
    disparities'' would have the meaning given such term in PHSA
    sec. 3171 (as would be established in sec. 2301 of this
    legislation) and the term ``primary health services'' would
    have the meaning given that term in PHSA sec. 331(a)(3)(D).
        Sec. 340I. Loan Repayments. In this sec. the Secretary
    would be required to enter into contracts for loan repayment
    with health professionals who agree:
               To serve as a full-time primary health
            services provider or as a full-time or part-time
            provider of other health services for a minimum of two
            years;
               To serve in a health professional needs area
            as designated under PHSA Sec. 340H (as would be
            established in this provision); and
               For individuals completing their health
            profession studies and who have accepted employment as
            a health services provider, to satisfactorily complete
            their education or training
        For individuals who qualify for loan repayment, the
    Secretary would be required to pay, for each year of obligated
    service, an amount on the principal and interest of the
    individual's undergraduate or graduate educational loans (or
    both) that is not greater than 50% of the average award made
    under the NHSC loan repayment program in that year. Individuals
    could satisfy their service requirement through employment in a
    solo or group practice, a clinic, an accredited public or
    private nonprofit hospital, or any other health care entity, as
    deemed appropriate by the Secretary.
        In keeping with the Committee's intention that HRSA look to
    the NHSC loan repayment program as the model in developing the
    new Frontline Health Providers Program, the provisions related
    to that program (PHSA sec. 338B) would be made applicable to
    the new program, except to extent they are inconsistent with
    the relevant provisions of this legislation. The Committee
    makes special note of one such difference. Under current NHSC
    law, the Secretary is not required to redirect any unobligated
    Corps funds to support other public health workforce
    activities; instead, they are automatically returned to the
    Treasury. To ensure that funds appropriated in any given year
    for public health workforce purposes are, in fact, used for
    those functions, the Secretary would be required to transfer
    any unobligated Frontline Health Providers loan repayment funds
    to the NHSC. The Corps, in turn, would be expected to use such
    funds ensure a sufficient number of Corps participants in the
    following fiscal year.
        Sec. 340J. Reports. This section would require the
    Secretary to submit an annual report to Congress on the
    Frontline Health Providers Program.
        Sec. 340K. Allocation. This section would require the
    Secretary to allocate each fiscal year, 90% of any obligated
    funds for loan repayments made to physicians and other health
    professionals who provide primary health services; the
    remaining 10% would be available for health professionals who
    provide other health services.
        This allocation requirement is consistent with the
    Committee's focus on providing targeted support for programs
    designed to help address the nationwide shortage of primary
    health service providers. It recognizes, however, the lack of
    sufficient health care providers in other specialties or
    disciplines in some areas. Thus, the Committee expects the
    Secretary, in making her annual 10% distribution each year, to
    assess which health professionals are in the greatest demand,
    taking into account state and local health workforce needs.

    Sec. 2212. Primary care student loan funds

                Current Law
        No comparable provisions.
        Part A, Subpart II of Part A of PHSA title VII (Health
    Professions Education) establishes federally-supported student
    loan funds for specified health professions. PHSA sec. 735
    establishes general provisions for these loans, which do not
    include provisions regarding personal or family financial
    information.
                Proposed Law
        This provision would amend PHSA sec. 735 by adding a new
    subsection (f). Under this subsection the Secretary would be
    authorized either to require (or to authorize a school or other
    entity to require) applicants for student loans to submit
    financial information for the purpose of determining the
    financial resources available to them to support their
    education as a primary care physician and, in turn, their
    eligibility for a student loan. In determining whether to
    require such information regarding an individual's family
    members, the Secretary would be required to take into account
    the extent to which the individual is financially independent
    from his or her family.
        The provision would also require the Secretary to strike
    the second sentence of 42 CFR 57.206(b). This regulation,
    issued in 1979, establishes certain requirements and guidelines
    related to loan programs for all health profession students
    under PHSA title VII. Among these requirements is one that
    states the Secretary must take into account the financial
    resources of the ``family members'' of an applicant for a title
    VII student loan.
        While this requirement may have been justified at some
    time, it has become apparent to the Committee that it is being
    misused in some instances, particularly with respect to medical
    students. With a significant percentage of such students
    spending time in the workforce before entering medical school--
    on their own--rising, the Committee believes it is appropriate
    to revisit this requirement. In so doing, the Committee has
    specifically eliminated the sentence in current regulations
    that requires a review of financial information of the family
    members of a student loan applicant. It is requiring instead
    that the Secretary issue new student loan regulations that are
    consistent with the provisions of this section. More
    specifically, the Committee is requiring that such regulations
    take into account the extent to which a loan applicant is
    financially independent of his or her family. If in fact an
    applicant is financially independent of her or his family, the
    submission of financial information of family members should
    not be required as part of the student loan application
    process; only the financial information of the individual
    applicant is relevant and should be considered.

    Sec. 2213. Training in family medicine, general internal medicine,
            general pediatrics, geriatrics, and physician assistants

                Current Law
        Part C of PHSA title VII (Health Professions Education)
    establishes training programs in family medicine, general
    internal medicine, general pediatrics, physician assistants,
    general dentistry, and pediatric dentistry that includes
    financial assistance for both trainees and physicians
    participating in such programs. Under subsections (a) through
    (d) of PHSA sec. 747, the Secretary may establish a program of
    grants and contracts for hospitals, medical and osteopathic
    schools, and other nonprofit entities for health professions
    training programs in family medicine, general internal
    medicine, or general pediatrics, and comparable programs in
    dentistry.
        Subsection (e) of PHSA Sec. 747 authorizes appropriations
    for such program and requires the Secretary to use a specified
    allocation formula when making grants and contracts. The
    authorization of appropriations for the program expired at the
    end of FY2002.
                Proposed Law
        This provision would amend PHSA Sec. 747 to redesignate
    subsection (e) as subsection (f), and to strike subsections (a)
    through (d) and in essence, to replace them with following new
    section:
        Sec. 747. Primary Care Training and Enhancement. This
    section is revised to require the Secretary to establish a
    program of grants and contracts for both primary care training
    programs and primary care capacity building activities at
    academic institutions.
        With respect to primary care training programs, accredited
    schools of medicine or osteopathic medicine, accredited
    physician assistant training programs, accredited public or
    non-profit hospitals and public or private nonprofit entities
    (or a consortia of such programs or entities) would be eligible
    for awards to engage in a variety of specified activities in
    support of professional training in various specialties of
    primary care, including family medicine, general internal
    medicine, general pediatrics, or geriatrics as well as
    physician assistant education. Such activities include
    traineeships, fellowships and faculty development.
        With respect to primary care capacity building activities,
    accredited schools of medicine or osteopathic medicine would be
    eligible for awards to support academic units or programs that
    improve clinical teaching in various specialties of primary
    care, including family medicine, general internal medicine,
    general pediatrics, or geriatrics.
        For both the primary care training and capacity building
    awards, the Secretary would be required to give preference to
    applicants with a demonstrated record of one or more of the
    following activities:
               Training primary care providers
               Training individuals from underrepresented
            minority groups or disadvantaged backgrounds
               Training individuals who provide care in
            underserved areas or to populations experiencing health
            disparities including those eligible for Medicaid and
            the Children's Health Insurance Program
               Supporting teaching programs targeting
            vulnerable populations
        In evaluating an applicant's record regarding the training
    of individuals who provide care to populations experiencing
    health disparities, this provision would require that the term
    ``health disparities'' have the meaning given that term in PHSA
    sec. 3171 (as would be established in sec. 2301 of this
    legislation). In evaluating an applicant's record regarding its
    teaching programs that target vulnerable populations, the
    Committee intends to include among those groups, individuals
    who are homeless or living with HIV/AIDS as well as other high-
    risk people.
        The Secretary would be required to submit an annual report
    to Congress on the program.

    Sec. 2214. Training of medical residents in community-based settings

                Current Law
        No comparable provisions.
                Proposed Law
        The provision would redesignate PHSA sec. 748 as PHSA sec.
    749A and insert the following new sec. after PHSA sec. 747:
        Sec. 748. Training of Medical Residents in Community-Based
    Settings. This new sec. would require the Secretary to
    establish a program of grants and contracts for various
    activities related to the training of medical residents in
    community-based settings, including planning and developing new
    primary care residency training programs (new programs), and
    operating or participating in an established primary care
    residency training program (established programs). Entities
    eligible for support include those (1) designated as a
    recipient of Medicare graduate medical education (GME) payments
    under Sec. 1886(k) of the Social Security Act (e.g., non-
    hospital health providers such as clinics or community health
    centers); (2) designated as an approved teaching health center
    in the GME demonstration project required under Sec. 1502(d) of
    this legislation; or (3) which have applied for designation
    under the programs specified in (1) or (2) and have
    demonstrated appropriate involvement of an accredited teaching
    hospital to carry out the inpatient responsibilities associated
    with a primary care residency training program.
        With respect to both new and established programs, the
    Secretary would be required to give preference to applicants
    that (1) support teaching programs that address the health care
    needs of vulnerable populations, or (2) are a federally
    qualified health center (as defined or a rural health clinic as
    those centers are defined respectively under SSA secs.
    1861(aa)(4) and 1861(aa)(2). With respect to established
    programs, the Secretary would be further required to give
    preference to applicants with a demonstrated record in training
    health professionals who provide primary care; individuals who
    are from underrepresented minority groups or disadvantaged
    backgrounds; or individuals who practice in settings with the
    principal focus of serving underserved areas or populations
    experiencing health disparities.
        In evaluating an applicant's record regarding its teaching
    programs that address the health care needs of vulnerable
    populations, the Committee intends to include among those
    groups individuals who are homeless or living with HIV/AIDS as
    well as other high-risk people. In evaluating an applicant's
    record regarding the training of individuals who practice in
    settings with the principal focus of serving populations
    experiencing health disparities, this provision would require
    that the term ``health disparities'' have the meaning given
    that term in PHSA sec. 3171 (as would be established in sec.
    2301 of this legislation).
        Grant or contract award periods would vary, depending upon
    the type of grant or contact being sought. Grants or contracts
    for new programs could not exceed three years; grants or
    contracts for established programs could not exceed five years.
    Moreover, grants for new programs could not be renewed,
    although an entity receiving support for a new program would
    remain eligible for support as an established program provided
    that the two funding periods do not overlap. The Committee has
    taken this approach to help ensure the establishment and
    ongoing operation of as many community-based primary care
    residency programs as possible.
        The Secretary would be required to submit an annual report
    on the programs carried out under this provision.
        For purposes of this sec., the term ``primary care
    resident'' has the meaning given such term in SSA sec.
    1886(h)(5)(H). The term ``primary care residency training
    program'' would mean an approved medical residency program
    training program described in SSA sec. 1886(h)(5)(A) for
    primary care residents that in case of new programs, is
    actively applying for accreditation by the appropriate
    accrediting body, or in the case of established programs, has
    been accredited by the appropriate accrediting body.
        The Committee has established this program as part of its
    overall goal in title II to support professional education
    efforts designed to train those who provide primary care.
    Currently, the vast majority of GME training takes place in the
    hospital setting; only a tiny number of non-hospital providers
    have been designated as GME training facilities, despite
    widespread agreement that more such training should take place
    in the ambulatory setting--the practice setting for most
    clinical care. The Committee expects that with this program in
    place, additional GME training will take place in the
    outpatient setting, including the new demonstration project for
    teaching centers (as would be established in sec. 1502 of this
    legislation).

    Sec. 2215. Training for general, pediatric, and public health dentists
            and dental hygienists

                Current Law
        Part C of PHSA title VII (Health Professions Education)
    establishes training programs in family medicine, general
    internal medicine, general pediatrics, physician assistants,
    general dentistry, and pediatric dentistry that includes
    financial assistance for both trainees and physicians
    participating in such programs. Under subsections (a) through
    (d) of PHSA sec. 747, the Secretary may establish a program of
    grants and contracts for hospitals, medical and osteopathic
    schools, and other nonprofit entities for health professions
    training programs in family medicine, general internal
    medicine, or general pediatrics, and comparable programs in
    dentistry.
        Subsection (e) of PHSA sec. 747 authorizes appropriations
    for such program and requires the Secretary to use a specified
    allocation formula when making grants and contracts. The
    authorization of appropriations for the program expired at the
    end of FY2002.
        PHSA sec. 791 sets forth criteria the Secretary is required
    to use in making grant or contract awards for programs
    authorized under PHSA sec. 747 and sec. 750. Such criteria
    include giving preference to applicants that have a high or
    recently improved rate of placing program graduates in practice
    settings that provide care to medically underserved
    communities.
                Proposed Law
        This provision would amend part C of PHSA title VII (Health
    Professions Education) to add at the end a new PHSA sec. 749:
        Sec. 749. Training for General, Pediatric, and Public
    Health Dentists and Dental Hygienists. This new sec. would
    require the Secretary to establish a program of grants and
    contracts to establish and maintain training programs for oral
    health professionals, including such individuals practicing in
    general dentistry, public health dentistry or dental hygiene.
    Entities eligible to participate in such a program include: (1)
    accredited schools of dentistry; (2) training programs in
    dental hygiene (located in either an accredited school of
    dentistry or an accredited institution of higher education; (3)
    public or private nonprofit entities; or (4) consortia of such
    entities. Such entities could receive support for various
    professional training-related activities, including
    scholarships, loan repayments, traineeships, fellowships, and
    faculty development.
        With respect to loan repayments for full-time dental
    faculty, the Committee underscores the sec.'s focus on
    targeting such faculty who participate in programs of general,
    pediatric or public health dentistry. This view is consistent
    with the overall purpose of subtitle A to increase the number
    of primary care health professionals--including oral health
    professionals--across the country. In addition, in developing
    the loan repayment program under this sec., the Committee
    encourages the Secretary to be guided by the loan repayment
    process used in administering either the nurse faculty loan
    repayment program authorized in PHSA 846A or the loan repayment
    program for disadvantaged students authorized in PHSA sec. 738.
        In awarding grants or contracts, the Secretary would be
    required to give preference to applicants with a demonstrated
    record of one or more of the following activities:
               Training oral health professionals who
            practice general, pediatric, or public health dentistry
               Training individuals from underrepresented
            minority groups or disadvantaged backgrounds
               Training individuals who practice in
            underserved areas or provide services to populations
            experiencing health disparities including those
            eligible for Medicaid and the Children's Health
            Insurance Program, or those with special health care
            needs
               Supporting teaching programs targeting
            vulnerable populations
               Providing instruction regarding the oral
            health status, dental health needs, and clinical oral
            disease management of children, especially underserved
            children
        In evaluating an applicant's record regarding the training
    of individuals who provide services to populations experiencing
    health disparities, this provision would require that the term
    ``health disparities'' have the meaning given that term in PHSA
    sec. 3171 (as would be established in sec. 2301 of this
    legislation). In evaluating an applicant's record regarding its
    training programs that target vulnerable populations, the
    Committee intends to include among those groups, individuals
    who are homeless or living with HIV/AIDS as well as other high-
    risk people.
        The Secretary would be required to submit an annual report
    to Congress on the program.

    Sec. 2216. Authorization of appropriations

                Current Law
        PHSA title VII (Health Professions Education) includes the
    authorization of appropriations for a number of training
    programs. Many of these authorizations have expired.
                Proposed Law
        This provision amends Part F of PHSA title VII (Health
    Professions Education) to add the following new sec. 799C:
        Sec. 799C. Funding through Public Health Investment Fund.
    This new sec. would have the following sums authorized to be
    appropriated from the Public Health Investment Fund (as would
    be established in section 2002 of this legislation) for the
    purpose of carrying out various programs related to the
    promotion of primary care, including primary oral health care:
               $240 million for FY2010
               $253 million for FY2011
               $265 million for FY2012
               $278 million for FY2013
               $292 million for FY2014
        These sums from the Fund are in addition to any other
    amounts authorized to be appropriated from general revenues for
    such purposes.
        This section would also reauthorize PHSA section 747
    through FY2014.

    Sec. 2217. Study on effectiveness of scholarships and loan repayments

                Current Law
        No comparable provisions.
                Proposed Law
        This provision would require GAO to conduct a study on the
    effectiveness of both the National Health Service Corps and the
    Frontline Health Provider Program (as would be established in
    sec. 2211 of this legislation) in encouraging individuals to
    pursue and maintain careers in primary care and in encouraging
    them to practice in underserved areas. More specifically, the
    study would evaluate the scholarships and loan repayments
    attached to each of these programs to determine their
    appropriateness and adequacy in helping to achieve these twin
    goals.

                         Subtitle B--Nursing Workforce

    Sec. 2221. Amendments to the Public Health Service Act

                Current Law
        PHSA title VIII (Nursing Workforce Development) contains
    several provisions on nurse workforce development, including
    programs to provide grants and loans to nursing students and
    schools of nursing.
        PHSA sec. 811 authorizes the Secretary to provide grants to
    fund projects that support the enhancement of advanced nursing
    and practice, and traineeships for individuals in advanced
    nursing programs. PHSA sec. 811(f) places some limitations on
    the use of these grant funds for traineeships, restricting
    their use to certain education-related costs and living
    expenses, and limiting the amount of support for individuals in
    doctoral programs to no more than 10% of the total amount of
    obligated funds. Special consideration is provided under the
    sec. for entities that agree to train advanced education nurses
    who will practice in health professional shortage areas
    (HPSAs).
        PHSA sec. 821 authorizes the Secretary to award grants to
    increase nursing education opportunities for individuals from
    disadvantaged backgrounds, including racial and ethnic
    minorities underrepresented in the nursing profession.
        PHSA sec. 831 authorizes the Secretary to award grants to
    expand both nursing education and nurse practice arrangements
    and to develop nurse retention programs.
        PHSA sec. 836 places limits on loans made by nursing
    schools authorized under PHSA sec. 835 (student loans). Such
    loans may not exceed $2,500 per year, with an exception for the
    final two academic years, during which they may not exceed
    $4,000 per year. Regardless of the time frame involved, no
    student may receive more than $13,000 in loans. The sec. also
    establishes a student loan repayment program for individuals
    who agree to serve as a nurse for at least two years at a
    qualified health care facility with a critical shortage of
    nurses.
        PHSA sec. 846A authorizes the Secretary to establish
    agreements with nursing schools for the development and
    operation of nurse faculty loan programs. Subsection (c) of
    that sec. establishes requirements for such programs, including
    a limitation of $30,000 (plus an annual inflation adjustment)
    on the total amount of loans that a nursing school may make to
    a student through its loan program in any academic year.
        PHSA sec. 845 requires the Secretary to establish the
    National Advisory Committee on Nursing Education and Practice.
        PHSA sec. 855 requires the Secretary to award grants for
    training and education programs and initiatives in geriatric
    care. These programs and initiatives are to be coordinated with
    programs authorized under PHSA sec. 753 (geriatric education
    and training).
        Part H of PHSA title VIII requires the Secretary to develop
    and issue public service announcements to advertise and promote
    the nursing professions. The Secretary is also authorized to
    fund state and local public service announcements for the same
    purpose.
        Part F of PHSA title VIII provides for the authorization of
    appropriations for various nurse workforce programs through
    FY2002, including Parts B, C and D (sections 811, 821, and 831
    respectively) of the title.
        The authorization of appropriations for six programs
    authorized under title VIII has expired, although the following
    programs have continued to be funded: advanced education
    nursing grants (PHSA sec. 811); nursing workforce diversity
    grants (PHSA sec. 821); nurse education, practice, and
    retention grants (PHSA sec. 831); National Nurse Services Corps
    (nurse educational loan repayment and scholarship programs)
    (PHSA sec. 846); nurse faculty loan program (PHSA sec. 846A);
    and comprehensive geriatric education (PHSA sec. 855).
        Two PHSA title VIII programs have not received
    appropriations since they were first authorized: public service
    announcements (PHSA sections 851 and 852) and grants for health
    professions education for cultural competency (PHSA sec. 807).
    The nursing student loan program (PHSA sections 835-840), which
    provides loans to nursing students to pursue studies in all
    levels of nursing, has not received any funding support in
    recent years. However, nursing schools are able to utilize
    funds from other sources as well as loan repayments to operate
    loan funds from which they award student loans.
                Proposed Law
        This provision would amend PHSA title VIII regarding
    certain nursing grant and loan programs, and would authorize
    monies from the Public Health Investment Fund (established
    under sec. 2002 of this legislation) to support such programs
    for FY2010 through FY2014.
        Congress first authorized comprehensive federal support for
    nursing workforce programs when it passed the Nurse Training
    Act of 1964 (P.L. 88-581). The initial programs were created in
    response to a 1963 Surgeon General's report that projected a
    nursing shortage within the decade. Subsequent legislation
    amended or reauthorized the title VIII programs to address
    evolving needs in nursing education and training. The programs
    were last reauthorized in 2002.
        Thirty-five years after the passage of the 1964 Nurse
    Training Act, title VIII programs continue to be a primary
    source of federal funding for nursing education. Within the
    context of health reform, the Committee believes that it is
    time to renew the nation's commitment to these programs to
    ensure an adequate and well-qualified nurse workforce. Indeed,
    experts report that with an anticipated shortfall of at least
    500,000 nurses by 2020, there is no time to lose.
        Experts report that a major contributor to this projected
    shortage is the lack of faculty to train new recruits to the
    profession. According to the American Association of Colleges
    of Nursing (AACN), some 42,000 qualified applicants were turned
    away from nursing schools in 2006, to a significant extent as a
    result of insufficient faculty. Several causes are attributed
    to this capacity building problem, including the ability of
    nursing schools to attract and retain faculty. Replacing the
    aging nurse workforce--those out in the field--has become a
    great challenge as well. The need and demand for primary care
    nurses with advanced degrees has become especially acute in
    light of the current shortage of primary care providers.
        The purpose, then, of this provision is to reauthorize
    various title VIII authorities and to provide improvements to
    those particular programs designed to help increase the nurse
    workforce. With such changes in place, the AACN estimates that
    10,000 new nurses will be trained each year, and half of those
    would hold an advanced degree. More specifically, this
    provision would make the following changes:
         The provision would amend PHSA sec. 801 to allow
    ``nurse-managed health centers'' (NMHCs) (as defined in this
    provision) to be eligible for support under various programs
    authorized under title VIII. The Committee understands that
    under current practice, NMHCs are eligible for awards--and have
    received support--under title VIII. As such, the Committee
    simply intends for this provision to codify that practice to
    ensure that NMHCs are able to continue to participate in title
    VIII programs. This is especially important as part of the
    country's push to train more nurses. Administered by nurses
    with advanced degrees, NMHCs are important sites both for
    nursing education and for providing access to health services,
    particularly for vulnerable populations. In codifying NMHC
    eligibility for title VIII support, however, the Committee also
    intends for these centers to continue to operate in accordance
    with applicable state law requirements regarding the scope of
    practice under which an individual is legally authorized to
    perform services at an NMHC. Indeed, nothing in this provision
    is intended to have any impact or effect on such laws (or on
    any state regulatory mechanism authorized under state law).
         The provision would strike PHSA sec. 807, a grant
    program for cultural and linguistic competence training for
    nurses. As noted, this program has never been funded; the
    Committee does not anticipate a change in this funding status.
    Moreover, the Committee believes that cultural and linguistic
    competence training should be coordinated across the spectrum
    of health professionals rather than targeted on one or two
    types of providers. Thus, the Committee has chosen not to
    continue the program authorized under PHSA sec. 807 (as well as
    other similar programs), but rather to take a new approach,
    much broader approach in supporting diversity and cultural
    competency programs. (See sections 2243 and 2251 of this
    legislation).
         The provision would add a new PHSA sec. 809 to
    require the Secretary to submit annual reports to Congress on
    all of the loan and grant programs in title VIII that do not
    already require such a report (PHSA sections 811, 821, 836,
    846A, and 861, as re-designated under this provision).
         The provision would amend PHSA sec. 811 (regarding
    the Advanced Education nursing grants) to strike the
    prohibition in paragraph (f), which currently restricts the
    percentage of traineeships that may be obligated to support
    individuals in doctoral programs to 10%. The provision would
    further amend PHSA sec. 811 to require the Secretary to give
    special consideration to applicants that either intend to
    expend their grant funds to train nurses with advanced degrees
    who will practice in HPSAs or to increase diversity among
    advanced education nurses.
         The provision would amend PHSA sec. 831 to revise
    one of the purposes of the nurse education, practice, and
    retention grants for practice priority areas to include the
    provision of coordinated care, quality care and other relevant
    skills and to replace the reference to managed care and quality
    improvement. The provision also strikes the outdated preference
    criterion for FY2003 through FY2005.
         The provision would amend PHSA sec. 836 to
    increase the total maximum amount of loans a student may
    receive on an annual basis from $2,500 to $3,300; to increase
    the annual such limit for a student's last two academic years
    from $4,000 to $5,200; and to increase the total amount of
    loans a student may receive over the course of his or her
    enrollment in a nursing program from $13,000 to $17,000.
    Effective FY2012, the provision also would instruct the
    Secretary to adjust these limits annually for inflation. In
    increasing these amounts, the Committee notes that no
    adjustment has been made since the program's inception in 2002.
         The provision would amend PHSA sec. 846(a) to
    allow individuals to be accepted into the loan repayment
    program if they agree to serve for not less than two years as a
    faculty member at an accredited school of nursing. This change
    is intended to complement other existing incentives designed to
    encourage nurses to become faculty. In addition, the revision
    is intended to expand the pool of nurses already serving as
    faculty who can qualify for loan repayment. Currently, the
    nurse faculty loan program is available only to nurses
    graduating from schools that operate loan funds. The provision
    would also amend PHSA sec. 846A(c) to raise the limit on the
    total amount of loan repayment any individual may receive for
    any academic year under the nurse faculty program from $30,000
    to $35,000. Effective FY2012, the provision would require the
    Secretary to adjust these limits annually for inflation. In
    increasing these amounts, the Committee notes that no such
    adjustment has been made since the program's inception in 2002,
    heightening the financial barriers that make it more difficult
    to attract people into the profession.
         The provision would strike part H of title VIII
    (PHSA sections 851 and 852) to eliminate the authority to
    develop and issue public service announcements to promote
    careers in nursing. As noted above, Congress has never funded
    this activity; the Committee has no basis for believing that
    this will change. Moreover, data indicate that the current
    nursing shortage is not a result of a lack of interest in the
    field--some 42,000 qualified individuals were turned away from
    nursing schools in 2006 alone, according to the AACN. Instead,
    it is due in large measure to a lack of financial resources to
    support nurse education and training, including nurse faculty
    recruitment and retention. Thus, the Committee believes it is
    far more prudent to invest the limited dollars available in
    programs that support those activities rather than in
    advertising campaigns.
         The provision would authorize to be appropriated
    ``such sums as may be necessary'' for each fiscal year through
    FY2014 for part B (advanced education grants), part C
    (workforce diversity grants), and part D (nurse education,
    practice, and retention grants) of title VIII.
         The provision would also authorize the following
    sums to be appropriated from the Public Health Investment Fund
    (as would be established in sec. 2002 of this legislation) for
    the purpose of carrying out various nurse workforce training
    programs:
               $115 million for FY2010
               $122 million for FY2011
               $127 million for FY2012
               $134 million for FY2013
               $140 million for FY2014
        These sums from the Fund are in addition to any other
    amounts authorized to be appropriated from general revenues for
    such purposes.
        In allocating funds to support nursing workforce programs,
    it is the intent of the Committee that priority be given to
    those programs and activities designed to (1) increase the
    number of nursing faculty; (2) address other factors impeding
    nursing education capacity; and (3) promote the training of
    advanced education nurses who deliver primary care.
         The provision would make technical and conforming
    changes to various programs in title VIII

                      Subtitle C--Public Health Workforce

        For some time, experts have argued that the public health
    workforce is inadequate to meet the nation's public health
    needs. To help address this problem, Congress established five
    public health workforce training programs under PHSA title VII
    (Health Professions Education) as part of the Health Education
    Partnerships Act of 1998 (P.L. 105-392): general grant
    authority (PHSA sec. 7650; public health training centers (PHSA
    sec. 766); public health traineeships (PHSA sec. 767);
    preventive medicine; dental public health (PHSA sec. 768), and
    heath administration traineeships and special projects (PHSA
    sec. 769). Programs funded in sec. 765 have gone unfunded;
    programs authorized in PHSA sec. 769 have not been funded since
    FY2006.
        Despite these efforts, the sufficiency and quality of the
    public health workforce remains of great concern. Today, the
    Association of Schools of Public Health estimates that within
    the next 10 years, the nation will experience a shortfall of
    more than 250,000 public health workers. Approximately one-
    quarter of the government's public health workforce will be
    eligible to retire by 2012, including nearly 50% of state
    employees who work in public health. And almost 20% of local
    public health employees will be qualified for retirement by
    2010, according to the National Association of County and City
    Health Officials.
        It is clear that state and local budget constraints are a
    major barrier to adequate staffing at public health agencies.
    Many prospective employees seek private sector employment
    because of the higher salaries and more generous benefits
    packages that are often available and that the public sector
    cannot match. Similarly, few state or local health departments
    have the resources to dedicate to recruiting, retaining, or
    training the professional workforce necessary to protect the
    public's health. This has become of increasing concern as the
    nation faces a number of emerging and ongoing public health
    challenges (e.g., salmonella outbreaks, H1N1 influenza, and the
    HIV/AIDS epidemic) that demand the use of trained experts.
    Indeed, according to CDC, the vast majority (80%) of the public
    health workforce now lacks formal public health training for
    their specific job functions.
        The provisions in subtitle C are intended to expand the
    efforts begun a decade ago. Their purpose is to improve the
    programs already on the books and to create a new program
    designed to encourage public health graduates to enter the
    public health workforce. Taken together, these initiatives,
    along with the funding made available for them, is expected to
    produce a larger and better trained workforce that can help
    meet the public health needs across the country.

    Sec. 2231. Public Health Workforce Corps

                Current Law
        No comparable provisions.
                Proposed Law
        This provision would amend PHSA title III to add at the end
    a new subpart XII--``Public Health Workforce''--and to
    establish in that part a new Public Health Workforce Corps
    consisting of the following three new sections:
        Sec. 340L. Public Health Workforce Corps. This sec. would
    require the establishment, within the U.S. Public Health
    Service, of a Public Health Workforce Corps (PHWC) to ensure an
    adequate national supply of public health professionals. The
    new program would be modeled on the National Health Service
    Corps (NHSC) that offers scholarships and loan repayments to
    attract health professionals to provide services in health
    professional shortage areas. Indeed, the sec. explicitly states
    that the PHSA sections regarding the general administrative
    aspects of the NHSC would apply to the PHWC unless they are
    inconsistent with such provisions.
        The PHWC would be administered by HRSA, the agency which
    oversees virtually all of the federal health workforce training
    programs. The CDC would, however, have responsibility for
    developing a methodology for placing and assigning Corps
    participants in such organizations as state, local, and tribal
    health departments, and federally qualified health centers. The
    Committee has specifically tasked CDC with this duty because of
    both its expertise in public health and its ongoing, strong
    connection with health departments.
        The Corps itself would consist of: (1) officers of the
    Regular and Reserve Corps of the U.S. Public Health Service
    Commissioned Corps; (2) civilian U.S. employees appointed by
    the Secretary; and (3) other individuals who are not employees
    of the United States. The Committee anticipates that students
    and graduates of accredited schools or programs of public
    health will comprise the majority of the Corps.
        The Secretary would be required to submit an annual report
    to Congress on the PHWC.
        Sec. 340M. Public Health Workforce Scholarship Program.
    This sec. would require the Secretary to establish a
    scholarship program for individuals who want to join PHWC. To
    be eligible for scholarship assistance, an applicant must:
              Be accepted or enrolled full-time or part-time in an
            accredited graduate school or program of public health;
            or
              Have public health expertise and be accepted or
            enrolled full-time or part-time in an accredited
            graduate school or program of nursing; health
            administration, management, or policy; preventive
            medicine; laboratory science; veterinary medicine; or
            dental medicine; or other accredited graduate school or
            program designated by the Secretary.
        It is the Committee's intent that the Secretary have
    discretionary authority to extend scholarship assistance to
    individuals pursuing graduate degrees in public health
    disciplines at non-public health accredited schools or
    programs. For example, in the Committee's view, it may be
    appropriate for the Corps to provide support for individuals
    enrolled in an accredited school of education that offers a
    program of study in health communications or in a graduate
    school of arts and sciences that offers a course of study in
    biostatistics.
        Scholarship awards could be made for up to four years. In
    return, scholarship recipients would be required to serve full-
    time as a public health professional for a period of one year
    for each academic year for which the recipient was provided
    scholarship support (with a maximum commitment of four years)
    or two years--whichever period is greater. Stipends would be
    provided on a monthly basis and would be required, effective
    FY2011, to be adjusted by the Secretary on an annual basis for
    inflation.
        The Committee anticipates that many, or even most,
    scholarship recipients will fulfill their service obligation
    working at public health agencies such as state and local
    health departments or community health centers. While the
    Committee fully endorses the placement of Corps members at
    these sites, it understands that there may be other entities
    with a public health focus that may benefit from their service.
    Thus, the Committee expects CDC to take a broad view in
    developing an appropriate methodology for placing and assigning
    Corps participants so as to include those sites experiencing
    the most severe shortages of, and the most difficulty in
    recruiting, public health professionals.
        As noted, it is the Committee's intent that the PHWC be
    administered in a manner similar to that followed with regard
    to the NHSC, except to the extent that the new subpart XII
    would require something different. The Committee underscores
    this intent with respect to the scholarship program that would
    be established in this section.
        Sec. 340N. Public Health Workforce Loan Repayment Program.
    This sec. would require the Secretary to establish a loan
    repayment program for individuals who want to join PHWC. To be
    eligible for loan repayment assistance, an applicant must:
               Have a graduate degree from an accredited
            school or program of public health;
               Have demonstrated public health expertise
            and a graduate degree from an accredited school or
            program of nursing; health administration, management,
            or policy; preventive medicine; laboratory science;
            veterinary medicine; or dental medicine; or other
            accredited graduate school or program designated by the
            Secretary; or
               Be enrolled in the final year of study at an
            accredited school or program of public health or an
            accredited school or program of nursing; health
            administration, management, or policy; preventive
            medicine; laboratory science; veterinary medicine; or
            dental medicine; or other accredited graduate school or
            program designated by the Secretary (with demonstrated
            expertise in public health).
        It is the Committee's intent that the Secretary have
    discretionary authority to extend loan repayment assistance to
    individuals pursuing or holding graduate degrees in public
    health disciplines at non-public health accredited schools or
    programs. For example, in the Committee's view, it may be
    appropriate for the Corps to provide support for individuals
    enrolled in an accredited school of education that offers a
    program of study in health communications or in a graduate
    school of arts and sciences that offers a course of study in
    biostatistics.
        In return for any assistance provided under this program,
    loan recipients would be required to serve for a minimum of two
    years as a public health professional in an appropriate
    setting. For each year of service provided, individuals could
    receive up to $35,000 in loan repayments, an amount that would
    be required, effective FY2012, to be adjusted by the Secretary
    on an annual basis for inflation.
        The Committee anticipates that many or even most loan
    recipients will fulfill their service obligation working at
    public health agencies such as state and local health
    departments or community health centers. While the Committee
    fully endorses the placement of Corps members at these sites,
    it understands that there may be other entities with a public
    health focus that may benefit from their service. Thus, the
    Committee expects CDC to take a broad view in developing an
    appropriate methodology for placing and assigning Corps
    participants so as to include those sites experiencing the most
    severe shortages of, and the most difficulty in recruiting,
    public health professionals.
        As noted, it is the Committee's intent that the PHWC be
    administered in a manner similar to that followed with regard
    to the NHSC except to the extent that the new subpart XII would
    require something different. The Committee underscores this
    intent with respect to the loan repayment program that would be
    established in this section.

    Sec. 2232. Enhancing the public health workforce

                Current Law
        PHSA sec. 765 authorizes the Secretary to establish a
    program of grants and contracts to enhance the public health
    workforce, including efforts to increase the number of
    individuals in such workforce, to enhance the quality of such
    workforce, and to enhance the ability of such workforce to meet
    the nation's public health needs.
        This program has not been funded.
                Proposed Law
        This provision would amend PHSA sec. 765, in essence, to
    replace it with the following new sec.:
        Sec. 765. Enhancing the Public Health Workforce. This new
    sec. would require the Secretary to establish a program of
    grants and contracts to enhance the public health workforce.
    Entities eligible to participate in such programs include (1)
    various health professions schools; (2) state, local or tribal
    health departments; (3) public or private nonprofit
    organizations; and (4) consortia of these entities. Such
    entities could receive support for various public health
    professional training-related activities, including
    traineeships and fellowships.
        In awarding grants or contracts, the Secretary would be
    required to give preference to applicants with a demonstrated
    record of one or more of the following activities:
               Training public health professionals who
            serve in underserved communities
               Training individuals from underrepresented
            minority groups or disadvantaged backgrounds
               Training individuals who practice in public
            health specialties experiencing a significant shortage
            of public health professionals
               Training public health professionals who
            serve in the federal government or state, local, or
            tribal governments
        The Secretary would be required to submit an annual report
    to Congress on the program. In evaluating an applicant's record
    regarding the training of individuals who practice in public
    health specialties experiencing a significant shortage of
    public health professionals, the Committee expects the
    Secretary to take into account various public health workforce
    needs. For example, across the country, there is increasing
    demand for (and shortage of) public health professionals with
    expertise in nursing, epidemiology and health education, among
    others specialties. Entities providing training in these areas
    would be given preferential treatment in evaluating their
    application for support under this program. However, once these
    shortages are adequately addressed, this preferential treatment
    would no longer apply; the emphasis instead would be placed on
    those public health specialties then experiencing a shortage of
    public health professionals.
        The Committee notes its interest in this program's focus on
    supporting training activities on mid-career public health
    professionals. As noted, some 80% of today's state and local
    public health workforce has not received formal training in
    their areas of responsibility. Many of them are at the mid-
    career level. This program would afford them the opportunity to
    build on the expertise they have developed through their work
    experience and in turn, to bring new public health knowledge
    back into the communities and organizations in which they
    serve.
        The Committee further notes its intent that the Secretary
    administer this program in a manner that best integrates its
    activities with other existing public health workforce
    programs, including the public health training centers program
    (PHSA sec. 766) and the public health traineeships program
    (PHSA sec. 767). In so doing, however, it underscores the
    requirement that the HRSA Administrator consult with the CDC
    Director in establishing the PHSA sec. 765 public health
    workforce program.

    Sec. 2233. Public health training centers

                Current Law
        PHSA sec. 766 authorizes the Secretary to establish a
    program of grants and contracts to support public health
    training centers. Subsection (b)(1) of that section refers to
    ``goals established by the Secretary for the year 2000.'' This
    clause refers to the decennial Healthy People goals developed
    and published by the Secretary.
                Proposed Law
        This provision would amend subsection (b)(1) of PHSA sec.
    766 to strike the reference to the HHS Healthy People
    publication and to replace it with a reference to the HHS
    prevention and wellness goals that would be developed by the
    Secretary under PHSA sec. 3121 (as would be established in sec.
    2301 of this legislation). PHSA sec. 3121 requires the
    Secretary to prepare such goals on a biennial basis, a
    timeframe much shorter than the 10-year span in between
    issuance of the HHS Healthy People reports. The change made in
    this provision would ensure that the required application
    standards for this program accurately reflect the status of the
    Department's work in the area of prevention and wellness.
        This provision would require the Secretary to submit an
    annual report to Congress on this program.
        In updating PHSA sec. 766, the Committee notes that the
    program authorized therein currently spans 45 states and the
    District of Columbia. While the Committee supports the
    program's continuation, it believes its work could be better
    integrated with the efforts undertaken through the program
    authorized in PHSA sec. 765. Thus, the Committee encourages the
    Secretary to bring these programs together as best as possible.

    Sec. 2234. Preventive medicine and public health training grant program

                Current Law
        PHSA sec. 768 authorizes a program of grants and contracts
    to support preventive medicine residency and dental public
    health training. Eligible entities schools include schools of
    medicine, osteopathic medicine, public health, and dentistry.
                Proposed Law
        This provision would replace the existing language in PHSA
    sec. 768 with the following new provision.
        Sec. 768. Preventive Medicine and Public Health Training
    Grant Program. This new provision would require the Secretary
    to establish a program of grants and contracts to provide
    training for graduate medical residents in preventive medicine.
    Entities eligible to participate in such program would include
    (1) accredited schools of public health, medicine, or
    osteopathic medicine; (2) accredited public or private
    hospitals; and (3) consortia of these entities. Such entities
    could receive support for various preventive medicine
    residency-related activities, including the operation of
    internship or residency programs in preventive medicine or
    public health; the defrayment of costs associated with required
    practical experiences; and faculty development.
        In revising the authority for this program, the Committee
    notes the uniqueness of preventive medicine among the various
    medical specialties. It is perhaps the only specialty that
    combines knowledge and skills in clinical medicine with those
    in public health. A 2007 Institute of Medicine report (Training
    Physicians for Public Health Careers) cited the importance of
    public health physicians in maintaining and improving the
    health of the public. It also emphasized the need to address
    the various barriers that make it difficult to practice as a
    public health physician, including inadequate support for
    graduate medical education.
        Unlike other specialties, preventive medicine residents
    spend time training in community-based outpatient clinics and
    public health departments, both of which are ineligible for
    Medicare graduate medical education (GME) funding--by far and
    away, the main source of support for GME training. As a result,
    preventive medicine residency programs rely almost exclusively
    on HRSA funding and other sources to support the training of
    physicians specializing in this field, many of who go on to
    lead public health agencies. In the Committee's view, then, it
    is critically important that the preventive medicine and public
    health training program authorized under PHSA sec. 768 continue
    to receive adequate funding and other support.
        In that spirit, the Committee further notes HRSA's recent
    decision to amend its own program guidance to clarify the
    program's eligibility standard of ``preventive medicine'' to
    include all three preventive medicine specialties--general
    preventive medicine and public health, occupational medicine,
    and aerospace medicine. The Committee strongly endorses the
    agency's action and in so doing, recognizes and supports the
    need for improved access to preventive medicine physicians in
    these three specialties, particularly in general preventive
    medicine and public health and occupational medicine.
        Physicians who specialize in occupational medicine warrant
    special attention. Their efforts parallel those of general
    preventive medicine and public health clinicians within the
    general public health system--only their work takes place
    within in the workplace setting, rather than the traditional
    office or clinic site. There, they not only deal with illnesses
    and injuries that occur within the workplace population; they
    also focus on health promotion and wellness in helping to
    reduce the incidence rates of obesity, diabetes, heart disease,
    cancer, and other chronic diseases that this population may
    experience. These physicians are involved on all fronts--most
    especially in actively supporting and providing health
    promotion and wellness services. Thus, the Committee strongly
    supports HRSA's decision to amend its program guidance material
    to ensure that programs that train these preventive medicine
    specialists are eligible to participate in this program and
    receive appropriate emphasis. As HRSA moves forward with this
    new guidance, the Committee urges the agency to consult with
    the National Institute for Occupational Safety and Health.

    Sec. 2235. Authorization of appropriations

                Current Law
        Subpart 2 (PHSA sections 765 through 770) of part E of PHSA
    title VII (Health Professions Education) authorizes various
    public health workforce programs, including general provisions
    (PHSA sec. 765); public health training centers (PHSA sec.
    766); public health traineeships (PHSA sec. 767); preventive
    medicine and dental public health (PHSA sec. 768); and health
    administration traineeships and special projects (PHSA sec.
    769). The authorization of appropriations for subpart 2 (PHSA
    sec. 770) expired at the end of FY2002.
                Proposed Law
        This provision would authorize the following sums to be
    appropriated from the Public Health Investment Fund (as would
    be established in sec. 2002 of this legislation) for the
    purpose of carrying out various programs related to public
    health workforce training activities:
               $51 million for FY2010
               $54 million for FY2011
               $57 million for FY2012
               $59 million for FY2013
               $62 million for FY2014
        These sums from the Fund are in addition to any other
    amounts authorized to be appropriated from general revenues for
    such purposes.
        The provision would extend the authorization of
    appropriations for public health workforce programs through
    FY2014.

         Subtitle D--Adapting Workforce to Evolving Health System Needs

        Enhancing the nation's health workforce involves more than
    simply increasing the number of providers; it also entails the
    development of a more diverse, cultural competent workforce and
    the introduction of new and improved service delivery systems.
    Experts agree, for example, that it is important for the health
    workforce to reflect the nation's increasingly diverse
    population, especially since health professionals from diverse
    backgrounds are more likely to work in medically underserved
    communities. This point was made most recently in MedPAC's 2009
    report to Congress (Improving Incentives in the Medicare
    Program) in which the advisory group discussed, among other
    indicators, the association between a racially and ethnically
    diverse health workforce and better access to, and quality of
    care for, disadvantaged populations.
        Similarly, the complexity of modern medicine and the
    increase in chronic disease call for innovation in the ways
    health services are currently delivered. A number of expert
    panels (including MedPAC, the Institute of Medicine, and the
    Council of Graduate Medical Education (COGME)) have pushed for
    residency training to focus on increased care coordination,
    formal training or experience in multidisciplinary teamwork,
    and other such efforts indicative of an innovative approach to
    the delivery of health care. The Committee agrees with these
    recommendations and believes that incorporating them broadly in
    the training of the nation's health workforce is most
    appropriate.
        Experts have also made a strong case for the creation of an
    independent advisory body to make recommendations regarding the
    composition of the health workforce. Indeed, in a report issued
    in 2007 (Enhancing Flexibility in Graduate Medical Education),
    COGME specifically supported the establishment of such a group
    whose mandate would also include a review of GME funding
    practices.
        The purpose of subtitle D is to help address a number of
    these issues: diversity in the workforce; cultural and
    linguistic competency; interdisciplinary care training; and
    workforce assessment and evaluation. Taken together, these
    efforts represent a coordinated approach to help ensure that
    the nation's 21st century health workforce needs--in their
    broadest sense--are met.

               Part 1--Health Professions Training for Diversity

    Sec. 2241. Scholarships for disadvantaged students, loan repayments and
            fellowships regarding faculty positions, and educational
            assistance in the health professions regarding individuals from
            disadvantaged backgrounds

                Current Law
        PHSA sec. 738(a) authorizes a program of loan repayments
    for individuals from disadvantaged backgrounds who (1) have a
    degree in medicine, osteopathic medicine, dentistry, nursing,
    public health or another specified health professions; or (2)
    are enrolled in an accredited program leading to one of these
    degrees and in the final year of study; and (3) agree to serve
    as a faculty member in a health professions school for at least
    two years. Individuals participating in the program may receive
    up to $20,000 of educational loan repayment for each year they
    serve as a faculty member.
                Proposed Law
        This provision would amend PHSA sec. 738(a) to increase the
    limit on the amount of loan repayment individuals may receive
    for each year they serve as a faculty member to $35,000.
    Effective FY2012, the Secretary would be required to adjust
    these limits annually for inflation. In increasing these
    amounts, the Committee notes that no adjustment has been made
    since the program's inception in 1991, heightening the
    financial barriers that make it more difficult to attract
    people from disadvantaged backgrounds into the teaching
    profession.

    Sec. 2242. Nursing workforce diversity grants

                Current Law
        PHSA sec. 821 authorizes the Secretary to establish a
    program of grants and contracts to increase nursing education
    opportunities for individuals from disadvantaged backgrounds.
    Individuals participating in the program may receive various
    forms of support, including student scholarships or stipends.
    In carrying out this program, the Secretary would be required
    to take into account the recommendations of the first (1992),
    second (1993), and third (1997) Invitational Congresses for
    Minority Nurse Leaders to consult with specified nursing
    organizations.
                Proposed Law
        This provision would amend PHSA sec. 821(b) to delete the
    outdated reference to the three Invitational Congresses for
    Minority Nurse Leaders. The provision would also delete the
    requirement that the Secretary consult with specified nursing
    organizations and would instead provide her with the discretion
    to consult with such groups as she finds appropriate.

    Sec. 2243. Coordination of diversity and cultural competency programs

                Current Law
        Part B (PHSA sections 736, 737, 738, and 739) of PHSA title
    VII (Health Professions Education) authorizes the Secretary to
    establish various programs of grants and contracts designed to
    help diversify the health professions, including scholarship
    and loan repayment programs, education assistance, and centers
    of excellence.
        Part C (PHSA sec. 821) of PHSA title VIII (Nursing
    Workforce Development) authorizes the Secretary to establish a
    program of grants and contracts to increase nursing education
    opportunities for individuals from disadvantaged backgrounds,
    including racial and ethnic minorities underrepresented in the
    nursing profession.
                Proposed Law
        This provision would amend PHSA title VII to add the
    following new sec. after PHSA sec. 739:
        Sec. 739A. Coordination of Diversity and Cultural
    Competency Programs. This new section would require the
    Secretary to coordinate the activities authorized under part B
    (PHSA sections 736, 737, 738, and 739) of PHSA title VII with
    those under part C (PHSA sec. 821) of PHSA title VIII to
    enhance their effectiveness and avoid any duplication of
    effort.
        The Committee has taken this action in response to concerns
    that have been raised about HRSA's authority to coordinate the
    diversity and cultural competency programs separately
    authorized in PHSA titles VII and VIII. The Committee believes
    that HRSA does have such authority and that, indeed, it should
    coordinate programs and activities for which it has
    responsibility whenever appropriate and prudent to do so. With
    this new PHSA sec. 739A in place, the Committee believes that
    HRSA's ability to work in this fashion has been made clear.
        The provision would also amend PHSA sec. 736 to require the
    Secretary to submit an annual report to Congress on the Centers
    for Excellence program.

                  Part 2--Interdisciplinary Training Programs

    Sec. 2251. Cultural and linguistic competency training for health care
            professionals

                Current Law
        Both PHSA sections 741 and 807 authorize the Secretary to
    establish a program of grants, contracts, and cooperative
    agreements to support research and demonstration projects on
    training health professionals in health disparities and the
    provision of culturally competent health care. Neither program
    has received funding since their inception in FY2001; the
    authority for appropriations under each sec. expired at the end
    of FY2004.
                Proposed Law
        This provision would amend PHSA sec. 741, in essence, to
    establish a new program of grants and contracts to develop and
    implement cultural and linguistic competency training models
    and programs for health professionals. Entities eligible for
    support would include: (1) accredited health professions
    schools or programs; (2) academic health centers; (3) public or
    private nonprofit entities; or (4) consortia of these entities.
    In awarding grants or contracts, the Secretary would be
    required to give preference to applicants with a demonstrated
    record of one or more of the following activities:
               Addressing (or partnering with an entity
            with experience addressing) the cultural and linguistic
            competency needs of the population to be served
               Addressing health disparities
               Placing health professionals in regions
            experiencing significant changes in the cultural and
            linguistic demographics of populations (including
            communities along the United States-Mexico border)
               Carrying out cultural and linguistic
            training in more than one health profession discipline,
            specialty, or subspecialty
        In evaluating an applicant's record regarding the training
    of individuals who provide services to populations experiencing
    health disparities, this provision would require that the term
    health disparities have the meaning given that term in PHSA
    sec. 3171 (as would be established in sec. 2301of this
    legislation).
        The provision would also require the Secretary to consult
    with appropriate HHS agencies and offices in developing this
    new program. The Committee expects that among these agencies
    and offices, in addition to the Office of Minority Health, the
    Secretary would consult with the NIH's National Center on
    Minority Health and Disparities.
        The provision would require the Secretary to submit an
    annual report to Congress on the program.
        In restructuring PHSA sec. 741, the Committee has chosen to
    consolidate both this sec. and PHSA sec. 807 into a single
    authority. The language of both sections is identical, with the
    only difference between them being their location in the PHSA--
    PHSA sec. 741 is authorized in title VII (Health Professions
    Education) and PHSA sec. 807 is authorized in title VIII
    (Nursing Workforce Development). The provision basically
    eliminates this duplication of effort and establishes a new
    program designed to better reflect the priorities for cultural
    and linguistic competency training necessary to help develop
    and maintain a 21st century U.S. health workforce.
        Towards that end, the Committee emphasizes its intent that
    the new PHSA sec. 741 program include grants and contracts for
    the training of any health professional that is a part of the
    U.S. health workforce (as that term is defined in sec. 2261 of
    this legislation)--not just those who have traditionally been
    supported through the title VII and title VIII programs. In
    addition, the Committee notes its interest in having this
    program support continuing education efforts whose purpose is
    to provide appropriate cultural and linguistic competency
    training to those who are already in the health workforce.

    Sec. 2252. Innovations in interdisciplinary care training

                Current Law
        Part D (PHSA sections 750-758) of PHSA title VII (Health
    Professions Education) is comprised of several authorities to
    support various programs to provide interdisciplinary and
    community-based education and training.
                Proposed Law
        This provision would add the following new sec. at the end
    of part D of PHSA title VII:
        Sec. 759. Innovations in Interdisciplinary Care Training.
    This new sec. would require the Secretary to establish a
    program of grants and contracts to develop and implement
    training programs for health professionals whose focus is the
    promotion of health care delivery through interdisciplinary and
    team-based models as well as through the coordination of health
    care services across various delivery settings, including
    health care institutions, the community, and the patient's
    home. Entities eligible for support would include: (1)
    accredited health professions schools or programs; (2) academic
    health centers; (3) public or private nonprofit entities
    (including an area health education center or geriatric
    education center); or (4) consortia of these entities. In
    awarding grants or contracts, the Secretary would be required
    to give preference to applicants with a demonstrated record of
    one or more of the following activities:
               Training health professionals who serve in
            underserved communities
               Broad, interdisciplinary, team-based
            collaboration
               Addressing health disparities
        In evaluating an applicant's record regarding its
    interdisciplinary, team-based collaborations, this sec. would
    define the term interdisciplinary to mean collaboration across
    health professions and specialties that include public health,
    nursing, allied health, and appropriate medical specialties.
    The Committee has chosen to define this term to underscore its
    purpose in establishing this program--to train health
    professionals in delivering their services as part of a team
    effort, integrating the whole of patients' physical, mental,
    and even oral health needs.
        In evaluating an applicant's record regarding its efforts
    in addressing health disparities, this sec. would require that
    the term ``health disparities'' have the meaning given that
    term in PHSA sec. 3171 (as would be established in sec. 2301 of
    this legislation).
        The Secretary would be required to submit an annual report
    to Congress on the program.
        The establishment of this new program is complementary to
    the Committee's actions in other parts of this legislation
    regarding collaborative approaches to patient care. Sections
    1301, 1302, and 1722, for example, provide for innovative
    payment systems under Medicare and Medicaid that are designed
    to reward more collaborative efforts in providing patient care,
    including the medical home and accountable care organizations.
    Taken together, the Committee believes that these initiatives
    can result in an increased number of health professionals
    providing better-coordinated care to their patients.
        Toward that end, the Committee emphasizes its intent that
    this program include grants and contracts for the training of
    any health professional that is a part of the U.S. health
    workforce (as that term is defined in sec. 2261 of this
    legislation)--not just those who have traditionally been
    supported through the title VII and title VIII programs. In
    addition, the Committee notes its interest in having this
    program support continuing education efforts whose purpose is
    to provide training in interdisciplinary and team-based health
    service delivery to those who are already in the health
    workforce.

         Part 3--Advisory Committee on Health Workforce Evaluation and
                                   Assessment

    Sec. 2261. Health workforce evaluation and assessment

                Current Law
        Subpart 1 (PHSA sections 761, 762, and 763) of part E of
    PHSA title VII (Health Professions Education) authorizes
    activities related to the health workforce, including a program
    of grants and contracts for the analysis of information on the
    health workforce; an Advisory Council on Graduate Medical
    Education; and an annual evaluation of the number of pediatric
    rheumatologists.
        Additional health-related advisory committees are
    authorized in PHSA sec. 337 (National Advisory Council for the
    National Health Service Corps); PHSA sec. 748 (Advisory
    Committee on Training in Primary Care and Dentistry); PHSA sec.
    756 (Advisory Committee on Interdisciplinary, Community-Based
    Linkages; and PHSA sec. 845 (National Advisory Council on Nurse
    Education and Practice).
                Proposed Law
        This provision would add the following new sec. at the end
    of subpart 1 of part E of PHSA title VII:
        Sec. 764. Health Workforce Evaluation and Assessment. This
    new sec. would require the Secretary to establish a new and
    permanent Advisory Committee on Health Workforce Evaluation and
    Assessment. The purpose of the Advisory Committee would be to
    provide for the continuous and independent review, assessment,
    and update of information on the U.S. health workforce as well
    as for recommendations on how best to ensure that such
    workforce is--and remains--sufficient and of high quality. More
    specifically, the Committee expects the scope of the Advisory
    Committee's work to include periodic assessments and
    recommendations regarding:
               The effect of federal policies on ensuring a
            sufficient and high quality health workforce, including
            the Medicare and Medicaid graduate medical education
            programs and HRSA workforce programs
               Factors in the health care environment that
            may influence the decision making of health
            professionals in choosing which discipline, specialty,
            and subspecialty they wish to pursue and, as
            appropriate, in rebuffing a discipline, specialty, and
            subspecialty they may wish to practice
               Incentives to encourage health professionals
            to become primary care providers
               Foreign-trained health professionals and
            international medical graduates
               The feasibility of an all-payer graduate
            medical education system
        The Secretary would be required to provide ongoing support
    for the Advisory Committee, including support for the
    Committee's administrative, research, dissemination, and
    technical operations.
        In carrying out its work, the Advisory Committee would
    first be required to develop classifications, methodologies,
    and procedures to be used for health workforce data collection
    purposes, particularly in counting the nation's health
    workforce. The term ``health workforce'' would be defined to
    include all health care providers with direct patient care and
    support responsibilities, including physicians, nurses,
    physician assistants, pharmacists, and specified professionals
    in oral health, allied health, mental and behavioral health,
    and public health (including veterinarians engaged in public
    health practice). The Committee has chosen to define this term
    very broadly so as to include within the Advisory Committee's
    charge, the broad spectrum of health professions that make up
    the country's health workforce.
        Membership on the Advisory Committee would include a
    diverse group of individuals with expertise in numerous health
    workforce-related areas such as health finance and health
    workforce education and training, and with experience working
    with various populations, including populations who are
    underrepresented in the health professions. Such membership may
    not, however, include a majority of individuals who are
    directly involved in health professions education or practice.
    The Committee underscores the diversity of backgrounds that is
    required in assembling and maintaining the Advisory Committee's
    membership. The Committee believes such diversity is necessary
    to ensure that the questions of health workforce adequacy and
    quality are addressed from varying perspectives and take into
    account the needs of specific groups or populations, not just
    those of the nation as a whole.
        The activities of the Advisory Committee would be carried
    out in accordance with the Federal Advisory Committee Act
    (FACA) (5 U.S.C. App.), except with regard to sec. 14 of that
    Act, to the extent that its provisions do not conflict with
    this section. The Committee has included this requirement to
    ensure the work of the Advisory Committee is conducted in an
    open and transparent manner. The Committee believes this is
    especially important as the nation transitions through the
    health insurance and finance reforms established in other
    divisions of this legislation (divisions A and B).
        The Secretary would also be required to submit an annual
    report to Congress on the activities of the Advisory Committee.
        In establishing this new Advisory Committee, the Committee
    notes, appreciates, and is encouraged by HRSA's recent efforts
    to coordinate the activities of other advisory committees
    assembled to examine health workforce issues related to their
    specific areas of interest. These committees play an important
    role in making programmatic recommendations and assessing the
    needs of the specific health professions they represent. For
    example, the Council on Graduate Medical Education makes
    recommendations pertaining only to the physician workforce; the
    National Advisory Council on Nurse Education and Practice looks
    at only nurse workforce issues. They do not, however, consider
    broader questions, such as the overall need for primary care--
    irrespective of the classification of provider. It would be the
    specific task of the Advisory Committee established in this
    section to take on that kind of evaluation.
        The Committee strongly believes the work of these specialty
    committees should continue and that HRSA, too, should continue
    to promote coordination among their activities whenever and
    wherever appropriate and effective. But the Committee also
    believes--along with numerous health workforce experts--that
    these initiatives are no substitute for an independent body
    charged with the responsibility to perform regular and periodic
    assessments of the nation's health workforce and to make
    recommendations to Congress on policies for ensuring that this
    workforce--in all its many facets--is both sufficient in number
    and of high quality. Thus, the Committee has not only
    established the Advisory Committee on a permanent and ongoing
    basis; it also intends that its work extend beyond those
    workforce programs authorized under the PHSA titles III
    (General Powers and Duties of Public Health Service), VII
    (Health Professions Education), and VIII (Nursing Workforce
    Development) to include health workforce-related programs under
    Medicare, Medicaid, the VA, and the Department of Defense.

                      Part 4--Health Workforce Assessment

    Sec. 2271. Health workforce assessment

                Current Law
        PHSA section 761 authorizes the Secretary to establish a
    program of grants and contracts to support the development and
    provision of information and analysis related to the health
    workforce, including the nurse workforce. Subsection (c) of
    PHSA sec. 761 requires the Secretary to reserve no less than
    $600,000 of funds appropriated for this program for conducting
    health professions research and for carrying out data
    collection and analysis in accordance with PHSA sec. 792
    (Health Professions Data). Subsection (a) of that section
    requires the Secretary to establish a program to collect,
    compile, and analyze data on health professions personnel. The
    authorization of appropriations under PHSA sec. 761 expired at
    the end of FY2002, although the program continued to receive
    funding through FY2005.
                Proposed Law
        This provision would amend subsections (a) and (b) of PHSA
    sec. 761 to strike these subsections and to replace them with
    new requirements designed to implement the health workforce
    data collection classifications, methodologies, and procedures
    developed by the Advisory Committee on Health Workforce
    Evaluation and Assessment (as would be established in sec. 2261
    of this legislation). Using these standards, the Secretary
    would be required to collect data on the nation's health
    workforce supply, diversity, and geographic distribution. In
    addition, the Secretary would be required to collect such data
    on individuals participating in the programs that would be
    authorized in subtitles A (Primary Care Workforce); B (Nursing
    Workforce); and C (Public Health Workforce); and part 1 of
    subtitle D (Health Professions Training for Diversity), all of
    title II of division C of this legislation.
        Pending the completion of the development of the Advisory
    Committee's data collection standards, the Secretary (in
    consultation with the Advisory Committee) would be authorized
    to make a judgment about the classifications, methodologies,
    and procedures to be used in carrying out the data collection
    activities required under this provision. This authority would
    expire at the time the Secretary adopts the Advisory
    Committee's recommendations regarding such standards. The
    Committee has granted the Secretary this time-limited authority
    in order to avoid any delay in the implementation of this
    provision's data collection requirements. The Committee
    believes that it is imperative that these efforts more forward
    as quickly as possible and that the timeline for action by the
    Advisory Committee should not impede her progress in collecting
    all relevant data.
        The Secretary would be authorized to award grants or
    contracts to carry out the data collection activities required
    under this provision. Entities eligible to participate in this
    effort include (1) accredited health professions schools or
    programs; (2) academic health centers; (3) state, local or
    tribal governments; (4) public or private entities; or (5)
    consortia of these entities.
        In carrying out these data collection requirements, the
    Secretary would be required to collaborate with federal
    departments and agencies, health professions organizations, and
    professional medical societies. Because neither HHS nor the
    federal government as a whole either collects or maintains all
    of the information relevant to the nation's health workforce
    supply, diversity or geographic distribution, the Committee
    believes it is necessary for the Secretary to work with groups
    outside the government in obtaining this information.
        The Secretary would also be required to submit an annual
    report to Congress on various requirements of this provision.
        The Committee understands that the Secretary is already
    engaged in some health workforce collection activities. But
    they have not been nearly as targeted as those required in this
    provision. Nor have they received adequate resources to develop
    the kind of projections contemplated by the Committee.
        In establishing these new data collection requirements, the
    Committee is responding to these concerns as well as
    recommendations made by the GAO (Health Professions Education
    Programs: Action Still Needed to Measure Impact (Feb. 2006)
    (GAO-06-55)) and numerous experts about the importance of
    collecting, analyzing, and reporting information on the supply,
    demand, and diversity of the nation's health workforce. The
    Committee believes such information is important for the
    purpose of evaluating the government's own efforts in
    addressing the nation's health workforce needs. But it also
    believes that this information will become even more critical
    to both HHS and the Congress as the health reforms established
    in other divisions of this legislation (divisions A and B) are
    implemented.

                    Part 5--Authorization of Appropriations

    Sec. 2281. Authorization of appropriations

                Current Law
        The authorizations of appropriations for the following
    programs expired at the end of FY2002: centers of excellence
    (PHSA sec. 736); programs authorized for appropriations under
    PHSA sec. 740 (including scholarships for disadvantaged
    students (PHSA sec. 737); loans repayments for faculty (PHSA
    sec. 738); educational assistance in the health professions
    regarding individuals from disadvantaged backgrounds (PHSA sec.
    739); and health workforce information and analysis (PHSA sec.
    761)). However, with the exception of the activities authorized
    under PHSA sec. 761 (which has never been funded), each of
    these programs has continued to receive annual appropriations.
        The authorization of appropriations for the education and
    health disparities and cultural competency program (PHSA sec.
    741) expired at the end of FY2004.
                Proposed Law
        This provision would authorize the following sums to be
    appropriated from the Public Health Investment Fund (as would
    be established in sec. 2002 of this legislation) for the
    purpose of carrying out various programs related to health
    workforce diversity and assessment and evaluation activities:
        Health Professions Training for Diversity (PHSA sections
    736 through 739A)--
               $90 million for FY2010
               $97 million for FY2011
               $100 million for FY2012
               $104 million for FY2013
               $110 million for FY2014
        Interdisciplinary Training Programs; Advisory Committee on
    Health Workforce Evaluation and Assessment; and Health
    Workforce Assessment (PHSA sections 741, 759, 761, and 764)--
               $87 million for FY2010
               $97 million for FY2011
               $103 million for FY2012
               $105 million for FY2013
               $113 million for FY2014
        These sums from the Fund are in addition to any other
    amounts authorized to be appropriated from general revenues for
    such purposes.
        The provision would also authorize to be appropriated
    ``such sums as may be necessary'' for each fiscal year through
    FY2014 for the education and health disparities and cultural
    competency program authorized under PHSA sec. 741. In addition,
    the provision would extend existing authorizations of
    appropriations through FY2014 for centers of excellence (PHSA
    sec. 736); programs authorized for appropriations under PHSA
    sec. 740 (including scholarships for disadvantaged students
    (PHSA sec. 737); loan repayments for faculty (PHSA sec. 738);
    educational assistance for individuals from disadvantaged
    backgrounds (PHSA sec. 739); and health workforce information
    and analysis (PHSA sec. 761)).
        These workforce diversity programs are widely regarded as
    being highly successful in bringing individuals from
    disadvantaged backgrounds (especially those from racial and
    ethnic minorities) into the health professions and, in turn,
    helping to diversity the health workforce. It is the
    Committee's view that these programs should continue to receive
    appropriate funding support through FY2014.

                       TITLE III--PREVENTION AND WELLNESS

        The evidence is clear: An individual's health status is
    determined not only by the availability and quality of clinical
    care he or she receives, but also by various social, economic,
    and behavioral factors. Thus, improving America's health
    requires ensuring both access to quality medical services when
    citizens are in need of care, and the presence of a strong
    public health system designed to keep people well in the first
    place and their communities safe all the time. Divisions A and
    B of this legislation are intended to help achieve the first
    goal; title III of division C targets the second.
        There are many ways in which this latter objective can be
    met. Promoting the use of evidence-based analyses of preventive
    services can help arm health care providers and communities
    alike with the tools necessary to detect public health problems
    early on or to prevent them altogether. Improvements in state
    and local public health infrastructure (such as public health
    departments and laboratories) can, for example, assist
    community-wide efforts in addressing the nation's obesity
    epidemic or stopping outbreaks of food-borne disease. And
    bolstering resources across the board at the federal, state,
    and local level can enhance government's capacity to put
    programs that work into place.
        But unlike medical services and biomedical research, the
    federal government has not made sustained and sizeable
    investments in public health. Indeed, support for public health
    activities account for less than 3% of all federal spending on
    health care.
        Title III establishes new public health initiatives and
    provides fixed public health funding to support them. When
    taken together and fully implemented, the result is expected to
    be an enormous impact on improving the nation's health.

    Sec. 2301. Prevention and wellness

                Current Law
        No comparable provisions.
        Although the PHSA as well as other federal laws such as
    Medicare and Medicaid authorize numerous programs and
    activities related to prevention and wellness, there is no
    statute (or sec. of a statute) that provides for a
    comprehensive, national approach for these efforts. In
    particular, there is no comparable provision that provides for
    dedicated, mandatory spending to support them.
                Proposed Law
        Subsection (a) of this provision would establish a new PHSA
    entitled ``Prevention and Wellness'' consisting of the
    following seven subtitles:

                      TITLE XXXI--PREVENTION AND WELLNESS

                  ``Subtitle A--Prevention and Wellness Trust

    ``Sec. 3111. Prevention and Wellness Trust''
                Current Law
        No comparable provisions.
                Proposed Law
        This sec. would establish a Prevention and Wellness Trust.
    The following amounts would be authorized to be appropriated to
    the Trust:
               For each fiscal year, any amount
            appropriated to the Prevention and Wellness Fund under
            the American Recovery and Reinvestment Act (P.L. 111-5)
               From the Public Health Investment Fund (as
            would be established in sec. 2002 of this legislation)
                       $2.4 billion for FY2010
                       $2.845 billion for FY2011
                       $3.1 billion for FY2012
                       $3.455 billion for FY2013
                       $3.6 billion for FY2014
        These sums from the Fund are in addition to any other
    amounts authorized to be appropriated from general revenues for
    such purposes.
        The sec. would also specify the amounts authorized to be
    appropriated from the Trust for each of FY2010 through FY2014
    for carrying out the activities of each of subtitle C
    (Prevention Task Forces); subtitle D (Prevention and Wellness
    Research); subtitle E (Delivery of Community Preventive and
    Wellness Services); and subtitle F (Core Public Health
    Infrastructure).
        The Committee has established this special funding source
    in recognition of the need for dedicated sources to support
    prevention and wellness activities. Currently, approximately
    78% of all health care spending in the United States is
    attributable to chronic illness, while only 3% of such spending
    goes to preventive services and health promotion. Funds made
    available through the Prevention and Wellness Trust will help
    address this disparity. The Committee expects that, in turn,
    Americans can become healthier and over time, the burden of
    chronic disease can be reduced.

            ``Subtitle B--National Prevention and Wellness Strategy

    ``Sec. 3121. National Prevention and Wellness Strategy''

                Current Law
        No comparable provisions.
        Under the general authorities of PHSA title XVII, the
    Surgeon General of the U.S. Public Health Service has developed
    the Healthy People Program that is responsible for setting the
    nation's health prevention strategy and goals. The Secretary
    issues the decennial Healthy People report through this
    program. The report includes broad population-based health
    goals that are targeted to be met on a national basis, within
    the decade covered by the report.
                Proposed Law
        The Secretary would be required to develop (and
    periodically update) a national strategy to improve the
    nation's health through evidence-based clinical and community-
    based prevention and wellness activities (including core public
    health infrastructure improvements). In essence, this strategy
    would provide a national blueprint for action in making the
    United States a healthier nation. Such strategy would include
    specific national prevention and wellness goals, objectives,
    and priorities as well as a detailed plan for meeting each of
    them. Throughout the strategy, special attention is required to
    be given to health disparities in prevention and wellness.
        In developing this strategy, the Committee intends that
    special attention also be given in developing prevention and
    wellness goals, objectives, and priorities related to the
    prevention of chronic disease. Currently, some nearly one in
    two American adults suffers from one or more chronic diseases,
    incurring approximately $1.5 trillion in costs each year, or
    some 75% of the nation's annual health care spending. In the
    Committee's view, it is imperative that the national strategy
    takes on this issue directly.
        In addition, the Committee notes the importance of the
    strategy's addressing the issue of payment or reimbursement for
    prevention services. Without sufficient payment mechanisms in
    place (or other appropriate incentives or rewards), the
    Committee is concerned that neither health care professionals
    nor communities will be able to adequately provide those
    prevention services and interventions that have been
    demonstrated to be effective.

                      ``Subtitle C--Prevention Task Forces

    ``Sec. 3131. Task Force on Clinical Preventive Services''

                Current Law
        PHSA sec. 915(a) establishes the authority for the U.S.
    Preventive Services Task Force (USPSTF), administered by the
    Agency for Healthcare Research and Quality (AHRQ). The sec.
    charges the USPSTF to conduct evidence-based systemic reviews
    of data and literature to determine what clinical preventive
    services--preventive services delivered to one patient at a
    time by traditional health care providers in clinical
    settings--are scientifically proven to be effective, and based
    upon such reviews, to develop recommendations for the health
    care community. It also requires AHRQ to provide
    administrative, research, and technical support to the USPSTF,
    and exempts the Task Force from requirements of the Federal
    Advisory Committee Act (FACA) (5 U.S.C. App.).
        The U.S. Public Health Service first convened the USPSTF in
    1984. Since that time, the Task Force has produced 74 reviews
    and 120 age and gender-specific recommendations.
                Proposed Law
        The Secretary would be required to establish a permanent
    Task Force on Clinical Preventive Services (Clinical Preventive
    Task Force) that would continue the work of the USPSTF. The
    charge to the Clinical Preventive Task Force would remain just
    as it is today--to study and make evidenced-based
    recommendations on the effectiveness of clinical preventive
    services. Administrative responsibility for the Clinical
    Preventive Task Force would also remain where it is today--
    AHRQ.
        The Committee underscores its overall objective to maintain
    for the Clinical Preventive Task Force, the well-earned
    credibility, independence, and scientific integrity of its
    predecessor organization, the USPSTF. In revising the authority
    for this preventive services task force, the Committee simply
    intends to statutorily improve some of the current practices
    and procedures and to augment available resources. Indeed, as
    the USPSTF transitions to the Task Force on Clinical Preventive
    Services, the Committee does not anticipate any significant
    changes in operations.
        As noted, while the core mission of the Clinical Preventive
    Task Force would not change, the provision would make some
    structural and funding modifications designed to ensure that
    the group can carry out its work most effectively and
    efficiently. Such modifications include increasing the size of
    the membership of the Task Force; establishing criteria for
    such membership; and providing for an authorization of
    appropriations.
        In addition to mandating its principal duties to identify,
    review, and make recommendations on clinical preventive
    services, the sec. would also require the Clinical Preventive
    Task Force to take on new responsibilities, all of which are
    directly related to its basic assignment. More specifically, in
    performing its work, the Clinical Preventive Task Force would
    be required to: (1) consider health disparities in making its
    recommendations: (2) consult with the Task Force on Community
    Preventive Services (as would be established in sec. 3132 of
    PHSA title XXXI of this legislation); (3) make recommendations
    regarding clinical preventive services research and evaluation;
    (4) as appropriate, consult with the clinical preventive
    stakeholders board that would be established as part of the
    operation of the Clinical Preventive Task Force; and (5) as
    appropriate, consider the national strategy on prevention and
    wellness (as would be developed in sec. 3121 of PHSA title XXXI
    of this legislation).
        In requiring that the Clinical Preventive Task Force
    consider health disparities in making its recommendations, the
    Committee underscores its intent that the Task Force act not
    only with regard to national recommendations, but also as
    appropriate, with respect to specific populations and even sub-
    populations. For example, should the Task Force make general
    recommendations regarding screening for lipid disorders among
    persons at risk for coronary heart disease (CHD), the Committee
    would expect it to include recommendations that may be
    different for African Americans than for other U.S. populations
    because this group has a higher prevalence of diabetes,
    hypertension, and obesity, conditions that increase the risk
    for CHD.
        The activities of the Clinical Preventive Task Force would
    be carried out in accordance with the FACA (5 U.S.C. App.),
    except with regard to sec. 14 of that Act, to the extent that
    its provisions do not conflict with the provisions of this
    section. The Committee has included this requirement to ensure
    the work of the Task Force is conducted in an open and
    transparent manner, while preserving its function and status as
    an expert panel that advises not only federal officials but
    also the broader health and health care communities. The
    Committee believes this is especially important because of the
    new and important role of the Task Force's work in implementing
    some of the reforms in the health care system provided for in
    this legislation, including the elimination of all cost-sharing
    requirements for clinical preventive services covered in the
    essential benefits package (as would be established in sec. 122
    of this legislation) and provided under Medicare and Medicaid
    (as would be established respectively in sec. 1305 and sec.
    1711 of this legislation). Such services would include those
    that receive either an ``A'' or ``B'' rating by the Clinical
    Preventive Task Force (or its predecessor organization, the
    USPSTF).
        The Secretary would be required to submit an annual report
    to Congress on the work of the Clinical Preventive Task Force.
        PHSA sec. 3111 (as would be established in PHSA title XXXI
    of this legislation) would authorize an annual appropriation of
    $30 million from the Prevention and Wellness Trust for each of
    FY2010 through FY2014 to support the work of both the Clinical
    Preventive Task Force and the Task Force on Community
    Preventive Services (as would be established in sec. 3132 of
    PHSA title XXXI of this legislation). These sums from the Fund
    are in addition to any other amounts authorized to be
    appropriated from general revenues for such purposes.

    ``Sec. 3132. Task Force on Community Preventive Services''

                Current Law
        No comparable provisions.
        The Task Force on Community Preventive Services (TFCPS) is
    not explicitly authorized in statute; rather, it functions
    under the general authorities of the Secretary found in PHSA
    title III (General Powers and Duties of Public Health Service).
        The TFCPS is a non-governmental panel of public health and
    prevention experts that is administered and supported by the
    CDC. Much like the U.S. Preventive Services Task Force, it is
    charged with conducting evidence-based systematic reviews of
    data and literature and based upon such reviews, making
    recommendations regarding preventive services. Its focus,
    however, is on population-based or community interventions,
    rather than clinical preventive services. Such interventions
    are designed to be provided to groups of people--rather than to
    an individual as is the case with clinical preventive
    services--by a range of providers in a variety of settings.
    Their purpose is to facilitate and reinforce, from a public
    health perspective, what is taught or learned in the health
    provider's office or other traditional clinical setting.
        The TFCPS was first convened in 1996. Since that time, the
    Task Force has produced recommendations on some 200 community
    preventive services or interventions. Among these are worksite
    wellness programs to promote physical activity among employees;
    school-based sealant programs to reduce the risk of dental
    caries; and tobacco cessation activities.
                Proposed Law
        The Secretary would be required to establish a permanent
    Task Force on Community Preventive Services (Community
    Preventive Task Force) that would continue the work of the
    TFCPS. The charge to the Community Preventive Task Force would
    remain just as it is today--to study and make evidenced-based
    recommendations on the effectiveness of community preventive
    services or interventions. Administrative responsibility for
    the Community Preventive Task Force would also remain where it
    is today--CDC.
        The Committee underscores its overall objective to maintain
    for the Community Preventive Task Force, the well-earned
    credibility, independence, and scientific integrity of its
    predecessor organization, the TFCPS. In establishing an
    explicit authority for the Task Force on Community Preventive
    Services, the Committee simply intends to make the TFCPS
    permanent and in so doing, to statutorily improve some of its
    current practices and procedures and to augment available
    resources. Indeed, as the TFCPS transitions to a group with
    permanent authority, the Committee does not anticipate any
    significant changes in operations.
        As noted, while the core mission of the Community
    Preventive Task Force would not change, the provision would
    make some structural and funding modifications designed to
    ensure that the group can carry out its work most effectively
    and efficiently. Such modifications include increasing the size
    of the membership of the Task Force; establishing criteria for
    such membership; and providing for an authorization of
    appropriations.
        In addition to mandating its principal duties to identify,
    review, and make recommendations on community preventive
    services or interventions, the provision would also require the
    Community Preventive Task Force to take on new
    responsibilities, all of which are directly related to its
    basic assignment. More specifically, in performing its work,
    the Community Preventive Task Force would be required to: (1)
    as appropriate, consider health disparities in making its
    recommendations; (2) consult with the Task Force on Clinical
    Preventive Services (as would be established in sec. 3131 of
    PHSA title XXXI of this legislation); (3) make recommendations
    regarding community preventive services research and
    evaluation; (4) as appropriate, consult with the community
    preventive stakeholders board that would be established as part
    of the operation of the Community Preventive Task Force; and
    (5) as appropriate, consider the national strategy on
    prevention and wellness (as would be developed in sec. 3121 of
    PHSA title XXXI of this legislation).
        In requiring that the Community Preventive Task Force
    consider health disparities in making its recommendations, the
    Committee underscores its intent that the Task Force act not
    only with regard to national recommendations, but also, as
    appropriate, with respect to specific populations and even sub-
    populations. For example, client reminders and small media
    campaigns promoting breast cancer screening among African-
    American women might put greater emphasis on educating these
    women about the importance of early diagnosis since African
    Americans have higher breast cancer mortality rates due, in
    large part, to late diagnosis.
        The activities of the Community Preventive Task Force would
    be carried out in accordance with FACA (5 U.S.C. App.), except
    with regard to sec. 14 of that Act, to the extent that its
    provisions do not conflict with the provisions of this section.
    The Committee has included this requirement to ensure that the
    work of the Community Preventive Task Force is conducted in an
    open and transparent manner, while preserving its function and
    status as an expert panel that advises not only federal
    officials but also the broader health and health care
    communities. The Committee believes this is especially
    important because of the new and important role of the Task
    Force's work in implementing the community prevention and
    wellness services grant community (as would be established in
    sec. 3151 of PHSA title XXXI of this legislation).
        The Secretary would be required to submit an annual report
    to Congress on the work of the Community Preventive Task Force.
        PHSA sec. 3111 (as would be established in PHSA title XXXI
    in this legislation) would authorize to be appropriated $30
    million from the Prevention and Wellness Trust for each of
    FY2010 through FY2014 to support the work of both the Community
    Preventive Task Force and the Task Force on Clinical Preventive
    Services (as would be established in section 3131 of PHSA title
    XXXI in this legislation). These sums from the Fund are in
    addition to any other amounts authorized to be appropriated
    from general revenues for such purposes.

                 ``Subtitle D--Prevention and Wellness Research

    ``Sec. 3141. Prevention and wellness research activity coordination''

                Current Law
        No comparable provisions.
                Proposed Law
        The Directors of the CDC and NIH and the heads of other HHS
    agencies would be required, in conducting or supporting
    research on prevention and wellness, to take into consideration
    the national strategy on prevention and wellness (as would be
    developed in section 3121 of PHSA title XXXI of this
    legislation) and the recommendations of both the Task Force on
    Clinical Preventive Services (as would be established in
    section 3131 of PHSA title XXXI of this legislation) and the
    Task Force on Community Preventive Services (as would be
    established in section 3132 of PHSA title XXXI of this
    legislation). The Committee has taken this action to ensure
    that research efforts called for to help address the priorities
    and needs identified in this strategy and by these task forces
    are not only funded, but also coordinated--especially by the
    federal government's two principal prevention and wellness
    research agencies: CDC and NIH. With limited dollars available
    for such research, the Committee believes it is imperative that
    these agencies work together in formulating an appropriate and
    robust prevention and wellness research agenda.

    ``Sec. 3142. Community prevention and wellness research grants''

                Current Law
        No comparable provisions.
                Proposed Law
        The Secretary would be required to establish a program to
    conduct or support research in priority areas identified in the
    national strategy on prevention and wellness (as would be
    developed in section 3121 of PHSA title XXXI of this
    legislation) or by the Task Force on Community Preventive
    Services (as would be established in section 3132 of PHSA title
    XXXI of this legislation). Entities eligible to participate in
    such program include: (1) state, local, or tribal departments
    of health; (2) public and nonprofit private entities; and (3)
    consortia of these entities. The Secretary would be required to
    submit an annual report to Congress on the research supported
    through this program.
        PHSA section 3111 (as would be established in PHSA title
    XXXI of this legislation) would authorize the following sums to
    be appropriated from the Prevention and Wellness Trust for the
    purpose of carrying out prevention and wellness research:
         $100 million for FY2010
         $150 million for FY2011
         $200 million for FY2012
         $250 million for FY2013
         $300,000,000 for FY2014
        These sums from the Fund are in addition to any other
    amounts authorized to be appropriated from general revenues for
    such purposes.
        The Committee has established this program to ensure that
    community prevention and wellness research needs and priorities
    identified through various mechanisms provided under PHSA title
    XXXI (as would be established in this legislation) are
    addressed. But beyond those immediate and ongoing concerns, the
    Committee believes that it is necessary to create a dedicated
    prevention and wellness research program to underscore the
    importance of this research. Community-based research
    (including community-based participatory research) is the
    primary means by which innovative prevention and wellness
    programs become effective public health interventions. Yet it
    is often under-funded or even neglected altogether because of
    the long-standing emphasis on and support for traditional
    clinical or medical research models. With a separate pool funds
    made available through this new and targeted research
    authority, the Committee would expect a significant increase in
    community prevention and wellness research and in turn, the
    development and implementation of additional evidence-based
    community public health interventions.

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

    ``Sec. 3151. Community prevention and wellness services grants''

                Current Law
        No comparable provisions.
        PHSA title III (General Powers and Duties of Public Health
    Service) provides CDC with various authorities to support
    numerous prevention and wellness activities, including those
    targeted at chronic diseases. Part A of PHSA title XIX (Block
    Grants) requires the Secretary to provide formula-based grants
    to states through the Preventive Health and Health Services
    Block Grant Program to address state-identified prevention
    priorities. The authorization of appropriations for that
    program expired at the end of FY1998, although the program has
    continued to receive annual appropriations.
                Proposed Law
        The Secretary would be required to establish a program of
    grants to plan or implement programs that deliver evidence-
    based community prevention and wellness services and
    interventions in priority areas that have been identified by
    the Secretary in the national strategy on prevention and
    wellness (as would be developed in section 3121 of PHSA title
    XXXI of this legislation). Entities eligible to participate in
    such a program include: (1) state, local, or tribal departments
    of health; (2) public or private entities; (3) consortia of
    these entities; or (4) community partnerships representing
    health empowerment zones (as that term would be defined in this
    sec.).
        In awarding grants or contracts, the Secretary would be
    required to give preference to applicants that:
         Will address one or more goals or objectives
    identified by the Secretary in the national strategy on
    prevention and wellness
         Will address significant health disparities
         Will address unmet community prevention and
    wellness needs
         Have a demonstrated record of effectiveness in
    communities comparable to those that are the subject of the
    grant application
         Will make a significant contribution to the
    evidence base for community prevention and wellness services
         Demonstrate that the prevention and wellness
    activities to be funded will be sustainable
         Demonstrate coordination or collaboration across
    governmental and nongovernmental partners
        The program would be structured to allow great latitude in
    the types of services or interventions that could be
    supported--so long as such services and interventions: (1) have
    been determined to be a priority in the national prevention and
    wellness strategy or by the Community Preventive Task Force;
    and (2) are evidenced-based. Indeed, effective FY2013, grants
    could only be awarded to support services and interventions
    recommended by the Community Preventive Task Force or deemed to
    be effective, based on a review of comparable rigor (as
    determined by the CDC Director). Thus, the Committee intends
    that a broad spectrum of evidence-based prevention and wellness
    services and interventions may be supported through this
    program, including those related to physical, mental, oral and
    other appropriate areas of health. Examples of the many types
    of activities that could be funded include workplace obesity
    reduction programs; programs to improve and expand access to
    mental health services for at-risk youth and their families;
    the promotion of healthy, nutritious, and sustainable food in
    schools and other appropriate institutions; and community-based
    health screenings and education. The Committee further intends
    that funding be available not only to support programs targeted
    on a single community preventive service or intervention,
    (e.g., workplace obesity reduction programs), but also those
    that may be designed to include multiple, but related such
    services or interventions (e.g., workplace obesity reduction
    programs, community exercise programs, and nutrition education)
    or to address more than one prevention and wellness priority
    (e.g., diabetes and heart disease).
        Although the Committee intends for the program to be able
    to support a broad array of community prevention and wellness
    services or interventions, grant awards may not be used to
    build or acquire real property, for construction, or to provide
    services that would otherwise be paid (or expected to be paid)
    by a private insurance plan or a public health benefits program
    such as Medicaid.
        The Secretary would also be required to award at least 50%
    of available funds to projects whose primary purpose is to
    achieve a measurable reduction in one or more ``health
    disparities'' (as that term would be defined in section 3171 of
    PHSA title XXXI of this legislation). Accordingly, community
    prevention and wellness programs or projects could be designed
    to address health disparities by race, ethnicity, or geographic
    setting (such as rural or urban setting), or disparities
    experienced by other populations or subpopulations as
    determined appropriate by the Secretary.
        The Secretary would be required to submit an annual report
    to Congress on the programs, projects, and other activities
    supported through this program.
        PHSA section 3111 (as would be established in this
    legislation) would authorize the following sums to be
    appropriated from the Prevention and Wellness Trust for the
    purpose of supporting community prevention and wellness
    services grants:
         $1.065 billion for FY2010
         $1.26 billion for FY2011
         $1.365 billion for FY2012
         $1.570 billion for FY2013
         $1.6 billion for FY2014
        These sums from the Fund are in addition to any other
    amounts authorized to be appropriated from general revenues for
    such purposes.
        It is Committee's expectation that the implementation of
    this new program will help to minimize the duplication of
    existing CDC prevention activities and maximize the delivery of
    services that promote national prevention and wellness goals
    and objectives. Consistent with these aims, the Committee
    intends for CDC to determine how to best integrate or
    coordinate this program with its current prevention and
    wellness efforts, including the Racial and Ethnic Approaches to
    Community Health (REACH) Program and the Healthy Communities
    Program.

                ``Subtitle F--Core Public Health Infrastructure

    ``Sec. 3161. Core public health Infrastructure for State, local, and
            tribal health departments

                Current Law
        No comparable provisions.
        PHSA section 319C authorizes both state formula grants and
    competitive grants to expand the core public health
    infrastructure for terrorism and disaster preparedness. Many
    other PHSA authorities, including several found in PHSA title
    III (General Powers and Duties of Public Health Service) are
    available to support state and local public health capacity.
    However, these authorities are usually targeted for specific
    purposes rather than for public health infrastructure as more
    broadly defined.
                Proposed Law
        The Secretary would be required to establish a program of
    grants to provide support for ``core public health
    infrastructure'' needs (as that term would be defined in
    section 3171 of PHSA title XXXI of this legislation) to state,
    local, and tribal health departments. Two types of awards would
    be made available: (1) mandatory awards (formula-based) for
    each state health department; and (2) competitive awards for
    which state, local, and tribal health departments would be
    eligible. In awarding competitive grants to state, local, or
    tribal health departments, the Secretary would be required to
    give preference to applicants demonstrating core public health
    infrastructure needs that may be identified as part of the
    voluntary accreditation process for public health departments
    (and laboratories) that would be established in subsection (g)
    of this section.
        Of the total amount of funds made available each year, the
    Secretary would be required to award at least 50% to state
    health departments and at least 30% to state, local, or tribal
    health departments; the remaining 20% would be distributed at
    the discretion of the Secretary. All departments--regardless of
    the type of grant awarded--would be mandated to meet
    maintenance of effort requirements as a condition for
    participating in the program.
        Health departments could receive support to address various
    core public health infrastructure needs, including those
    identified in the voluntary accreditation process for public
    health departments. That process would be required to be
    developed and implemented by the Secretary. Its purpose is to
    advance the quality and performance of these government
    agencies.
        It is the Committee's understanding that significant
    progress has already been made in designing such a process. In
    2006 and in response to the recommendations in a 2003 Institute
    of Medicine report (The Future of the Public's Health), several
    public health experts and leading public health organizations,
    including the American Public Health Association (APHA), the
    Association of State and Territorial Health Officials (ASTHO),
    the National Association of County and City Health Officials
    (NACCHO), and the National Association of Local Boards of
    Health (NALBOH) convened and launched a public health
    accreditation initiative, Exploring Accreditation Project. That
    work led to the 2007 incorporation of the Public Health
    Accreditation Board (PHAB), a nonprofit private entity whose
    mission is to develop a national voluntary accreditation
    program for public health departments.
        PHAB is now entering its beta stage of pilot testing
    accreditation standards that address public health
    administrative capacity as well as governance issues in
    addition to the 10 public health services identified by CDC as
    essential (e.g., diagnosing and investigating health outbreaks
    and other health hazards). PHAB is on track to accredit its
    first public health department in 2011. In preparation for the
    implementation of the accreditation process, in 2008, NACCHO
    (with the support of the CDC and The Robert Wood Johnson
    Foundation) selected 66 local health departments to conduct
    self assessments and quality improvement activities. In the
    Committee's view, this is clear indication that many public
    health departments expect to take part in the accreditation
    process once it is in full force.
        The Committee is very much encouraged by the PHAB
    activities and the overall progress being made and does not
    wish to see these efforts interrupted or slowed down as a
    result of the enactment of this section. It has, therefore,
    provided authority to the Secretary to enter into a cooperative
    agreement with a private, nonprofit entity to carry out her
    responsibility to develop and implement a voluntary
    accreditation process for public health departments. It is the
    Committee's expectation that the Secretary will determine how
    best to integrate or coordinate these activities with existing
    accreditation activities and outreach efforts at CDC, including
    those within its Office of Public Health Practice and National
    Center for Health Marketing.
        The Secretary would be required to submit an annual report
    to Congress on the activities supported through this program.
        PHSA section 3111 (as would be established in PHSA title
    XXXI of this legislation) would authorize the following sums to
    be appropriated from the Prevention and Wellness Trust for the
    purpose of supporting core public health infrastructure grants
    to state, local, and tribal health department:
         $800 million for FY2010
               $1 billion for FY2011
               $1.1 billion for FY2012
               $1.2 billion for FY2013
               $1.265 billion for FY2014
        These sums from the Fund are in addition to any other
    amounts authorized to be appropriated from general revenues for
    such purposes.
        Although the Committee has required that all state health
    departments receive funding under this program, it emphasizes
    its expectation that large local health departments will also
    receive appropriate support. Indeed, the Committee strongly
    believes that funding be made available for competitive grants
    for local and tribal health departments and that in awarding
    such grants, the Secretary take into account the needs of
    health departments of varying sizes and scope of
    responsibilities.

    Sec. 3162. Core public health infrastructure and activities for CDC

                Current Law
        No comparable provisions.
                Proposed Law
        The Secretary would be required to expand and improve the
    core public health infrastructure and activities of the CDC to
    address unmet and emerging public health needs. The Secretary
    would be required to submit an annual report to Congress on the
    activities supported through this program.
        PHSA section 3111 (as would be established in PHSA title
    XXXI of this legislation) would authorize to be appropriated
    $350 million for each of FY2010 through FY2014 from the
    Prevention and Wellness Trust for the purpose of expanding and
    improving core public health infrastructure and activities at
    CDC. These sums from the Fund are in addition to any other
    amounts authorized to be appropriated from general revenues for
    such purposes.
        As the country's central public health authority, CDC has
    enormous responsibilities. Its mission--to serve as the
    national focus for developing and applying disease prevention
    and control, environmental health, and health promotion and
    health education activities designed to improve the health of
    the people of the United States--is very broad. And its
    portfolio of activities is extensive (and growing), ranging
    from confronting the HIV/AIDS epidemic and outbreaks of E. coli
    to fighting obesity; from monitoring lead poisoning to
    addressing emergency preparedness (including bioterrorism) and
    pandemic flu; and from supporting state and local health
    departments to providing assistance to the global health
    community. And the CDC is seen as the world leader in promoting
    and protecting the public's health.
        As it carries out its work, however, the agency often finds
    itself without the flexibility necessary to respond to unmet
    and emerging public health needs. Sometimes this is a result of
    restrictions placed on the agency by legislative authority; in
    other cases it is because of a lack of resources. The purpose
    of this provision is to provide CDC with additional funding so
    it can be prepared to address these needs in a timely fashion.
        The Committee recognizes the importance of supporting basic
    public health infrastructure activities as part of this effort.
    Thus, for example, funds from this new authority could be used
    to enhance real-time surveillance capacity for emerging or
    critical public health issues (such as food safety); to upgrade
    public health surveillance systems so that they are well
    integrated and promote rapid information sharing among public
    health agencies; or to improve CDC capacity for the development
    of laboratory methods, tests, and protocols that can be used in
    state, local, territorial, and tribal health department and
    clinical settings.
        Support might also go to increase CDC's capacity for
    rigorous evaluation of public health interventions, and to
    improve the speed at which public health research gets
    translated into the field. The Committee believes this
    evaluation function will be crucial not only for reviewing
    existing programs, but also the new programs established in
    PHSA title XXXI of this legislation. Indeed, in the Committee's
    view, systematic evaluation and continuous application of new
    evidence will help ensure maximum health impact from these new
    investments.

                        ``Subtitle G--General Provisions

    ``Sec. 3171. Definitions''

                Current Law
        The term ``public health infrastructure'' is not defined in
    the U.S. Code. Nor is the term ``health disparities'', although
    there are related terms that are defined, including ``minority
    health conditions'' and ``health disparity populations''
    (defined in PHSA section 485E, establishing the National Center
    on Minority Health and Health Disparities at NIH). Other PHSA
    sections, such as PHSA section 903 (establishing AHRQ), cross
    reference these sections.
                Proposed Law
        The following terms, among others, would be defined for
    purposes of carrying out relevant sections of title III of
    division C of this legislation: ``core public health
    infrastructure''; ``health disparities''; and ``tribal''.
        The Committee underscores its intent to include within the
    meaning of the term ``health disparities'' differences among
    populations and subpopulations not only in the presence of
    disease, but also in health outcomes and access to health care.
    In the Committee's view, it is critically important to view
    health disparities from this broader perspective so as to
    capture the full extent to which certain populations and
    subpopulations experience such disparities.
        The Committee notes that under section 2402 of subtitle D
    of division C of this legislation (related to the Assistant
    Secretary for Health Information), the new Assistant Secretary
    for Health Information would be required to develop standards
    for the collection of data that is expected to assist in the
    measurement of health disparities. It is the Committee's intent
    that these data, in turn, be used to help inform the meaning of
    the term health disparities under this section.

    Sec. 2301(b). Transition provisions applicable to task forces

                Current Law
        PHSA section 915(a) establishes the authority for the U.S.
    Preventive Services Task Force (USPSTF), administered by the
    Agency for Healthcare Research and Quality (AHRQ). The section
    charges the USPSTF to conduct evidence-based systemic reviews
    of data and literature to determine what clinical preventive
    services--preventive services delivered to one patient at a
    time by traditional health care providers in clinical
    settings--are scientifically proven to be effective and based
    upon such reviews, to develop recommendations for the health
    care community. It also requires AHRQ to provide
    administrative, research, and technical support to the USPSTF,
    and exempts the Task Force from requirements of FACA (5 U.S.C.
    App.).
        The Task Force on Community Preventive Services (TFCPS) is
    not explicitly authorized in statute; rather, it functions
    under the general authorities of the Secretary found in PHSA
    title III (General Powers and Duties of Public Health Service).
        The TFCPS is a non-governmental panel of public health and
    prevention experts that is administered and supported by the
    CDC. Much like the U.S. Preventive Services Task Force, it is
    charged with conducting evidence-based systematic reviews of
    data and literature and based upon such reviews, making
    recommendations regarding preventive services. Its focus,
    however, is on population-based or community interventions,
    rather than clinical preventive services. Such interventions
    are designed for groups of people from a range of providers in
    a variety of settings, rather than individuals, as is the case
    with clinical preventive services. Their purpose is to
    facilitate and reinforce, from a public health perspective,
    what is taught or learned in the health provider's office or
    other traditional clinical setting.
                Proposed Law
        This provision would establish rules for transitioning the
    operations of the existing USPSTF and TFCPS to respectively,
    the Task Force on Clinical Preventive Services (as would be
    established in section 3131 of PHSA title XXXI of this
    legislation) and the Task Force on Community Preventive
    Services (as would be established in section 3132 of PHSA title
    XXXI of this legislation). More specifically, the provision
    would:
         Require the transfer of all functions, personnel,
    assets, and liabilities of the USPSTF and TFCPS to their
    respective new task force
         Require all recommendations of the USPSTF and
    TFCPS in existence before the enactment of this legislation to
    be considered recommendations of their respective new task
    force
         Authorize the Secretary to select members of the
    USPSTF and TFCPS to serve as members of their respective new
    task force
         Discount any prior service on the USPSTF or TFCPS
    by any member of either respective new task force in
    calculating his or her total years of service for purposes of
    meeting term limit requirements
        In establishing these transition rules, the Committee
    underscores its intent in creating the new Task Force on
    Clinical Preventive Services and the Task Force on Community
    Preventive Services and made clear in its comments in sections
    3131 and 3132 (as would be established in PHSA title XXXI of
    this legislation): To continue and maintain the work of the
    USPSTF and TFCPS, and to provide for improvements in some of
    their current practices and procedures. In the Committee's
    view, the changes or adjustments in operations that are
    required in those sections are not significant and should be
    easily implemented. These transition rules should further allow
    for a seamless transition from one entity to the other,
    limiting the disruption in work that might otherwise occur.

    Sec. 2301(c). Period before completion of national strategy

                Current Law
        No comparable provisions.
                Proposed Law
        This provision would authorize the Secretary, pending
    completion of the national prevention and wellness strategy (as
    would be required in sec. 3121 of PHSA title XXXI of this
    legislation) to make a judgment about how the strategy would
    address an issue (and rely on that judgment) in carrying out
    any provision of subtitles C, D, E or F of such title as it may
    relate to such national strategy.
        In establishing this transition rule, the Committee
    emphasizes its intent that the activities required under
    subtitles C, D, E, or F of PHSA title XXXI move forward even as
    the national prevention and wellness strategy (as would be
    required in section 3121 of PHSA title XXXI of this
    legislation) is being developed. To ensure that work is begun
    and that progress is being made, the Committee has provided
    temporary authority to the Secretary to make her best judgment
    about the potential impact of the national strategy in carrying
    out the programs and activities established under these
    subtitles. This authority would expire at the time the national
    prevention and wellness strategy is completed and released.

    Sec. 2301(d). Conforming amendments

                Proposed Law
        This provision would make appropriate and conforming
    amendments to the Indian Health Care Improvement Act, the
    Social Security Act (with regard to Medicare, Medicaid, and
    SCHIP), and the Public Health Service Act.

                       TITLE IV--QUALITY AND SURVEILLANCE

        The United States spends more on health care than any other
    country in the world; yet its health care system ranks number
    37 out of 191 countries measured by the World Health
    Organization. Other titles within this division as well as
    other divisions of this legislation are primarily intended to
    change that statistic. Title IV is intended to focus on two
    areas through which the nation's progress in meeting this goal
    can be met: health care quality and public health surveillance.
        Tens of thousands of Americans die each year from poor
    quality care. A 1999 Institute of Medicine report (To Err is
    Human: Building a Safer Health System) estimated that between
    44,000 and 98,000 Americans die each year due to preventable
    medical errors. Some 10 years later, the number of such deaths
    remains alarmingly high.
        Medical errors are not the only source for poor quality of
    care. According to CDC, almost 100,000 Americans die annually
    because of health care-associated infections alone (Klevens et
    al, Estimating Health Care-Associated Infections and Deaths in
    U.S. Hospitals, 2002; Public Health Reports, March-April 2007).
    CDC also estimates that the direct medical costs to hospitals
    of treating such infections ranges from $28 to $45 billion
    annually (Direct Medical Costs of Healthcare-Associated
    Infections in U.S. Hospitals and the Benefits of Prevention,
    March 2009).
        These statistics and other important health and health care
    information come about through the use of various data
    collection and surveillance tools. When working well and in
    concert with each other, these activities combine to create a
    common metric for understanding the public's health as well as
    the country's health care delivery system. Today's patchwork of
    programs at the national level has made it difficult to achieve
    this end.
        The health and health care of the nation cannot be truly
    improved--even with the health reforms established in other
    divisions of this legislation in place--without also
    constructing better pathways to enhanced quality and better
    surveillance mechanisms. Indeed, efforts to expand access and
    to control costs can only be meaningful if accompanied by
    improvements in the actual care being provided and in the tools
    being used to measure success.

    Sec. 2401. Implementation of best practices in the delivery of health
            care

                Current Law
        PHSA title IX (Agency for Healthcare Research and Quality)
    (AHRQ) specifically provides AHRQ with broad research authority
    regarding the development, presentation, publication and
    dissemination of evidence-based information on all aspects of
    health care, including best practices. Such activities are
    authorized more generally under section 301 of PHSA title III
    (General Powers and Duties of Public Health Service).
        Since its creation in 1989 as the Agency for Health Care
    Policy and Research (renamed the Agency for Healthcare Research
    and Quality in 1999), AHRQ has been the lead government agency
    in conducting and otherwise supporting evidence-based research
    on health care quality, safety, efficiency, and effectiveness
    of health care for all Americans.
        Despite important successes by the agency, clinical
    practice continues to lag behind the best science available.
    Researchers estimate that it may take as long as 17 years for
    scientific research to be adopted widely into patient care.
    These delays in the implementation of best practices are rooted
    in the large volume of new studies and journal articles
    released every day, generated in part by work supported with
    billions of dollars in federal investments for the National
    Institutes of Health (NIH). It is critical to be able to access
    the research produced at NIH to create a scientific foundation
    for medical care. Such efforts are significantly hampered,
    however, by the resources available to AHRQ--with the agency
    receiving only two cents on every dollar allocated to NIH, its
    ability to assist in the dissemination and adoption of this
    important new science is limited and the 17-year lag in the
    adoption of best practices looks to continue.
        A recent example dramatically makes this point. A large
    body of research has long demonstrated the success of various
    interventions in reducing the health care-associated
    infections, central-line associated bloodstream infections.
    Yet, such infections continue to kill about 30,000 Americans
    each year. An AHRQ-funded study, An Intervention to Decrease
    Catheter-Related Bloodstream Infections in the ICU (New England
    Journal of Medicine, December 2006), demonstrated that the use
    of a simple checklist of the most important interventions could
    virtually eliminate these deadly infections. These stunning
    results led to a February 2009 promulgation from AHRQ to
    institute this best practice in institutions in 10 states, with
    a goal of reducing central-line associated bloodstream
    infections by 80%. A number of additional states expressed
    interest in participating in this effort but were forced to
    look for private funding because of a lack of resources at
    AHRQ.
                Proposed Law
        This provision would amend PHSA title IX to add a new part
    D--``Implementation of Best Practices in the Delivery of Health
    Care''--and to establish in that part a new Center for Quality
    Improvement within AHRQ. The purpose of the Center is to
    identify, develop, evaluate, and implement best practices in
    health care delivery, i.e., those health care practices that
    result in the delivery of consistently high quality, efficient
    health services and that in turn significantly improve the
    quality of patient care. The Director of AHRQ would head this
    Center.
        The Director would be required to prioritize those areas
    (such as heart disease) for the identification, development,
    evaluation, and implementation of best practices in health care
    delivery. In so doing, the Director would be required to take
    into account the priorities established under SSA section 1191
    (as would be established in section 1441 of this legislation)
    as well as the key health indicators that would be identified
    by the Assistant Secretary for Health Information (as would be
    established in section 2402 of this legislation).
        With regard to each priority targeted for action, the
    Secretary would be further required to: (1) identify existing
    best practices; (2) develop new best practices; (3) evaluate
    all best practices; and (4) implement all appropriate best
    practices (through arrangements with Quality Improvement
    Organizations (QIAs) (authorized under SSA section 1153) and
    other entities. The Secretary would be specifically prohibited,
    however, from developing quality-adjusted life year measures or
    other methodologies that could be used to deny health care
    benefits on the basis of a beneficiary's age, life expectancy,
    disability, or expected quality of life. The Committee has
    taken this action to ensure that the Center does not target its
    efforts too narrowly and instead keep the Center focused on
    developing and disseminating information about the best science
    that can have impact on the greatest number of Americans.
    Nonetheless, this restriction should not preclude AHRQ from
    developing best practices that may affect one population or
    sub-population more directly than another (or others) when the
    evidence suggests that such an approach is justified.
        The Director would be required to carry out these
    activities through a program of grants and contracts. Only
    nonprofit entities would be eligible for support under this
    program, including QIAs. Because of their extensive experience
    and expertise in working with best practices, it is the
    Committee's expectation that such groups will be common
    recipients of awards made under this program. In some areas,
    however, the Committee would also expect that other
    organizations would play a central role in the dissemination of
    a particular best practice.
        The Director would be required to provide for the public
    dissemination of information regarding the Center's various
    efforts. This is to ensure that the public has easy access to
    the Center's work and recommendations. The Director would also
    be required to submit an annual report to Congress (and the
    Secretary) on the activities carried out under this provision.
    Such report would be required to include summary data on
    patient outcomes before, during, and after the implementation
    of best practices that are the focus of the Center as well as
    recommendations on the adaptability of such best practices for
    use by health providers.
        Pending the Director's designation of an initial set of
    priority areas for the identification, development, evaluation,
    and implementation of best practices, the Director would be
    directed to prioritize the following five topics: (1) reducing
    health care-associated infections; (2) increasing hospital and
    outpatient perioperative patient safety; (3) improving care in
    hospital emergency rooms; (4) improving the provision of
    obstetrical and neonatal care; and (5) improving the provision
    of preventive and developmental child health services. This
    authority would expire at the time the Director establishes her
    own set of priorities for action by the Center.
        The Committee has selected these areas for focus because of
    the potential for relatively quick, important, and widespread
    improvements in quality of care that is expected to result from
    this work. In each of these areas, the Committee understands
    some success has already been demonstrated; with this push it
    would anticipate seeing much more and much sooner than might
    otherwise take place.
        The Director would also be required to submit an initial
    report to Congress on the impact of the nurse-to-patient ratio
    on the quality of care and patient outcomes.
        The Committee has chosen to establish a new Center for
    Quality Improvement to provide a targeted focus on issues of
    quality improvement as well as additional resources to help
    ensure success of AHRQ in this field. The need for such
    improvement is undisputed. Tens of thousands of Americans die
    each year due to preventable conditions, including medical
    errors and health care-associated infections. Indeed, CDC
    reports that such infections alone account for 1.7 million
    infections and almost 100,000 deaths each year. The Committee
    believes such results are unacceptable and can be prevented. In
    its view, the new Center for Quality Improvement can play a
    critical role in helping to address this ongoing problem, most
    especially through its work on best practices.

    Sec. 2402. Assistant Secretary for Health Information

                Current Law
        HHS supports and conducts a number of programs and
    activities related to the collecting and dissemination of
    health statistics and other health information. These efforts
    are primarily directed by CDC's National Center for Health
    Statistics (NCHS) and AHRQ.
        PHSA section 306 establishes the authority for NCHS to
    conduct and support various statistical and epidemiological
    activities related to health and health care in the United
    States. Among these is the collection of statistics on illness
    and disability (including their economic impact);
    environmental, social, and other health hazards; determinants
    of health; health resources; health care utilization, including
    associated costs and financing; and family formation, growth,
    and dissolution.
        Several authorities under PHSA title IX (AHRQ) also provide
    for the collection and dissemination of health and healthcare-
    related data and information. Among other such activities, AHRQ
    is responsible for preparing annual reports on disparities in
    health care delivery and national trends in the quality of U.S.
    health care.
        In addition to these efforts, under the general authorities
    of PHSA title XVII (Health Information and Health Promotion),
    HHS supports the Healthy People Program through which the
    decennial Healthy People report is issued. This report provides
    a national assessment of the health of the nation based upon a
    series of health indicators such as tobacco use and obesity.
        There is no authority under which the Secretary is required
    to share health data, analyses, and other information among the
    various HHS agencies. Such sharing is facilitated, however,
    through the Office of Management and Budget's (OMB) Directive
    15 (Standards for the Classification of Federal Data on Race
    and Ethnicity), which outlines standards for the collection of
    race and ethnicity data on federally-sponsored surveys,
    administrative forms, and other records (e.g., school
    applications). OMB Directive 15 does not mandate the collection
    of such data; instead it sets the requirements that must be met
    when such data are collected. In general, these requirements do
    not apply to state and local public health departments or to
    Medicaid.
                Proposed Law
        This provision would amend PHSA title XVII (Health
    Information and Health Promotion) to re-designate PHSA sections
    1709 and 1710 and to insert a new PHSA section 1709--
    ``Assistant Secretary for Health Information.'' The new PHSA
    section 1709 would establish within HHS the new position of
    Assistant Secretary for Health Information who would be
    appointed by the Secretary.
        The Assistant Secretary would be charged with the following
    responsibilities with respect to information regarding the
    nation's health and health care:
         Ensure the collection, collation, reporting, and
    publishing of information on key health indicators (as
    identified and periodically updated by the Assistant Secretary)
         Develop standards for the collection of data,
    including standards for the collection of data on race,
    ethnicity, primary language, sex, and other relevant population
    categories
         Provide support to federal departments and
    agencies whose programs have a significant impact upon health
    for the collection and collation of such information
         Ensure the sharing of such information among HHS
    agencies
         Facilitate the sharing of such information by and
    among federal departments and agencies whose programs have a
    significant impact upon health
         Identify gaps in such information and the
    appropriate agency or entity to address such gaps
         Award grants or contracts for the collection and
    collation of such information
        The Assistant Secretary would also be required to
    facilitate public accessibility of datasets (such as de-
    identified Medicare datasets) related to health and health
    care. Such accessibility must be in keeping, however, with all
    privacy, proprietary, and other appropriate safeguards.
        In addition to these duties, the Assistant Secretary would
    be mandated to facilitate and coordinate the identification and
    monitoring of ``health disparities'' (as that term would be
    defined in section 3171, as would be established in section
    2301 of this legislation) by HHS agencies in order to inform
    their program and policy activities designed to reduce such
    disparities.
        The Assistant Secretary's reporting and publishing
    functions regarding information on the key health indicators he
    or she identifies would be guided by OMB regulations, rules,
    processes, and procedures governing the review, release, and
    dissemination of Principal Federal Economic Indicators made
    available by the Bureau of Labor Statistics (OMB Statistical
    Policy Directive No. 3: Compilation, Release, and Evaluation of
    Principal Federal Economic Indicators (72 Federal Register
    42266, August 1, 2007); and OMB Statistical Policy Directive
    No. 4: Release and Dissemination of Statistical Products
    Produced by Federal Statistical Agencies (73 Federal Register
    12622, March 7, 2008). Indeed, these OMB policy directives
    would specifically be required to be applied to any OMB
    regulations, rules, processes, and procedures governing the
    review, release, and dissemination of information on these key
    health indicators in the same manner as they are used in the
    review, release, and dissemination of key economic indicators.
        The Committee has mandated the application of these OMB
    policy directives with regard to the reporting and publishing
    of information on key health indicators to ensure its timely
    release, reliability, and scientific integrity. The Committee
    understands that such directives have worked very well in
    helping to provide information relatively quickly and on a
    regular basis to both government officials and the public on
    key economic indicators that inform the country's fiscal
    policies. In the Committee's view, information on the nation's
    key health indicators should receive this very same treatment.
        In developing standards for the collection of data on race,
    ethnicity, and primary language, as well as a set of other
    appropriate population and subpopulation categories (such as
    sexual orientation and gender identity, socioeconomic status,
    and disability), it is the Committee's expectation that the
    Assistant Secretary will work to establish standards that that
    can be used and applied consistently among the Department's
    various data collection efforts as well as those of other
    federal departments and agencies. In so doing, however, the
    Committee intends for the Assistant Secretary to take into
    account the health and health care context in which these data
    will be used.
        In doing all this, the Assistant Secretary would be
    authorized to obtain information from any federal department or
    agency that is necessary to enable the Assistant Secretary to
    perform his or her functions. The Committee has provided this
    authority to the Assistant Secretary in response to concerns
    that have been raised about the ability of HHS to secure data
    and other relevant information from various government agencies
    (e.g., Centers on Medicare and Medicaid Services and the Social
    Security Administration) that would be useful in measuring and
    reporting on the nation's health and health care. The Committee
    understands, for example, that it has been difficult to bring
    various HHS agencies together to share data related to
    ethnicity. It is the Committee's expectation that with this
    authority in place, this problem can be alleviated and
    hopefully, avoided altogether.
        The Assistant Secretary would be required to submit an
    annual report to the Secretary and the Congress on his or her
    work. Such report would be required to include information on
    national, regional, or state changes in health and health care
    (as measured by the key health indicators she or he has
    identified); gaps in data collection on the nation's health and
    health care (and recommendations for addressing such gaps); and
    health disparities analyses.
        The Committee has established this new position to provide
    a central and unified source for data and other information
    regarding the health and health care of the nation. Currently,
    no single office within HHS is charged with the responsibility
    of collecting, collating, reporting, and publishing such
    information. Nor is there any statutory mechanism in place that
    gives the Secretary the authority to require HHS agencies
    engaged in these activities to share their results with each
    other, allowing for a more complete and up-to-date national
    health and health care assessment.
        The Committee believes that this new administrative
    structure is necessary to reduce the duplication and otherwise
    enhance and strengthen the Department's ongoing health
    information activities. This will be especially important as
    the health reforms spelled out in other provisions of this
    legislation (see Divisions A and B) are implemented and
    subsequently evaluated, in terms of helping to improve the
    nation's health and health care.

    Sec. 2403. Authorization of appropriations

        This provision would authorize to be appropriated $300
    million for each of FY2010 through FY2014 from the Public
    Health Investment Fund (as would be established in section 2002
    of this legislation) for the purpose of supporting various
    health quality and surveillance activities.
        These sums from the Fund are in addition to any other
    amounts authorized to be appropriated from general revenues for
    such purposes.

                           TITLE V--OTHER PROVISIONS

            Subtitle A--Drug Discount for Rural and Other Hospitals

    Sec. 2501. Expanded participation in 340B program

                Current Law
        PHSA section 340B requires pharmaceutical drug
    manufacturers that participate in the Medicaid drug rebate
    program to enter into pharmaceutical pricing agreements with
    the Secretary (340B Program). Under these agreements,
    manufacturers provide discounts on covered outpatient drugs
    purchased by certain groups of providers known as ``covered
    entities,'' including community health centers, state-operated
    AIDS drug assistance programs, and hospitals with high Medicare
    disproportionate share adjustments. The discounts are
    calculated to ensure that covered entities can purchase covered
    outpatient drugs at the same price that Medicaid pays net of
    the rebates it receives from manufacturers. Approximately
    13,000 covered entities and 800 pharmaceutical manufacturers
    currently participate in the 340B Program, which is
    administered by HRSA.
                Proposed Law
        This provision would amend PHSA Section 340B to add the
    following categories to the list of covered entities that would
    be entitled to discounted drug prices under the 340B Program:
         Certain children's hospitals excluded from the
    Medicare prospective payment system
         Medicare critical access hospitals
         Entities receiving funds for the provision of
    services under the Maternal and Child Health Services Block
    Grant Program (SSA title V)
         Entities receiving funds for the provision of
    services under the Comprehensive Community Mental Health
    Services Block Grant Program (subpart I of part B of PHSA title
    XIX (Block Grants))
         Entities receiving funds for the provision of
    treatment services under the Substance Abuse Prevention and
    Treatment Block Grant Program (subpart II of part B of PHSA
    title XIX (Block Grants))
         Medicare-dependent small rural hospitals
         Medicare sole community hospitals
         Medicare rural referral centers
        The provision would apply to covered outpatient drugs
    dispensed by these covered entities on or after July 1, 2010,
    without regard to whether implementing regulations have been
    issued.
        Hospitals participating in the 340B Program, including
    those added as covered entities under this provision, would
    generally be prohibited from obtaining covered outpatient drugs
    through a group purchasing organization (GPO) or other group
    purchasing arrangement. The Secretary would be required to
    establish reasonable exceptions to this prohibition in the
    following cases:
         For outpatient drugs that are unavailable under
    the 340B Program due to a supply shortage, manufacturer
    noncompliance, or other circumstances beyond the hospital's
    control
         To facilitate generic substitution when generic
    drugs are available at lower prices
         To reduce the administrative burdens in managing
    inventories of drugs purchased under the 340B Program and
    uncovered drugs (unless a duplicate discount or drug diversion
    problem would be created)
        The Committee emphasizes that these exceptions are not
    intended to create an opportunity for group purchasing
    organizations to purchase drugs through the 340B Program at the
    program's prices. Instead, prices paid by GPOs for outpatient
    covered drugs are to be based on the ability of the GPOs to
    negotiate with drug manufactures on behalf of the purchasers
    they represent, not on the statutory discounts that the 340B
    program provides.

    Sec. 2502. Extension of discounts to inpatient drugs

                Current Law
        PHSA Section 340B requires pharmaceutical drug
    manufacturers that participate in the Medicaid drug rebate
    program to enter into pharmaceutical pricing agreements with
    the Secretary (340B Program). Such agreements cover outpatient
    drugs and do not extend to drugs provided on an inpatient
    basis.
                Proposed Law
        This provision would expand discounts available to
    hospitals participating in the 340B Program to include drugs
    provided on an inpatient basis. The provision would apply to
    inpatient drugs dispensed by these hospitals on or after July
    1, 2010, without regard to whether implementing regulations
    have been issued.
        The availability of 340B Program discounts for inpatient
    drugs is expected to reduce the costs that participating
    hospitals incur in furnishing services to their patients. To
    ensure that the Medicaid program gets the full benefit of those
    savings when it purchases inpatient services from hospitals
    participating in the 340B Program, the provision would
    establish a Medicaid credit process. Under this process,
    hospitals participating in the 340B Program would be required
    to issue credits to state Medicaid programs based on the
    estimated annual costs to the hospital of brand-name and
    generic drugs provided to Medicaid beneficiaries for inpatient
    use.
        More specifically, a hospital participating in the 340B
    Program would be required to issue credits to each state
    Medicaid program from which it has received revenue (either
    directly on a fee-for-service basis or from a Medicaid managed
    care organization) during the most recent Medicare cost
    reporting period. The credit amounts would be calculated by the
    state Medicaid agency based on information supplied by the
    hospital within 30 days of the filing of its Medicare cost
    report. (Hospitals would be required to submit the dosage,
    form, strength, package size, date of purchase, and the number
    of units for each inpatient drug purchased during the cost
    reporting period.) The credit payments would be due to the
    state Medicaid program within 60 days after the hospital has
    been notified by the state of the amounts owed. To ensure the
    federal government's participation in these savings, amounts of
    credits received by the state Medicaid program would be treated
    as a reduction in the state's Medicaid expenditures that are
    subject to federal matching.
        Two types of credits would be available for: (1) the
    estimated annual costs of single source and innovator multiple
    source drugs provided by the hospital to Medicaid beneficiaries
    during that cost reporting period; and (2) non-innovator
    multiple source drugs.
        The credit amount for single source and innovator multiple
    source inpatient prescription drugs would be the product of:
    (1) the annual value of such drugs based on the drug's average
    manufacturer price (AMP); (2) the estimated percentage of the
    hospital's inpatient drugs purchases attributable to use by
    Medicaid beneficiaries on an inpatient basis; and (3) the
    minimum Medicaid rebate percentage (currently 15.1%). (Section
    1742 of the legislation would increase this minimum rebate
    percentage to 22.1%.)
        The credit amount for non-innovator multiple source drugs
    would be the product of: (1) the annual value of those drugs
    purchased based on each drug's AMP; (2) the estimated
    percentage of the hospital's purchases of the drug attributable
    to inpatient use by Medicaid beneficiaries; and (3) the
    applicable Medicaid rebate percentage for non-innovator single
    source drugs (currently 11%).
        A hospital participating in the 340B Program would not be
    required to pay Medicaid credits for any cost reporting period
    if it could demonstrate to the state Medicaid agency that it
    would lose Medicaid reimbursement as a result of extending
    discounts to inpatient drugs and the amount of reimbursement it
    would lose would exceed the amount of the credit otherwise owed
    by the hospital.
        For purposes of calculating credit amounts, the provision
    would define AMP to have the same meaning as that term is used
    under current Medicaid law, except if an inpatient drug is not
    distributed to the retail pharmacy class of trade. In that
    case, AMP would be defined as the average price paid to the
    manufacturer for the drug in the United States by wholesalers
    for drugs distributed to the acute care class of trade, after
    deducting customary prompt pay discounts. (Section 1741 of the
    legislation would change the definition of AMP under Medicaid
    law.)
        The provision would not prohibit hospitals participating in
    the 340B Program for the purchase of inpatient drugs from also
    using GPOs for the purchase of inpatient drugs. The Committee
    emphasizes that the absence of a prohibition on GPO
    participation is not intended to create an opportunity for GPOs
    through the 340B Program to purchase drugs at the program's
    statutory prices. Instead, prices paid by GPOs for inpatient
    drugs are to be based on the ability of the GPOs to negotiate
    with drug manufactures on behalf of the purchasers they
    represent, not on the statutory discounts that the 340B Program
    provides.

    Sec. 2503. Effective date

                Current Law
        No comparable provisions.
                Proposed Law
        This provision would establish an effective date for
    subtitle II (regarding the program under PHSA section 340B) of
    July 1, 2010, making the provisions of such subtitle applicable
    to drugs dispensed on or after that date.
        It is the intent of the Committee that the provisions of
    subtitle II be used to determine if prescription drug
    manufacturers meet Medicaid and PHSA section 340B requirements.

                              Subtitle B--Programs

                     Part 1--Grants for Clinics and Centers

    Sec. 2511. School-based health clinics

                Current Law
        No comparable provisions.
        The PHSA does not explicitly authorize a program of support
    for school-based health clinics (SBHCs). Support is provided,
    however, through the PHSA section 330, the authority for
    community health centers (CHCs).
        The 2008 reauthorization of the CHC program (P.L. 110-355)
    included a provision requiring GAO to conduct a study on the
    economic costs and benefits of SBHCs as well as their impact on
    student health. The results of that study are not yet
    available.
                Proposed Law
        This provision would amend part Q of PHSA title III
    (General Powers and Duties of Public Health Service) to add a
    new PHSA section 399Z-1 to require the Secretary to establish a
    program of grants to support school-based health clinics. The
    provision mandates that no funds made available through such
    program may be used to provide abortions.
        PHSA section 399Z-1 would authorize $50 million to be
    appropriated for FY2010 and ``such sums as may be necessary''
    for each of FY2011 through FY2014. The Secretary would be
    required to begin awarding grants under this program not later
    than July 1, 2010, whether or not the final regulations that
    pertain to the program have been issued.

    Sec. 2512. Nurse-managed health centers

                Current Law
        No comparable provisions.
                Proposed Law
        This provision would amend title III (Powers and Duties of
    Public Health Service) to establish at the end a new ``Part S--
    ``Nurse-Managed Health Centers'' that includes a new PHSA
    section 399GG to establish a nurse-managed health center
    program.
        In establishing this program, the Committee has used the
    community health centers program as a model. It expects,
    therefore, that the Secretary will look to the CHC program for
    guidance in implementing the nurse-managed health centers
    program. In so doing, the Committee underscores its intent to
    preserve applicable state law with regard to the scope of
    practice under which an individual has the legal authority to
    provide services at or through a nurse-managed health center.
    Indeed, the Committee intends that nothing in this provision be
    construed to change or otherwise impact such state laws.

    Sec. 2513. Federally qualified behavioral health centers

                Current Law
        Subpart I (PHSA sections 1911 through 1920) of part B of
    PHSA title XIX (Block Grants) requires the Secretary to provide
    grants to states (formula-based) to support community mental
    health services. The authorization for appropriations for this
    subpart expired at the end of FY2003.
                Proposed Law
        This provision would amend PHSA section 1913 to establish
    criteria for the certification of federally qualified
    behavioral health centers and to otherwise recognize the role
    of such centers as a safety net provider for individuals with
    behavioral, mental health, and substance abuse disorders.
        The Committee has taken this step in an effort to establish
    a foundation for strengthening the nation's health care
    delivery system to better meet the needs of underserved
    individuals with mental health and substance abuse problems. It
    is anticipated that such improvements will be especially
    important as the health reforms required under this legislation
    (see divisions A and B) are put into place.

                          Part 2--Other Grant Programs

    Sec. 2521. Comprehensive programs to provide education to nurses and
            create a pipeline to nursing

                Current Law
        PHSA section 831 requires the Secretary to establish a
    program of grants and contracts to support nurse education,
    practice, and retention activities. The authorization of
    appropriations for this program expired at the end of FY2007.
                Proposed Law
        This provision would require the Secretary of Labor to
    establish a program of grants to provide education to nurses
    and to create a pipeline to nursing for ancillary health care
    workers who wish to advance their careers.
        The provision would authorize ``such sums as may be
    necessary'' to support this program.

    Sec. 2522. Mental and behavioral health training

                Current Law
        Part E (sections 761 through 770) of PHSA title VII (Health
    Professions Education) provides support for various programs
    and activities related to the health professions and public
    health workforce. A number of authorizations of appropriations
    are included within part E, all of which have expired.
                Proposed Law
        This provision would amend part E of PHSA title VII to add
    a new subpart 3--``Mental and Behavioral Health Training'' that
    includes a new PHSA section 775. Under PHSA section 775, the
    Secretary would be required to establish a program of grants
    and contracts to support an interdisciplinary mental and
    behavioral health training program.
        In establishing this new program, the Committee intends to
    formally authorize and allow for the expansion of the scope of
    the Graduate Psychology Education program to involve all mental
    and behavioral health professionals, including those
    specializing in substance abuse counseling and addiction
    medicine. This program, in existence since 2004 and
    administered by HRSA, trains psychologists in behavioral and
    mental health to work with individuals and families in
    medically underserved areas.
        PHSA section 775 would authorize $60 million to be
    appropriated for each of FY2010 through FY2014.

    Sec. 2523. Programs to increase awareness of advance care planning
            issues

                Current Law
        Section 4751(d) of the 1990 Omnibus Budget Reconciliation
    Act (P.L. 101-508) required the Secretary to develop and
    implement a national public education campaign to inform
    individuals about their option to execute an advance directive
    as well as their rights to participate in, and direct decisions
    related to, their health care. The Secretary was also required
    to develop or approve national information materials and to
    assist states in developing state specific documents regarding
    such information that healthcare providers would be required to
    distribute. In addition, the Secretary is required to mail to
    Social Security recipients, and to include a page in the
    Medicare Handbook, information about advance directives and
    patients rights.
        Section 6 of the Assisted Suicide Funding Restriction Act
    of 1997 (P.L. 105-12) prohibits appropriations from being used
    to provide, procure, furnish, or fund any item, good, benefit,
    activity, or service, furnished or performed for the purpose of
    causing, or assisting in causing, the suicide, euthanasia, or
    mercy killing of any individual.
                Proposed Law
        This provision would amend PHSA title III (General Powers
    and Duties of the Public Health Service) to add at the end a
    new part T--``Programs to Increase Awareness of Advance Care
    Planning Issues''--that would include a new PHSA section 399HH.
    Under PHSA section 399HH, the Secretary would be required to
    establish a program of grants and contracts to conduct a
    national education campaign to increase awareness and educate
    the public about end of life issues, including: (1) the
    importance of planning for care near the end of life; (2) the
    need for readily available legal documents (such as an advance
    directive, living will, durable power of attorney, or
    physician's orders for life-sustaining treatment) that express
    an individual's wishes regarding such care; and (3) the
    availability of hospice and palliative care. The Secretary
    would also be required to establish a national, toll-free
    information telephone line and clearinghouse for the public and
    health professionals to access information about advance
    directives and other end-of-life-related decisions.
        The Secretary would be prohibited from awarding a grant to
    any entity that promotes suicide, assisted suicide, or the
    active hastening of death. Such prohibition would not apply,
    however, to entities that provide palliative or hospice care.
        With respect to the national education campaign, PHSA
    section 399HH would authorize to be appropriated $10 million
    for FY2010.
        With respect to the information telephone line and
    clearinghouse, PHSA section 399HH would authorize to be
    appropriated $5 million for FY2010 and each subsequent fiscal
    year.

    Sec. 2524. Reauthorization of telehealth and telemedicine grant
            programs

                Current Law
        PHSA section 330I provides for a program of grants to
    support telehealth networks and telehealth resource centers.
    The authorization of appropriations for this program expired at
    the end of FY2006, although the program has continued to
    receive annual appropriations.
        PHSA section 330L authorizes the Secretary to establish a
    program of grants to provide incentives to coordinate
    telemedicine licensure activities among the states. The
    authorization of appropriations for this program expired at the
    end of FY2006, although the program has continued to receive
    annual appropriations.
                Proposed Law
        This provision would amend PHSA section 330I to reauthorize
    both telehealth networks and telehealth resource centers
    programs and revise the requirements for funding priorities
    within each of them.
        With respect to each of the programs authorized under PHSA
    section 330I, the provision would authorize $10 million for
    FY2010 and ``such sums as may be necessary'' for each of FY2011
    through FY2014.
        With respect to the program authorized under PHSA section
    330L, the provision would also authorize $10 million for FY2010
    and ``such sums as may be necessary'' for each of FY2011
    through FY2014.
        The Committee has reauthorized these programs because of
    the continuing and ongoing problem of access to health care for
    individuals living in rural areas. By facilitating the use of
    health-related telecommunications technologies through
    technical assistance and other means, these programs play a
    critical role in ensuring such access.

    Sec. 2525. No child left unimmunized against influenza: demonstration
            program using elementary and secondary schools as influenza
            vaccination centers

                Current Law
        No comparable provisions.
        Various PHSA authorities support federal immunization
    efforts that target children. PHSA section 317 authorizes a
    program of grants to states and local governments for the
    provision of childhood vaccines; PHSA section 319(A) requires
    the Secretary to develop a voluntary tracking system for use
    during major outbreaks of infectious disease (such as an
    influenza epidemic); and PHSA title XXI (Vaccines) requires the
    Secretary to establish a National Vaccine Program, responsible
    for developing and recommending national immunization policy.
        The Medicaid program (SSA title XIX) also provides coverage
    for childhood immunizations.
        PHSA title XXII--and more broadly, the Health Insurance
    Portability and Accountability Act of 1996 (HIPPA) (P.L. 104-
    191)--provides for the privacy of certain records containing
    health-related information. Section 444 of the General
    Education Provisions Act (commonly referred to as the Family
    Educational Rights and Privacy Act of 1974 (FERPA)) (P.L. 93-
    380) establishes requirements regarding the use and disclosure
    of information contained in student education files.
                Proposed Law
        This provision would require the Secretary to establish a
    program of demonstration projects designed to study the
    feasibility of using elementary and secondary schools as
    influenza vaccination centers. Such program would be required
    to adhere to the privacy, confidentiality, and requirements
    included in both HIPPA and FERPA.
        The provision would authorize to be appropriated ``such
    sums as may be necessary'' to carry out the program.

    Sec. 2526. Extension of Wisewoman Program

                Current Law
        PHSA section 1509 authorizes the Secretary to establish a
    program of grants for up to three state-based demonstration
    projects to provide preventive health (and appropriate follow-
    up) services to women in addition to the breast and cervical
    cancer screening services that are provided through the breast
    and cervical cancer program authorized in PHSA section 1501.
    Known as the ``Well-Integrated Screening and Evaluation for
    Women Across the Nation'' or WISEWOMAN program, the program has
    been expanded under the authority of PHSA title III (General
    Powers and Duties of Public Health Service) to include 19
    states and two tribal organizations. The authorization of
    appropriations for the WISEWOMAN program expired at the end
    FY2003.
                Proposed Law
        This provision would amend PHSA section 1509 to remove the
    three-state limitation on state participation in the WISEWOMAN
    program.
        The provision would authorize appropriations of $70 million
    for FY2010; $73.5 million for FY2011; $77 million for FY2012;
    $81 million for FY2013; and $85 million for FY2014.

    Sec. 2527. Healthy teen initiative to prevent teen pregnancy

                Current Law
        SSA section 510(b)(2) requires the Secretary to establish a
    grant program (formula-based) for states to support abstinence-
    only-until-marriage programs. State programs must adhere to a
    strict eight-point definition of ``abstinence education'' and
    are not permitted to provide instruction regarding condoms or
    other prevention methods other than to offer information on
    contraception failure rates. The authorization of
    appropriations (mandatory spending of $50 million for each
    fiscal year) for this program expired at the end of FY2003,
    although the program has continued to receive annual funding.
    In addition to this effort, since FY2001 funding has been given
    to support grants to community-based organizations to also
    provide abstinence-only-until marriage education in accordance
    with the eight-point plan required under the section 510(b)(2)
    program.
        Various PHSA authorities support federal programs and other
    activities related to teen pregnancy.
        PHSA title XX (Adolescent Family Life Demonstration
    Projects) authorizes the Secretary to establish a program of
    grants to support teen pregnancy care and prevention
    initiatives. With respect to teen pregnancy prevention
    initiatives, grantees are required to adhere to the eight-point
    ``abstinence education'' requirements of the abstinence
    education program authorized under SSA sec. 510(b)(2). The
    authorization of appropriations for this program expired at the
    end of FY1985, although the program has continued to receive
    annual funding.
        PHSA title X (Population Research and Voluntary Family
    Planning Programs) authorizes the Secretary to establish a
    program of grants and contracts to provide comprehensive
    voluntary family planning and related preventive health
    services, including such services for adolescents. The
    authorization of appropriations for this program expired at the
    end of FY1985, although it has continued to receive annual
    funding.
        In addition, PHSA sections 318 and 318A authorize the
    Secretary to establish programs of grants and contracts to
    support various activities related to diagnosis, treatment, and
    control of sexually transmitted infections. The authorization
    of appropriations for the program authorized in PHSA section
    318A expired at the end of FY1998.
                Proposed Law
        The provision would amend part B of PHSA title III (General
    Powers and Duties of Public Health Service) by adding the
    following new section:
        Sec. 317U. Healthy Teen Initiative to Prevent Teen
    Pregnancy. The Secretary would be required to establish a
    program of grants for states to provide ``evidence-based'' (as
    that term is defined in this section) education programs to
    reduce teen pregnancy or sexually transmitted infections. In
    designing such programs, states would be required to choose an
    evidence-based education program among those listed on a
    registry. The Secretary would be required to develop (and
    periodically update) this registry that would include evidence-
    based, medically and scientifically accurate, and age-
    appropriate programs. The Committee has explicitly required
    that this registry be made available publicly--not only in
    keeping with good government rules of transparency, but also in
    the belief that the information it contains can serve as a
    valuable resource for policymakers and program experts both
    within and outside the program.
        In carrying out their programs, states would be allowed to
    work with public or private nonprofit organizations, including
    schools and community-based and faith-based organizations.
        Funds would be available for distribution to states based
    upon the product of: (1) the amount of funds appropriated to
    carry out this program each fiscal year; and (2) the percentage
    of low-income children determined for a state under the
    abstinence education program authorized in SSA section 502. In
    order to receive any funds, however, states would be required
    to make their own contribution--in cash or in kind--to support
    program activities.
        States would also be required to arrange for an independent
    evaluation of their healthy teen initiatives and, in turn, to
    submit a report to the Secretary on such evaluation.
        PHSA section 317U would authorize to be appropriated $50
    million for each of FY2010 through FY2014.
        In establishing this new initiative, the Committee notes
    the different approach it has taken to the teen pregnancy issue
    as compared to that which underlies the federal government's
    most visible teen pregnancy efforts in recent years. Unlike
    both the state-based and community-based programs that have
    mandated the use of a very rigid eight-point curriculum, this
    initiative would not establish ideological requirements for
    participation. Indeed, the Committee, in effect, specifically
    rejected this philosophy in defeating an amendment to
    reauthorize the section 510(b)(2) program. Instead, the new
    healthy teen initiative would evaluate state programs based
    upon their effectiveness, accuracy, and age-appropriateness in
    reducing the risks of teen pregnancy and sexually transmitted
    infections. It is the Committee's expectation that an emphasis
    on the benefits of abstinence and delaying sexual activity will
    be a primary component of these programs.
        In establishing this program as well, the Committee
    underscores its intent to preserve applicable state law with
    regard to parental involvement and decision-making in
    children's education. Thus, the Committee has made clear that
    nothing in this section may be construed to change or otherwise
    impact such state laws.

    Sec. 2528. National training initiative on autism supplemental grants
            and technical assistance

                Current Law
        Part R (sections 399AA through 399EE) of PHSA title III
    (General Powers and Duties of Public Health Service)
    establishes authorities for several programs related to autism
    spectrum disorder (ASD) and other developmental disabilities.
    The authorizations of appropriations for these various programs
    each expire at the end of FY2011.
                Proposed Law
        This provision would amend part R of PHSA title III to
    create two subparts. Subpart 1--``Surveillance and Research
    Program; Education, Early Detection, and Intervention; and
    Reporting''--would include PHSA sections 399A through 399EE, as
    they are in current law. Subpart 2--``National Training
    Initiative''--would include a new PHSA section 399FF.
        Under PHSA section 399FF, the Secretary would be required
    to award supplemental grants to University Centers of
    Excellence in Developmental Disabilities (authorized by the
    Developmental Disabilities Assistance and Bill of Rights Act of
    2000, P.L. 106-402) to support training programs in ASD and
    related developmental disabilities. The Secretary would also be
    required to award additional grants to such centers to enhance
    the number of training facilities serving minority institutions
    with a primary focus on ASD and related developmental
    disabilities.
        With respect to the supplemental training grants, PHSA
    section 399FF would authorize to be appropriated $17 million
    for FY2011 and ``such sums as may be necessary'' for FY2012
    through FY2015.
        With respect to the additional grants targeted on
    facilities serving minority institutions, PHSA section 399FF
    would authorize to be appropriated $2 million for each of
    FY2011 through FY2015.

    Sec. 2529. Implementation of medication management services in
            treatment of chronic diseases

                Current Law
        No applicable provisions.
        Although there is no statute that explicitly authorizes a
    program to provide medication therapy management services (MTM)
    for the treatment for chronic diseases, both Medicare and
    Medicaid include provisions related to such services.
    Regulations (42 CFR part 423, subpart D) issued under the
    Medicare Prescription Drug, Improvement, and Modernization Act
    of 2003 (P.L. 108-173) established requirements for MTM
    programs. Section 6081 of the Deficit Reduction Act (P.L. 109-
    171) establishes a program of grants for state Medicaid
    programs to improve effectiveness in providing medical
    assistance under Medicaid, including the implementation of a
    medication risk management program.
                Proposed Law
        This provision would require the Secretary to establish a
    program of grants to implement MTM services provided by
    licensed pharmacists as part of a collaborative approach to the
    treatment of chronic diseases.

    Sec. 2530. Postpartum depression

                Current Law
        No comparable provisions.
        PHSA section 508 requires the Director of the Center for
    Substance Abuse and Treatment of the National Institutes of
    Health (authorized under PHSA section 507) to establish a
    program of grants, contracts, and cooperative agreements to
    provide residential substance abuse treatment for pregnant and
    postpartum women.
                Proposed Law
        This provision would encourage the Secretary to expand and
    intensify activities on postpartum conditions, including
    research, epidemiological studies, the development of improved
    screening and diagnostic techniques, and information and
    education programs. In addition, it would require the Secretary
    to conduct a study on the benefits of screening for postpartum
    conditions.
        The provision would also express the sense of Congress that
    the Director of the National Institute of Mental Health may
    conduct a nationally representative longitudinal study on the
    relative mental health consequences for women of resolving a
    pregnancy (intended and unintended) in various ways.
        The provision would authorize to be appropriated ``such
    sums as may be necessary'' for each of FY2010 through FY2012 to
    carry out these activities (in addition to any other amounts
    authorized to be appropriated for such activities).

    Sec. 2531. Grants to promote positive health behaviors and outcomes

                Current Law
        No comparable provisions.
        Although there is no statute that explicitly authorizes a
    program to provide training for community health workers, such
    training is among the activities authorized for funding under
    PHSA section 752 (Health Education and Training Centers).
                Proposed Law
        This provision would amend part P of PHSA title III
    (General Powers and Duties of Public Health Service) to add at
    the end a new section PHSA section 399V to require the
    Secretary to establish a program of grants to train community
    health workers. Such workers would promote positive health
    behaviors among populations in medically underserved areas.
        PHSA section 399V would authorize to be appropriated $30
    million for each of FY2010 through FY2014.

                    Part 3--Emergency Care-Related Programs

    Sec. 2541. Trauma care centers

                Current Law
        Part D (sections 1241 through 1245) of PHSA title XII
    (Trauma Care) requires the Secretary to establish a program of
    grants to support the operating costs of trauma centers that
    have incurred substantial uncompensated costs in providing care
    in geographic areas with a significant incidence of violence
    arising from the illicit trafficking of drugs. The
    authorization of appropriations for the program expired at the
    end of FY1994.
                Proposed Law
        This provision would amend PHSA sections 1241 through 1245,
    in essence to establish a new program of grants to provide: (1)
    operating support for existing trauma centers; and (2) start up
    support for new trauma centers in urban areas with a
    substantial degree of trauma resulting from violent crime.
        PHSA section 1245 would authorize to be appropriated $100
    million for FY2010 and ``such sums as may be necessary'' for
    FY2011 through FY2014 to carry out the program.

    Sec. 2542. Emergency care coordination

                Current Law
        Subtitle B of PHSA title XXVIII (National Preparedness for
    Bioterrorism and Other Public Health Emergencies) establishes
    the HHS Office of the Assistant Secretary for Preparedness and
    Response (ASPR). The Office is responsible for carrying out a
    number of duties with respect to bioterrorism and other public
    health emergencies, including the coordination of the
    Department's various medical incident response assets and
    activities.
        The Emergency Care Coordination Center is located within
    ASPR. The Secretary established the Center in January 2009; it
    has no authority in statute.
                Proposed Law
        This provision would amend subtitle B of PHSA title XXVIII
    to add a new section 2816 to require the Secretary to establish
    an Emergency Care Coordination Center within ASPR. All
    functions, personnel, assets, and liabilities of, and
    administrative actions applicable to, the Emergency Care
    Coordination Center that was established in January 2009 would
    be transferred to the Emergency Care Coordination Center that
    would be established under this section.
        PHSA section 2816 would authorize to be appropriated such
    sums as may be necessary for each of FY2010 through FY2014 to
    carry out the various activities of the Center.

    Sec. 2543. Pilot programs to improve emergency medical care

                Current Law
        No comparable provisions.
        Part B of PHSA title III (General Powers and Duties of
    Public Health Service) establishes authorities for various
    programs and other activities designed to encourage, foster, or
    otherwise promote cooperation between the federal government
    and among the states.
                Proposed Law
        This provision would amend part B of PHSA title III to add
    a new PHSA section 315 to require the Secretary to establish a
    program of demonstration projects on regionalized communication
    systems for emergency care response.
        PHSA section 315 would authorize to be appropriated $12
    million in each of FY2010 through FY2015 to support the
    demonstration projects.

    Sec. 2544. Assisting veterans with military emergency medical training
            to become State-licensed or certified emergency medical
            technicians (EMTs)

                Current Law
        No comparable provisions.
                Proposed Law
        This provision would amend part B of PHSA title III
    (General Powers and Duties of Public Health Service) to add a
    new PHSA section 315A to require the Secretary to establish a
    program of grants to states to assist veterans with military
    emergency training to become state-licensed or certified
    medical technicians.
        PHSA section 315A would authorize to be appropriated ``such
    sums as may be necessary'' in each of FY2010 through FY2015 to
    support the program.
        The provision would also require the Comptroller General of
    the Government Accountability Office to conduct a study on the
    barriers experienced by veterans with military emergency
    training in becoming licensed or certified civilian health
    professionals.

    Sec. 2545. Dental emergency responders: public health and medical
            response

                Current Law
        PHSA section 2802 requires the Secretary to prepare on a
    quadrennial basis, the National Health Security Strategy. Such
    strategy is to include a national plan for public health
    emergency preparedness that, among other things, addresses the
    preparedness of various medical providers for public health
    emergencies.
        PHSA section 319F(a)(5)(B) requires the Secretary to
    develop curricula and training programs for health
    professionals to respond to public health emergencies.
                Proposed Law
        This provision would amend PHSA section 2802 to clarify
    that dental health facilities are to be included among the
    medical providers whose preparedness for public health
    emergencies is to be addressed in the National Health Security
    Strategy required under such section.
        The provision would also amend PHSA section 319F(a)(5)(B)
    to clarify that emergency curricula and training programs could
    be carried out at federal dental health facilities.

    Sec. 2546. Dental emergency responders: homeland security

                Current Law
        Section 2 of the Homeland Security Act of 2002 (P.L. 107-
    296) provides a definition of the term ``emergency response
    provider'' for purposes of carrying out the various activities
    authorized under such Act. Section 516 of this Act establishes
    within the Department of Homeland Security the position of
    Chief Medical Officer whose responsibilities include serving as
    the Department's primary point of contact with the medical
    community.
        Section 653 of the Post-Katrina Emergency Management Reform
    Act of 2006 (P.L. 109-295) requires operational plans for a
    coordinated federal response to natural and man-made disasters
    and terrorism to include the preparedness and deployment of
    public health and medical resources.
                Proposed Law
        This provision would amend section 2 of the Homeland
    Security Act of 2002 to clarify that the definition of the term
    ``emergency response provider'' includes emergency dental
    personnel, agencies, and authorities. In addition, it would
    amend section 516 of that Act, clarifying that the Department
    of Homeland Security's Chief Medical Officer serves as the
    Department's primary point of contact with the dental as well
    as the medical community.
        The provision also would amend section 653 of the Post-
    Katrina Emergency Management Reform Act of 2006 to clarify that
    operational plans for a coordinated federal response to natural
    and man-made disasters and terrorism include the preparedness
    and deployment of dental as well as public health and medical
    resources.

                   Part 4--Pain Care and Management Programs

    Sec. 2551. Institute of Medicine Conference on Pain

                Current Law
        No comparable provisions.
                Proposed Law
        This provision would require the Secretary to seek to enter
    into an agreement with the Institute of Medicine of the
    National Academies to convene a Conference on Pain.
        To support the conference the provision would authorize to
    be appropriated $500,000 for each of FY2010 and FY2011.

    Sec. 2552. Pain research at National Institutes of Health

                Current Law
        No comparable provisions.
        Although there is no statute that explicitly authorizes a
    program to support research on pain, under the authority of
    both PHSA title III (General Powers and Duties of Public Health
    Service) and PHSA title IV (National Research Institutes), NIH
    has established the Pain Consortium. The purpose of such
    Consortium is to enhance pain research and promote
    collaboration among researchers across various NIH institutes
    and centers that support programs and activities designed to
    address pain.
        PHSA section 403 requires the NIH Director to prepare a
    biennial report that includes, among other things, a summary of
    the research activities carried out by the various NIH
    institutes and centers, organized by category; the chronic
    disease category includes pain and palliative care.
                Proposed Law
        This provision would amend part B of PHSA title IV to add a
    new PHSA section 409J to encourage the NIH Director to continue
    and expand, through the Pain Consortium, a program of basic and
    clinical research on pain, including research on the treatment
    of pain.

    Sec. 2553. Public awareness campaign on pain management

                Current Law
        No comparable provisions.
                Proposed Law
        This provision would amend part B of PHSA title II
    (Administration and Miscellaneous Provisions) to add a new PHSA
    section 249 to require the Secretary to establish and implement
    a national education outreach and awareness campaign on pain
    management.
        PHSA section 249 would authorize to be appropriated $2
    million for FY2010 and $4 million for each of FY2011 and FY2012
    to carry out the campaign.

                    Subtitle C--Food and Drug Administration

                               Part 1--In General

    Sec. 2561. National medical device registry

                Current Law
        Several provisions of current law are intended to
    facilitate surveillance of the safety of devices after they are
    marketed. In particular, sec. 519(a) of the Federal Food, Drug
    and Cosmetic Act (FFDCA) authorizes FDA to require
    manufacturers of marketed devices to submit reports of adverse
    events and device malfunctions to FDA. This information can be
    used as a signal of potential safety problems. The usefulness
    of the information is limited by two factors: (1) the reporting
    of adverse events by physicians to manufacturers is voluntary,
    so the true number of adverse events is not usually known; and
    (2) when FDA receives adverse event reports, it does not know
    the total number of such devices in use, and so cannot reliably
    assess the likely incidence of a given adverse event in the
    total patient population.
        The FDA Amendments Act of 2007 (P.L. 110-85) added a new
    FFDCA sec. 519(f), which requires the Secretary to promulgate
    regulations establishing a unique device identification system
    for medical devices, requiring the label of devices to bear a
    unique device identifier (UDI). When fully implemented, a UDI
    system can be a useful tool for tracking device risks and
    patient outcomes, particularly when used in conjunction with
    electronic health records. FDA has not yet issued regulations
    to implement FFDCA section 519(f).
        The Office of the National Coordinator for Health
    Information Technology is the principal federal entity charged
    with coordination of nationwide efforts to implement and use
    the most advanced health information technology and the
    electronic exchange of health information. The position of
    National Coordinator was created in 2004, through Executive
    Order 13335, and legislatively mandated in the Health
    Information Technology for Economic and Clinical Health Act of
    2009, which was incorporated in the American Recovery and
    Reinvestment Act of 2009 (P.L. 111-5).
                Proposed Law
        This provision would amend the FFDCA to add a new paragraph
    (g) to sec. 519 to require the Secretary, in consultation with
    certain agency heads, to establish a public national medical
    device registry. The purpose of the registry would be to
    provide more rapid, reliable information about risks and
    performance of devices once they are out on the market. The
    registry would also allow researchers to track many more
    patients than in clinical trials, with much more complex
    medical conditions, allowing them to understand how to optimize
    the use of devices in ``real-life'' patients, and to help
    locate patients when serious device risks emerge.
        Manufacturers would be required to register each covered
    device at the time of sale and provide the device's UDI, if
    available, or other identifying information. The Secretary
    would be required to establish and validate a procedure to link
    specified medical device data from manufacturers with patient
    safety and outcomes data from disparate sources (such as
    relevant Medicare data). When linked to patient safety and
    outcome data from external databases, the registry would
    facilitate analysis of postmarket safety and effectiveness data
    on certain implantable, life-sustaining, and other types of
    medical devices. The Secretary would conduct analyses of the
    linked data and provide public access to the data and analysis
    collected or developed through the registry in a manner and
    form that protects patient privacy and proprietary information,
    and is comprehensive, useful, and not misleading to patients,
    physicians, and scientists.
        To avoid overlap and duplication, the Secretary would also
    be required to integrate the registry activities with certain
    other postmarket risk and safety activities authorized under
    the FFDCA, such as the Sentinel Initiative. To ensure that
    implementation of the registry does not slow FDA's work on a
    unique device identification system, the provision includes a
    requirement that FDA issue a proposed regulation on UDIs within
    six months of enactment.
        In addition, acting through the Office of the National
    Coordinator for Health Information Technology, the Secretary
    would be required to adopt standards, implementation
    specifications, and certification criteria for the electronic
    exchange and use in certified electronic health records of a
    unique device identifier.

    Sec. 2562. Nutrition labeling of standard menu items at chain
            restaurants and of articles of food sold at vending machines

                Current Law
        Section 403(q) of the Federal Food, Drug and Cosmetic Act
    (FFDCA) requires that food offered for sale must adhere to the
    FFDCA's nutrition labeling requirements. Among other things, a
    food's label must include: (1) the serving size; (2) the total
    number of calories per serving; (3) the total fat, saturated
    fat, cholesterol, sodium, carbohydrates, complex carbohydrates,
    sugars, dietary fiber, and total protein per serving; and (4)
    any vitamin, mineral, or other nutrient required to be placed
    on the label by the Secretary.
        Under FFDCA section 403(q)(5)(A), certain food is exempt
    from those requirements, including: (1) food that is served in
    restaurants or other establishments in which food is served for
    immediate human consumption or which is sold for sale or use in
    such establishments; and (2) food which is processed and
    prepared primarily in a retail establishment, which is ready
    for human consumption, which is of the type described in (1),
    and which is offered for sale to consumers but not for
    immediate human consumption in such establishment and which is
    not offered for sale outside such establishment.
        FFDCA section 403A prohibits states and localities from
    establishing their own nutrition labeling that is not identical
    to the FFDCA's nutrition labeling requirements. This
    prohibition against states and localities establishing
    nutrition-labeling requirements does not apply to food that is
    exempt from FFDCA's labeling requirements, such as food served
    in restaurants. States and localities may petition the
    Secretary of HHS for an exemption from the preemption clause in
    FFDCA sec. 403A.
                Proposed Law
        This provision would modify the nutrition labeling
    exemption in FFDCA section 403(q)(5)(A) for food served in
    certain restaurants, similar retail food establishments, and
    vending machines to require that certain information be
    provided to consumers about caloric and other nutritional
    content. The purpose of the requirements is to give consumers
    important health information, and allow them to exercise choice
    and responsibility about what they and their children eat.
        For food served in restaurants and similar retail food
    establishments, the labeling requirements would apply to
    standard menu items offered for sale in a restaurant or similar
    retail food establishment that is part of a chain with 20 or
    more locations and offering for sale substantially the same
    menu items. Such establishments would be required, for each
    standard menu item, to disclose, in a clear and conspicuous
    manner on the menu, and on a menu board (including a drive-
    through menu board), adjacent to the name of the item the
    number of calories contained in the item and a statement
    concerning suggested daily caloric intake. Such establishments
    would also be required to make available, on request, written
    information regarding, for each standard menu item: (1) the
    total number of calories derived from any source; (2) the total
    number of calories derived from the total fat; and (3) the
    amount of total fat, saturated fat, cholesterol, sodium, total
    carbohydrates, complex carbohydrates, sugars, dietary fiber,
    and total protein.
        A restaurant or similar retail food establishment offering
    food for sale 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,
    would be required to place adjacent to each food offered a sign
    that lists calories per displayed food item or per serving.
        These requirements would not apply to certain food items,
    including those items that are not listed on a menu or menu
    board (such as condiments and other items for general use), or
    temporary menu items.
        The Secretary would be required to establish 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, pizza, or children's combination meals.
        If the Secretary determines that a nutrient (other than a
    nutrient whose disclosure is already required, such as
    saturated fat) should be disclosed to assist consumers in
    maintaining healthy dietary practices, the Secretary would be
    permitted to require disclosure of such nutrient in written
    form, available on the premises.
        If a food sold from a vending machine operated by a person
    who owns or operates 20 or more vending machines does not
    permit a prospective purchaser to examine nutrition information
    at the point of purchase, the vending machine operator would be
    required to provide in close proximity to each food item, a
    clear and conspicuous statement of the number of calories in
    the food.
        Failure to comply with the new requirements would render a
    food misbranded under FFDCA sec. 403, and therefore unlawfully
    in commerce.
        A restaurant, similar retail food establishment or vending
    machine operator not subject to the requirements of this
    provision could elect to be subject to such requirements by
    voluntarily registering, biannually, its name and address.
        In promulgating regulations to implement this provision the
    Secretary would be required to: (1) consider, among other
    things, standardization of recipes and methods of preparation,
    reasonable variation in serving size and formulation of menu
    items, and space on menus and menu boards; and (2) specify the
    format and manner of the nutrient disclosure requirements.
        This provision would also amend FFDCA section 403A to
    preempt states and their political subdivisions from
    establishing or continuing in effect any requirement for
    nutrition labeling of a food that is specifically covered by
    this provision if the requirement that is not identical to the
    requirements of this provision would expressly exempt from its
    preemptive effect state and local regulations governing food
    that is not covered by this provision, i.e., 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 and offering for sale substantially the same menu
    items, unless the restaurant or similar retail food
    establishment elected to comply with the requirements for
    restaurants that are part of a chain of 20 or more locations by
    registering biannually under the voluntary registration
    provisions of the provision. The provision also includes a rule
    of construction further limiting the preemptive effect of the
    amendment to 403A, by disclaiming preemption of: (1) any state
    or local law that is not expressly preempted by 403A, and (2)
    any requirements related to safety warnings.

    Sec. 2563. Protecting consumer access to generic drugs

                Current Law
        Under section 505(j) of the Federal Food, Drug and Cosmetic
    Act (FFDCA), generic drug companies commonly file an
    abbreviated new drug application (ANDA) in order to receive
    approval to sell a generic version of a brand name drug. The
    filing of an ANDA may trigger patent infringement litigation
    between the brand name drug manufacturer and the ANDA
    applicant. The FFDCA encourages the early resolution of patent
    litigation to permit consumers access to low-cost generic drugs
    as early as possible, by allowing patent litigation to begin
    during the period that the ANDA is under review by the FDA, and
    by providing incentives to generic companies to challenge
    patents on brand name drugs. Current law does not restrict the
    ability of these parties to resolve their patent disputes
    through settlement. The Medicare Prescription Drug,
    Improvement, and Modernization Act of 2003 (MMA) (P.L. 108-173)
    required that certain settlements be filed with the Department
    of Justice and the Federal Trade Commission (FTC).
        The FTC has documented a growing number of settlements in
    which the brand name manufacturer grants the generic an
    ``exclusion payment'' in return for a delay in the market entry
    of the generic. Rather than giving consumers the savings they
    would gain from competition, this practice allows the brand
    name and generic drug companies to share in the monopoly
    profits that are preserved by a delay in competition. Because
    monopoly drug prices are so high, both parties can make more
    money from such a settlement than they could by competing in
    the open market. The cost of such settlements is borne by
    individual and institutional consumers, who must pay monopoly
    prices during the period that generic competition is delayed.
        The FTC has determined that settlements that include
    exclusion payments are anti-competitive. Two courts of appeal,
    however, have ruled that these settlements do not violate the
    anti-trust laws.
                Proposed Law
        This provision would amend FFDCA section 505 to make
    unlawful any agreement resolving or settling a patent
    infringement claim in which an ANDA applicant receives anything
    of value; and the ANDA applicant agrees to limit or forgo
    research, development, manufacturing, marketing, or sales, for
    any period of time, of the drug that is the subject of the ANDA
    and the patent. Agreements under which the ANDA applicant
    receives no more than the right to sell the drug that is the
    subject of the ANDA and the patent, along with the waiver of
    past damages for patent infringement, would remain permissible.
        The provision would authorize the FTC to enforce these
    provisions under section 5 of the FTC Act. The provision would
    allow the FTC to exempt, by rule, certain agreements from the
    provision's requirements if the FTC finds that such agreements
    are ``in furtherance of market competition and for the benefit
    of consumers.'' The provision states that such rules can
    include interpretive rules and general statements of policy.
        This provision also would expand the types of settlements
    required to be filed under the MMA to include any patent
    litigation settlement covered by this provision. The chief
    executive officer or company official responsible for
    negotiating the agreement would also be required to certify,
    under penalty of perjury, that the filing constitutes the
    complete, final, and exclusive agreement between the parties,
    including any ancillary agreements and oral agreements.
        The provision would require GAO to conduct a series of
    studies regarding the pharmaceutical patent litigation
    settlements and the impact of this provision on the timing of
    market entry of generic drugs, and whether the provision has
    benefited or harmed consumers.

                              Part 2--Biosimilars

    Sec. 2565. Licensure pathway for biosimilar biological products

                Current Law
        No comparable provisions.
        The Drug Price Competition and Patent Term Restoration Act
    of 1984 (P.L. 98-417)--often referred to as the Hatch-Waxman
    Act--provides authority to the FDA to approve generic chemical
    drugs.
                Proposed Law
        The provision would amend PHSA section 351 to require the
    Secretary to approve applications for biological products that
    have been shown to be biosimilar or interchangeable to an
    already licensed biological product (the reference product).
        The provision would require an applicant for a biosimilar
    or interchangeable product to submit an application containing
    data derived from analytical, animal, and clinical studies
    demonstrating biosimilarity or interchangeability. The
    provision would, however, provide discretion to the Secretary
    to determine that any of the data elements (such as clinical
    studies) are unnecessary in an application.
        The Secretary would be required to approve an application
    for a biosimilar product if, among other things, the
    application demonstrates that it is highly similar to the
    reference product, notwithstanding minor differences in
    clinically inactive components, and that there is no clinically
    meaningful difference from the reference product.
        The Secretary would be required to approve an application
    for an interchangeable product if the biological product is
    biosimilar to the reference product; can be expected to produce
    the same clinical result in any given patient; and if
    administered more than once to an individual, the risk of
    switching between the reference product and the biological
    product (in terms of safety or diminished efficacy) is not
    greater than using only the reference product. The term
    ``interchangeable'' would be defined to mean that the
    biological product may be substituted for the reference product
    without the intervention of the health care provider who
    prescribed the reference product.
        If the biological product is, bears, or contains a select
    agent, toxin, or schedule I or II controlled substance, the
    application or supplement would not be approved unless the
    Secretary determines, after consultation with appropriate
    agencies, that there is no increased risk to the security or
    health of the public from licensing such product.
        The provision would allow for a period of exclusive
    marketing for the biological product that is the first to be
    established as interchangeable with the reference product for
    any approved condition of use. The Secretary would be
    prohibited from approving another interchangeable version of
    the reference drug during the exclusivity period. Biosimilar
    versions of the reference drug that were not approved as
    interchangeable could, however, be approved and marketed during
    the exclusivity period.
        The provision would provide a 12-year exclusive marketing
    period (from the date on which the reference product was first
    approved) for the reference product and would provide an
    additional six months of exclusivity if pediatric studies show
    health benefits in that population. To help ensure that
    companies could not obtain additional 12-year exclusivity
    periods for changes in already-approved biologics that do not
    provide significant clinical benefits to patients, the
    provision includes a number of minor changes in an approved
    product that are not eligible for 12 years of exclusivity:
         Any change that can be accomplished through filing
    of a supplemental application rather than a new application
         New indications
         Changes in dosage form, strength, or route of
    administration
         Modifications in molecular structure that are not
    shown to improve the safety or effectiveness of the original
    product
        The Secretary would be permitted, but not required, to
    publish proposed guidance for public comment prior to
    publication of final guidance on general or specific matters
    related to the licensure of biosimilar or interchangeable
    biological products. If guidance is to be developed, a process
    would have to be established to allow for public input
    regarding priorities for issuing guidance. The issuance or non-
    issuance of guidance would not preclude the review of, or
    action on, an application.
        The provision would also require the Secretary to ensure
    that the labeling and packaging of each biological product
    bears a unique name that distinguishes it from the reference
    product and any other biological products that are evaluated
    against the reference product.
        The provision would set forth a process governing patent
    infringement claims against an applicant or prospective
    applicant for a biological product license. It would also
    establish new processes for identifying patents that might be
    disputed between the reference product company and the company
    submitting a biosimilar application as well as a multistep
    patent resolution process.
        The provision stipulates that all biological product
    applications would have to be submitted under the requirements
    of PHSA section 351. For the small number of biological
    products that have been approved under FFDCA section 505, the
    approved application would be deemed to be a license for the
    biological product under PHSA sec. 351 as of 10 years after the
    date of the enactment of this legislation.
        The Committee notes that the approval process set forth in
    this sec. is intended to be analogous to the authority FDA has
    for approving generic chemical drugs under the Drug Price
    Competition and Patent Term Restoration Act of 1984 (P.L. 98-
    417), often called the Hatch-Waxman Act.
        Sec. 2566. Fees relating to biosimilar biological products.
                Current Law
        No comparable provisions.
                Proposed Law
        The provision would amend Federal Food, Drug and Cosmetic
    Act section 735(1) to allow for the collection of user fees for
    the approval of biosimilar or interchangeable biological
    products.

         Subtitle D--Community Living Assistance Services and Supports

    Sec. 2571. Establishment of national voluntary insurance program for
            purchasing community living assistance services and supports

                Current Law
        No comparable provisions.
                Proposed Law
        This provision would amend the PHSA to establish a new
    title XXXII--``Community Living Assistance Services and
    Supports'' (CLASS)--that includes several new sections. The
    plan would take effect on the effective date of a statute
    establishing a voluntary deduction under the Internal Revenue
    Code of 1986 to support such plan.
        Sec. 3201. In general. This section requires the Secretary
    to establish a national voluntary insurance program--to be
    known as the CLASS Independence Benefit Plan--for the purchase
    of community living services and supports. Supported through an
    innovative financing mechanism, the plan would be designed to:
         Provide individuals with functional limitations
    with tools to allow them to maintain their personal and
    financial independence and to live in their homes and community
         Establish an infrastructure to help address the
    nation's community living assistance services and supports
    needs
         Alleviate burdens on family caregivers who provide
    care to family members with functional limitations
         Address institutional bias by providing a
    financing mechanism that supports personal choice and
    independence to live at home and in the community
        Sec. 3202. Development and Management of the Program. This
    section requires the Secretary to develop and administer the
    CLASS Plan in an actuarially sound manner such that the plan
    will remain solvent, and with respect to the federal budget,
    deficit neutral. This would include, as appropriate, the
    Secretary's making adjustments to the premiums collected in
    and/or the benefits paid out under the plan.
        In addition, the Secretary would be required to:
         Set criteria for CLASS Plan participation that do
    not restrict eligibility based on underwriting
         Establish criteria for eligibility for benefits
         Establish benefit levels
         Establish mechanisms for collecting and
    distributing payments
         Provide mechanisms to assist beneficiaries in the
    use of benefits
         Promulgate regulations necessary to implement the
    CLASS Plan program
        Sec. 3203. Report. This section would require the Secretary
    to submit an annual report to the Congress on the CLASS Plan.
        The Committee has taken this action in response to the
    nation's growing and ongoing long-term care challenges. Today,
    10 million Americans are in need of long-term care services and
    support, including 4 million people under the age of 65. As the
    population continues to age, these numbers will more than
    double.
        Currently, seniors and people with disabilities have great
    difficulty in accessing affordable and quality insurance that
    provides coverage for services and supports offered in a
    community setting. While Medicaid remains the main option for
    long-term care and supports, the program's menu of services is
    restricted and it is only available to those who have become
    impoverished. Similarly, private long-term care insurance
    remains out of reach for most people because of its high costs
    and limited protections.
        The purpose of the CLASS Plan is to provide a voluntary and
    affordable alternative to these increasingly unworkable
    options. It is the Committee's belief that with this plan in
    place, seniors and those with disabilities will have much
    improved access to the services and supports they need to
    continue living independently and productively.

                           Subtitle E--Miscellaneous

    Sec. 2581. States failing to adhere to certain employment obligations

                Current Law
        No comparable provisions.
        PHSA title XXII (Requirements for Certain Group Health
    Plans for Certain State and Local Employees) includes
    provisions requiring public employers to provide continuation
    of insurance coverage (popularly known as ``COBRA
    Continuation''). Such title conditions a state's eligibility
    for PHSA funds on its agreement to be subject to the
    requirements of COBRA continuation with respect to its
    employees.
                Proposed Law
        This provision is modeled on PHSA title XXII. The provision
    would condition a state's eligibility for funds under the PHSA
    on a state's agreement to be subject in its capacity as an
    employer to each employer obligation under division A of this
    legislation and to assure that all political subdivisions in
    the state, and agencies and instrumentalities thereof, will
    also be subject to such employer obligations.
        The Committee recognizes the national goal of increasing
    the number of individuals who have quality affordable health
    insurance is an integral and fundamental part of assuring the
    general welfare of the nation. Consistent with this goal is
    encouraging the participation of state and local governments,
    as employers in the shared responsibility of health care reform
    for their millions of workers. The Committee also recognizes
    the particular importance of ensuring that civil servants who
    are in contact with the public or perform important
    governmental functions have access to health care coverage in
    order to reduce the spread of contagious or infectious diseases
    (both within a state and across state line--germs being
    notoriously peripatetic and involved in interstate operations,
    whether we like it or not). The Committee also believes that it
    is of national significance to reduce absenteeism due to
    illness and disease among civil servants who are vital to
    performing needed governmental functions that are key to
    community well-being and public safety of the state itself and
    possibly the nation. At a time when the adequacy and
    reliability of the infrastructure of transportation, security,
    information, and research all depend on attention being paid by
    local, state, and federal authorities, one jurisdiction's
    absent workers can become another jurisdiction's bridge
    collapse or power blackout.
        The intent of this provision is to encourage state and all
    political subdivisions in the state, and agencies and
    instrumentalities thereof, to agree, in their capacity as
    employers to comply with each of specific responsibilities
    applicable to other similarly situated employers under division
    A of this legislation. Inducing public sector employers to
    comply with the requirements applicable to other employers will
    help achieve the important public interest objective of
    ensuring that the 19 million public employees, like other
    Americans, receive health care coverage.
        The provision provides states with clearly stated
    conditions for eligibility for federal grants under the PHSA.
    Public employers must simply comply with the same conditions
    under the Act as private employers.
        In conditioning eligibility for federal monies under the
    PHSA upon compliance with the employer related responsibilities
    in division A, the Committee is advancing common and
    interconnected goals. Both the employer responsibilities and
    the programs of the PHSA promote the protection and advancement
    of the nation's physical and mental health. Compliance with the
    employer conditions of this legislation and spending of PHSA
    funds both serve to increase quality and years of healthy life
    by preventing and reducing disease and disorders, eliminating
    health disparities, and improving systems for personal and
    public health.

    Sec. 2582. Study, report, and termination of duplicative grant programs

                Current Law
        No comparable provisions.
                Proposed Law
        This provision would require the Secretary to conduct a
    study to determine if any grant program established in division
    C of this legislation (or any change made under such Division)
    is duplicative of one or more other federal grant programs
    under the authority of the Secretary in existence on the date
    of the enactment of this legislation. In addition, the
    Secretary would be required to submit to Congress and to make
    available to the public, a report that contains the results of
    the study. Based upon such results, the provision would also
    require the Secretary to terminate, to the maximum extent
    appropriate, any federal grant program she may find to be
    duplicative of any grant program established in division C of
    this legislation (or any change made under such division).

    Sec. 2583. Health centers under Public Health Service Act; liability
            protections for volunteer practitioners

                Current Law
        PHSA sec. 224 gives employees of the Public Health Service
    (PHS) protection from medical malpractice claims resulting from
    the services provided as part of their public health service
    employment or contract. It both requires the Attorney General
    to defend PHS employees in cases involving claims of medical
    malpractice and empowers him to settle such lawsuits.
        For purposes of providing this protection, PHSA section 224
    deems any officer, governing board member, employee, or
    licensed or certified health professional under contract with a
    community health center (CHC) (authorized under PHSA section
    330) to be a PHS employee. Volunteer health professionals are
    not afforded any protection against malpractice claims that may
    arise from the services they provide at a CHC.
                Proposed Law
        This provision would amend PHSA section 224 to revise the
    list of individuals associated with a CHC who are deemed to be
    PHS employees for purposes of carrying out such section, to
    include ``volunteer practitioners''. Such individuals are
    defined to include licensed physicians, clinical psychologists,
    or other licensed or certified health care professionals who
    provide uncompensated services at CHC sites.
        The provision would establish an effective date for
    including CHC volunteer practitioners among those entitled to
    the medical malpractice protection provided under PHSA section
    224: the first fiscal year for which a congressional
    appropriations act provides that funds are available to cover
    such individuals.

    Sec. 2584. Report to Congress on the current state of parasitic
            diseases that have been overlooked among the poorest Americans

                Current Law
        No comparable provisions.
                Proposed Law
        This provision would require the Secretary to conduct a
    study on the epidemiology of, impact of, and appropriate
    funding required to address neglected diseases of poverty,
    including Chagas Disease, cysticercosis, toxocariasis,
    toxoplasmosis, trichomoniasis, and the soil-transmitted
    helminthes, and others.

    Sec. 2585. Study of impact of optometrists on access to health care and
            on availability of support under Federal health programs for
            optometry

                Current Law
        No comparable provisions.
                Proposed Law
        This provision would require the Secretary to conduct a
    study on optometrists and optometry, including the role of
    optometrists in the health workforce.

               Additional Committee Action Relating to H.R. 3200

        At the conclusion of the Committee's markup of H.R. 3200 on
    July 31, 2009, a number of majority and minority amendments had
    been filed with the Committee clerk but not yet considered by
    the Committee. At that time, the Chairman and Ranking Member
    reached an agreement to have a supplemental Committee meeting
    to consider certain amendments.
        After H.R. 3200 was ordered reported, amended, on July 31,
    2009, pursuant to this agreement, the Committee met on
    September 23, 2009, to consider a motion to instruct the
    Chairman to transmit to the Committee on Rules additional
    recommended amendments to H.R. 3200 for consideration. The
    Committee approved this motion by a roll call vote of 28-22.
        Following is a description of the amendments included in
    this motion:
        An amendment by Rep. Baldwin of Wisconsin--To provide for
    technical assistance to states to improve coordination between
    Medicare and Medicaid for those dually-eligible, and new
    quality measures for reporting relating to care for dual
    eligibles.
        An amendment by Reps. Barton of Texas, Green of Texas, and
    Burgess of Texas--To require insurers to provide requested out-
    of-pocket cost information to enrollees prior to receiving
    services. In addition, requires states, as a condition of
    receiving federal Medicaid funding, to enact laws requiring
    hospitals to publically disclose: (1) charges for the most
    common services, (2) the Medicaid and Medicare reimbursement
    amounts for these services; and (3) the charity care policy for
    the hospital, including any formula used to calculate financial
    aid for low-income individuals.
        An amendment by Rep. Butterfield of North Carolina--To
    require a report by the Secretary of Health and Human Services
    on the need and cost of providing oral health care as part of
    the essential benefits package.
        An amendment by Rep. Buyer of Indiana--To ensure that the
    veterans healthcare program can seek reimbursement from the
    public health insurance plans for non-duty related injuries
    like they can from private plans.
        An amendment by Rep. Castor of Florida--To provide grants
    for employer wellness programs.
        An amendment by Rep. Christensen of the Virgin Islands--To
    require that the Health Benefits Advisory Committee include
    ``an expert in child and adolescent health''.
        An amendment by Reps. DeGette of Colorado, Sarbanes of
    Maryland, and McNerney of California--To require that the
    Health Benefits Advisory Committee include ``experts in oral
    health care''.
        An amendment by Rep. Green of Texas--To provide for a
    special enrollment period for chronic-care special needs plans
    targeted at end-stage renal disease.
        An amendment by Rep. Green of Texas--To authorize the
    Secretary of Health and Human Services to award grants to
    certain communities to help develop integrated health care
    delivery systems.
        An amendment by Rep. Hill of Indiana--To make minor and
    technical changes to the Physician Payments Sunshine provisions
    reported by the Committee.
        An amendment by Rep. Markey of Massachusetts--To authorize
    the Commissioner to use data on enrollee demographics,
    inpatient and outpatient diagnoses, and other such information
    as the Secretary of Health and Human Services may determine is
    necessary, in creating risk adjustment mechanisms for the
    Exchange.
        An amendment by Rep. Murphy of Connecticut--To require the
    Secretary of Health and Human Services to attempt to attract 10
    percent of all eligible providers to act as bundling test sites
    under acute care bundling pilot program.
        An amendment by Rep. Murphy of Connecticut--To establish an
    Office on Women's Health within the Office of the Secretary of
    Health and Human Services and within the director's office of
    each of the following agencies: Agency for Health Research and
    Quality (AHRQ), Centers for Disease Control and Prevention
    (CDC), Food and Drug Administration (FDA), Health Resources and
    Services Administration (HRSA), and Substance Abuse and Mental
    Health Services Administration (SAMHSA).
        An amendment by Rep. Pallone of New Jersey--To authorize
    the Secretary of Health and Human Services to establish pilot
    programs to reduce infant mortality. (001)
        An amendment by Rep. Pallone of New Jersey--To modify the
    standards for qualified health benefit plans, including the
    public option, to provide for rules regarding Indian enrollees
    and Indian health care providers.
        An amendment by Rep. Ross of Arkansas--To preserve State
    insurance laws prohibiting discrimination among providers by
    insurance companies.
        An amendment by Rep. Rush of Illinois--To authorize the
    Secretary of Health and Human Services and the Secretary of
    Education to award grants to public secondary schools to
    establish health science training programs to prepare students
    for careers in health sciences.
        An amendment by Rep. Rush of Illinois--To authorize the
    Secretary of Health and Human Services to award grants to
    community-based collaborative care networks that assist low-
    income patient populations in accessing health care services
    and in participating in case management.
        An amendment by Reps. Sarbanes of Maryland and Dingell of
    Michigan--To designate school-based health clinics funded under
    the new grant program in section 2511 of the Committee-reported
    bill as federally-qualified health centers for purposes of
    Medicaid.
        An amendment by Rep. Sarbanes of Maryland--To provide that
    Medicare Advantage plans serving continuing care retirement
    communities with a contract in effect on January 1, 2009, may
    continue operations with a waiver of geographic integrity
    rules.
        An amendment by Rep. Stupak--To clarify that manufacturers
    need not pay rebates to Medicaid on the drugs purchased by
    Medicaid managed care organizations (MCOs) if the MCOs have
    received discounts on the drugs through the 340B program.
        An amendment by Rep. Sutton of Ohio--To clarify the means
    by which individuals can submit information to the Qualified
    Health Benefits Plan Ombudsman, including mail, telephone,
    electronically, and in person.
        An amendment by Rep. Waxman of California--To provide
    program integrity in the 340B program through procedures for
    improving compliance by covered entities and manufacturers with
    program requirements.
        An amendment by Rep. Welch of Vermont--To clarify the scope
    of preemption of state law by the provisions of the Physician
    Payment Sunshine Act (Section 1451) relating to the disclosure
    of payments to physicians.

             Changes in Existing Law Made by the Bill, as Reported

      The bill was referred to this committee for consideration of
    such provisions of the bill as fall within the jurisdiction of
    this committee pursuant to clause 2 of rule XII of the Rules of
    the House of Representatives. In compliance with clause 3(e) of
    rule XIII of the Rules of the House of Representatives, changes
    in existing law made by the bill, as reported, are shown as
    follows (existing law proposed to be omitted is enclosed in
    black brackets, new matter is printed in italic, existing law
    in which no change is proposed is shown in roman):

                           PUBLIC HEALTH SERVICE ACT

             TITLE II--ADMINISTRATION AND MISCELLANEOUS PROVISIONS

    Part A--Administration

               *       *       *       *       *       *       *

              DEFENSE OF CERTAIN MALPRACTICE AND NEGLIGENCE SUITS

      Sec. 224. (a) * * *

               *       *       *       *       *       *       *

      (g)(1)(A) For purposes of this section and subject to the
    approval by the Secretary of an application under subparagraph
    (D), an entity described in paragraph (4), and any officer,
    governing board member, [or employee] employee, or (subject to
    subsection (k)(4)) volunteer practitioner of such an entity,
    and any contractor of such an entity who is a physician or
    other licensed or certified health care practitioner (subject
    to paragraph (5)), shall be deemed to be an employee of the
    Public Health Service for a calendar year that begins during a
    fiscal year for which a transfer was made under subsection
    (k)(3) (subject to paragraph (3)). The remedy against the
    United States for an entity described in paragraph (4) and any
    officer, governing board member, [employee, or contractor]
    employee, volunteer practitioner, or contractor (subject to
    paragraph (5) and subsection (k)(4)) of such an entity who is
    deemed to be an employee of the Public Health Service pursuant
    to this paragraph shall be exclusive of any other civil action
    or proceeding to the same extent as the remedy against the
    United States is exclusive pursuant to subsection (a).
      (B) The deeming of any entity or officer, governing board
    member, [employee, or contractor] employee, volunteer
    practitioner, or contractor of the entity to be an employee of
    the Public Health Service for purposes of this section shall
    apply with respect to services provided--
              (i) * * *

               *       *       *       *       *       *       *

      (C) Subparagraph (B)(ii) applies to services provided to
    individuals who are not patients of an entity if the Secretary
    determines, after reviewing an application submitted under
    subparagraph (D), that the provision of the services to such
    individuals--
              (i) * * *

               *       *       *       *       *       *       *

              (iii) are otherwise required under an employment
            contract (or similar arrangement) between the entity
            and an officer, governing board member, [employee, or
            contractor] employee, volunteer practitioner, or
            contractor of the entity.
      (D) The Secretary may not under subparagraph (A) deem an
    entity or an officer, governing board member, [employee, or
    contractor] employee, volunteer practitioner, or contractor of
    the entity to be an employee of the Public Health Service for
    purposes of this section, and may not apply such deeming to
    services described in subparagraph (B)(ii), unless the entity
    has submitted an application for such deeming to the Secretary
    in such form and such manner as the Secretary shall prescribe.
    The application shall contain detailed information, along with
    supporting documentation, to verify that the entity, and the
    officer, governing board member, [employee, or contractor]
    employee, volunteer practitioner, or contractor of the entity,
    as the case may be, meets the requirements of subparagraphs (B)
    and (C) of this paragraph and that the entity meets the
    requirements of paragraphs (1) through (4) of subsection (h).
      (E) The Secretary shall make a determination of whether an
    entity or an officer, governing board member, [employee, or
    contractor] employee, volunteer practitioner, or contractor of
    the entity is deemed to be an employee of the Public Health
    Service for purposes of this section within 30 days after the
    receipt of an application under subparagraph (D). The
    determination of the Secretary that an entity or an officer,
    governing board member, [employee, or contractor] employee,
    volunteer practitioner, or contractor of the entity is deemed
    to be an employee of the Public Health Service for purposes of
    this section shall apply for the period specified by the
    Secretary under subparagraph (A).
      (F) Once the Secretary makes a determination that an entity
    or an officer, governing board member, [employee, or
    contractor] employee, volunteer practitioner, or contractor of
    an entity is deemed to be an employee of the Public Health
    Service for purposes of this section, the determination shall
    be final and binding upon the Secretary and the Attorney
    General and other parties to any civil action or proceeding.
    Except as provided in subsection (i), the Secretary and the
    Attorney General may not determine that the provision of
    services which are the subject of such a determination are not
    covered under this section.

               *       *       *       *       *       *       *

      (H) In the case of an entity described in paragraph (4) for
    which an application under subparagraph (D) is in effect, the
    entity may, through notifying the Secretary in writing, elect
    to terminate the applicability of this subsection to the
    entity. With respect to such election by the entity:
              (i) * * *
              (ii) Upon taking effect, the election terminates the
            applicability of this subsection to the entity and each
            officer, governing board member, [employee, and
            contractor] employee, volunteer practitioner, and
            contractor of the entity.

               *       *       *       *       *       *       *

              (iv) If after making the election the entity submits
            an application under subparagraph (D), the election
            does not preclude the Secretary from approving the
            application (and thereby restoring the applicability of
            this subsection to the entity and each officer,
            governing board member, [employee, and contractor]
            employee, volunteer practitioner, and contractor of the
            entity, subject to the provisions of this subsection
            and the subsequent provisions of this section.

               *       *       *       *       *       *       *

      (h) The Secretary may not approve an application under
    subsection (g)(1)(D) unless the Secretary determines that the
    entity--
              (1)  * * *

               *       *       *       *       *       *       *

              (3) has no history of claims having been filed
            against the United States as a result of the
            application of this section to the entity or its
            officers, [employees, or contractors] employees,
            volunteer practitioners, or contractors as provided for
            under this section, or, if such a history exists, has
            fully cooperated with the Attorney General in defending
            against any such claims and either has taken, or will
            take, any necessary corrective steps to assure against
            such claims in the future; and

               *       *       *       *       *       *       *

      (i)(1) Notwithstanding subsection (g)(1), the Attorney
    General, in consultation with the Secretary, may on the record
    determine, after notice and opportunity for a full and fair
    hearing, that an individual physician or other licensed or
    certified health care practitioner who is an officer,
    [employee, or contractor] employee, volunteer practitioner, or
    contractor of an entity described in subsection (g)(4) shall
    not be deemed to be an employee of the Public Health Service
    for purposes of this section, if treating such individual as
    such an employee would expose the Government to an unreasonably
    high degree of risk of loss because such individual--
              (A) * * *

               *       *       *       *       *       *       *

      (j) In the case of a health care provider who is an officer,
    [employee, or contractor] employee, volunteer practitioner, or
    contractor of an entity described in subsection (g)(4), section
    335(e) shall apply with respect to the provider to the same
    extent and in the same manner as such section applies to any
    member of the National Health Service Corps.
      (k)(1)(A) For each fiscal year, the Attorney General, in
    consultation with the Secretary, shall estimate by the
    beginning of the year the amount of all claims which are
    expected to arise under this section (together with related
    fees and expenses of witnesses) for which payment is expected
    to be made in accordance with section 1346 and chapter 171 of
    title 28, United States Code, from the acts or omissions,
    during the calendar year that begins during that fiscal year,
    of entities described in subsection (g)(4) and of officers,
    [employees, or contractors] employees, volunteer practitioners,
    or contractors (subject to subsection (g)(5)) of such entities.
      (B) The estimate under subparagraph (A) shall take into
    account--
              (i) the value and frequency of all claims for damage
            for personal injury, including death, resulting from
            the performance of medical, surgical, dental, or
            related functions by entities described in subsection
            (g)(4) or by officers, [employees, or contractors]
            employees, volunteer practitioners, or contractors
            (subject to subsection (g)(5)) of such entities who are
            deemed to be employees of the Public Health Service
            under subsection (g)(1) that, during the preceding 5-
            year period, are filed under this section or, with
            respect to years occurring before this subsection takes
            effect, are filed against persons other than the United
            States,

               *       *       *       *       *       *       *

      (3) In order for payments to be made for judgments against
    the United States (together with related fees and expenses of
    witnesses) pursuant to this section arising from the acts or
    omissions of entities described in subsection (g)(4) and of
    officers, [employees, or contractors] employees, volunteer
    practitioners, or contractors (subject to subsection (g)(5)) of
    such entities, the total amount contained within the fund
    established by the Secretary under paragraph (2) for a fiscal
    year shall be transferred not later than the December 31 that
    occurs during the fiscal year to the appropriate accounts in
    the Treasury.
      (4)(A) Subsections (g) through (m) apply with respect to
    volunteer practitioners beginning with the first fiscal year
    for which an appropriations Act provides that amounts in the
    fund under paragraph (2) are available with respect to such
    practitioners.
      (B) For purposes of subsections (g) through (m), the term
    ``volunteer practitioner'' means a practitioner who, with
    respect to an entity described in subsection (g)(4), meets the
    following conditions:
              (i) The practitioner is a licensed physician, a
            licensed clinical psychologist, or other licensed or
            certified health care practitioner.
              (ii) At the request of such entity, the practitioner
            provides services to patients of the entity, at a site
            at which the entity operates or at a site designated by
            the entity. The weekly number of hours of services
            provided to the patients by the practitioner is not a
            factor with respect to meeting conditions under this
            subparagraph.
              (iii) The practitioner does not for the provision of
            such services receive any compensation from such
            patients, from the entity, or from third-party payors
            (including reimbursement under any insurance policy or
            health plan, or under any Federal or State health
            benefits program).
      (l)(1) If a civil action or proceeding is filed in a State
    court against any entity described in subsection (g)(4) or any
    officer, governing board member, [employee, or any contractor]
    employee, volunteer practitioner, or contractor of such an
    entity for damages described in subsection (a), the Attorney
    General, within 15 days after being notified of such filing,
    shall make an appearance in such court and advise such court as
    to whether the Secretary has determined under subsections (g)
    and (h), that such entity, officer, governing board member,
    [employee, or contractor] employee, volunteer practitioner, or
    contractor of the entity is deemed to be an employee of the
    Public Health Service for purposes of this section with respect
    to the actions or omissions that are the subject of such civil
    action or proceeding. Such advice shall be deemed to satisfy
    the provisions of subsection (c) that the Attorney General
    certify that an entity, officer, governing board member,
    [employee, or contractor] employee, volunteer practitioner, or
    contractor of the entity was acting within the scope of their
    employment or responsibility.
      (2) If the Attorney General fails to appear in State court
    within the time period prescribed under paragraph (1), upon
    petition of any entity or officer, governing board member,
    [employee, or contractor] employee, volunteer practitioner, or
    contractor of the entity named, the civil action or proceeding
    shall be removed to the appropriate United States district
    court. The civil action or proceeding shall be stayed in such
    court until such court conducts a hearing, and makes a
    determination, as to the appropriate forum or procedure for the
    assertion of the claim for damages described in subsection (a)
    and issues an order consistent with such determination.
      (m)(1) An entity or officer, governing board member,
    [employee, or contractor] employee, volunteer practitioner, or
    contractor of an entity described in subsection (g)(1) shall,
    for purposes of this section, be deemed to be an employee of
    the Public Health Service with respect to services provided to
    individuals who are enrollees of a managed care plan if the
    entity contracts with such managed care plan for the provision
    of services.
      (2) Each managed care plan which enters into a contract with
    an entity described in subsection (g)(4) shall deem the entity
    and any officer, governing board member, [employee, or
    contractor] employee, volunteer practitioner, or contractor of
    the entity as meeting whatever malpractice coverage
    requirements such plan may require of contracting providers for
    a calendar year if such entity or officer, governing board
    member, [employee, or contractor] employee, volunteer
    practitioner, or contractor of the entity has been deemed to be
    an employee of the Public Health Service for purposes of this
    section for such calendar year. Any plan which is found by the
    Secretary on the record, after notice and an opportunity for a
    full and fair hearing, to have violated this subsection shall
    upon such finding cease, for a period to be determined by the
    Secretary, to receive and to be eligible to receive any Federal
    funds under titles XVIII or XIX of the Social Security Act.

               *       *       *       *       *       *       *

    PART B--MISCELLANEOUS PROVISIONS

               *       *       *       *       *       *       *

    SEC. 249. NATIONAL EDUCATION OUTREACH AND AWARENESS CAMPAIGN ON PAIN
                        MANAGEMENT.

      (a) Establishment.--Not later than June 30, 2010, the
    Secretary shall establish and implement a national pain care
    education outreach and awareness campaign described in
    subsection (b).
      (b) Requirements.--The Secretary shall design the public
    awareness campaign under this section to educate consumers,
    patients, their families, and other caregivers with respect
    to--
              (1) the incidence and importance of pain as a
            national public health problem;
              (2) the adverse physical, psychological, emotional,
            societal, and financial consequences that can result if
            pain is not appropriately assessed, diagnosed, treated,
            or managed;
              (3) the availability, benefits, and risks of all pain
            treatment and management options;
              (4) having pain promptly assessed, appropriately
            diagnosed, treated, and managed, and regularly
            reassessed with treatment adjusted as needed;
              (5) the role of credentialed pain management
            specialists and subspecialists, and of comprehensive
            interdisciplinary centers of treatment expertise;
              (6) the availability in the public, nonprofit, and
            private sectors of pain management-related information,
            services, and resources for consumers, employers,
            third-party payors, patients, their families, and
            caregivers, including information on--
                      (A) appropriate assessment, diagnosis,
                    treatment, and management options for all types
                    of pain and pain-related symptoms; and
                      (B) conditions for which no treatment options
                    are yet recognized; and
              (7) other issues the Secretary deems appropriate.
      (c) Consultation.--In designing and implementing the public
    awareness campaign required by this section, the Secretary
    shall consult with organizations representing patients in pain
    and other consumers, employers, physicians including physicians
    specializing in pain care, other pain management professionals,
    medical device manufacturers, and pharmaceutical companies.
      (d) Coordination.--
              (1) Lead official.--The Secretary shall designate one
            official in the Department of Health and Human Services
            to oversee the campaign established under this section.
              (2) Agency coordination.--The Secretary shall ensure
            the involvement in the public awareness campaign under
            this section of the Surgeon General of the Public
            Health Service, the Director of the Centers for Disease
            Control and Prevention, and such other representatives
            of offices and agencies of the Department of Health and
            Human Services as the Secretary determines appropriate.
      (e) Underserved Areas and Populations.--In designing the
    public awareness campaign under this section, the Secretary
    shall--
              (1) take into account the special needs of geographic
            areas and racial, ethnic, gender, age, and other
            demographic groups that are currently underserved; and
              (2) provide resources that will reduce disparities in
            access to appropriate diagnosis, assessment, and
            treatment.
      (f) Grants and Contracts.--The Secretary may make awards of
    grants, cooperative agreements, and contracts to public
    agencies and private nonprofit organizations to assist with the
    development and implementation of the public awareness campaign
    under this section.
      (g) Evaluation and Report.--Not later than the end of fiscal
    year 2012, the Secretary shall prepare and submit to the
    Congress a report evaluating the effectiveness of the public
    awareness campaign under this section in educating the general
    public with respect to the matters described in subsection (b).
      (h) Authorization of Appropriations.--For purposes of
    carrying out this section, there are authorized to be
    appropriated $2,000,000 for fiscal year 2010 and $4,000,000 for
    each of fiscal years 2011 and 2012.

               *       *       *       *       *       *       *

         TITLE III--GENERAL POWERS AND DUTIES OF PUBLIC HEALTH SERVICE

    Part A--Research and Investigation

               *       *       *       *       *       *       *

    GENERAL AUTHORITY RESPECTING RESEARCH, EVALUATIONS, AND DEMONSTRATIONS
       IN HEALTH STATISTICS, HEALTH SERVICES, AND HEALTH CARE TECHNOLOGY
                                   ASSESSMENT

      Sec. 304. (a) * * *

               *       *       *       *       *       *       *

      (c)(1) The Secretary, acting through the Assistant Secretary
    for Health Information, shall coordinate all health services
    research, evaluations, and demonstrations, all health
    statistical and epidemiological activities, and all research,
    evaluations, and demonstrations respecting the assessment of
    health care technology undertaken and supported through units
    of the Department of Health and Human Services. To the maximum
    extent feasible such coordination shall be carried out through
    the Agency for Health Care Policy and Research and the National
    Center for Health Statistics.
      (2) The Secretary, acting through the Assistant Secretary for
    Health Information, shall coordinate the health services
    research, evaluations, and demonstrations, the health
    statistical and (where appropriate) epidemiological activities,
    and the research, evaluations, and demonstrations respecting
    the assessment of health care technology authorized by this Act
    through the Agency for Health Care Policy and Research and the
    National Center for Health Statistics.

                     NATIONAL CENTER FOR HEALTH STATISTICS

      Sec. 306. (a) * * *

               *       *       *       *       *       *       *

      (j) In carrying out the requirements of section 304(c) and
    paragraph (1) of subsection (e) of this section, the Secretary,
    acting through the Assistant Secretary for Health Information,
    shall coordinate health statistical and epidemiological
    activities of the Department of Health and Human Services by--
              (1) * * *

               *       *       *       *       *       *       *

    PART B--FEDERAL-STATE COOPERATION

               *       *       *       *       *       *       *

    SEC. 315. REGIONALIZED COMMUNICATION 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 demonstration programs that design,
    implement, and evaluate innovative models of regionalized,
    comprehensive, and accountable emergency care systems.
      (b) Eligible Entity; Region.--
              (1) Eligible entity.--In this section, the term
            ``eligible entity'' means a State or a partnership of 1
            or more States and 1 or more local governments.
              (2) Region.--In this section, 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.
      (c) Demonstration Program.--The Secretary shall award a
    contract or grant under subsection (a) to an eligible entity
    that proposes a demonstration program to design, implement, and
    evaluate an emergency medical system that--
              (1) coordinates with public safety services, public
            health services, emergency medical services, medical
            facilities, and other entities within a region;
              (2) coordinates an approach to emergency medical
            system access throughout the region, including 9-1-1
            public safety answering points and emergency medical
            dispatch;
              (3) includes a mechanism, such as a regional medical
            direction or transport communications system, that
            operates throughout the region to ensure that the
            correct patient is taken to the medically appropriate
            facility (whether an initial facility or a higher level
            facility) in a timely fashion;
              (4) allows for the tracking of prehospital and
            hospital resources, including inpatient bed capacity,
            emergency department capacity, on-call specialist
            coverage, ambulance diversion status, and the
            coordination of such tracking with regional
            communications and hospital destination decisions; and
              (5) includes a consistent regionwide prehospital,
            hospital, and interfacility data management system
            that--
                      (A) complies with 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 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) is compatible with the
                            applicable State emergency medical
                            services system;
                              (iii) includes consistent indirect
                            and direct medical oversight of
                            prehospital, hospital, and
                            interfacility transport throughout the
                            region;
                              (iv) coordinates prehospital
                            treatment and triage, hospital
                            destination, and interfacility
                            transport throughout the region;
                              (v) includes a categorization or
                            designation system for special medical
                            facilities throughout the region that
                            is--
                                      (I) consistent with State
                                    laws and regulations; and
                                      (II) integrated with the
                                    protocols for transport and
                                    destination throughout the
                                    region; and
                              (vi) includes a regional medical
                            direction system, a patient tracking
                            system, and a resource allocation
                            system that--
                                      (I) support day-to-day
                                    emergency care system
                                    operation;
                                      (II) can manage surge
                                    capacity during a major event
                                    or disaster; and
                                      (III) are integrated with
                                    other components of the
                                    national and State emergency
                                    preparedness system;
                      (B) an agreement to make available non-
                    Federal contributions in accordance with
                    subsection (e); and
                      (C) such other information as the Secretary
                    may require.
      (e) Matching Funds.--
              (1) In general.--With respect to the costs of the
            activities to be carried out each year with a contract
            or grant under subsection (a), a condition for the
            receipt of the contract or grant is that the eligible
            entity involved agrees to make available (directly or
            through donations from public or private entities) non-
            Federal contributions toward such costs in an amount
            that is not less than 25 percent of such costs.
              (2) Determination of amount contributed.--Non-Federal
            contributions required in paragraph (1) may be in cash
            or in kind, fairly evaluated, including plant,
            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 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 medically underserved
    population (as defined in section 330(b)(3)).
      (g) Report.--Not later than 90 days after the completion of a
    demonstration program under subsection (a), the recipient of
    such contract or grant described in such subsection 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 system on patient outcomes for various critical
            care categories, such as trauma, stroke, cardiac
            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 system;
              (4) the State and local legislation necessary to
            implement and to maintain the system; and
              (5) the barriers to developing regionalized,
            accountable emergency care systems, as well as the
            methods to overcome such barriers.
      (h) Evaluation.--The Secretary, acting through the Assistant
    Secretary for Preparedness and Response, shall enter into a
    contract with an academic institution or other entity to
    conduct an independent evaluation of the demonstration programs
    funded under subsection (a), including an evaluation of--
              (1) the performance of the eligible entities
            receiving the funds; and
              (2) the impact of the demonstration programs.
      (i) 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 (h).
      (j) Authorization of Appropriations.--
              (1) In general.--There is authorized to be
            appropriated to carry out this section $12,000,000 for
            each of fiscal years 2010 through 2015.
              (2) Reservation.--Of the amount appropriated to carry
            out this section for a fiscal year, the Secretary shall
            reserve 3 percent of such amount to carry out
            subsection (h) (relating to an independent evaluation).

    SEC. 315A. ASSISTING VETERANS WITH MILITARY EMERGENCY MEDICAL TRAINING
                        TO BECOME STATE-LICENSED OR CERTIFIED EMERGENCY
                        MEDICAL TECHNICIANS (EMTS).

      (a) Program.--The Secretary shall establish a program
    consisting of awarding grants to States to assist veterans who
    received and completed military emergency medical training
    while serving in the Armed Forces of the United States to
    become, upon their discharge or release from active duty
    service, State-licensed or certified emergency medical
    technicians.
      (b) Use of Funds.--Amounts received as a grant under this
    section may be used to assist veterans described in subsection
    (a) to become State-licensed or certified emergency medical
    technicians as follows:
              (1) Providing training.
              (2) Providing reimbursement for costs associated
            with--
                      (A) training; or
                      (B) applying for licensure or certification.
              (3) Expediting the licensing or certification
            process.
      (c) Eligibility.--To be eligible for a grant under this
    section, a State shall demonstrate to the Secretary's
    satisfaction that the State has a shortage of emergency medical
    technicians.
      (d) Report.--The Secretary shall submit to the Congress an
    annual report on the program under this section.
      (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.

               *       *       *       *       *       *       *

           PREVENTIVE HEALTH MEASURES WITH RESPECT TO PROSTATE CANCER

      Sec. 317D. (a) In General.--The Secretary, acting through the
    Director of the Centers for Disease Control and Prevention, may
    make grants to States and local health departments for the
    purpose of enabling such States and departments to carry out
    programs that may include the following:
              (1)  * * *

               *       *       *       *       *       *       *

              (7) Upon a determination by the Secretary, who shall
            take into consideration recommendations by the [United
            States Preventive Services Task Force] Task Force on
            Clinical Preventive Services and shall seek input,
            where appropriate, from professional societies and
            other private and public entities, that there is
            sufficient consensus on the effectiveness of prostate
            cancer screening--
                      (A)  * * *

               *       *       *       *       *       *       *

    SEC. 317U. HEALTHY TEEN INITIATIVE TO PREVENT TEEN PREGNANCY.

      (a) Program.--To the extent and in the amount of
    appropriations made in advance in appropriations Acts, the
    Secretary, acting through the Director of the Centers for
    Disease Control and Prevention, shall establish a program
    consisting of making grants, in amounts determined under
    subsection (c), to each State that submits an application in
    accordance with subsection (d) for an evidence-based education
    program described in subsection (b).
      (b) Use of Funds.--Amounts received by a State under this
    section shall be used to conduct or support evidence-based
    education programs (directly or through grants or contracts to
    public or private nonprofit entities, including schools and
    community-based and faith-based organizations) to reduce teen
    pregnancy or sexually transmitted diseases.
      (c) Distribution of Funds.--The Director shall, for fiscal
    year 2010 and each subsequent fiscal year, make a grant to each
    State described in subsection (a) in an amount equal to the
    product of--
              (1) the amount appropriated to carry out this section
            for the fiscal year; and
              (2) the percentage determined for the State under
            section 502(c)(1)(B)(ii) of the Social Security Act.
      (d) Application.--To seek a grant under this section, a State
    shall submit an application at such time, in such manner, and
    containing such information and assurance of compliance with
    this section as the Secretary may require. At a minimum, an
    application shall to the satisfaction of the Secretary--
              (1) describe how the State's proposal will address
            the needs of at-risk teens in the State;
              (2) identify the evidence-based education program or
            programs selected from the registry developed under
            subsection (g) that will be used to address risks in
            priority populations;
              (3) describe how the program or programs will be
            implemented and any adaptations to the evidence-based
            model that will be made;
              (4) list any private and public entities with whom
            the State proposes to work, including schools and
            community-based and faith-based organizations, and
            demonstrate their capacity to implement the proposed
            program or programs; and
              (5) identify an independent entity that will evaluate
            the impact of the program or programs.
      (e) Evaluation.--
              (1) Requirement.--As a condition on receipt of a
            grant under this section, a State shall agree--
                      (A) to arrange for an independent evaluation
                    of the impact of the programs to be conducted
                    or supported through the grant; and
                      (B) submit reports to the Secretary on such
                    programs and the results of evaluation of such
                    programs.
              (2) Funding limitation.--Of the amounts made
            available to a State through a grant under this section
            for any fiscal year, not more than 10 percent may be
            used for such evaluation.
      (f) Rule of Construction.--This section shall not be
    construed to preempt or limit any State law regarding parental
    involvement and decisionmaking in children's education.
      (g) Registry of Eligible Programs.--The Secretary shall
    develop not later than 180 days after the date of the enactment
    of the America's Affordable Health Choices Act of 2009, and
    periodically update thereafter, a publicly available registry
    of programs described in subsection (b) that, as determined by
    the Secretary--
              (1) meet the definition of the term ``evidence-
            based'' in subsection (i);
              (2) are medically and scientifically accurate; and
              (3) provide age-appropriate information.
      (h) Matching Funds.--The Secretary may award a grant to a
    State under this section for a fiscal year only if the State
    agrees to provide, from non-Federal sources, an amount equal to
    $1 (in cash or in kind) for each $4 provided through the grant
    to carry out the activities supported by the grant.
      (i) Definition.--In this section, the term ``evidence-based''
    means based on a model that has been found, in methodologically
    sound research--
              (1) to delay initiation of sex;
              (2) to decrease number of partners;
              (3) to reduce teen pregnancy;
              (4) to reduce sexually transmitted infection rates;
            or
              (5) to improve rates of contraceptive use.
      (j) Appropriations.--To carry out this section, there is
    authorized to be appropriated $50,000,000 for each of the
    fiscal years 2010 through 2014.

               *       *       *       *       *       *       *

    SEC. 319F. PUBLIC HEALTH COUNTERMEASURES TO A BIOTERRORIST ATTACK.

      (a) All-Hazards Public Health and Medical Response Curricula
    and Training.--
              (1) * * *

               *       *       *       *       *       *       *

              (5) Dissemination and training.--
                      (A) * * *
                      (B) Certain entities.--The education and
                    training activities described in subparagraph
                    (A) may be carried out by Federal [public
                    health or medical] public health, medical, or
                    dental entities, appropriate educational
                    entities, professional organizations and
                    societies, private accrediting organizations,
                    and other nonprofit institutions or entities
                    meeting criteria established by the Secretary.

               *       *       *       *       *       *       *

                          Part D--Primary Health Care

                           Subpart I--Health Centers

    SEC. 330. HEALTH CENTERS.

      (a) * * *

               *       *       *       *       *       *       *

      (r) Authorization of Appropriations.--
              (1) In general.--For the purpose of carrying out this
            section, in addition to the amounts authorized to be
            appropriated under subsection (d), there are authorized
            to be appropriated--
                      (A) * * *

               *       *       *       *       *       *       *

                      (D) $2,940,000,000 for fiscal year 2011;
                    [and]
                      (E) $3,337,000,000 for fiscal year 2012[.];
                    and
                      (F) such sums as may be necessary for each of
                    fiscal years 2013 and 2014.

               *       *       *       *       *       *       *

      (s) Additional Funding.--For the purpose of carrying out this
    section, in addition to any other amounts authorized to be
    appropriated for such purpose, there are authorized to be
    appropriated, out of any monies in the Public Health Investment
    Fund, the following:
              (1) For fiscal year 2010, $1,000,000,000.
              (2) For fiscal year 2011, $1,500,000,000.
              (3) For fiscal year 2012, $2,500,000,000.
              (4) For fiscal year 2013, $3,000,000,000.
              (5) For fiscal year 2014, $4,000,000,000.

               *       *       *       *       *       *       *

    SEC. 330I. TELEHEALTH NETWORK AND TELEHEALTH RESOURCE CENTERS GRANT
                        PROGRAMS.

      (a) Definitions.--In this section:
              (1) * * *

               *       *       *       *       *       *       *

              [(3) Frontier community.--The term ``frontier
            community'' shall have the meaning given the term in
            regulations issued under subsection (r).]
              (3) Health disparities.--The term ``health
            disparities'' has the meaning given such term in
            section 3171.

               *       *       *       *       *       *       *

      (d) Grants.--
              (1) Telehealth network grants.--The Director may, in
            carrying out the telehealth network grant program
            referred to in subsection (b), award grants to eligible
            entities for projects to demonstrate how telehealth
            technologies can be used through telehealth networks in
            rural areas, frontier communities, and medically
            underserved areas, and for medically underserved
            populations, to--
                      (A) * * *
                      (B) improve and expand the training of health
                    care providers; [and]
                      (C) expand and improve the quality of health
                    information available to health care providers,
                    and patients and their families, for
                    decisionmaking[.]; and
                      (D) reduce health disparities.

               *       *       *       *       *       *       *

      (f) Eligible Entities.--
              (1) Telehealth network grants.--
                      (A) * * *
                      (B) Telehealth networks.--
                              (i) * * *

               *       *       *       *       *       *       *

                              (iii) Composition of network.--The
                            telehealth network shall include at
                            least 2 of the following entities (at
                            least 1 of which shall be a community-
                            based health care provider):
                                      (I) * * *

               *       *       *       *       *       *       *

                                      (VII) Long-term care
                                    providers, including skilled
                                    nursing facilities.

               *       *       *       *       *       *       *

                                      (IX) Providers of outpatient
                                    mental health services and
                                    entities operating outpatient
                                    mental health facilities,
                                    including county mental health
                                    and public mental health
                                    facilities.

               *       *       *       *       *       *       *

                                      (XIII) Renal dialysis
                                    facilities.

               *       *       *       *       *       *       *

      [(i) Preferences.--
              [(1) Telehealth networks.--In awarding grants under
            subsection (d)(1) for projects involving telehealth
            networks, the Secretary shall give preference to an
            eligible entity that meets at least 1 of the following
            requirements:
                      [(A) Organization.--The eligible entity is a
                    rural community-based organization or another
                    community-based organization.
                      [(B) Services.--The eligible entity proposes
                    to use Federal funds made available through
                    such a grant to develop plans for, or to
                    establish, telehealth networks that provide
                    mental health, public health, long-term care,
                    home care, preventive, or case management
                    services.
                      [(C) Coordination.--The eligible entity
                    demonstrates how the project to be carried out
                    under the grant will be coordinated with other
                    relevant federally funded projects in the
                    areas, communities, and populations to be
                    served through the grant.
                      [(D) Network.--The eligible entity
                    demonstrates that the project involves a
                    telehealth network that includes an entity
                    that--
                              [(i) provides clinical health care
                            services, or educational services for
                            health care providers and for patients
                            or their families; and
                              [(ii) is--
                                      [(I) a public library;
                                      [(II) an institution of
                                    higher education; or
                                      [(III) a local government
                                    entity.
                      [(E) Connectivity.--The eligible entity
                    proposes a project that promotes local
                    connectivity within areas, communities, or
                    populations to be served through the project.
                      [(F) Integration.--The eligible entity
                    demonstrates that health care information has
                    been integrated into the project.
              [(2) Telehealth resource centers.--In awarding grants
            under subsection (d)(2) for projects involving
            telehealth resource centers, the Secretary shall give
            preference to an eligible entity that meets at least 1
            of the following requirements:
                      [(A) Provision of services.--The eligible
                    entity has a record of success in the provision
                    of telehealth services to medically underserved
                    areas or medically underserved populations.
                      [(B) Collaboration and sharing of
                    expertise.--The eligible entity has a
                    demonstrated record of collaborating and
                    sharing expertise with providers of telehealth
                    services at the national, regional, State, and
                    local levels.
                      [(C) Broad range of telehealth services.--The
                    eligible entity has a record of providing a
                    broad range of telehealth services, which may
                    include--
                              [(i) a variety of clinical specialty
                            services;
                              [(ii) patient or family education;
                              [(iii) health care professional
                            education; and
                              [(iv) rural residency support
                            programs.]
      (i) Preferences.--
              (1) Telehealth networks.--In awarding grants under
            subsection (d)(1) for projects involving telehealth
            networks, the Secretary shall give preference to
            eligible entities meeting the following:
                      (A) Network.--The eligible entity is a health
                    care provider in, or proposing to form, a
                    health care network that furnishes services in
                    a medically underserved area or a health
                    professional shortage area.
                      (B) Broad geographic coverage.--The eligible
                    entity demonstrates broad geographic coverage
                    in the rural or medically underserved areas of
                    the State or States in which the entity is
                    located.
                      (C) Health disparities.--The eligible entity
                    demonstrates how the project to be funded
                    through the grant will address health
                    disparities.
                      (D) Linkages.--The eligible entity agrees to
                    use the grant to establish or develop plans for
                    telehealth systems that will link rural
                    hospitals and rural health care providers to
                    other hospitals, health care providers, and
                    patients.
                      (E) Efficiency.--The eligible entity agrees
                    to use the grant to promote greater efficiency
                    in the use of health care resources.
                      (F) Viability.--The eligible entity
                    demonstrates the long-term viability of
                    projects through--
                              (i) availability of non-Federal
                            funding sources; or
                              (ii) institutional and community
                            support for the telehealth network.
                      (G) Services.--The eligible entity provides a
                    plan for coordinating system use by eligible
                    entities and prioritizes use of grant funds for
                    health care services over nonclinical uses.
              (2) Telehealth resource centers.--In awarding grants
            under subsection (d)(2) for projects involving
            telehealth resource centers, the Secretary shall give
            preference to eligible entities meeting the following:
                      (A) Provision of a broad range of services.--
                    The eligible entity has a record of success in
                    the provision of a broad range of telehealth
                    services to medically underserved areas or
                    populations.
                      (B) Provision of telehealth technical
                    assistance.--The eligible entity has a record
                    of success in the provision of technical
                    assistance to providers serving medically
                    underserved communities or populations in the
                    establishment and implementation of telehealth
                    services.
                      (C) Collaboration and sharing of expertise.--
                    The eligible entity has a demonstrated record
                    of collaborating and sharing expertise with
                    providers of telehealth services at the
                    national, regional, State, and local levels.
      (j) Distribution of Funds.--
              (1) * * *
              (2) Telehealth networks.--In awarding grants under
            subsection (d)(1) for a fiscal year, the Director shall
            ensure that--
                      (A) * * *
                      (B) the total amount of funds awarded for
                    such projects for that fiscal year shall be not
                    less than the total amount of funds awarded for
                    [such projects for fiscal year 2001 under
                    section 330A (as in effect on the day before
                    the date of enactment of the Health Care Safety
                    Net Amendments of 2002).] such project for
                    fiscal year 2009.
      (k) Use of Funds.--
              (1) Telehealth network program.--The recipient of a
            grant under subsection (d)(1) may use funds received
            through such grant for salaries, equipment, and
            operating or other costs, including the cost of--
                      (A) * * *

               *       *       *       *       *       *       *

                      (E)(i) providing for [transmission of medical
                    data] transmission and electronic archival of
                    medical data, and maintenance of equipment; and

               *       *       *       *       *       *       *

                      [(F) developing projects to use telehealth
                    technology to facilitate collaboration between
                    health care providers;]
                      (F) developing projects to use telehealth
                    technology--
                              (i) to facilitate collaboration
                            between health care providers;
                              (ii) to promote telenursing services;
                            or
                              (iii) to promote patient
                            understanding and adherence to national
                            guidelines for chronic disease and
                            self-management of such conditions;

               *       *       *       *       *       *       *

      (q) Report.--[Not later than September 30, 2005] Not later
    than 1 year after the date of the enactment of the America's
    Affordable Health Choices Act of 2009, and annually thereafter,
    the Secretary shall prepare and submit to the appropriate
    committees of Congress a report on the progress and
    accomplishments of the grant programs described in subsection
    (b).
      [(r) Regulations.--The Secretary shall issue regulations
    specifying, for purposes of this section, a definition of the
    term ``frontier area''. The definition shall be based on
    factors that include population density, travel distance in
    miles to the nearest medical facility, travel time in minutes
    to the nearest medical facility, and such other factors as the
    Secretary determines to be appropriate. The Secretary shall
    develop the definition in consultation with the Director of the
    Bureau of the Census and the Administrator of the Economic
    Research Service of the Department of Agriculture.]
      [(s)] (r) Authorization of Appropriations.--There are
    authorized to be appropriated to carry out this section--
              (1) for grants under subsection (d)(1), $40,000,000
            for fiscal year 2002, [and] such sums as may be
            necessary for each of fiscal years 2003 through 2006,
            $10,000,000 for fiscal year 2010, and such sums as may
            be necessary for each of fiscal years 2011 through
            2014; and
              (2) for grants under subsection (d)(2), $20,000,000
            for fiscal year 2002, [and] such sums as may be
            necessary for each of fiscal years 2003 through 2006,
            $10,000,000 for fiscal year 2010, and such sums as may
            be necessary for each of fiscal years 2011 through
            2014.

               *       *       *       *       *       *       *

    SEC. 330L. TELEMEDICINE; INCENTIVE GRANTS REGARDING COORDINATION AMONG
                        STATES.

      (a) * * *
      (b) Authorization of Appropriations.--For the purpose of
    carrying out subsection (a), there are authorized to be
    appropriated such sums as may be necessary for each of the
    fiscal years 2002 through 2006, $10,000,000 for fiscal year
    2010, and such sums as may be necessary for each of fiscal
    years 2011 through 2014.

               Subpart II--National Health Service Corps Program

                         NATIONAL HEALTH SERVICE CORPS

      Sec. 331. (a) * * *

               *       *       *       *       *       *       *

      (i)(1) [In carrying out subpart III, the Secretary may, in
    accordance with this subsection, carry out demonstration
    projects in which individuals who have entered into a contract
    for obligated service under the Loan Repayment Program receive
    waivers under which the individuals are authorized to satisfy
    the requirement of obligated service through providing clinical
    service that is not full-time.] In carrying out subpart III,
    the Secretary may, in accordance with this subsection, issue
    waivers to individuals who have entered into a contract for
    obligated service under the Scholarship Program or the Loan
    Repayment Program under which the individuals are authorized to
    satisfy the requirement of obligated service through providing
    clinical practice that is half-time.
      (2) A waiver described in paragraph (1) may be provided by
    the Secretary only if--
              (A) the entity for which the service is to be
            performed--
                      (i) * * *
                      (ii) has requested in writing assignment of a
                    health professional who would serve [less than
                    full time] half time;
              (B) the Secretary has determined that assignment of a
            health professional who would serve [less than full
            time] half time would be appropriate for the area where
            the entity is located;
              (C) a Corps member who is required to perform
            obligated service has agreed in writing to be assigned
            for [less than full-time service] half-time service to
            an entity described in subparagraph (A);
              [(D) the entity and the Corps member agree in writing
            that the less than full-time service provided by the
            Corps member will not be less than 16 hours of clinical
            service per week;
              [(E) the Corps member agrees in writing that the
            period of obligated service pursuant to section 338B
            will be extended so that the aggregate amount of less
            than full-time service performed will equal the amount
            of service that would be performed through full-time
            service under section 338C; and]
              (D) the entity and the Corps member agree in writing
            that the Corps member will perform half-time clinical
            practice;
              (E) the Corps member agrees in writing to fulfill all
            of the service obligations under section 338C through
            half-time clinical practice and either--
                      (i) double the period of obligated service
                    that would otherwise be required; or
                      (ii) in the case of contracts entered into
                    under section 338B, accept a minimum service
                    obligation of 2 years with an award amount
                    equal to 50 percent of the amount that would
                    otherwise be payable for full-time service; and
              (F) the Corps member agrees in writing that if the
            Corps member begins providing [less than full-time
            service] half-time service but fails to begin or
            complete the period of obligated service, the method
            stated in 338E(c) for determining the damages for
            breach of the individual's written contract will be
            used after converting periods of obligated service or
            of service performed into their full-time equivalents.
      (3) [In evaluating a demonstration project described in
    paragraph (1)] In evaluating waivers issued under paragraph
    (1), the Secretary shall examine the effect of
    multidisciplinary teams.
      (j) For the purposes of this subpart and subpart III:
              (1) * * *

               *       *       *       *       *       *       *

              (5) The terms ``full time'' and ``full-time'' mean a
            minimum of 40 hours per week in a clinical practice,
            for a minimum of 45 weeks per year.
              (6) The terms ``half time'' and ``half-time'' mean a
            minimum of 20 hours per week (not to exceed 39 hours
            per week) in a clinical practice, for a minimum of 45
            weeks per year.

               *       *       *       *       *       *       *

                           NATIONAL ADVISORY COUNCIL

      Sec. 337. (a) * * *
      (b)(1) Members of the Council shall be appointed for a term
    of three years, except that any member appointed to fill a
    vacancy occurring prior to the expiration of the term for which
    the member's predecessor was appointed shall be appointed for
    the remainder of such term. No member shall be removed, except
    for cause. [Members may not be reappointed to the Council.]

               *       *       *       *       *       *       *

                         AUTHORIZATION OF APPROPRIATION

      Sec. 338. (a) For the purpose of carrying out this subpart,
    there are authorized to be appropriated such sums as may be
    necessary for each of the fiscal years 2008 through [2012]
    2014.

               *       *       *       *       *       *       *

      (c) For the purpose of carrying out this subpart, in addition
    to any other amounts authorized to be appropriated for such
    purpose, there are authorized to be appropriated, out of any
    monies in the Public Health Investment Fund, the following:
              (1) $63,000,000 for fiscal year 2010.
              (2) $66,000,000 for fiscal year 2011.
              (3) $70,000,000 for fiscal year 2012.
              (4) $73,000,000 for fiscal year 2013.
              (5) $77,000,000 for fiscal year 2014.

          Subpart III--Scholarship Program and Loan Repayment Program

    SEC. 338B. NATIONAL HEALTH SERVICE CORPS LOAN REPAYMENT PROGRAM.

      (a) * * *

               *       *       *       *       *       *       *

      (g) Payments.--
              (1) * * *
              (2) Payments for years served.--
                      (A) In general.--For each year of obligated
                    service that an individual contracts to serve
                    under subsection (f) the Secretary may pay up
                    to [$35,000] $50,000, plus, beginning with
                    fiscal year 2012, an amount determined by the
                    Secretary on an annual basis to reflect
                    inflation, on behalf of the individual for
                    loans described in paragraph (1). In making a
                    determination of the amount to pay for a year
                    of such service by an individual, the Secretary
                    shall consider the extent to which each such
                    determination--
                              (i) * * *

               *       *       *       *       *       *       *

                               OBLIGATED SERVICE

      Sec. 338C. (a) 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. The Secretary may treat teaching as
    clinical practice for up to 20 percent of such period of
    obligated service.

               *       *       *       *       *       *       *

    SEC. 338H. AUTHORIZATION OF APPROPRIATIONS.

      (a) Authorization of Appropriations.--For the purposes of
    carrying out this subpart, there are authorized to be
    appropriated--
              (1) * * *

               *       *       *       *       *       *       *

              (4) for fiscal year 2011, $170,296,310; [and]
              (5) for fiscal year 2012, $185,622,980[.]; and
              (6) for fiscal years 2013 and 2014, such sums as may
            be necessary.

               *       *       *       *       *       *       *

    SEC. 338H-1. ADDITIONAL FUNDING.

      For the purpose of carrying out this subpart, in addition to
    any other amounts authorized to be appropriated for such
    purpose, there are authorized to be appropriated, out of any
    monies in the Public Health Investment Fund, the following:
              (1) $254,000,000 for fiscal year 2010.
              (2) $266,000,000 for fiscal year 2011.
              (3) $278,000,000 for fiscal year 2012.
              (4) $292,000,000 for fiscal year 2013.
              (5) $306,000,000 for fiscal year 2014.

               *       *       *       *       *       *       *

                      Subpart VII--Drug Pricing Agreements

          LIMITATION ON PRICES OF DRUGS PURCHASED BY COVERED ENTITIES

      Sec. 340B. (a) Requirements for Agreement With Secretary.--
              (1) * * *

               *       *       *       *       *       *       *

              (4) Covered entity defined.--In this section, the
            term ``covered entity'' means an entity that meets the
            requirements described in paragraph (5) and is one of
            the following:
                      (A) * * *

               *       *       *       *       *       *       *

                      (L) A subsection (d) hospital (as defined in
                    section 1886(d)(1)(B) of the Social Security
                    Act) that--
                              (i) is owned or operated by a unit of
                            State or local government, is a public
                            or private non-profit corporation which
                            is formally granted governmental powers
                            by a unit of State or local government,
                            or is a private non-profit hospital
                            which has a contract with a State or
                            local government to provide health care
                            services to low income individuals who
                            are not entitled to benefits under
                            title XVIII of the Social Security Act
                            or eligible for assistance under the
                            State plan under this title; and
                              (ii) for the most recent cost
                            reporting period that ended before the
                            calendar quarter involved, had a
                            disproportionate share adjustment
                            percentage (as determined under section
                            1886(d)(5)(F) of the Social Security
                            Act) greater than 11.75 percent or was
                            described in section
                            1886(d)(5)(F)(i)(II) of such Act[;
                            and].
                              [(iii) does not obtain covered
                            outpatient drugs through a group
                            purchasing organization or other group
                            purchasing arrangement.]
                      (M) A children's hospital excluded from the
                    Medicare prospective payment system pursuant to
                    section 1886(d)(1)(B)(iii) of the Social
                    Security Act which would meet the requirements
                    of subparagraph (L), including the
                    disproportionate share adjustment percentage
                    requirement under subparagraph (L)(ii), if the
                    hospital were a subsection (d) hospital as
                    defined in section 1886(d)(1)(B) of the Social
                    Security Act.
                      (N) An entity that is a critical access
                    hospital (as determined under section
                    1820(c)(2) of the Social Security Act).
                      (O) An entity receiving funds under title V
                    of the Social Security Act (relating to
                    maternal and child health) for the provision of
                    health services.
                      (P) An entity receiving funds under subpart I
                    of part B of title XIX of the Public Health
                    Service Act (relating to comprehensive mental
                    health services) for the provision of community
                    mental health services.
                      (Q) An entity receiving funds under subpart
                    II of such part B (relating to the prevention
                    and treatment of substance abuse) for the
                    provision of treatment services for substance
                    abuse.
                      (R) An entity that is a Medicare-dependent,
                    small rural hospital (as defined in section
                    1886(d)(5)(G)(iv) of the Social Security Act).
                      (S) An entity that is a sole community
                    hospital (as defined in section
                    1886(d)(5)(D)(iii) of the Social Security Act).
                      (T) An entity that is classified as a rural
                    referral center under section 1886(d)(5)(C) of
                    the Social Security Act.
              (5) Requirements for covered entities.--
                      (A) * * *
                      (B) Prohibiting resale of drugs.--With
                    respect to any covered [outpatient] drug that
                    is subject to an agreement under this
                    subsection, a covered entity shall not resell
                    or otherwise transfer the drug to a person who
                    is not a patient of the entity.
                      (C) Prohibiting use of group purchasing
                    arrangements.--
                              (i) A hospital described in
                            subparagraph (L), (M), (N), (R), (S),
                            or (T) of paragraph (4) shall not
                            obtain covered outpatient drugs through
                            a group purchasing organization or
                            other group purchasing arrangement,
                            except as permitted or provided
                            pursuant to clause (ii).
                              (ii) The Secretary shall establish
                            reasonable exceptions to the
                            requirement of clause (i)--
                                      (I) with respect to a covered
                                    outpatient drug that is
                                    unavailable to be purchased
                                    through the program under this
                                    section due to a drug shortage
                                    problem, manufacturer
                                    noncompliance, or any other
                                    reason beyond the hospital's
                                    control;
                                      (II) to facilitate generic
                                    substitution when a generic
                                    covered outpatient drug is
                                    available at a lower price; and
                                      (III) to reduce in other ways
                                    the administrative burdens of
                                    managing both inventories of
                                    drugs obtained under this
                                    section and not under this
                                    section, if such exception does
                                    not create a duplicate discount
                                    problem in violation of
                                    subparagraph (A) or a diversion
                                    problem in violation of
                                    subparagraph (B).
                      [(C)] (D) Auditing.--A covered entity shall
                    permit the Secretary and the manufacturer of a
                    covered outpatient drug that is subject to an
                    agreement under this subsection with the entity
                    (acting in accordance with procedures
                    established by the Secretary relating to the
                    number, duration, and scope of audits) to audit
                    at the Secretary's or the manufacturer's
                    expense the records of the entity that directly
                    pertain to the entity's compliance with the
                    requirements described in subparagraphs (A) or
                    (B) with respect to drugs of the manufacturer.
                      [(D)] (E) Additional sanction for
                    noncompliance.--If the Secretary finds, after
                    notice and hearing, that a covered entity is in
                    violation of a requirement described in
                    subparagraphs (A) or (B), the covered entity
                    shall be liable to the manufacturer of the
                    covered [outpatient] drug that is the subject
                    of the violation in an amount equal to the
                    reduction in the price of the drug (as
                    described in subparagraph (A)) provided under
                    the agreement between the entity and the
                    manufacturer under this paragraph.

               *       *       *       *       *       *       *

              (7) Certification of certain covered entities.--
                      (A)  * * *
                      (B) Inclusion of purchase information.--The
                    process developed under subparagraph (A) shall
                    include a requirement that an entity applying
                    for certification under this paragraph submit
                    information to the Secretary concerning the
                    amount such entity expended for covered
                    [outpatient] drugs in the preceding year so as
                    to assist the Secretary in evaluating the
                    validity of the entity's subsequent purchases
                    of covered [outpatient] drugs at discounted
                    prices.
                      (C) Criteria.--The Secretary shall make
                    available to all manufacturers of covered
                    [outpatient] drugs a description of the
                    criteria for certification under this
                    paragraph.

               *       *       *       *       *       *       *

              (9) Notice to manufacturers.--The Secretary shall
            notify manufacturers of covered [outpatient] drugs and
            single State agencies under section 1902(a)(5) of the
            Social Security Act of the identities of covered
            entities under this paragraph, and of entities that no
            longer meet the requirements of paragraph (5) or that
            are no longer certified pursuant to paragraph (7).

               *       *       *       *       *       *       *

      (b) Other Definitions.--[In this section, the terms] In this
    section:
              (1) In general.--The terms ``average manufacturer
            price'', ``covered outpatient drug'', and
            ``manufacturer'' have the meaning given such terms in
            section 1927(k) of the Social Security Act.
              (2) Covered drug.--The term ``covered drug''--
                      (A) means a covered outpatient drug (as
                    defined in section 1927(k)(2) of the Social
                    Security Act ); and
                      (B) includes, notwithstanding the section
                    1927(k)(3)(A) of such Act, a drug used in
                    connection with an inpatient or outpatient
                    service provided by a hospital described in
                    subparagraph (L), (M), (N), (R), (S), or (T) of
                    subsection (a)(4) that is enrolled to
                    participate in the drug discount program under
                    this section.
      [(c) References to Social Security Act.--Any reference in
    this section to a provision of the Social Security Act shall be
    deemed to be a reference to the provision as in effect on the
    date of the enactment of this section.]
      (c) Medicaid Credits on Inpatient Drugs.--
              (1) In general.--For the cost reporting period
            covered by the most recently filed Medicare cost report
            under title XVIII of the Social Security Act , a
            hospital described in subparagraph (L), (M), (N), (R),
            (S), or (T) of subsection (a)(4) and enrolled to
            participate in the drug discount program under this
            section shall provide to each State under its plan
            under title XIX of such Act--
                      (A) a credit on the estimated annual costs to
                    such hospital of single source and innovator
                    multiple source drugs provided to Medicaid
                    beneficiaries for inpatient use; and
                      (B) a credit on the estimated annual costs to
                    such hospital of noninnovator multiple source
                    drugs provided to Medicaid beneficiaries for
                    inpatient use.
              (2) Amount of credits.--
                      (A) Single source and innovator multiple
                    source drugs.--For purposes of paragraph
                    (1)(A)--
                              (i) the credit under such paragraph
                            shall be equal to the product of--
                                      (I) the annual value of
                                    single source and innovator
                                    multiple source drugs purchased
                                    under this section by the
                                    hospital based on the drugs'
                                    average manufacturer price;
                                      (II) the estimated percentage
                                    of the hospital's drug
                                    purchases attributable to
                                    Medicaid beneficiaries for
                                    inpatient use; and
                                      (III) the minimum rebate
                                    percentage described in section
                                    1927(c)(1)(B) of the Social
                                    Security Act;
                              (ii) the reference in clause (i)(I)
                            to the annual value of single source
                            and innovator multiple source drugs
                            purchased under this section by the
                            hospital based on the drugs' average
                            manufacturer price shall be equal to
                            the sum of--
                                      (I) the annual quantity of
                                    each single source and
                                    innovator multiple source drug
                                    purchased during the cost
                                    reporting period, multiplied by
                                      (II) the average manufacturer
                                    price for that drug;
                              (iii) the reference in clause (i)(II)
                            to the estimated percentage of the
                            hospital's drug purchases attributable
                            to Medicaid beneficiaries for inpatient
                            use shall be equal to--
                                      (I) the Medicaid inpatient
                                    drug charges as reported on the
                                    hospital's most recently filed
                                    Medicare cost report, divided
                                    by
                                      (II) total drug charges
                                    reported on the cost report;
                                    and
                              (iv) the terms ``single source drug''
                            and ``innovator multiple source drug''
                            have the meanings given such terms in
                            section 1927(k)(7) of the Social
                            Security Act.
                      (B) Noninnovator multiple source drugs.--For
                    purposes of paragraph (1)(B)--
                              (i) the credit under such paragraph
                            shall be equal to the product of--
                                      (I) the annual value of
                                    noninnovator multiple source
                                    drugs purchased under this
                                    section by the hospital based
                                    on the drugs' average
                                    manufacturer price;
                                      (II) the estimated percentage
                                    of the hospital's drug
                                    purchases attributable to
                                    Medicaid beneficiaries for
                                    inpatient use; and
                                      (III) the applicable
                                    percentage as defined in
                                    section 1927(c)(3)(B) of the
                                    Social Security Act;
                              (ii) the reference in clause (i)(I)
                            to the annual value of noninnovator
                            multiple source drugs purchased under
                            this section by the hospital based on
                            the drugs' average manufacturer price
                            shall be equal to the sum of--
                                      (I) the annual quantity of
                                    each noninnovator multiple
                                    source drug purchased during
                                    the cost reporting period,
                                    multiplied by
                                      (II) the average manufacturer
                                    price for that drug;
                              (iii) the reference in clause (i)(II)
                            to the estimated percentage of the
                            hospital's drug purchases attributable
                            to Medicaid beneficiaries for inpatient
                            use shall be equal to--
                                      (I) the Medicaid inpatient
                                    drug charges as reported on the
                                    hospital's most recently filed
                                    Medicare cost report, divided
                                    by
                                      (II) total drug charges
                                    reported on the cost report;
                                    and
                              (iv) the term ``noninnovator multiple
                            source drug'' has the meaning given
                            such term in section 1927(k)(7) of the
                            Social Security Act.
              (3) Calculation of credits.--
                      (A) In general.--Each State calculates
                    credits under paragraph (1) and informs
                    hospitals of amount under section 1927(a)(5)(D)
                    of the Social Security Act.
                      (B) Hospital provision of information.--Not
                    later than 30 days after the date of the filing
                    of the hospital's most recently filed Medicare
                    cost report, the hospital shall provide the
                    State with the information described in
                    paragraphs (2)(A)(ii) and (2)(B)(ii). With
                    respect to each drug purchased during the cost
                    reporting period, the hospital shall provide
                    the dosage form, strength, package size, date
                    of purchase, and the number of units purchased.
              (4) Payment deadline.--The credits provided by a
            hospital under paragraph (1) shall be paid within 60
            days after receiving the information specified in
            paragraph (3)(A).
              (5) Opt out.--A hospital shall not be required to
            provide the Medicaid credit required under paragraph
            (1) if it can demonstrate to the State that it will
            lose reimbursement under the State plan resulting from
            the extension of discounts to inpatient drugs under
            subsection (b)(2) and that the loss of reimbursement
            will exceed the amount of the credit otherwise owed by
            the hospital.
              (6) Offset against medical assistance.--Amounts
            received by a State under this subsection in any
            quarter shall be considered to be a reduction in the
            amount expended under the State plan in the quarter for
            medical assistance for purposes of section 1903(a)(1)
            of the Social Security Act.

               *       *       *       *       *       *       *

                  Subpart XI--Health Professional Needs Areas

    SEC. 340H. IN GENERAL.

      (a) Program.--The Secretary, acting through the Administrator
    of the Health Resources and Services Administration, shall
    establish a program, to be known as the Frontline Health
    Providers Loan Repayment Program, to address unmet health care
    needs in health professional needs areas through loan
    repayments under section 340I.
      (b) Designation of Health Professional Needs Areas.--
              (1) In general.--In this subpart, the term ``health
            professional needs area'' means an area, population, or
            facility that is designated by the Secretary in
            accordance with paragraph (2).
              (2) Designation.--To be designated by the Secretary
            as a health professional needs area under this subpart:
                      (A) In the case of an area, the area must be
                    a rational area for the delivery of health
                    services.
                      (B) The area, population, or facility must
                    have, in one or more health disciplines,
                    specialties, or subspecialties for the
                    population served, as determined by the
                    Secretary--
                              (i) insufficient capacity of health
                            professionals; or
                              (ii) high needs for health services,
                            including services to address health
                            disparities.
                      (C) With respect to the delivery of primary
                    health services, the area, population, or
                    facility must not include a health professional
                    shortage area (as designated under section
                    332), except that the area, population, or
                    facility may include such a health professional
                    shortage area in which there is an unmet need
                    for such services.
      (c) Eligibility.--To be eligible to participate in the
    Program, an individual shall--
              (1) hold a degree in a course of study or program
            (approved by the Secretary) from a school defined in
            section 799B(1)(A) (other than a school of public
            health);
              (2) hold a degree in a course of study or program
            (approved by the Secretary) from a school or program
            defined in subparagraph (C), (D), or (E)(4) of section
            799B(1), as designated by the Secretary;
              (3) be enrolled as a full-time student--
                      (A) in a school or program defined in
                    subparagraph (C), (D), or (E)(4) of section
                    799B(1), as designated by the Secretary, or a
                    school described in paragraph (1); and
                      (B) in the final year of a course of study or
                    program, offered by such school or program and
                    approved by the Secretary, leading to a degree
                    in a discipline referred to in subparagraph (A)
                    (other than a graduate degree in public
                    health), (C), (D), or (E)(4) of section
                    799B(1);
              (4) be a practitioner described in section
            1842(b)(18)(C) or 1848(k)(3)(B)(iii) or (iv) of the
            Social Security Act; or
              (5) be a practitioner in the field of respiratory
            therapy, medical technology, or radiologic technology.
      (d) Definitions.--In this subpart:
              (1) The term ``health disparities'' has the meaning
            given to the term in section 3171.
              (2) The term ``primary health services'' has the
            meaning given to such term in section 331(a)(3)(D).

    SEC. 340I. LOAN REPAYMENTS.

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

    SEC. 340J. REPORT.

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

    SEC. 340K. ALLOCATION.

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

                      Subpart XII--Public Health Workforce

    SEC. 340L. PUBLIC HEALTH WORKFORCE CORPS.

      (a) Establishment.--There is established, within the Service,
    the Public Health Workforce Corps (in this subpart referred to
    as the ``Corps''), for the purpose of ensuring an adequate
    supply of public health professionals throughout the Nation.
    The Corps shall consist of--
              (1) such officers of the Regular and Reserve Corps of
            the Service as the Secretary may designate;
              (2) such civilian employees of the United States as
            the Secretary may appoint; and
              (3) such other individuals who are not employees of
            the United States.
      (b) Administration.--Except as provided in subsection (c),
    the Secretary shall carry out this subpart acting through the
    Administrator of the Health Resources and Services
    Administration.
      (c) Placement and Assignment.--The Secretary, acting through
    the Director of the Centers for Disease Control and Prevention,
    shall develop a methodology for placing and assigning Corps
    participants as public health professionals. Such methodology
    may allow for placing and assigning such participants in State,
    local, and tribal health departments and Federally qualified
    health centers (as defined in section 1861(aa)(4) of the Social
    Security Act).
      (d) Application of Certain Provisions.--The provisions of
    subpart II shall, except as inconsistent with this subpart,
    apply to the Public Health Workforce Corps in the same manner
    and to the same extent as such provisions apply to the National
    Health Service Corps established under section 331.
      (e) Report.--The Secretary shall submit to the Congress an
    annual report on the programs carried out under this subpart.

    SEC. 340M. PUBLIC HEALTH WORKFORCE SCHOLARSHIP PROGRAM.

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

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

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

               *       *       *       *       *       *       *

        Part F--Licensing--Biological Products and Clinical Laboratories

                         Subpart 1--Biological Products

                       REGULATION OF BIOLOGICAL PRODUCTS

      Sec. 351. (a)(1) No person shall introduce or deliver for
    introduction into interstate commerce any biological product
    unless--
              (A) a biologics license under this subsection or
            subsection (k) is in effect for the biological product;
            and

               *       *       *       *       *       *       *

      (i) [In this section, the term ``biological product'' means]
    In this section:
              (1) The term ``biological product'' means a virus,
            therapeutic serum, toxin, antitoxin, vaccine, blood,
            blood component or derivative, allergenic product,
            protein (except any chemically synthesized
            polypeptide), or analogous product, or arsphenamine or
            derivative of arsphenamine (or any other trivalent
            organic arsenic compound), applicable to the
            prevention, treatment, or cure of a disease or
            condition of human beings.
              (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).

               *       *       *       *       *       *       *

      (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
                              (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).
                      (D) Restrictions on biological products
                    containing dangerous ingredients.--If
                    information in an application submitted under
                    this subsection, in a supplement to such an
                    application, or otherwise available to the
                    Secretary shows that a biological product--
                              (i) is, bears, or contains a select
                            agent or toxin listed in section 73.3
                            or 73.4 of title 42, section 121.3 or
                            121.4 of title 9, or section 331.3 of
                            title 7, Code of Federal Regulations
                            (or any successor regulations); or
                              (ii) is, bears, or contains a
                            controlled substance in schedule I or
                            II of section 202 of the Controlled
                            Substances Act, as listed in part 1308
                            of title 21, Code of Federal
                            Regulations (or any successor
                            regulations);
                    the Secretary shall not license the biological
                    product under this subsection unless the
                    Secretary determines, after consultation with
                    appropriate national security and drug
                    enforcement agencies, that there would be no
                    increased risk to the security or health of the
                    public from licensing such biological product
                    under this subsection.
              (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)(5) 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)(5) 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)(5) 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)(5).
            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) Pediatric studies.--
                      (A) Exclusivity.--If, before or after
                    licensure of the reference product under
                    subsection (a) of this section, the Secretary
                    determines that information relating to the use
                    of such product in the pediatric population may
                    produce health benefits in that population, the
                    Secretary makes a written request for pediatric
                    studies (which shall include a timeframe for
                    completing such studies), the applicant or
                    holder of the approved application agrees to
                    the request, such studies are completed using
                    appropriate formulations for each age group for
                    which the study is requested within any such
                    timeframe, and the reports thereof are
                    submitted and accepted in accordance with
                    section 505A(d)(3) of the Federal Food, Drug,
                    and Cosmetic Act the period referred to in
                    paragraph (7)(A) of this subsection is deemed
                    to be 12 years and 6 months rather than 12
                    years.
                      (B) Exception.--The Secretary shall not
                    extend the period referred to in subparagraph
                    (A) of this paragraph if the determination
                    under section 505A(d)(3) of the Federal Food,
                    Drug, and Cosmetic Act is made later than 9
                    months prior to the expiration of such period.
                      (C) Application of certain provisions.--The
                    provisions of subsections (a), (d), (e), (f),
                    (h), (j), (k), and (l) of section 505A of the
                    Federal Food, Drug, and Cosmetic Act shall
                    apply with respect to the extension of a period
                    under subparagraph (A) of this paragraph to the
                    same extent and in the same manner as such
                    provisions apply with respect to the extension
                    of a period under subsection (b) or (c) of
                    section 505A of the Federal Food, Drug, and
                    Cosmetic Act.
              (9) 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.
              (10) Naming.--The Secretary shall ensure that the
            labeling and packaging of each biological product
            licensed under this subsection bears a name that
            uniquely identifies the biological product and
            distinguishes it from the reference product and any
            other biological products licensed under this
            subsection following evaluation against such reference
            product.
      (l) Patent Notices; Relationship to Final Approval.--
              (1) Definitions.--For the purposes of this
            subsection, the term--
                      (A) ``biosimilar product'' means the
                    biological product that is the subject of the
                    application under subsection (k);
                      (B) ``relevant patent'' means a patent that--
                              (i) expires after the date specified
                            in subsection (k)(7)(A) that applies to
                            the reference product; and
                              (ii) could reasonably be asserted
                            against the applicant due to the
                            unauthorized making, use, sale, or
                            offer for sale within the United
                            States, or the importation into the
                            United States of the biosimilar
                            product, or materials used in the
                            manufacture of the biosimilar product,
                            or due to a use of the biosimilar
                            product in a method of treatment that
                            is indicated in the application;
                      (C) ``reference product sponsor'' means the
                    holder of an approved application or license
                    for the reference product; and
                      (D) ``interested third party'' means a person
                    other than the reference product sponsor that
                    owns a relevant patent, or has the right to
                    commence or participate in an action for
                    infringement of a relevant patent.
              (2) Handling of confidential information.--Any entity
            receiving confidential information pursuant to this
            subsection shall designate one or more individuals to
            receive such information. Each individual so designated
            shall execute an agreement in accordance with
            regulations promulgated by the Secretary. The
            regulations shall require each such individual to take
            reasonable steps to maintain the confidentiality of
            information received pursuant to this subsection and
            use the information solely for purposes authorized by
            this subsection. The obligations imposed on an
            individual who has received confidential information
            pursuant to this subsection shall continue until the
            individual returns or destroys the confidential
            information, a court imposes a protective order that
            governs the use or handling of the confidential
            information, or the party providing the confidential
            information agrees to other terms or conditions
            regarding the handling or use of the confidential
            information.
              (3) Public notice by secretary.--Within 30 days of
            acceptance by the Secretary of an application filed
            under subsection (k), the Secretary shall publish a
            notice identifying--
                      (A) the reference product identified in the
                    application; and
                      (B) the name and address of an agent
                    designated by the applicant to receive notices
                    pursuant to paragraph (4)(B).
              (4) Exchanges concerning patents.--
                      (A) Exchanges with reference product
                    sponsor.--
                              (i) Within 30 days of the date of
                            acceptance of the application by the
                            Secretary, the applicant shall provide
                            the reference product sponsor with a
                            copy of the application and information
                            concerning the biosimilar product and
                            its production. This information shall
                            include a detailed description of the
                            biosimilar product, its method of
                            manufacture, and the materials used in
                            the manufacture of the product.
                              (ii) Within 60 days of the date of
                            receipt of the information required to
                            be provided under clause (i), the
                            reference product sponsor shall provide
                            to the applicant a list of relevant
                            patents owned by the reference product
                            sponsor, or in respect of which the
                            reference product sponsor has the right
                            to commence an action of infringement
                            or otherwise has an interest in the
                            patent as such patent concerns the
                            biosimilar product.
                              (iii) If the reference product
                            sponsor is issued or acquires an
                            interest in a relevant patent after the
                            date on which the reference product
                            sponsor provides the list required by
                            clause (ii) to the applicant, the
                            reference product sponsor shall
                            identify that patent to the applicant
                            within 30 days of the date of issue of
                            the patent, or the date of acquisition
                            of the interest in the patent, as
                            applicable.
                      (B) Exchanges with interested third
                    parties.--
                              (i) At any time after the date on
                            which the Secretary publishes a notice
                            for an application under paragraph (3),
                            any interested third party may provide
                            notice to the designated agent of the
                            applicant that the interested third
                            party owns or has rights under 1 or
                            more patents that may be relevant
                            patents. The notice shall identify at
                            least 1 patent and shall designate an
                            individual who has executed an
                            agreement in accordance with paragraph
                            (2) to receive confidential information
                            from the applicant.
                              (ii) Within 30 days of the date of
                            receiving notice pursuant to clause
                            (i), the applicant shall send to the
                            individual designated by the interested
                            third party the information specified
                            in subparagraph (A)(i), unless the
                            applicant and interested third party
                            otherwise agree.
                              (iii) Within 90 days of the date of
                            receiving information pursuant to
                            clause (ii), the interested third party
                            shall provide to the applicant a list
                            of relevant patents which the
                            interested third party owns, or in
                            respect of which the interested third
                            party has the right to commence or
                            participate in an action for
                            infringement.
                              (iv) If the interested third party is
                            issued or acquires an interest in a
                            relevant patent after the date on which
                            the interested third party provides the
                            list required by clause (iii), the
                            interested third party shall identify
                            that patent within 30 days of the date
                            of issue of the patent, or the date of
                            acquisition of the interest in the
                            patent, as applicable.
                      (C) Identification of basis for
                    infringement.--For any patent identified under
                    clause (ii) or (iii) of subparagraph (A) or
                    under clause (iii) or (iv) of subparagraph (B),
                    the reference product sponsor or the interested
                    third party, as applicable--
                              (i) shall explain in writing why the
                            sponsor or the interested third party
                            believes the relevant patent would be
                            infringed by the making, use, sale, or
                            offer for sale within the United
                            States, or importation into the United
                            States, of the biosimilar product or by
                            a use of the biosimilar product in
                            treatment that is indicated in the
                            application;
                              (ii) may specify whether the relevant
                            patent is available for licensing; and
                              (iii) shall specify the number and
                            date of expiration of the relevant
                            patent.
                      (D) Certification by applicant concerning
                    identified relevant patents.--Not later than 45
                    days after the date on which a patent is
                    identified under clause (ii) or (iii) of
                    subparagraph (A) or under clause (iii) or (iv)
                    of subparagraph (B), the applicant shall send a
                    written statement regarding each identified
                    patent to the party that identified the patent.
                    Such statement shall either--
                              (i) state that the applicant will not
                            commence marketing of the biosimilar
                            product and has requested the Secretary
                            to not grant final approval of the
                            application before the date of
                            expiration of the noticed patent; or
                              (ii) provide a detailed written
                            explanation setting forth the reasons
                            why the applicant believes--
                                      (I) the making, use, sale, or
                                    offer for sale within the
                                    United States, or the
                                    importation into the United
                                    States, of the biosimilar
                                    product, or the use of the
                                    biosimilar product in a
                                    treatment indicated in the
                                    application, would not infringe
                                    the patent; or
                                      (II) the patent is invalid or
                                    unenforceable.
              (5) Action for infringement involving reference
            product sponsor.--If an action for infringement
            concerning a relevant patent identified by the
            reference product sponsor under clause (ii) or (iii) of
            paragraph (4)(A), or by an interested third party under
            clause (iii) or (iv) of paragraph (4)(B), is brought
            within 60 days of the date of receipt of a statement
            under paragraph (4)(D)(ii), and the court in which such
            action has been commenced determines the patent is
            infringed prior to the date applicable under subsection
            (k)(7)(A) or (k)(8), the Secretary shall make approval
            of the application effective on the day after the date
            of expiration of the patent that has been found to be
            infringed. If more than one such patent is found to be
            infringed by the court, the approval of the application
            shall be made effective on the day after the date that
            the last such patent expires.

               *       *       *       *       *       *       *

    PART P--ADDITIONAL PROGRAMS

               *       *       *       *       *       *       *

    SEC. 399V. GRANTS TO PROMOTE POSITIVE HEALTH BEHAVIORS AND OUTCOMES.

      (a) Grants Authorized.--The Secretary, in collaboration with
    the Director of the Centers for Disease Control and Prevention
    and other Federal officials determined appropriate by the
    Secretary, is authorized to award grants to eligible entities
    to promote positive health behaviors 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, especially racial
            and ethnic minority populations;
              (2) to educate, guide, and provide experiential
            learning opportunities that target behavioral risk
            factors including--
                      (A) poor nutrition;
                      (B) physical inactivity;
                      (C) being overweight or obese;
                      (D) tobacco use;
                      (E) alcohol and substance use;
                      (F) injury and violence;
                      (G) risky sexual behavior;
                      (H) untreated mental health problems;
                      (I) untreated dental and oral health
                    problems; and
                      (J) understanding informed consent;
              (3) to educate and provide guidance regarding
            effective strategies to promote positive health
            behaviors within the family;
              (4) to educate and provide outreach regarding
            enrollment in health insurance including the State
            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;
              (5) to educate and refer underserved populations to
            appropriate health care agencies and community-based
            programs and organizations in order to increase access
            to quality health care services, including preventive
            health services, and to eliminate duplicative care; or
              (6) to educate, guide, and provide home visitation
            services regarding maternal health and prenatal care.
      (c) Application.--
              (1) In general.--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.
              (2) Contents.--Each application submitted pursuant to
            paragraph (1) shall--
                      (A) describe the activities for which
                    assistance is sought under this section;
                      (B) contain an assurance that, with respect
                    to each community health worker program
                    receiving funds under the grant, such program
                    will provide training and supervision to
                    community health workers to enable such workers
                    to provide authorized program services;
                      (C) contain an assurance that the applicant
                    will evaluate the effectiveness of community
                    health worker programs receiving funds under
                    the grant;
                      (D) contain an assurance that each community
                    health worker program receiving funds under the
                    grant will provide services in the cultural
                    context most appropriate for the individuals
                    served by the program;
                      (E) contain a plan to document and
                    disseminate project descriptions and results to
                    other States and organizations as identified by
                    the Secretary; and
                      (F) describe plans to enhance the capacity of
                    individuals to utilize health services and
                    health-related social services under Federal,
                    State, and local programs by--
                              (i) assisting individuals in
                            establishing eligibility under the
                            programs and in receiving the services
                            or other benefits of the programs; and
                              (ii) providing other services as the
                            Secretary determines to be appropriate,
                            that may include transportation and
                            translation services.
      (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 including
                    pulmonary conditions, hypertension, heart
                    disease, mental disorders, diabetes, and
                    asthma; and
                      (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.--The Secretary
    shall encourage community health worker programs receiving
    funds under this section to collaborate with academic
    institutions, especially those that graduate a disproportionate
    number of health and health care students from underrepresented
    racial and ethnic minority backgrounds. 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 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 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) Report to Congress.--
              (1) In general.--Not later than 4 years after the
            date on which the Secretary first awards grants under
            subsection (a), the Secretary shall submit to Congress
            a report regarding the grant project.
              (2) Contents.--The report required under paragraph
            (1) shall include the following:
                      (A) A description of the programs for which
                    grant funds were used.
                      (B) The number of individuals served under
                    such programs.
                      (C) An evaluation of--
                              (i) the effectiveness of such
                            programs;
                              (ii) the cost of such programs; and
                              (iii) the impact of the programs on
                            the health outcomes of the community
                            residents.
                      (D) Recommendations for sustaining the
                    community health worker programs developed or
                    assisted under this section.
                      (E) Recommendations regarding training to
                    enhance career opportunities for community
                    health workers.
      (k) Definitions.--In this section:
              (1) Community health worker.--The term ``community
            health worker'' 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 health care agencies;
                      (B) by providing guidance and social
                    assistance to community residents;
                      (C) by enhancing community residents' ability
                    to effectively communicate with health care
                    providers;
                      (D) by providing culturally and
                    linguistically appropriate health or nutrition
                    education;
                      (E) by advocating for individual and
                    community health, including oral and mental, or
                    nutrition needs; and
                      (F) by providing referral and followup
                    services or otherwise coordinating care.
              (2) Community setting.--The term ``community
            setting'' means a home or a community organization
            located in the neighborhood in which a participant
            resides.
              (3) Medically underserved community.--The term
            ``medically underserved community'' means a community
            identified by a State, United States territory or
            possession, or federally recognized Indian tribe--
                      (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.
              (4) Support.--The term ``support'' means the
            provision of training, supervision, and materials
            needed to effectively deliver the services described in
            subsection (b), reimbursement for services, and other
            benefits.
              (5) 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, or a federally qualified health center), or
            a consortium of any of such entities, located in the
            United States or territory thereof.
      (l) Authorization of Appropriations.--There is authorized to
    be appropriated to carry out this section $30,000,000 for each
    of fiscal years 2010, 2011, 2012, 2013, and 2014.

    PART Q--PROGRAMS TO IMPROVE THE HEALTH OF CHILDREN

               *       *       *       *       *       *       *

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

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

                      PART R--PROGRAMS RELATING TO AUTISM

        Subpart 1--Surveillance and Research Program; Education, Early
                   Detection, and Intervention; and Reporting

    SEC. 399AA. DEVELOPMENTAL DISABILITIES SURVEILLANCE AND RESEARCH
                        PROGRAM.

      (a) * * *

               *       *       *       *       *       *       *

      (d) Definitions.--In this [part] subpart:
              (1) * * *

               *       *       *       *       *       *       *

                    Subpart 2--National Training Initiative

    SEC. 399FF. NATIONAL TRAINING INITIATIVE.

      (a) National Training Initiative Supplemental Grants and
    Technical Assistance.--
              (1) Supplemental grants.--
                      (A) In general.--The Secretary shall award,
                    in consultation with the Interagency Autism
                    Coordinating Committee, multiyear national
                    training initiative supplemental grants to
                    University Centers for Excellence in
                    Developmental Disabilities authorized by the
                    Developmental Disabilities Assistance and Bill
                    of Rights Act of 2000, public or private
                    nonprofit entities, and other comparable
                    interdisciplinary service, training, and
                    academic entities to provide interdisciplinary
                    training, continuing education initiatives,
                    technical assistance, dissemination, and
                    services to address the unmet needs of children
                    and adults with autism spectrum disorders and
                    related developmental disabilities, and their
                    families.
                      (B) Requirements.--A University Center for
                    Excellence in Developmental Disabilities that
                    desires to receive a grant under this paragraph
                    shall submit to the Secretary an application
                    containing such agreements and information as
                    the Secretary may require, including agreements
                    that the training program shall--
                              (i) provide trainees with an
                            appropriate balance of
                            interdisciplinary academic and
                            community-based experiences;
                              (ii) have a demonstrated capacity to
                            provide training and technical
                            assistance in evidence-based practices
                            to evaluate, and provide effective
                            interventions, treatment, services, and
                            supports to children and adults with
                            autism and related developmental
                            disabilities, and their families;
                              (iii) have a demonstrated capacity to
                            include persons with autism spectrum
                            disorders, parents, and family members
                            as part of the training program to
                            ensure that a person and family-
                            centered approach is used;
                              (iv) provide to the Secretary, in the
                            manner prescribed by the Secretary,
                            data regarding the number of persons
                            who have benefitted and outcomes of the
                            provision of training and technical
                            assistance;
                              (v) demonstrate a capacity to share
                            and disseminate materials and practices
                            that are developed and evaluated to be
                            effective in the provision of training
                            and technical assistance;
                              (vi) provide assurances that
                            training, technical assistance,
                            dissemination, and services performed
                            under grants made pursuant to this
                            paragraph shall be consistent with the
                            goals of the Developmental Disabilities
                            Act of 1984, the Americans with
                            Disabilities Act of 1990, the
                            Individuals with Disabilities Education
                            Act, and the No Child Left Behind Act
                            of 2001 and conducted in coordination
                            with other relevant State agencies,
                            other institutions of higher education,
                            and service providers; and
                              (vii) have a demonstrated capacity to
                            provide training, technical assistance,
                            supports, and services under this
                            section statewide.
                      (C) Activities.--A University Center for
                    Excellence in Developmental Disabilities, or
                    other eligible entity that receives a grant
                    under this paragraph shall expand and develop
                    interdisciplinary training and continuing
                    education initiatives for parents, health,
                    allied health, vocational, educational, and
                    other professionals and develop model services
                    and supports that demonstrate evidence-based
                    practices, by engaging in the following
                    activities:
                              (i) Training health, allied health,
                            vocational, and educational
                            professionals to identify, evaluate the
                            needs, and develop treatments,
                            interventions, services, and supports
                            for children and adults with, autism
                            spectrum disorder and related
                            developmental disabilities.
                              (ii) Developing systems and products
                            that allow for the interventions,
                            services and supports to be evaluated
                            for fidelity of implementation.
                              (iii) Working to expand the
                            availability of evidence-based,
                            lifelong interventions, educational,
                            employment, and transition services,
                            and community supports.
                              (iv) Providing statewide technical
                            assistance in collaboration with
                            relevant State agencies, other
                            institutions of higher education,
                            autism spectrum disorder advocacy
                            groups, and community-based service
                            providers.
                              (v) Working to develop comprehensive
                            systems of supports and services for
                            individuals with autism and related
                            developmental disabilities and their
                            families, including seamless
                            transitions between educational and
                            health systems across the lifespan.
                              (vi) Promoting training, technical
                            assistance, dissemination, supports,
                            and services.
                              (vii) Developing mechanisms to
                            provide training and technical
                            assistance, including for-credit
                            courses, intensive summer institutes,
                            continuing education programs, distance
                            based programs, and Web-based
                            information dissemination strategies.
                              (viii) Promoting activities that
                            support community-based family and
                            individual services and enable
                            individuals with autism and related
                            developmental disabilities to fully
                            participate in society and achieve good
                            quality of life outcomes.
                              (ix) Collecting data on the outcomes
                            of training and technical assistance
                            programs to meet statewide needs for
                            the expansion of services to children
                            and adults with autism spectrum
                            disorders and related developmental
                            disabilities.
              (2) Technical assistance.--The Secretary shall
            reserve 2 percent of the appropriated funds to make a
            grant to a national organization with demonstrated
            capacity for proving training and technical assistance
            to University Centers for Excellence in Developmental
            Disabilities to--
                      (A) assist in national dissemination of
                    specific information, including evidence-based
                    best practices, from interdisciplinary training
                    programs, and when appropriate, other entities
                    whose findings would inform the work performed
                    by entities awarded grants;
                      (B) compile and disseminate strategies and
                    materials that prove to be effective in the
                    provision of training and technical assistance
                    so that the entire network can benefit from the
                    models, materials, and practices developed in
                    individual centers;
                      (C) assist in the coordination of activities
                    of grantees under this section;
                      (D) develop a Web portal that will provide
                    linkages to each of the individual training
                    initiatives and provide access to training
                    modules, promising training, and technical
                    assistance practices and other materials
                    developed by grantees;
                      (E) serve as a research-based resource for
                    Federal and State policymakers on information
                    concerning the provision of training and
                    technical assistance for the assessment, and
                    provision of supports and services for children
                    and adults with autism spectrum disorders and
                    related developmental disabilities;
                      (F) convene experts from multiple
                    interdisciplinary training programs,
                    individuals with autism spectrum disorders, and
                    their families to discuss and make
                    recommendations with regard to training issues
                    related to the assessment, and treatment,
                    interventions, supports, and services for
                    children and adults with autism spectrum
                    disorders and related developmental disorders;
                    and
                      (G) undertake any other functions that the
                    Secretary determines to be appropriate.
              (3) Authorization of appropriations.--
                      (A) In general.--Subject to subparagraph (B),
                    there is authorized to be appropriated to carry
                    out this subsection $17,000,000 for fiscal year
                    2011 to be equally divided among existing
                    University Centers for Excellence in
                    Developmental Disabilities and such sums for
                    fiscal years 2012 through 2015 in the case of
                    University Centers for Excellence in
                    Developmental Disabilities located in American
                    Samoa or the Commonwealth of the Northern
                    Mariana Islands, supplemental grants of not
                    less than $100,000.
                      (B) Appropriations less than $17,000,000.--
                    With respect to any fiscal year in which the
                    amount appropriated under subsection (A) to
                    carry out this section is less than
                    $17,000,000, the Secretary shall make
                    competitive grants from such amount to
                    individual University Centers for Excellence in
                    Developmental Disabilities but would not be
                    less than $250,000 per individual grant, in the
                    case of University Centers for Excellence for
                    Developmental Disabilities located in American
                    Samoa or the Commonwealth of the Northern
                    Mariana Islands, supplemental grants of not
                    less than $100,000.
                      (C) Reservation.--Not more than 2 percent of
                    the amount appropriated under subparagraphs (A)
                    or (B) shall be reserved to carry out paragraph
                    (2).
      (b) Expansion of the Number of University Centers for
    Excellence in Developmental Disabilities Research, Education,
    and Services.--
              (1) Purpose.--The Secretary shall award up to four
            additional grants for the University Centers for
            Excellence in Developmental Disabilities for the
            purpose of expanding the capacity of existing national
            network and enhance the number of training facilities
            serving minority institutions with a primary focus on
            autism spectrum disorder and related developmental
            disabilities. Such centers shall--
                      (A) train health, allied health, and
                    educational professionals to identify,
                    diagnose, treat, and provide services for
                    individuals with autism spectrum disorders;
                      (B) provide services, including early
                    identification, diagnosis, and intervention for
                    individuals with autism spectrum disorders; and
                      (C) provide other training and technical
                    assistance, as necessary.
              (2) Priority.--The Secretary shall give priority to
            establishing such centers in--
                      (A) minority-serving institutions that have
                    demonstrated capacity to meet the requirements
                    to qualify as a University Center for
                    Excellence in Developmental Disabilities and
                    provide services to individuals with autism
                    spectrum disorders; or
                      (B) States with underserved populations.
              (3) Authorization of appropriations.--There is
            authorized to be appropriated to carry out this
            subsection $2,000,000 for each of the fiscal years 2011
            through 2015.

                      PART S--NURSE-MANAGED HEALTH CENTERS

    SEC. 399GG. NURSE-MANAGED HEALTH CENTERS.

      (a) Program.--The Secretary, acting through the Administrator
    of the Health Resources and Services Administration, shall
    establish a nurse-managed health center program consisting of
    awarding grants to entities under subsection (b).
      (b) Grant.--The Secretary shall award grants to entities--
              (1) to plan and develop a nurse-managed health
            center; or
              (2) to operate a nurse-managed health center.
      (c) Use of Funds.--Amounts received as a grant under
    subsection (b) may be used for activities including the
    following:
              (1) Purchasing or leasing equipment.
              (2) Training and technical assistance related to the
            provision of comprehensive primary care services and
            wellness services.
              (3) Other activities for planning, developing, or
            operating, as applicable, a nurse-managed health
            center.
      (d) Assurances Applicable to Both Planning and Operation
    Grants.--
              (1) In general.--The Secretary may award a grant
            under this section to an entity only if the entity
            demonstrates to the Secretary's satisfaction that--
                      (A) nurses, in addition to managing the
                    center, will be adequately represented as
                    providers at the center; and
                      (B) not later than 90 days after receiving
                    the grant, the entity will establish a
                    community advisory committee composed of
                    individuals, a majority of whom are being
                    served by the center, to provide input into the
                    nurse-managed health center's operations.
              (2) Matching requirement.--The Secretary may award a
            grant under this section to an entity only if the
            entity agrees to provide, from non-Federal sources, an
            amount equal to 20 percent of the amount of the grant
            (which may be provided in cash or in kind) to carry out
            the activities supported by the grant.
              (3) Payor of last resort.--The Secretary may award a
            grant under this section to an entity only if the
            entity demonstrates to the satisfaction of the
            Secretary that funds received through the grant will
            not be expended for any activity to the extent that
            payment has been made, or can reasonably be expected to
            be made--
                      (A) under any insurance policy;
                      (B) under any Federal or State health
                    benefits program (including titles XIX and XXI
                    of the Social Security Act); or
                      (C) by an entity which provides health
                    services on a prepaid basis.
              (4) Maintenance of effort.--The Secretary may award a
            grant under this section to an entity only if the
            entity demonstrates to the satisfaction of the
            Secretary that--
                      (A) funds received through the grant will be
                    expended only to supplement, and not supplant,
                    non-Federal and Federal funds otherwise
                    available to the entity for the activities to
                    be funded through the grant; and
                      (B) with respect to such activities, the
                    entity will maintain expenditures of non-
                    Federal amounts for such activities at a level
                    not less than the lesser of such expenditures
                    maintained by the entity for the fiscal year
                    preceding the fiscal year for which the entity
                    receives the grant.
      (e) Additional Assurance for Planning Grants.--The Secretary
    may award a grant under subsection (b)(1) to an entity only if
    the entity agrees--
              (1) to assess the needs of the medically underserved
            populations proposed to be served by the nurse-managed
            health center; and
              (2) to design services and operations of the nurse-
            managed health center for such populations based on
            such assessment.
      (f) Additional Assurances for Operation Grants.--The
    Secretary may award a grant under subsection (b)(2) to an
    entity only if the entity assures that the nurse-managed health
    center will provide--
              (1) comprehensive primary care services, wellness
            services, and other health care services deemed
            appropriate by the Secretary;
              (2) care without respect to insurance status or
            income of the patient; and
              (3) direct access to client-centered services offered
            by advanced practice nurses, other nurses, physicians,
            physician assistants, or other qualified health
            professionals.
      (g) Technical Assistance.--The Secretary shall provide
    (either directly or by grant or contract) technical and other
    assistance to nurse-managed health centers to assist such
    centers in meeting the requirements of this section. Such
    assistance may include fiscal and program management
    assistance, training in fiscal and program management,
    operational and administrative support, and the provision of
    information to nurse-managed health centers regarding the
    various resources available under this section and how those
    resources can best be used to meet the health needs of the
    communities served by nurse-managed health centers.
      (h) Report.--The Secretary shall submit to the Congress an
    annual report on the program under this section.
      (i) Definitions.--
              (1) Comprehensive primary care services.--The term
            ``comprehensive primary care services'' has the meaning
            given to the term ``required primary health services''
            in section 330(b)(1).
              (2) Medically underserved population.--The term
            ``medically underserved population'' has the meaning
            given to such term in section 330(b)(3).
              (3) Nurse-managed health center.--The term ``nurse-
            managed health center'' has the meaning given to such
            term in section 801.
              (4) Wellness services.--The term ``wellness
            services'' means any health-related service or
            intervention, not including primary care, which is
            designed to reduce identifiable health risks and
            increase healthy behaviors intended to prevent the
            onset of disease or lessen the impact of existing
            chronic conditions by teaching more effective
            management techniques that focus on individual self-
            care and patient-driven decisionmaking.

     PART T--PROGRAMS TO INCREASE AWARENESS OF ADVANCE CARE PLANNING ISSUES

    SEC. 399HH. ADVANCE CARE PLANNING EDUCATION CAMPAIGNS AND INFORMATION
                        PHONE LINE AND CLEARINGHOUSE.

      (a) Advance Care Planning Education Campaign.--The Secretary
    shall, directly or through grants awarded under subsection (c),
    conduct a national public education campaign--
              (1) to raise public awareness of the importance of
            planning for care near the end of life;
              (2) to improve the public's understanding of the
            various situations in which individuals may find
            themselves if they become unable to express their
            health care wishes;
              (3) to explain the need for readily available legal
            documents that express an individual's wishes through--
                      (A) advance directives (including living
                    wills, comfort care orders, and durable powers
                    of attorney for health care); and
                      (B) other planning tools, such as a
                    physician's orders for life-sustaining
                    treatment (POLST); and
              (4) to educate the public about the availability of
            hospice care and palliative care.
      (b) Information Phone Line and Clearinghouse.--The Secretary,
    directly or through grants awarded under subsection (c), shall
    provide for the establishment of a national, toll-free,
    information telephone line and a clearinghouse that the public
    and health professionals may access to find out about State-
    specific and other information regarding advance directive and
    end-of-life decisions.
      (c) Grants.--
              (1) In general.--The Secretary shall use funds
            appropriated under subsection (d) for the purpose of
            awarding grants to public or nonprofit private entities
            (including States or political subdivisions of a
            State), or a consortium of any of such entities, for
            the purpose of conducting education campaigns under
            subsection (a).
              (2) Limitation on eligibility.--Any grant awarded
            under this Act shall not go to any governmental or
            nongovernmental organization that promotes suicide,
            assisted suicide, or the active hastening of death.
            Nothing in the previous clause shall be construed to
            prohibit palliative or hospice care.
              (3) Period.--Any grant awarded under paragraph (1)
            shall be for a period of 3 years.
      (d) Authorization of Appropriations.--There are authorized to
    be appropriated--
              (1) for purposes of carrying out subsection (b),
            $5,000,000 for fiscal year 2010 and each subsequent
            year; and
              (2) for purposes of making grants under subsection
            (c), $10,000,000 for fiscal year 2010, to remain
            available until expended.

    TITLE IV--NATIONAL RESEARCH INSTITUTES

               *       *       *       *       *       *       *

    PART B--GENERAL PROVISIONS RESPECTING NATIONAL RESEARCH INSTITUTES

               *       *       *       *       *       *       *

    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 as follows:
                                      (I) The Director of the
                                    Centers for Disease Control and
                                    Prevention.
                                      (II) The Director of the
                                    National Institutes of Health
                                    and the directors of such
                                    national research institutes
                                    and national centers as the
                                    Secretary determines
                                    appropriate.
                                      (III) The heads of such other
                                    agencies of the Department of
                                    Health and Human Services as
                                    the Secretary determines
                                    appropriate.
                                      (IV) Representatives of other
                                    Federal agencies that conduct
                                    or support pain care research
                                    and treatment, including the
                                    Department of Defense and the
                                    Department of Veterans Affairs.
                              (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 members shall be appointed from
                            among scientists, physicians, and other
                            health professionals, who--
                                      (I) are not officers or
                                    employees of the United States;
                                      (II) represent multiple
                                    disciplines, including
                                    clinical, basic, and public
                                    health sciences;
                                      (III) represent different
                                    geographical regions of the
                                    United States; and
                                      (IV) are from practice
                                    settings, academia,
                                    manufacturers, or other
                                    research settings; and
                              (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, including the
                    Department of Defense and the Department of
                    Veteran Affairs, 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, including
                    Federal agencies, 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.

               *       *       *       *       *       *       *

    TITLE V--SUBSTANCE ABUSE AND MENTAL HEALTH SERVICES ADMINISTRATION

               *       *       *       *       *       *       *

    Part B--Centers and Programs

               *       *       *       *       *       *       *

                  Subpart 3--Center for Mental Health Services

                       CENTER FOR MENTAL HEALTH SERVICES

      Sec. 520. (a) * * *
      (b) Duties.--The Director of the Center shall--
              (1) * * *

               *       *       *       *       *       *       *

              (13) monitor and enforce obligations incurred by
            [community mental health centers] federally qualified
            behavioral health centers pursuant to the Community
            Mental Health Centers Act (as in effect prior to the
            repeal of such Act on August 13, 1981, by section
            902(e)(2)(B) of Public Law 97-35 (95 Stat. 560));

               *       *       *       *       *       *       *

    SEC. 520F. GRANTS FOR EMERGENCY MENTAL HEALTH CENTERS.

      (a) * * *
      (b) Health Center.--In this section, the term ``health
    center'' has the meaning given such term in section 330, and
    includes community health centers and [community mental health
    centers] federally qualified behavioral health centers.

               *       *       *       *       *       *       *

                    TITLE VII--HEALTH PROFESSIONS EDUCATION

    PART A--STUDENT LOANS

               *       *       *       *       *       *       *

    Subpart II--Federally-Supported Student Loan Funds

               *       *       *       *       *       *       *

    SEC. 735. GENERAL PROVISIONS.

      (a) * * *

               *       *       *       *       *       *       *

      (f) Determination of Financial Need.--The Secretary--
              (1) may require, or authorize a school or other
            entity to require, the submission of financial
            information to determine the financial resources
            available to any individual seeking assistance under
            this subpart; and
              (2) shall take into account the extent to which such
            individual is financially independent in determining
            whether to require or authorize the submission of such
            information regarding such individual's family members.
      [(f)] (g) Funding for Certain Medical Schools.--
              (1) * * *

               *       *       *       *       *       *       *

               PART B--HEALTH PROFESSIONS TRAINING FOR DIVERSITY

    SEC. 736. CENTERS OF EXCELLENCE.

      (a) * * *

               *       *       *       *       *       *       *

      (h) Report.--The Secretary shall submit to the Congress an
    annual report on the activities carried out under this section.
      [(h)] (i) Funding.--
              (1) Authorization of appropriations.--For the purpose
            of making grants under subsection (a), there are
            authorized to be appropriated $26,000,000 for fiscal
            year 1998, and such sums as may be necessary for each
            of the fiscal years 1999 through [2002] 2014.

               *       *       *       *       *       *       *

    SEC. 738. LOAN REPAYMENTS AND FELLOWSHIPS REGARDING FACULTY POSITIONS.

      (a) Loan Repayments.--
              (1) Establishment of program.--The Secretary shall
            establish a program of entering into contracts with
            individuals described in paragraph (2) under which the
            individuals agree to serve as members of the faculties
            of schools described in paragraph (3) in consideration
            of the Federal Government agreeing to pay, for each
            year of such service, [not more than $20,000 of the
            principal and interest of the educational loans of such
            individuals.] not more than $35,000 (plus, beginning
            with fiscal year 2012, an amount determined by the
            Secretary on an annual basis to reflect inflation) of
            the principal and interest of the educational loans of
            such individuals.

               *       *       *       *       *       *       *

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

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

    SEC. 740. AUTHORIZATION OF APPROPRIATION.

      (a) Scholarships.--There are authorized to be appropriated to
    carry out section 737, $37,000,000 for fiscal year 1998, and
    such sums as may be necessary for each of the fiscal years 1999
    through [2002] 2014. Of the amount appropriated in any fiscal
    year, the Secretary shall ensure that not less than 16 percent
    shall be distributed to schools of nursing.
      (b) Loan Repayments and Fellowships.--For the purpose of
    carrying out section 738, there is authorized to be
    appropriated $1,100,000 for fiscal year 1998, and such sums as
    may be necessary for each of the fiscal years 1999 through
    [2002] 2014.
      (c) Educational Assistance in Health Professions Regarding
    Individuals for Disadvantaged Backgrounds.--For the purpose of
    grants and contracts under section 739(a)(1), there is
    authorized to be appropriated $29,400,000 for fiscal year 1998,
    and such sums as may be necessary for each of the fiscal years
    1999 through [2002] 2014. The Secretary may use not to exceed
    20 percent of the amount appropriated for a fiscal year under
    this subsection to provide scholarships under section
    739(a)(2)(F).

               *       *       *       *       *       *       *

    SEC. 741. [GRANTS FOR HEALTH PROFESSIONS EDUCATION] CULTURAL AND
                        LINGUISTIC COMPETENCY TRAINING FOR HEALTH
                        PROFESSIONALS.

      [(a) Grants for Health Professions Education in Health
    Disparities and Cultural Competency.--
              [(1) In general.--The Secretary, acting through the
            Administrator of the Health Resources and Services
            Administration, may make awards of grants, contracts,
            or cooperative agreements to public and nonprofit
            private entities (including tribal entities) for the
            purpose of carrying out research and demonstration
            projects (including research and demonstration projects
            for continuing health professions education) for
            training and education of health professionals for the
            reduction of disparities in health care outcomes and
            the provision of culturally competent health care.
              [(2) Eligible entities.--Unless specifically required
            otherwise in this title, the Secretary shall accept
            applications for grants or contracts under this section
            from health professions schools, academic health
            centers, State or local governments, or other
            appropriate public or private nonprofit entities (or
            consortia of entities, including entities promoting
            multidisciplinary approaches) for funding and
            participation in health professions training
            activities. The Secretary may accept applications from
            for-profit private entities as determined appropriate
            by the Secretary.]
      (a) Program.--The Secretary shall establish a cultural and
    linguistic competency training program for health
    professionals, including nurse professionals, consisting of
    awarding grants and contracts under subsection (b).
      (b) Cultural and Linguistic Competency Training.--The
    Secretary shall award grants and contracts to eligible
    entities--
              (1) to test, develop, and evaluate models of cultural
            and linguistic competency training (including
            continuing education) for health professionals; and
              (2) to implement cultural and linguistic competency
            training programs for health professionals developed
            under paragraph (1) or otherwise.
      (c) Eligibility.--To be eligible for a grant or contract
    under subsection (b), an entity shall be--
              (1) an accredited health professions school or
            program;
              (2) an academic health center;
              (3) a public or private nonprofit entity; or
              (4) a consortium of 2 or more entities described in
            paragraphs (1) through (3).
      (d) Preference.--In awarding grants and contracts under this
    section, the Secretary shall give preference to entities that
    have a demonstrated record of the following:
              (1) Addressing, or partnering with an entity with
            experience addressing, the cultural and linguistic
            competency needs of the population to be served through
            the grant or contract.
              (2) Addressing health disparities.
              (3) Placing health professionals in regions
            experiencing significant changes in the cultural and
            linguistic demographics of populations, including
            communities along the United States-Mexico border.
              (4) Carrying out activities described in subsection
            (b) with respect to more than one health profession
            discipline, specialty, or subspecialty.
      (e) Consultation.--The Secretary shall carry out this section
    in consultation with the heads of appropriate health agencies
    and offices in the Department of Health and Human Services,
    including the Office of Minority Health.
      (f) Definition.--In this section, the term ``health
    disparities'' has the meaning given to the term in section
    3171.
      (g) Report.--The Secretary shall submit to the Congress an
    annual report on the program carried out under this section.
      [(b)] (h) Authorization of Appropriations.--There are
    authorized to be appropriated to carry out subsection (a),
    $3,500,000 for fiscal year 2001, $7,000,000 for fiscal year
    2002, $7,000,000 for fiscal year 2003, [and] $3,500,000 for
    fiscal year 2004, and such sums as may be necessary for
    subsequent fiscal years through the end of fiscal year 2014.

    PART C--TRAINING IN FAMILY MEDICINE, GENERAL INTERNAL MEDICINE, GENERAL
      PEDIATRICS, PHYSICIAN ASSISTANTS, GENERAL DENTISTRY, AND PEDIATRIC
                                   DENTISTRY

    SEC. 747. [FAMILY MEDICINE, GENERAL INTERNAL MEDICINE, GENERAL
                        PEDIATRICS, GENERAL DENTISTRY, PEDIATRIC DENTISTRY,
                        AND PHYSICIAN ASSISTANTS.] PRIMARY CARE TRAINING
                        AND ENHANCEMENT.

      [(a) Training Generally.--The Secretary may make grants to,
    or enter into contracts with, any public or nonprofit private
    hospital, school of medicine or osteopathic medicine, or to or
    with a public or private nonprofit entity (which the Secretary
    has determined is capable of carrying out such grant or
    contract)--
              [(1) to plan, develop, and operate, or participate
            in, an approved professional training program
            (including an approved residency or internship program)
            in the field of family medicine, internal medicine, or
            pediatrics for medical (M.D. and D.O.) students,
            interns (including interns in internships in
            osteopathic medicine), residents, or practicing
            physicians that emphasizes training for the practice of
            family medicine, general internal medicine, or general
            pediatrics (as defined by the Secretary);
              [(2) to provide financial assistance (in the form of
            traineeships and fellowships) to medical (M.D. and
            D.O.) students, interns (including interns in
            internships in osteopathic medicine), residents,
            practicing physicians, or other medical personnel, who
            are in need thereof, who are participants in any such
            program, and who plan to specialize or work in the
            practice of family medicine, general internal medicine,
            or general pediatrics;
              [(3) to plan, develop, and operate a program for the
            training of physicians who plan to teach in family
            medicine (including geriatrics), general internal
            medicine or general pediatrics training programs;
              [(4) to provide financial assistance (in the form of
            traineeships and fellowships) to physicians who are
            participants in any such program and who plan to teach
            in a family medicine (including geriatrics), general
            internal medicine or general pediatrics training
            program;
              [(5) to meet the costs of projects to plan, develop,
            and operate or maintain programs for the training of
            physician assistants (as defined in section 799B), and
            for the training of individuals who will teach in
            programs to provide such training; and
              [(6) to meet the costs of planning, developing, or
            operating programs, and to provide financial assistance
            to residents in such programs, of general dentistry or
            pediatric dentistry.
    For purposes of paragraph (6), entities eligible for such
    grants or contracts shall include entities that have programs
    in dental schools, approved residency programs in the general
    or pediatric practice of dentistry, approved advanced education
    programs in the general or pediatric practice of dentistry, or
    approved residency programs in pediatric dentistry.
      [(b) Academic Administrative Units.--
              [(1) In general.--The Secretary may make grants to or
            enter into contracts with schools of medicine or
            osteopathic medicine to meet the costs of projects to
            establish, maintain, or improve academic administrative
            units (which may be departments, divisions, or other
            units) to provide clinical instruction in family
            medicine, general internal medicine, or general
            pediatrics.
              [(2) Preference in making awards.--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 an academic administrative
                    unit for programs in family medicine, general
                    internal medicine, or general pediatrics;
                      [(B) substantially expanding the programs of
                    such a unit; or
              [(3) Priority in making awards.--In making awards of
            grants and contracts under paragraph (1), the Secretary
            shall give priority to any qualified applicant for such
            an award that proposes a collaborative project between
            departments of primary care.
      [(c) Priority.--
              [(1) In general.--With respect to programs for the
            training of interns or residents, the Secretary shall
            give priority in awarding grants under this section to
            qualified applicants that have a record of training the
            greatest percentage of providers, or that have
            demonstrated significant improvements in the percentage
            of providers, which enter and remain in primary care
            practice or general or pediatric dentistry.
              [(2) Disadvantaged individuals.--With respect to
            programs for the training of interns, residents, or
            physician assistants, the Secretary shall give priority
            in awarding grants under this section to qualified
            applicants that have a record of training individuals
            who are from disadvantaged backgrounds (including
            racial and ethnic minorities underrepresented among
            primary care practice or general or pediatric
            dentistry).
              [(3) Special consideration.--In awarding grants under
            this section the Secretary shall give special
            consideration to projects which prepare practitioners
            to care for underserved populations and other high risk
            groups such as the elderly, individuals with HIV-AIDS,
            substance abusers, homeless, and victims of domestic
            violence.
      [(d) Duration of Award.--The period during which payments are
    made to an entity from an award of a grant or contract under
    subsection (a) may not exceed 5 years. The provision of such
    payments shall be subject to annual approval by the Secretary
    of the payments and subject to the availability of
    appropriations for the fiscal year involved to make the
    payments.]
      (a) Program.--The Secretary shall establish a primary care
    training and capacity building program consisting of awarding
    grants and contracts under subsections (b) and (c).
      (b) Support and Development of Primary Care Training
    Programs.--
              (1) In general.--The Secretary shall make grants to,
            or enter into contracts with, eligible entities--
                      (A) to plan, develop, operate, or participate
                    in an accredited professional training program,
                    including an accredited residency or internship
                    program, in the field of family medicine,
                    general internal medicine, general pediatrics,
                    or geriatrics for medical students, interns,
                    residents, or practicing physicians;
                      (B) to provide financial assistance in the
                    form of traineeships and fellowships to medical
                    students, interns, residents, or practicing
                    physicians, who are participants in any such
                    program, and who plan to specialize or work in
                    family medicine, general internal medicine,
                    general pediatrics, or geriatrics;
                      (C) to plan, develop, operate, or participate
                    in an accredited program for the training of
                    physicians who plan to teach in family
                    medicine, general internal medicine, general
                    pediatrics, or geriatrics training programs
                    including in community-based settings;
                      (D) to provide financial assistance in the
                    form of traineeships and fellowships to
                    practicing physicians who are participants in
                    any such programs and who plan to teach in a
                    family medicine, general internal medicine,
                    general pediatrics, or geriatrics training
                    program; and
                      (E) to plan, develop, operate, or participate
                    in an accredited program for physician
                    assistant education, and for the training of
                    individuals who plan to teach in programs to
                    provide such training.
              (2) Eligibility.--To be eligible for a grant or
            contract under paragraph (1), an entity shall be--
                      (A) an accredited school of medicine or
                    osteopathic medicine, public or nonprofit
                    private hospital, or physician assistant
                    training program;
                      (B) a public or private nonprofit entity; or
                      (C) a consortium of 2 or more entities
                    described in subparagraphs (A) and (B).
      (c) Capacity Building in Primary Care.--
              (1) In general.--The Secretary shall make grants to
            or enter into contracts with eligible entities to
            establish, maintain, or improve--
                      (A) academic administrative units (including
                    departments, divisions, or other appropriate
                    units) in the specialties of family medicine,
                    general internal medicine, general pediatrics,
                    or geriatrics; or
                      (B) programs that improve clinical teaching
                    in such specialties.
              (2) Eligibility.--To be eligible for a grant or
            contract under paragraph (1), an entity shall be an
            accredited school of medicine or osteopathic medicine.
      (d) Preference.--In awarding grants or contracts under this
    section, the Secretary shall give preference to entities that
    have a demonstrated record of the following:
              (1) Training the greatest percentage, or
            significantly improving the percentage, of health
            professionals who provide primary care.
              (2) Training individuals who are from
            underrepresented minority groups or disadvantaged
            backgrounds.
              (3) A high rate of placing graduates in practice
            settings having the principal focus of serving in
            underserved areas or populations experiencing health
            disparities (including serving patients eligible for
            medical assistance under title XIX of the Social
            Security Act or for child health assistance under title
            XXI of such Act or those with special health care
            needs).
              (4) Supporting teaching programs that address the
            health care needs of vulnerable populations.
      (e) Report.--The Secretary shall submit to the Congress an
    annual report on the program carried out under this section.
      (f) Definition.--In this section, the term ``health
    disparities'' has the meaning given the term in section 3171.
      [(e)] (g) Funding.--
              (1) Authorization of appropriations.--For the purpose
            of carrying out this section, there is authorized to be
            appropriated $78,300,000 for fiscal year 1998, and such
            sums as may be necessary for each of the fiscal years
            1999 through [2002] 2014.

               *       *       *       *       *       *       *

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

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

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

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

    SEC. [748] 749A. ADVISORY COMMITTEE ON TRAINING IN PRIMARY CARE
                        MEDICINE AND DENTISTRY.

      (a)  * * *

               *       *       *       *       *       *       *

    PART D--INTERDISCIPLINARY, COMMUNITY-BASED LINKAGES

               *       *       *       *       *       *       *

    SEC. 759. INNOVATIONS IN INTERDISCIPLINARY CARE TRAINING.

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

             PART E--HEALTH PROFESSIONS AND PUBLIC HEALTH WORKFORCE

        Subpart 1--Health Professions Workforce Information and Analysis

    SEC. 761. HEALTH PROFESSIONS WORKFORCE INFORMATION AND ANALYSIS.

      [(a) Purpose.--It is the purpose of this section to--
              [(1) provide for the development of information
            describing the health professions workforce and the
            analysis of workforce related issues; and
              [(2) provide necessary information for decision-
            making regarding future directions in health
            professions and nursing programs in response to
            societal and professional needs.
      [(b) Grants or Contracts.--The Secretary may award grants or
    contracts to State or local governments, health professions
    schools, schools of nursing, academic health centers,
    community-based health facilities, and other appropriate public
    or private nonprofit entities to provide for--
              [(1) targeted information collection and analysis
            activities related to the purposes described in
            subsection (a);
              [(2) research on high priority workforce questions;
              [(3) the development of a non-Federal analytic and
            research infrastructure related to the purposes
            described in subsection (a); and
              [(4) the conduct of program evaluation and
            assessment.]
      (a) In General.--The Secretary shall, based upon the
    classifications and standardized methodologies and procedures
    developed by the Advisory Committee on Health Workforce
    Evaluation and Assessment under section 764(b)--
              (1) collect data on the health workforce (as defined
            in section 764(i)), disaggregated by field, discipline,
            and specialty, with respect to--
                      (A) the supply (including retention) of
                    health professionals relative to the demand for
                    such professionals;
                      (B) the diversity of health professionals
                    (including with respect to race, ethnic
                    background, and gender); and
                      (C) the geographic distribution of health
                    professionals; and
              (2) collect such data on individuals participating in
            the programs authorized by subtitles A, B, and C and
            part 1 of subtitle D of title II of division C of the
            America's Affordable Health Choices Act of 2009.
      (b) Grants and Contracts for Health Workforce Analysis.--
              (1) In general.--The Secretary may award grants or
            contracts to eligible entities to carry out subsection
            (a).
              (2) Eligibility.--To be eligible for a grant or
            contract under this subsection, an entity shall be--
                      (A) an accredited health professions school
                    or program;
                      (B) an academic health center;
                      (C) a State, local, or tribal government;
                      (D) a public or private entity; or
                      (E) a consortium of 2 or more entities
                    described in subparagraphs (A) through (D).
      (c) Collaboration and Data Sharing.--The Secretary shall
    collaborate with Federal departments and agencies, health
    professions organizations (including health professions
    education organizations), and professional medical societies
    for the purpose of carrying out subsection (a).
      (d) Report.--The Secretary shall submit to the Congress an
    annual report on the data collected under subsection (a).
      [(c)] (e) Authorization of Appropriations.--
              (1) In general.--There are authorized to be
            appropriated to carry out this section, $750,000 for
            fiscal year 1998, and such sums as may be necessary for
            each of the fiscal years 1999 through [2002] 2014.

               *       *       *       *       *       *       *

    SEC. 764. HEALTH WORKFORCE EVALUATION AND ASSESSMENT.

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

                       Subpart 2--Public Health Workforce

    [SEC. 765. GENERAL PROVISIONS.

      [(a) In General.--The Secretary may award grants or contracts
    to eligible entities to increase the number of individuals in
    the public health workforce, to enhance the quality of such
    workforce, and to enhance the ability of the workforce to meet
    national, State, and local health care needs.
      [(b) Eligibility.--To be eligible to receive a grant or
    contract under subsection (a) an entity shall--
              [(1) be--
                      [(A) a health professions school, including
                    an accredited school or program of public
                    health, health administration, preventive
                    medicine, or dental public health or a school
                    providing health management programs;
                      [(B) an academic health center;
                      [(C) a State or local government; or
                      [(D) any other appropriate public or private
                    nonprofit entity; and
              [(2) prepare and submit to the Secretary an
            application at such time, in such manner, and
            containing such information as the Secretary may
            require.
      [(c) Preference.--In awarding grants or contracts under this
    section the Secretary may grant a preference to entities--
              [(1) serving individuals who are from disadvantaged
            backgrounds (including underrepresented racial and
            ethnic minorities); and
              [(2) graduating large proportions of individuals who
            serve in underserved communities.
      [(d) Activities.--Amounts provided under a grant or contract
    awarded under this section may be used for--
              [(1) the costs of planning, developing, or operating
            demonstration training programs;
              [(2) faculty development;
              [(3) trainee support;
              [(4) technical assistance;
              [(5) to meet the costs of projects--
                      [(A) to plan and develop new residency
                    training programs and to maintain or improve
                    existing residency training programs in
                    preventive medicine and dental public health,
                    that have available full-time faculty members
                    with training and experience in the fields of
                    preventive medicine and dental public health;
                    and
                      [(B) to provide financial assistance to
                    residency trainees enrolled in such programs;
              [(6) the retraining of existing public health workers
            as well as for increasing the supply of new
            practitioners to address priority public health,
            preventive medicine, public health dentistry, and
            health administration needs;
              [(7) preparing public health professionals for
            employment at the State and community levels; or
              [(8) other activities that may produce outcomes that
            are consistent with the purposes of this section.
      [(e) Traineeships.--
              [(1) In general.--With respect to amounts used under
            this section for the training of health professionals,
            such training programs shall be designed to--
                      [(A) make public health education more
                    accessible to the public and private health
                    workforce;
                      [(B) increase the relevance of public health
                    academic preparation to public health practice
                    in the future;
                      [(C) provide education or training for
                    students from traditional on-campus programs in
                    practice-based sites; or
                      [(D) develop educational methods and
                    distance-based approaches or technology that
                    address adult learning requirements and
                    increase knowledge and skills related to
                    community-based cultural diversity in public
                    health education.
              [(2) Severe shortage disciplines.--Amounts provided
            under grants or contracts under this section may be
            used for the operation of programs designed to award
            traineeships to students in accredited schools of
            public health who enter educational programs in fields
            where there is a severe shortage of public health
            professionals, including epidemiology, biostatistics,
            environmental health, toxicology, public health
            nursing, nutrition, preventive medicine, maternal and
            child health, and behavioral and mental health
            professions.]

    SEC. 765. ENHANCING THE PUBLIC HEALTH WORKFORCE.

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

    SEC. 766. PUBLIC HEALTH TRAINING CENTERS.

      (a) * * *
      (b) Eligible Entities.--
              (1) In general.--A public health training center
            shall be an accredited school of public health, or
            another public or nonprofit private institution
            accredited for the provision of graduate or specialized
            training in public health, that plans, develops,
            operates, and evaluates projects that are [in
            furtherance of the goals established by the Secretary
            for the year 2000] in furtherance of the goals
            established by the Secretary in the national prevention
            and wellness strategy under section 3121 in the areas
            of preventive medicine, health promotion and disease
            prevention, or improving access to and quality of
            health services in medically underserved communities.

               *       *       *       *       *       *       *

      (d) Report.--The Secretary shall submit to the Congress an
    annual report on the program carried out under this section.

               *       *       *       *       *       *       *

    [SEC. 768. PREVENTIVE MEDICINE; DENTAL PUBLIC HEALTH.

      [(a) In General.--The Secretary may make grants to and enter
    into contracts with schools of medicine, osteopathic medicine,
    public health, and dentistry to meet the costs of projects--
              [(1) to plan and develop new residency training
            programs and to maintain or improve existing residency
            training programs in preventive medicine and dental
            public health; and
              [(2) to provide financial assistance to residency
            trainees enrolled in such programs.
      [(b) Administration.--
              [(1) Amount.--The amount of any grant under
            subsection (a) shall be determined by the Secretary.
              [(2) Eligibility.--To be eligible for a grant under
            subsection (a), the applicant must demonstrate to the
            Secretary that it has or will have available full-time
            faculty members with training and experience in the
            fields of preventive medicine or dental public health
            and support from other faculty members trained in
            public health and other relevant specialties and
            disciplines.
              [(3) Other funds.--Schools of medicine, osteopathic
            medicine, dentistry, and public health may use funds
            committed by State, local, or county public health
            officers as matching amounts for Federal grant funds
            for residency training programs in preventive
            medicine.]

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

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

               *       *       *       *       *       *       *

    SEC. 770. AUTHORIZATION OF APPROPRIATIONS.

      (a) In General.--For the purpose of carrying out this
    subpart, there is authorized to be appropriated $9,100,000 for
    fiscal year 1998, and such sums as may be necessary for each of
    the fiscal years 1999 through [2002] 2014.

               *       *       *       *       *       *       *

                Subpart 3--Mental and Behavioral Health Training

    SEC. 775. MENTAL AND BEHAVIORAL HEALTH TRAINING PROGRAM.

      (a) Program.--The Secretary shall establish an
    interdisciplinary mental and behavioral health training program
    consisting of awarding grants and contracts under subsection
    (b).
      (b) Support and Development of Mental and Behavioral Health
    Training Programs.--The Secretary shall make grants to, or
    enter into contracts with, eligible entities--
              (1) to plan, develop, operate, or participate in an
            accredited professional training program for mental and
            behavioral health professionals to promote--
                      (A) interdisciplinary training; and
                      (B) coordination of the delivery of health
                    care within and across settings, including
                    health care institutions, community-based
                    settings, and the patient's home;
              (2) to provide financial assistance to mental and
            behavioral health professionals, who are participants
            in any such program, and who plan to work in the field
            of mental and behavioral health;
              (3) to plan, develop, operate, or participate in an
            accredited program for the training of mental and
            behavioral health professionals who plan to teach in
            the field of mental and behavioral health; and
              (4) to provide financial assistance in the form of
            traineeships and fellowships to mental and behavioral
            health professionals who are participants in any such
            program and who plan to teach in the field of mental
            and behavioral health.
      (c) Eligibility.--To be eligible for a grant or contract
    under subsection (b), an entity shall be--
              (1) an accredited health professions school,
            including an accredited school or program of
            psychology, psychiatry, social work, marriage and
            family therapy, professional mental health and
            substance abuse counseling, or addiction medicine;
              (2) an accredited public or nonprofit private
            hospital;
              (3) a public or private nonprofit entity; or
              (4) a consortium of 2 or more entities described in
            paragraphs (1) through (3).
      (d) Preference.--In awarding grants or contracts under this
    section, the Secretary shall give preference to entities that
    have a demonstrated record of the following:
              (1) Training the greatest percentage, or
            significantly improving the percentage, of health
            professionals who serve in underserved communities.
              (2) Supporting teaching programs that address the
            health care needs of vulnerable populations.
              (3) Training individuals who are from
            underrepresented minority groups or disadvantaged
            backgrounds.
              (4) Training individuals who serve geriatric
            populations with an emphasis on underserved elderly.
              (5) Training individuals who serve pediatric
            populations with an emphasis on underserved children.
      (e) Report.--The Secretary shall submit to the Congress an
    annual report on the program under this section.
      (f) Definition.--In this section:
              (1) The term ``health disparities'' has the meaning
            given the term in section 3171.
              (2) The term ``mental and behavioral health
            professional'' means an individual training or
            practicing--
                      (A) in psychology; general, geriatric, child
                    or adolescent psychiatry; social work; marriage
                    and family therapy; professional mental health
                    and substance abuse counseling; or addiction
                    medicine; or
                      (B) another mental and behavioral health
                    specialty, as deemed appropriate by the
                    Secretary.
              (3) The term ``interdisciplinary'' means
            collaboration across health professions, specialties,
            and subspecialties, which may include public health,
            nursing, allied health, and appropriate medical
            specialties.
      (g) Authorization of Appropriations.--To carry out this
    section, there is authorized to be appropriated $60,000,000 for
    each of fiscal years 2010 through 2014. Of the amounts
    appropriated to carry out this section for a fiscal year, not
    less than 15 percent shall be used for training programs in
    psychology.

                           PART F--GENERAL PROVISIONS

    SEC. 791. PREFERENCES AND REQUIRED INFORMATION IN CERTAIN PROGRAMS.

      (a) Preferences in Making Awards.--
              (1) In general.--Subject to paragraph (2), in making
            awards of grants or contracts under any of sections
            [747 and 750] 747, 749, and 750, the Secretary shall
            give preference to any qualified applicant that--
                      (A) * * *

               *       *       *       *       *       *       *

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

      (a) Promotion of Primary Care and Dentistry.--For the purpose
    of carrying out subpart XI of part D of title III and sections
    747, 748, and 749, in addition to any other amounts authorized
    to be appropriated for such purpose, there are authorized to be
    appropriated, out of any monies in the Public Health Investment
    Fund, the following:
              (1) $240,000,000 for fiscal year 2010.
              (2) $253,000,000 for fiscal year 2011.
              (3) $265,000,000 for fiscal year 2012.
              (4) $278,000,000 for fiscal year 2013.
              (5) $292,000,000 for fiscal year 2014.
      (b) Public Health Workforce.--For the purpose of carrying out
    subpart XII of part D of title III and sections 765, 766, and
    768, in addition to any other amounts authorized to be
    appropriated for such purpose, there are authorized to be
    appropriated, out of any monies in the Public Health Investment
    Fund, the following:
              (1) $51,000,000 for fiscal year 2010.
              (2) $54,000,000 for fiscal year 2011.
              (3) $57,000,000 for fiscal year 2012.
              (4) $59,000,000 for fiscal year 2013.
              (5) $62,000,000 for fiscal year 2014.
      (c) Health Professions Training for Diversity.--For the
    purpose of carrying out sections 736, 737, 738, 739, and 739A,
    in addition to any other amounts authorized to be appropriated
    for such purpose, there are authorized to be appropriated, out
    of any monies in the Public Health Investment Fund, the
    following:
              (1) $90,000,000 for fiscal year 2010.
              (2) $97,000,000 for fiscal year 2011.
              (3) $100,000,000 for fiscal year 2012.
              (4) $104,000,000 for fiscal year 2013.
              (5) $110,000,000 for fiscal year 2014.
      (d) Interdisciplinary Training Programs, Advisory Committee
    on Health Workforce Evaluation and Assessment, and Health
    Workforce Assessment.--For the purpose of carrying out sections
    741, 759, 761, and 764, in addition to any other amounts
    authorized to be appropriated for such purpose, there are
    authorized to be appropriated, out of any monies in the Public
    Health Investment Fund, the following:
              (1) $87,000,000 for fiscal year 2010.
              (2) $97,000,000 for fiscal year 2011.
              (3) $103,000,000 for fiscal year 2012.
              (4) $105,000,000 for fiscal year 2013.
              (5) $113,000,000 for fiscal year 2014.
      (e) Quality and Surveillance.--For the purpose of carrying
    out part D of title IX and section 1709, in addition to any
    other amounts authorized to be appropriated for such purpose,
    there are authorized to be appropriated, out of any monies in
    the Public Health Investment Fund, $300,000,000 for each of
    fiscal years 2010 through 2014.

                   TITLE VIII--NURSING WORKFORCE DEVELOPMENT

                           PART A--GENERAL PROVISIONS

    SEC. 801. DEFINITIONS.

      As used in this title:
              (1) Eligible entities.--The term ``eligible
            entities'' means schools of nursing, nursing centers,
            nurse-managed health centers, academic health centers,
            State or local governments, and other public or private
            nonprofit entities determined appropriate by the
            Secretary that submit to the Secretary an application
            in accordance with section 802.

               *       *       *       *       *       *       *

              (16) Nurse-managed health center.--The term ``nurse-
            managed health center'' means a nurse-practice
            arrangement, managed by advanced practice nurses, that
            provides primary care or wellness services to
            underserved or vulnerable populations and is associated
            with an accredited school of nursing, Federally
            qualified health center, or independent nonprofit
            health or social services agency.

               *       *       *       *       *       *       *

    [SEC. 807. GRANTS FOR HEALTH PROFESSIONS EDUCATION.

      [(a) Grants for Health Professions Education in Health
    Disparities and Cultural Competency.--The Secretary, acting
    through the Administrator of the Health Resources and Services
    Administration, may make awards of grants, contracts, or
    cooperative agreements to eligible entities for the purpose of
    carrying out research and demonstration projects (including
    research and demonstration projects for continuing health
    professions education) for training and education for the
    reduction of disparities in health care outcomes and the
    provision of culturally competent health care. Grants under
    this section shall be the same as provided in section 741.
      [(b) Authorization of Appropriations.--There are to be
    appropriated to carry out subsection (a) such sums as may be
    necessary for each of the fiscal years 2001 through 2004.]

               *       *       *       *       *       *       *

    SEC. 809. REPORTS.

      The Secretary shall submit to the Congress a separate annual
    report on the activities carried out under each of sections
    811, 821, 836, 846A, and 861.

       prohibition against discrimination by schools on the basis of sex

      Sec. 810. The Secretary may not make a grant, loan guarantee,
    or interest subsidy payment under this title to, or for the
    benefit of, any school of nursing unless the application for
    the grant, loan guarantee, or interest subsidy payment contains
    assurances satisfactory to the Secretary that the school will
    not discriminate on the basis of sex in the admission of
    individuals to its training programs. The Secretary may not
    enter into a contract under this title with any school unless
    the school furnishes assurances satisfactory to the Secretary
    that it will not discriminate on the basis of sex in the
    admission of individuals to its training programs.

     PART B--NURSE PRACTITIONERS, NURSE MIDWIVES, NURSE ANESTHETISTS, AND
                        OTHER ADVANCED EDUCATION NURSES

    SEC. 811. ADVANCED EDUCATION NURSING GRANTS.

      (a) * * *

               *       *       *       *       *       *       *

      (f) Traineeships.--
              (1) * * *
              [(2) Doctoral programs.--The Secretary may not
            obligate more than 10 percent of the traineeships under
            subsection (a) for individuals in doctorate degree
            programs.]
              [(3)] (2) Special consideration.--In making awards of
            grants and contracts under subsection (a)(2), the
            Secretary shall give special consideration to an
            eligible entity [that agrees to expend the award to
            train advanced education nurses who will practice in
            health professional shortage areas designated under
            section 332.] that agrees to expend the award--
                      (A) to train advanced education nurses who
                    will practice in health professional shortage
                    areas designated under section 332; or
                      (B) to increase diversity among advanced
                    education nurses.

                 PART C--INCREASING NURSING WORKFORCE DIVERSITY

    SEC. 821. WORKFORCE DIVERSITY GRANTS.

      (a) * * *
      (b) [Guidance] Consultation.--In carrying out subsection (a),
    the Secretary [shall take into consideration the
    recommendations of the First, Second and Third Invitational
    Congresses for Minority Nurse Leaders on ``Caring for the
    Emerging Majority,'' in 1992, 1993 and 1997, and consult with
    nursing associations] shall, as appropriate, consult with
    nursing associations including the American Nurses Association,
    the National League for Nursing, the American Association of
    Colleges of Nursing, the National Black Nurses Association, the
    National Association of Hispanic Nurses, the Association of
    Asian American and Pacific Islander Nurses, the Native American
    Indian and Alaskan Nurses Association, and the National Council
    of State Boards of Nursing.

               *       *       *       *       *       *       *

     PART D--STRENGTHENING CAPACITY FOR BASIC NURSE EDUCATION AND PRACTICE

    SEC. 831. NURSE EDUCATION, PRACTICE, AND RETENTION GRANTS.

      (a) * * *
      (b) Practice Priority Areas.--The Secretary may award grants
    to or enter into contracts with eligible entities for--
              (1) * * *

               *       *       *       *       *       *       *

              [(3) providing managed care, quality improvement, and
            other skills needed to practice in existing and
            emerging organized health care systems; or]
              (3) providing coordinated care, quality care, and
            other skills needed to practice nursing; or

               *       *       *       *       *       *       *

      [(e) Preference.--For purposes of any amount of funds
    appropriated to carry out this section for fiscal year 2003,
    2004, or 2005 that is in excess of the amount of funds
    appropriated to carry out this section for fiscal year 2002,
    the Secretary shall give preference to awarding grants or
    entering into contracts under subsections (a)(2) and (c).]
      [(f)] (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.
      [(g)] (f) Eligible Entity.--For purposes of this section, the
    term ``eligible entity'' includes a school of nursing, a health
    care facility, or a partnership of such a school and facility.
      [(h)] (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 2003 through
    [2007] 2014.

                             Part E--Student Loans

                                LOAN AGREEMENTS

      Sec. 835. (a) The Secretary is authorized to enter into an
    agreement for the establishment and operation of a student loan
    fund in accordance with [this subpart] this part with any
    public or nonprofit private school of nursing which is located
    in a State.
      (b) Each agreement entered into under this section shall--
              (1) * * *
              (2) provide for deposit in the fund, except as
            provided in section [841] 871, of (A) the Federal
            capital contributions paid from allotments under
            section 838 to the school by the Secretary, (B) an
            additional amount from other sources equal to not less
            than one-ninth of such Federal capital contributions,
            (C) collections of principal and interest on loans made
            from the fund, (D) collections pursuant to section
            836(f), and (E) any other earnings of the fund;
              (3) provide that the fund, except as provided in
            section [841] 871, shall be used only for loans to
            students of the school in accordance with the agreement
            and for costs of collection of such loans and interest
            thereon;

               *       *       *       *       *       *       *

      (c)(1) Any standard established by the Secretary by
    regulation for the collection by schools of nursing of loans
    made pursuant to loan agreements under [this subpart] this part
    shall provide that the failure of any such school to collect
    such loans shall be measured in accordance with this
    subsection. With respect to the student loan fund established
    pursuant to such agreements, this subsection may not be
    construed to require such schools to reimburse such loan fund
    for loans that became uncollectable prior to 1983.
      (2) The measurement of a school's failure to collect loans
    made under [this subpart] this part shall be the ratio (stated
    as a percentage) that the defaulted principal amount
    outstanding of such school bears to the matured loans of such
    school.
      (3) For purposes of this subsection--
              (A) the term ``default'' means the failure of a
            borrower of a loan made under [this subpart] this part
            to--
                      (i) * * *

               *       *       *       *       *       *       *

            except that a loan made under [this subpart] this part
            shall not be considered to be in default if the loan is
            discharged in bankruptcy or if the school reasonably
            concludes from written contacts with the borrower that
            the borrower intends to repay the loan;

               *       *       *       *       *       *       *

              (D) the term ``matured loans'' means the total
            principal amount of all loans made by a school of
            nursing under [this subpart] this part minus the total
            principal amount of loans made by such school to
            students who are--
                      (i) * * *

               *       *       *       *       *       *       *

                                LOAN PROVISIONS

      Sec. 836. (a) The total of the loans for any academic year
    (or its equivalent, as determined under regulations of the
    Secretary) made by schools of nursing from loan funds
    established pursuant to agreements under [this subpart] this
    part may not exceed [$2,500] $3,300 in the case of any student,
    except that for the final two academic years of the program
    involved, such total may not exceed [$4,000] $5,200. The
    aggregate of the loans for all years from such funds may not
    exceed [$13,000] $17,000 in the case of any student. In the
    granting of such loans, a school shall give preference to
    licensed practical nurses, to persons with exceptional
    financial need, and to persons who enter as first-year students
    after enactment of this title. Beginning with fiscal year 2012,
    the dollar amounts specified in this subsection shall be
    adjusted by an amount determined by the Secretary on an annual
    basis to reflect inflation.
      (b) Loans from any such student loan fund by any school shall
    be made on such terms and conditions as the school may
    determine; subject, however, to such conditions, limitations,
    and requirements as the Secretary may prescribe (by regulation
    or in the agreement with the school) with a view to preventing
    impairment of the capital of such fund to the maximum extent
    practicable in the light of the objective of enabling the
    student to complete his course of study; and except that--
              (1) * * *

               *       *       *       *       *       *       *

              (7) no note or other evidence of any such loan may be
            transferred or assigned by the school making the loan
            except that, if the borrower transfers to another
            school participating in the program under [this
            subpart] this part, such note or other evidence of a
            loan may be transferred to such other school; and

               *       *       *       *       *       *       *

      (d) Any loan for any year by a school from a student loan
    fund established pursuant to an agreement under [this subpart]
    this part shall be made in such installments as may be provided
    in regulations of the Secretary or such agreement and, upon
    notice to the Secretary by the school that any recipient of a
    loan is failing to maintain satisfactory standing, any or all
    further installments of his loans shall be withheld, as may be
    appropriate.
      (e) An agreement under [this subpart] this part with any
    school shall include provisions designed to make loans from the
    student loan fund established thereunder reasonably available
    (to the extent of the available funds in such fund) to all
    eligible students in the school in need thereof.
      (f) Subject to regulations of the Secretary and in accordance
    with this section, a school shall assess a charge with respect
    to a loan from the loan fund established pursuant to an
    agreement under [this subpart] this part for failure of the
    borrower to pay all or any part of an installment when it is
    due and, in the case of a borrower who is entitled to deferment
    of the loan under subsection (b)(2) or cancellation of part or
    all of the loan under subsection (b)(3), for any failure to
    file timely and satisfactory evidence of such entitlement. No
    such charge may be made if the payment of such installment or
    the filing of such evidence is made within 60 days after the
    date on which such installment or filing is due. The amount of
    any such charge may not exceed an amount equal to 6 percent of
    the amount of such installment. The school may elect to add the
    amount of any such charge to the principal amount of the loan
    as of the first day after the day on which such installment or
    evidence was due, or to make the amount of the charge payable
    to the school not later than the due date of the next
    installment after receipt by the borrower of notice of the
    assessment of the charge.
      (g) A school may provide in accordance with regulations of
    the Secretary, that during the repayment period of a loan from
    a loan fund established pursuant to an agreement under [this
    subpart] this part payments of principal and interest by the
    borrower with respect to all the outstanding loans made to him
    from loan funds so established shall be at a rate equal to not
    less than $40 per month.
      (h) Notwithstanding the amendment made by section 6(b) of the
    Nurse Training Act of 1971 to this section--
              (A) any person who obtained one or more loans from a
            loan fund established under [this subpart] this part,
            who before the date of the enactment of the Nurse
            Training Act of 1971 became eligible for cancellation
            of all or part of such loans (including accrued
            interest) under this section (as in effect on the day
            before such date), and who on such date was not engaged
            in a service for which loan cancellation was authorized
            under this section (as so in effect), may at any time
            elect to receive such cancellation in accordance with
            this subsection (as so in effect); and
              (B) in the case of any person who obtained one or
            more loans from a loan fund established under [this
            subpart] this part and who on such date was engaged in
            a service for which cancellation of all or part of such
            loans (including accrued interest) was authorized under
            this section (as so in effect), this section (as so in
            effect) shall continue to apply to such person for
            purposes of providing such loan cancellation until he
            terminates such service.
    [Nothing in this subsection shall be construed to prevent any
    person from entering into an agreement for loan cancellation
    under subsection (h) (as amended by section 6(b)(2) of the
    Nurse Training Act of 1971).]

               *       *       *       *       *       *       *

      (j) The Secretary is authorized to attempt to collect any
    loan which was made under [this subpart] this part, which is in
    default, and which was referred to the Secretary by a school of
    nursing with which the Secretary has an agreement under [this
    subpart] this part, on behalf of that school under such terms
    and conditions as the Secretary may prescribe (including
    reimbursement from the school's student loan fund for expenses
    the Secretary may reasonably incur in attempting collection),
    but only if the school has complied with such requirements as
    the Secretary may specify by regulation with respect to the
    collection of loans under [this subpart] this part. A loan so
    referred shall be treated as a debt subject to section 5514 of
    title 5, United States Code. Amounts collected shall be
    deposited in the school's student loan fund. Whenever the
    Secretary desires the institution of a civil action regarding
    any such loan, the Secretary shall refer the matter to the
    Attorney General for appropriate action.
      [(l)] (k) Elimination of Statute of Limitation for Loan
    Collections.--
              (1) * * *
              (2) Prohibition.--Notwithstanding any other provision
            of Federal or State law, no limitation shall terminate
            the period within which suit may be filed, a judgment
            may be enforced, or an offset, garnishment, or other
            action may be initiated or taken by a school of nursing
            that has an agreement with the Secretary pursuant to
            section 835 that is seeking the repayment of the amount
            due from a borrower on a loan made under [this subpart]
            this part after the default of the borrower on such
            loan.

            ALLOTMENTS AND PAYMENTS OF FEDERAL CAPITAL CONTRIBUTIONS

      Sec. 838. (a)(1) * * *

               *       *       *       *       *       *       *

      (3) Funds which, pursuant to section 839(c) or pursuant to a
    loan agreement under section 835, are returned to the Secretary
    in any fiscal year, shall be available for allotment until
    expended. Funds described in the preceding sentence shall be
    allotted among schools of nursing in such manner as the
    Secretary determines will best carry out [this subpart] this
    part.

               *       *       *       *       *       *       *

      (c) The Federal capital contributions to a loan fund of a
    school under [this subpart] this part shall be paid to it from
    time to time in such installments as the Secretary determines
    will not result in unnecessary accumulations in the loan fund
    at such school.

                     distribution of assets from loan funds

      Sec. [839.
      [(a)] 839. (a) If a school terminates a loan fund established
    under an agreement pursuant to section 835(b), or if the
    Secretary for good cause terminates the agreement with the
    school, there shall be a capital distribution as follows:
              (1) * * *

               *       *       *       *       *       *       *

                           ADMINISTRATIVE PROVISIONS

      Sec. 840. The Secretary may agree to modifications of
    agreements made under [this subpart] this part, and may
    compromise, waive, or release any right, title, claim, or
    demand of the United States arising or acquired under [this
    subpart] this part.

               *       *       *       *       *       *       *

                     PROCEDURES FOR APPEAL OF TERMINATIONS

      Sec. 842. In any case in which the Secretary intends to
    terminate an agreement with a school of nursing under [this
    subpart] this part, the Secretary shall provide the school with
    a written notice specifying such intention and stating that the
    school may request a formal hearing with respect to such
    termination. If the school requests such a hearing within 30
    days after the receipt of such notice, the Secretary shall
    provide such school with a hearing conducted by an
    administrative law judge.

               *       *       *       *       *       *       *

                    LOAN REPAYMENT AND SCHOLARSHIP PROGRAMS

      Sec. 846. (a) In General.--In the case of any individual--
              (1) * * *

               *       *       *       *       *       *       *

              [(3) who enters into an agreement with the Secretary
            to serve as nurse for a period of not less than two
            years at a health care facility with a critical
            shortage of nurses;]
              (3) who enters into an agreement with the Secretary
            to serve for a period of not less than 2 years--
                      (A) as a nurse at a health care facility with
                    a critical shortage of nurses; or
                      (B) as a faculty member at an accredited
                    school of nursing;

               *       *       *       *       *       *       *

      (g) Breach of Agreement.--
              (1) In general.--In the case of any program under
            this section under which an individual makes an
            agreement [to provide health services] to provide
            health services or serve as a faculty member for a
            period of time in accordance with such program in
            consideration of receiving an award of Federal funds
            regarding education as a nurse (including an award for
            the repayment of loans), the following applies if the
            agreement provides that this subsection is applicable:
                      (A) * * *
                      (B) The individual is liable to the Federal
                    Government for the amount of such award
                    (including amounts provided for expenses
                    related to such attendance), and for interest
                    on such amount at the maximum legal prevailing
                    rate, if the individual fails [to provide
                    health services] to provide health services or
                    serve as a faculty member in accordance with
                    the program under this section for the period
                    of time applicable under the program.

               *       *       *       *       *       *       *

      (i) Funding.--
              (1) Authorization of appropriations.--For the purpose
            of payments under agreements entered into under
            subsection (a) or (d), there are authorized to be
            appropriated such sums as may be necessary for each of
            fiscal years 2003 through [2007] 2014.

               *       *       *       *       *       *       *

                           NURSE FACULTY LOAN PROGRAM

      Sec. 846A. (a) * * *

               *       *       *       *       *       *       *

      (c) Loan Provisions.--Loans from any student loan fund
    established by a school pursuant to an agreement under
    subsection (a) shall be made to an individual on such terms and
    conditions as the school may determine, except that--
              (1) * * *
              (2) in the case of any individual, the total of the
            loans for any academic year made by schools of nursing
            from loan funds established pursuant to agreements
            under subsection (a) may not exceed [$30,000, plus any
            amount determined by the Secretary on an annual basis
            to reflect inflation;] $35,000, plus, beginning with
            fiscal year 2012, an amount determined by the Secretary
            on an annual basis to reflect inflation;

               *       *       *       *       *       *       *

      (f) 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 2003 through [2007] 2014.

               *       *       *       *       *       *       *

     PART [G] F--NATIONAL ADVISORY COUNCIL ON NURSE EDUCATION AND PRACTICE

    SEC. [845.] 851. NATIONAL ADVISORY COUNCIL ON NURSE EDUCATION AND
                        PRACTICE.

      (a) * * *

               *       *       *       *       *       *       *

                     [PART H--PUBLIC SERVICE ANNOUNCEMENTS

    [SEC. 851. PUBLIC SERVICE ANNOUNCEMENTS.

      [(a) In General.--The Secretary shall develop and issue
    public service announcements that advertise and promote the
    nursing profession, highlight the advantages and rewards of
    nursing, and encourage individuals to enter the nursing
    profession.
      [(b) Method.--The public service announcements described in
    subsection (a) shall be broadcast through appropriate media
    outlets, including television or radio, in a manner intended to
    reach as wide and diverse an audience as possible.
      [(c) 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 2003 through 2007.

    [SEC. 852. STATE AND LOCAL PUBLIC SERVICE ANNOUNCEMENTS.

      [(a) In General.--The Secretary may award grants to eligible
    entities to support State and local advertising campaigns
    through appropriate media outlets to promote the nursing
    profession, highlight the advantages and rewards of nursing,
    and encourage individuals from disadvantaged backgrounds to
    enter the nursing profession.
      [(b) Use of Funds.--An eligible entity that receives a grant
    under subsection (a) shall use funds received through such
    grant to acquire local television and radio time, place
    advertisements in local newspapers, or post information on
    billboards or on the Internet in a manner intended to reach as
    wide and diverse an audience as possible, in order to--
              [(1) advertise and promote the nursing profession;
              [(2) promote nursing education programs;
              [(3) inform the public of financial assistance
            regarding such education programs;
              [(4) highlight individuals in the community who are
            practicing nursing in order to recruit new nurses; or
              [(5) provide any other information to recruit
            individuals for the nursing profession.
      [(c) Limitation.--An eligible entity that receives a grant
    under subsection (a) shall not use funds received through such
    grant to advertise particular employment opportunities.
      [(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 2003 through 2007.]

               *       *       *       *       *       *       *

                 PART [I] G--COMPREHENSIVE GERIATRIC EDUCATION

    SEC. [855] 861. COMPREHENSIVE GERIATRIC EDUCATION.

      (a) * * *

               *       *       *       *       *       *       *

      (e) 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 2003 through [2007] 2014.

                            [PART F] PART H--FUNDING

    [SEC. 841. FUNDING.

      [(a) Authorization of Appropriations.--For the purpose of
    carrying out parts B, C, and D (subject to section 845(g)),
    there are authorized to be appropriated $65,000,000 for fiscal
    year 1998, and such sums as may be necessary for each of the
    fiscal years 1999 through 2002.
      [(b) Allocations for Fiscal Years 1998 Through 2002.--
              [(1) Nurse practitioners; nurse midwives.--
                      [(A) Fiscal year 1998.--Of the amount
                    appropriated under subsection (a) for fiscal
                    year 1998, the Secretary shall reserve not less
                    than $17,564,000 for making awards of grants
                    and contracts under section 822 as such section
                    was in effect for fiscal year 1998.
                      [(B) Fiscal years 1999 through 2002.--Of the
                    amount appropriated under subsection (a) for
                    fiscal year 1999 or any of the fiscal years
                    2000 through 2002, the Secretary, subject to
                    subsection (d), shall reserve for the fiscal
                    year involved, for making awards of grants and
                    contracts under part B with respect to nurse
                    practitioners and nurse midwives, not less than
                    the percentage constituted by the ratio of the
                    amount appropriated under section 822 as such
                    section was in effect for fiscal year 1998 to
                    the total of the amounts appropriated under
                    this title for such fiscal year. For purposes
                    of the preceding sentence, the Secretary, in
                    determining the amount that has been reserved
                    for the fiscal year involved, shall include any
                    amounts appropriated under subsection (a) for
                    the fiscal year that are obligated by the
                    Secretary to continue in effect grants or
                    contracts under section 822 as such section was
                    in effect for fiscal year 1998.
              [(2) Nurse anesthetists.--
                      [(A) Fiscal year 1998.--Of the amount
                    appropriated under subsection (a) for fiscal
                    year 1998, the Secretary shall reserve not less
                    than $2,761,000 for making awards of grants and
                    contracts under section 831 as such section was
                    in effect for fiscal year 1998.
                      [(B) Fiscal years 1999 through 2002.--Of the
                    amount appropriated under subsection (a) for
                    fiscal year 1999 or any of the fiscal years
                    2000 through 2002, the Secretary, subject to
                    subsection (d), shall reserve for the fiscal
                    year involved, for making awards of grants and
                    contracts under part B with respect to nurse
                    anesthetists, not less than the percentage
                    constituted by the ratio of the amount
                    appropriated under section 831 as such section
                    was in effect for fiscal year 1998 to the total
                    of the amounts appropriated under this title
                    for such fiscal year. For purposes of the
                    preceding sentence, the Secretary, in
                    determining the amount that has been reserved
                    for the fiscal year involved, shall include any
                    amounts appropriated under subsection (a) for
                    the fiscal year that are obligated by the
                    Secretary to continue in effect grants or
                    contracts under section 831 as such section was
                    in effect for fiscal year 1998.
      [(c) Allocations After Fiscal Year 2002.--
              [(1) In general.--For fiscal year 2003 and subsequent
            fiscal years, amounts appropriated under subsection (a)
            for the fiscal year involved shall be allocated by the
            Secretary among parts B, C, and D (and programs within
            such parts) according to a methodology that is
            developed in accordance with paragraph (2). The
            Secretary shall enter into a contract with a public or
            private entity for the purpose of developing the
            methodology. The contract shall require that the
            development of the methodology be completed not later
            than February 1, 2002.
              [(2) Use of certain factors.--The contract under
            paragraph (1) shall provide that the methodology under
            such paragraph will be developed in accordance with the
            following:
                      [(A) The methodology will take into account
                    the need for and the distribution of health
                    services among medically underserved
                    populations, as determined according to the
                    factors that apply under section 330(b)(3).
                      [(B) The methodology will take into account
                    the need for and the distribution of health
                    services in health professional shortage areas,
                    as determined according to the factors that
                    apply under section 332(b).
                      [(C) The methodology will take into account
                    the need for and the distribution of mental
                    health services among medically underserved
                    populations and in health professional shortage
                    areas.
                      [(D) The methodology will be developed in
                    consultation with individuals in the field of
                    nursing, including registered nurses, nurse
                    practitioners, nurse midwives, nurse
                    anesthetists, clinical nurse specialists,
                    nursing educators and educational institutions,
                    nurse executives, pediatric nurse associates
                    and practitioners, and women's health,
                    obstetric, and neonatal nurses.
                      [(E) The methodology will take into account
                    the following factors with respect to the
                    States:
                              [(i) A provider population ratio
                            equivalent to a managed care formula of
                            1/1,500 for primary care services.
                              [(ii) The use of whole rather than
                            fractional counts in determining the
                            number of health care providers.
                              [(iii) The counting of only employed
                            health care providers in determining
                            the number of health care providers.
                              [(iv) The number of families whose
                            income is less than 200 percent of the
                            official poverty line (as established
                            by the Director of the Office of
                            Management and Budget and revised by
                            the Secretary in accordance with
                            section 673(2) of the Omnibus Budget
                            Reconciliation Act of 1981).
                              [(v) The rate of infant mortality and
                            the rate of low-birthweight births.
                              [(vi) The percentage of the general
                            population constituted by individuals
                            who are members of racial or ethnic
                            minority groups, stated both by
                            minority group and in the aggregate.
                              [(vii) The percentage of the general
                            population constituted by individuals
                            who are of Hispanic ethnicity.
                              [(viii) The number of individuals
                            residing in health professional
                            shortage areas, and the number of
                            individuals who are members of
                            medically underserved populations.
                              [(ix) The percentage of the general
                            population constituted by elderly
                            individuals.
                              [(x) The extent to which the
                            populations served have a choice of
                            providers.
                              [(xi) The impact of care on
                            hospitalizations and emergency room
                            use.
                              [(xii) The number of individuals who
                            lack proficiency in speaking the
                            English language.
                              [(xiii) Such additional factors as
                            the Secretary determines to be
                            appropriate.
              [(3) Report to congress.--Not later than 30 days
            after the completion of the development of the
            methodology required in paragraph (1), the Secretary
            shall submit to the Committee on Commerce of the House
            of Representatives, and to the Committee on Labor and
            Human Resources of the Senate, a report describing the
            methodology and explaining the effects of the
            methodology on the allocation among parts B, C, and D
            (and programs within such parts) of amounts
            appropriated under subsection (a) for the first fiscal
            year for which the methodology will be in effect. Such
            explanation shall include a comparison of the
            allocation for such fiscal year with the allocation
            made under this section for the preceding fiscal year.
      [(d) Use of Methodology Before Fiscal Year 2003.--With
    respect to the fiscal years 1999 through 2002, if the report
    required in subsection (c)(3) is submitted in accordance with
    such subsection not later than 90 days before the beginning of
    such a fiscal year, the Secretary may for such year implement
    the methodology described in the report (rather than
    implementing the methodology in fiscal year 2003), in which
    case subsection (b) ceases to be in effect. The authority under
    the preceding sentence is subject to the condition that the
    fiscal year for which the methodology is implemented be the
    same fiscal year identified in such report as the fiscal year
    for which the methodology will first be in effect.
      [(e) Authority for Use of Additional Factors in
    Methodology.--
              [(1) In general.--The Secretary shall make the
            determinations specified in paragraph (2). For any
            fiscal year beginning after the first fiscal year for
            which the methodology under subsection (c)(1) is in
            effect, the Secretary may alter the methodology by
            including the information from such determinations as
            factors in the methodology.
              [(2) Relevant determinations.--The determinations
            referred to in paragraph (1) are as follows:
                      [(A) The need for and the distribution of
                    health services among populations for which it
                    is difficult to determine the number of
                    individuals who are in the population, such as
                    homeless individuals; migratory and seasonal
                    agricultural workers and their families;
                    individuals infected with the human
                    immunodeficiency virus, and individuals who
                    abuse drugs.
                      [(B) In the case of a population for which
                    the determinations under subparagraph (A) are
                    made, the extent to which the population
                    includes individuals who are members of racial
                    or ethnic minority groups and a specification
                    of the skills needed to provide health services
                    to such individuals in the language and the
                    educational and cultural context that is most
                    appropriate to the individuals.
                      [(C) Data, obtained from the Director of the
                    Centers for Disease Control and Prevention, on
                    rates of morbidity and mortality among various
                    populations (including data on the rates of
                    maternal and infant mortality and data on the
                    rates of low-birthweight births of living
                    infants).
                      [(D) Data from the Health Plan Employer Data
                    and Information Set, as appropriate.]

    SEC. 871. FUNDING.

      For the purpose of carrying out parts B, C, and D (subject to
    section 845(g)), there are authorized to be appropriated such
    sums as may be necessary for each fiscal year through fiscal
    year 2014.

    SEC. 872. FUNDING THROUGH PUBLIC HEALTH INVESTMENT FUND.

      For the purpose of carrying out this title, in addition to
    any other amounts authorized to be appropriated for such
    purpose, there are authorized to be appropriated, out of any
    monies in the Public Health Investment Fund, the following:
              (1) $115,000,000 for fiscal year 2010.
              (2) $122,000,000 for fiscal year 2011.
              (3) $127,000,000 for fiscal year 2012.
              (4) $134,000,000 for fiscal year 2013.
              (5) $140,000,000 for fiscal year 2014.

               *       *       *       *       *       *       *

    TITLE IX--AGENCY FOR HEALTHCARE RESEARCH AND QUALITY

               *       *       *       *       *       *       *

    PART B--HEALTH CARE IMPROVEMENT RESEARCH

               *       *       *       *       *       *       *

    SEC. 915. RESEARCH SUPPORTING PRIMARY CARE AND ACCESS IN UNDERSERVED
                        AREAS.

      [(a) Preventive Services Task Force.--
              [(1) Establishment and purpose.--The Director may
            periodically convene a Preventive Services Task Force
            to be composed of individuals with appropriate
            expertise. Such a 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.
              [(2) Role of agency.--The Agency shall provide
            ongoing administrative, research, and technical support
            for the operations of the Preventive Services Task
            Force, including coordinating and supporting the
            dissemination of the recommendations of the Task Force.
              [(3) Operation.--In carrying out its responsibilities
            under paragraph (1), the Task Force is not subject to
            the provisions of Appendix 2 of title 5, United States
            Code.]

               *       *       *       *       *       *       *

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

    SEC. 931. CENTER FOR QUALITY IMPROVEMENT.

      (a) In General.--There is established the Center for Quality
    Improvement (referred to in this part as the ``Center''), to be
    headed by the Director.
      (b) Prioritization.--
              (1) In general.--The Director shall prioritize areas
            for the identification, development, evaluation, and
            implementation of best practices (including innovative
            methodologies and strategies) for quality improvement
            activities in the delivery of health care services (in
            this section referred to as ``best practices'').
              (2) Considerations.--In prioritizing areas under
            paragraph (1), the Director shall consider--
                      (A) the priorities established under section
                    1191 of the Social Security Act; and
                      (B) the key health indicators identified by
                    the Assistant Secretary for Health Information
                    under section 1709.
              (3) Limitations.--In conducting its duties under this
            subsection, the Center for Quality Improvement shall
            not develop quality-adjusted life year measures or any
            other methodologies that can be used to deny benefits
            to a beneficiary against the beneficiary's wishes on
            the basis of the beneficiary's age, life expectancy,
            present or predicted disability, or expected quality of
            life.
      (c) Other Responsibilities.--The Director, acting directly or
    by awarding a grant or contract to an eligible entity, shall--
              (1) identify existing best practices under subsection
            (e);
              (2) develop new best practices under subsection (f);
              (3) evaluate best practices under subsection (g);
              (4) implement best practices under subsection (h);
              (5) ensure that best practices are identified,
            developed, evaluated, and implemented under this
            section consistent with standards adopted by the
            Secretary under section 3004 for health information
            technology used in the collection and reporting of
            quality information (including for purposes of the
            demonstration of meaningful use of certified electronic
            health record (EHR) technology by physicians and
            hospitals under the Medicare program (under sections
            1848(o)(2) and 1886(n)(3), respectively, of the Social
            Security Act)); and
              (6) provide for dissemination of information and
            reporting under subsections (i) and (j).
      (d) Eligibility.--To be eligible for a grant or contract
    under subsection (c), an entity shall--
              (1) be a nonprofit entity;
              (2) agree to work with a variety of institutional
            health care providers, physicians, nurses, and other
            health care practitioners; and
              (3) if the entity is not the organization holding a
            contract under section 1153 of the Social Security Act
            for the area to be served, agree to cooperate with and
            avoid duplication of the activities of such
            organization.
      (e) Identifying Existing Best Practices.--The Secretary shall
    identify best practices that are--
              (1) currently utilized by health care providers
            (including hospitals, physician and other clinician
            practices, community cooperatives, and other health
            care entities) that deliver consistently high-quality,
            efficient health care services; and
              (2) easily adapted for use by other health care
            providers and for use across a variety of health care
            settings.
      (f) Developing New Best Practices.--The Secretary shall
    develop best practices that are--
              (1) based on a review of existing scientific
            evidence;
              (2) sufficiently detailed for implementation and
            incorporation into the workflow of health care
            providers; and
              (3) designed to be easily adapted for use by health
            care providers across a variety of health care
            settings.
      (g) Evaluation of Best Practices.--The Director shall
    evaluate best practices identified or developed under this
    section. Such evaluation--
              (1) shall include determinations of which best
            practices--
                      (A) most reliably and effectively achieve
                    significant progress in improving the quality
                    of patient care; and
                      (B) are easily adapted for use by health care
                    providers across a variety of health care
                    settings;
              (2) shall include regular review, updating, and
            improvement of such best practices; and
              (3) may include in-depth case studies or empirical
            assessments of health care providers (including
            hospitals, physician and other clinician practices,
            community cooperatives, and other health care entities)
            and simulations of such best practices for
            determinations under paragraph (1).
      (h) Implementation of Best Practices.--
              (1) In general.--The Director shall enter into
            arrangements with entities in a State or region to
            implement best practices identified or developed under
            this section. Such implementation--
                      (A) may include forming collaborative multi-
                    institutional teams; and
                      (B) shall include an evaluation of the best
                    practices being implemented, including the
                    measurement of patient outcomes before, during,
                    and after implementation of such best
                    practices.
              (2) Preferences.--In carrying out this subsection,
            the Director shall give priority to health care
            providers implementing best practices that--
                      (A) have the greatest impact on patient
                    outcomes and satisfaction;
                      (B) are the most easily adapted for use by
                    health care providers across a variety of
                    health care settings;
                      (C) promote coordination of health care
                    practitioners across the continuum of care; and
                      (D) engage patients and their families in
                    improving patient care and outcomes.
      (i) Public Dissemination of Information.--The Director shall
    provide for the public dissemination of information with
    respect to best practices and activities under this section.
    Such information shall be made available in appropriate formats
    and languages to reflect the varying needs of consumers and
    diverse levels of health literacy.
      (j) Report.--
              (1) In general.--The Director shall submit an annual
            report to the Congress and the Secretary on activities
            under this section.
              (2) Content.--Each report under paragraph (1) shall
            include--
                      (A) information on activities conducted
                    pursuant to grants and contracts awarded;
                      (B) summary data on patient outcomes before,
                    during, and after implementation of best
                    practices; and
                      (C) recommendations on the adaptability of
                    best practices for use by health providers.

                         PART [D] E--GENERAL PROVISIONS

    SEC. [931.] 941. ADVISORY COUNCIL FOR HEALTHCARE RESEARCH AND QUALITY.

      (a) * * *

               *       *       *       *       *       *       *

    SEC. [932.] 942. PEER REVIEW WITH RESPECT TO GRANTS AND CONTRACTS.

      (a) * * *

               *       *       *       *       *       *       *

    SEC. [933.] 943. CERTAIN PROVISIONS WITH RESPECT TO DEVELOPMENT,
                        COLLECTION, AND DISSEMINATION OF DATA.

      (a) * * *

               *       *       *       *       *       *       *

    SEC. [934.] 944. DISSEMINATION OF INFORMATION.

      (a) * * *

               *       *       *       *       *       *       *

    SEC. [935.] 945. ADDITIONAL PROVISIONS WITH RESPECT TO GRANTS AND
                        CONTRACTS.

      (a) * * *

               *       *       *       *       *       *       *

    SEC. [936.] 946. CERTAIN ADMINISTRATIVE AUTHORITIES.

      (a) * * *

               *       *       *       *       *       *       *

    SEC. [937.] 947. FUNDING.

      (a) * * *

               *       *       *       *       *       *       *

    SEC. [938.] 948. DEFINITIONS.

      In this title:
              (1) Advisory council.--The term ``Advisory Council''
            means the National Advisory Council on Healthcare
            Research and Quality established under section [931]
            941.

               *       *       *       *       *       *       *

    TITLE XII--TRAUMA CARE

               *       *       *       *       *       *       *

      PART D--TRAUMA CENTERS OPERATING IN AREAS SEVERELY AFFECTED BY DRUG-
                                RELATED VIOLENCE

    [SEC. 1241. GRANTS FOR CERTAIN TRAUMA CENTERS.

      [(a) In General.--The Secretary may make grants for the
    purpose of providing for the operating expenses of trauma
    centers that have incurred substantial uncompensated costs in
    providing trauma care in geographic areas with a significant
    incidence of violence arising directly or indirectly from
    illicit trafficking in drugs. Grants under this subsection may
    be made only to such trauma centers.
      [(b) Minimum Qualifications of Centers.--
              [(1) Significant incidence of treating certain
            patients.--
                      [(A) The Secretary may not make a grant under
                    subsection (a) to a trauma center unless the
                    population of patients that has been served by
                    the center for the period specified in
                    subparagraph (B) includes a significant number
                    of patients who were treated for--
                              [(i) trauma resulting from the
                            penetration of the skin by knives,
                            bullets, or any other implement that
                            can be used as a weapon; or
                              [(ii) trauma that the center
                            reasonably believes results from
                            violence arising directly or indirectly
                            from illicit trafficking in drugs.
                      [(B) The period specified in this
                    subparagraph is the 2-year period preceding the
                    fiscal year for which the trauma center
                    involved is applying to receive a grant under
                    subsection (a).
              [(2) Participation in trauma care system operating
            under certain professional guidelines.--The Secretary
            may not make a grant under subsection (a) unless the
            trauma center involved is a participant in a system
            that--
                      [(A) provides comprehensive medical care to
                    victims of trauma in the geographic area in
                    which the trauma center is located;
                      [(B) is established by the State or political
                    subdivision in which such center is located;
                    and
                      [(C)(i) has adopted guidelines for the
                    designation of trauma centers, and for triage,
                    transfer, and transportation policies,
                    equivalent to (or more protective than) the
                    applicable guidelines developed by the American
                    College of Surgeons or utilized in the model
                    plan established under section 1213(c); or
                      [(ii) agrees that such guidelines will be
                    adopted by the system not later than 6 months
                    after the date on which the trauma center
                    submits to the Secretary the application for
                    the grant.
              [(3) Submission and approval of long-term plan.--The
            Secretary may not make a grant under subsection (a)
            unless the trauma center involved--
                      [(A) submits to the Secretary a plan
                    satisfactory to the Secretary that--
                              [(i) is developed on the assumption
                            that the center will continue to incur
                            substantial uncompensated costs in
                            providing trauma care; and
                              [(ii) provides for the long-term
                            continued operation of the center with
                            an acceptable standard of medical care,
                            notwithstanding such uncompensated
                            costs; and
                      [(B) agrees to implement the plan according
                    to a schedule approved by the Secretary.

    [SEC. 1242. PREFERENCES IN MAKING GRANTS.

      [(a) In General.--In making grants under section 1241(a), the
    Secretary shall give preference to any application--
              [(1) made by a trauma center that, for the purpose
            specified in such section, will receive financial
            assistance from the State or political subdivision
            involved for each fiscal year during which payments are
            made to the center from the grant, which financial
            assistance is exclusive of any assistance provided by
            the State or political subdivision as a non-Federal
            contribution under any Federal program requiring such a
            contribution; or
              [(2) made by a trauma center that, with respect to
            the system described in section 1241(b)(2) in which the
            center is a participant--
                      [(A) is providing trauma care in a geographic
                    area in which the availability of trauma care
                    has significantly decreased as a result of a
                    trauma center in the area permanently ceasing
                    participation in such system as of a date
                    occurring during the 2-year period specified in
                    section 1241(b)(1)(B); or
                      [(B) will, in providing trauma care during
                    the 1-year period beginning on the date on
                    which the application for the grant is
                    submitted, incur uncompensated costs in an
                    amount rendering the center unable to continue
                    participation in such system, resulting in a
                    significant decrease in the availability of
                    trauma care in the geographic area.
      [(b) Further Preference for Certain Applications.--With
    respect to applications for grants under section 1241 that are
    receiving preference for purposes of subsection (a), the
    Secretary shall give further preference to any such application
    made by a trauma center for which a disproportionate percentage
    of the uncompensated costs of the center result from the
    provision of trauma care to individuals who neither are
    citizens nor aliens lawfully admitted to the United States for
    permanent residence.

    [SEC. 1243. CERTAIN AGREEMENTS.

      [(a) Commitment Regarding Continued Participation in Trauma
    Care System.--The Secretary may not make a grant under
    subsection (a) of section 1241 unless the trauma center
    involved agrees that--
              [(1) the center will continue participation in the
            system described in subsection (b) of such section
            throughout the 3-year period beginning on the date that
            the center first receives payments under the grant; and
              [(2) if the agreement made pursuant to paragraph (1)
            is violated by the center, the center will be liable to
            the United States for an amount equal to the sum of--
                      [(A) the amount of assistance provided to the
                    center under subsection (a) of such section;
                    and
                      [(B) an amount representing interest on the
                    amount specified in subparagraph (A).
      [(b) Maintenance of Financial Support.--With respect to
    activities for which a grant under section 1241 is authorized
    to be expended, the Secretary may not make such a grant unless
    the trauma center involved agrees that, during the period in
    which the center is receiving payments under the grant, the
    center will maintain expenditures for such activities at a
    level that is not less than the level maintained by the center
    during the fiscal year preceding the first fiscal year for
    which the center receives such payments.
      [(c) Trauma Care Registry.--The Secretary may not make a
    grant under section 1241(a) unless the trauma center involved
    agrees that--
              [(1) the center will operate a registry of trauma
            cases in accordance with the applicable guidelines
            described in section 1241(b)(2)(C), and will begin
            operation of the registry not later than 6 months after
            the date on which the center submits to the Secretary
            the application for the grant; and
              [(2) in carrying out paragraph (1), the center will
            maintain information on the number of trauma cases
            treated by the center and, for each such case, the
            extent to which the center incurs uncompensated costs
            in providing trauma care.

    [SEC. 1244. GENERAL PROVISIONS.

      [(a) Application.--The Secretary may not make a grant under
    section 1241(a) unless an application for the grant is
    submitted to the Secretary and the application is in such form,
    is made in such manner, and contains such agreements,
    assurances, and information as the Secretary determines to be
    necessary to carry out this part.
      [(b) Limitation on Duration of Support.--The period during
    which a trauma center receives payments under section 1241(a)
    may not exceed 3 fiscal years, except that the Secretary may
    waive such requirement for the center and authorize the center
    to receive such payments for 1 additional fiscal year.
      [(c) Limitation on Amount of Grant.--A grant under section
    1241 may not be made in an amount exceeding $2,000,000.

    [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
    1993, and such sums as may be necessary for fiscal year 1994.
    Such authorization of appropriations is in addition to any
    other authorization of appropriations or amounts that are
    available for such purpose.]

    SEC. 1241. GRANTS FOR CERTAIN TRAUMA CENTERS.

      (a) In General.--The Secretary shall establish a trauma
    center program consisting of awarding grants under section (b).
      (b) Grants.--The Secretary shall award grants as follows:
              (1) Existing centers.--Grants to public, private
            nonprofit, Indian Health Service, Indian tribal, and
            urban Indian trauma centers--
                      (A) to further the core missions of such
                    centers; or
                      (B) to provide emergency relief to ensure the
                    continued and future availability of trauma
                    services by trauma centers--
                              (i) at risk of closing or operating
                            in an area where a closing has occurred
                            within their primary service area; or
                              (ii) in need of financial assistance
                            following a natural disaster or other
                            catastrophic event, such as a terrorist
                            attack.
              (2) New centers.--Grants to local governments and
            public or private nonprofit entities to establish new
            trauma centers in urban areas with a substantial degree
            of trauma resulting from violent crimes.
      (c) Minimum Qualifications of Trauma Centers.--
              (1) Participation in trauma care system operating
            under certain professional guidelines.--
                      (A) Limitation.--Subject to subparagraph (B),
                    the Secretary may not award a grant to an
                    existing trauma center under this section
                    unless the center is a participant in a trauma
                    care system that substantially complies with
                    section 1213.
                      (B) Exemption.--Subparagraph (A) shall not
                    apply to trauma centers that are located in
                    States with no existing trauma care system.
              (2) Designation.--The Secretary may not award a grant
            under this section to an existing trauma center unless
            the center is--
                      (A) verified as a trauma center by the
                    American College of Surgeons; or
                      (B) designated as a trauma center by the
                    applicable State health or emergency medical
                    services authority.

    SEC. 1242. CONSIDERATIONS IN MAKING GRANTS.

      (a) Core Mission Awards.--
              (1) In general.--In awarding grants under section
            1241(b)(1)(A), the Secretary shall--
                      (A) reserve a minimum of 25 percent of the
                    amount allocated for such grants for level III
                    and level IV trauma centers in rural or
                    underserved areas;
                      (B) reserve a minimum of 25 percent of the
                    amount allocated for such grants for level I
                    and level II trauma centers in urban areas; and
                      (C) give preference to any application made
                    by a trauma center--
                              (i) in a geographic area where growth
                            in demand for trauma services exceeds
                            capacity;
                              (ii) that demonstrates the financial
                            support of the State or political
                            subdivision involved;
                              (iii) that has at least 1 graduate
                            medical education fellowship in trauma
                            or trauma-related specialties,
                            including neurological surgery,
                            surgical critical care, vascular
                            surgery, and spinal cord injury, for
                            which demand is exceeding supply; or
                              (iv) that demonstrates a substantial
                            commitment to serving vulnerable
                            populations.
              (2) Financial support.--For purposes of paragraph
            (1)(C)(ii), financial support may be demonstrated by
            State or political subdivision funding for the trauma
            center's capital or operating expenses (including
            through State trauma regional advisory coordination
            activities, Medicaid funding designated for trauma
            services, or other governmental funding). State funding
            derived from Federal support shall not constitute State
            or local financial support for purposes of preferential
            treatment under this subsection.
              (3) Use of funds.--The recipient of a grant under
            section 1241(b)(1)(A) shall carry out, consistent with
            furthering the core missions of the center, one or more
            of the following activities:
                      (A) Providing 24-hour-a-day, 7-day-a-week
                    trauma care availability.
                      (B) Reducing overcrowding related to
                    throughput of trauma patients.
                      (C) Enhancing trauma surge capacity.
                      (D) Ensuring physician and essential
                    personnel availability.
                      (E) Trauma education and outreach.
                      (F) Coordination with local and regional
                    trauma care systems.
                      (G) Such other activities as the Secretary
                    may deem appropriate.
      (b) Emergency Awards; New Centers.--In awarding grants under
    paragraphs (1)(B) and (2) of section 1241(b), the Secretary
    shall--
              (1) give preference to any application submitted by
            an applicant that demonstrates the financial support
            (in accordance with subsection (a)(2)) of the State or
            political subdivision involved for the activities to be
            funded through the grant for each fiscal year during
            which payments are made to the center under the grant;
            and
              (2) give preference to any application submitted for
            a trauma center that--
                      (A) is providing or will provide trauma care
                    in a geographic area in which the availability
                    of trauma care has either significantly
                    decreased as a result of a trauma center in the
                    area permanently ceasing participation in a
                    system described in section 1241(c)(1) as of a
                    date occurring during the 2-year period
                    preceding the fiscal year for which the trauma
                    center is applying to receive a grant, or in
                    geographic areas where growth in demand for
                    trauma services exceeds capacity;
                      (B) will, in providing trauma care during the
                    1-year period beginning on the date on which
                    the application for the grant is submitted,
                    incur substantial uncompensated care costs in
                    an amount that renders the center unable to
                    continue participation in such system and
                    results in a significant decrease in the
                    availability of trauma care in the geographic
                    area;
                      (C) operates or will operate in rural areas
                    where trauma care availability will
                    significantly decrease if the center is forced
                    to close or downgrade service and substantial
                    costs are contributing to a likelihood of such
                    closure or downgradation;
                      (D) is in a geographic location substantially
                    affected by a natural disaster or other
                    catastrophic event such as a terrorist attack;
                    or
                      (E) will establish a new trauma service in an
                    urban area with a substantial degree of trauma
                    resulting from violent crimes.
      (c) Designations of Levels of Trauma Centers in Certain
    States.--In the case of a State which has not designated 4
    levels of trauma centers, any reference in this section to--
              (1) a level I or level II trauma center is deemed to
            be a reference to a trauma center within the highest 2
            levels of trauma centers designated under State
            guidelines; and
              (2) a level III or IV trauma center is deemed to be a
            reference to a trauma center not within such highest 2
            levels.

    SEC. 1243. CERTAIN AGREEMENTS.

      (a) Commitment Regarding Continued Participation in Trauma
    Care System.--The Secretary may not award a grant to an
    applicant under section 1241(b) unless the applicant agrees
    that--
              (1) the trauma center involved will continue
            participation, or in the case of a new center will
            participate, in the system described in section
            1241(c)(1), except as provided in section
            1241(c)(1)(B), throughout the grant period beginning on
            the date that the center first receives payments under
            the grant; and
              (2) if the agreement made pursuant to paragraph (1)
            is violated by the center, the center will be liable to
            the United States for an amount equal to the sum of--
                      (A) the amount of assistance provided to the
                    center under section 1241; and
                      (B) an amount representing interest on the
                    amount specified in subparagraph (A).
      (b) Maintenance of Financial Support.--With respect to
    activities for which funds awarded through a grant under
    section 1241 are authorized to be expended, the Secretary may
    not award such a grant unless the applicant agrees that, during
    the period in which the trauma center involved is receiving
    payments under the grant, the center will maintain access to
    trauma services at levels not less than the levels for the
    prior year, taking into account--
              (1) reasonable volume fluctuation that is not caused
            by intentional trauma boundary reduction;
              (2) downgrading of the level of services; and
              (3) whether such center diverts its incoming patients
            away from such center 5 percent or more of the time
            during which the center is in operation over the course
            of the year.
      (c) Trauma Care Registry.--The Secretary may not award a
    grant to a trauma center under section 1241(b)(1) unless the
    center agrees that--
              (1) not later than 6 months after the date on which
            the center submits a grant application to the
            Secretary, the center will establish and operate a
            registry of trauma cases in accordance with guidelines
            developed by the American College of Surgeons; and
              (2) in carrying out paragraph (1), the center will
            maintain information on the number of trauma cases
            treated by the center and, for each such case, the
            extent to which the center incurs uncompensated costs
            in providing trauma care.

    SEC. 1244. GENERAL PROVISIONS.

      (a) Limitation on Duration of Support.--The period during
    which a trauma center receives payments under a grant under
    section 1241(b)(1) shall be for 3 fiscal years, except that the
    Secretary may waive such requirement for the center and
    authorize the center to receive such payments for 1 additional
    fiscal year.
      (b) Eligibility.--The acquisition of, or eligibility for, a
    grant under section 1241(b) shall not preclude a trauma
    center's eligibility for another grant described in such
    section.
      (c) Funding Distribution.--Of the total amount appropriated
    for a fiscal year under section 1245--
              (1) 90 percent shall be used for grants under
            paragraph (1)(A) of section 1241(b); and
              (2) 10 percent shall be used for grants under
            paragraphs (1)(B) and (2) of section 1241(b).
      (d) Report.--Beginning 2 years after the date of the
    enactment of the America's Affordable Health Choices Act of
    2009, and every 2 years thereafter, the Secretary shall
    biennially--
              (1) report to Congress on the status of the grants
            made pursuant to section 1241;
              (2) evaluate and report to Congress on the overall
            financial stability of trauma centers in the United
            States;
              (3) report on the populations using trauma care
            centers and include aggregate patient data on income,
            race, ethnicity, and geography; and
              (4) evaluate the effectiveness and efficiency of
            trauma care center activities using standard public
            health measures and evaluation methodologies.

    SEC. 1245. AUTHORIZATION OF APPROPRIATIONS.

      (a) In General.--For the purpose of carrying out this part,
    there are authorized to be appropriated $100,000,000 for fiscal
    year 2010, and such sums as may be necessary for each of fiscal
    years 2011 through 2015. Such authorization of appropriations
    is in addition to any other authorization of appropriations or
    amounts that are available for such purpose.
      (b) Reallocation.--The Secretary shall reallocate for grants
    under section 1241(b)(1)(A) any funds appropriated for grants
    under paragraph (1)(B) or (2) of section 1241(b), but not
    obligated due to insufficient applications eligible for
    funding.

               *       *       *       *       *       *       *

        TITLE XV--PREVENTIVE HEALTH MEASURES WITH RESPECT TO BREAST AND
    CERVICAL CANCERS

               *       *       *       *       *       *       *

    SEC. 1509. SUPPLEMENTAL GRANTS FOR ADDITIONAL PREVENTIVE HEALTH
                        SERVICES.

      (a) [Demonstration Projects] In General.--In the case of
    States receiving grants under section 1501, the Secretary,
    acting through the Director of the Centers for Disease Control
    and Prevention, [may make grants to not more than 3 such States
    to carry out demonstration projects for the purpose] may make
    grants to such States for the purpose of--
              (1)  * * *

               *       *       *       *       *       *       *

      (d) Funding.--
              (1) In general.--Subject to paragraph (2), for the
            purpose of carrying out this section, [there are
            authorized to be appropriated $3,000,000 for fiscal
            year 1994, and such sums as may be necessary for each
            of the fiscal years 1995 through 2003.] there are
            authorized to be appropriated $70,000,000 for fiscal
            year 2010, $73,500,000 for fiscal year 2011,
            $77,000,000 for fiscal year 2012, $81,000,000 for
            fiscal year 2013, and $85,000,000 for fiscal year 2014.

               *       *       *       *       *       *       *

    TITLE XVII--HEALTH INFORMATION AND HEALTH PROMOTION

               *       *       *       *       *       *       *

    SEC. 1709. ASSISTANT SECRETARY FOR HEALTH INFORMATION.

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

                 BIENNIAL REPORT REGARDING NUTRITION AND HEALTH

      Sec. [1709.] 1710. (a) * * *

               *       *       *       *       *       *       *

                            EDUCATION REGARDING DES

      Sec. [1710.] 1711. (a) * * *

               *       *       *       *       *       *       *

    TITLE XIX--BLOCK GRANTS

               *       *       *       *       *       *       *

        PART B--BLOCK GRANTS REGARDING MENTAL HEALTH AND SUBSTANCE ABUSE

        Subpart I--Block Grants for [Community Mental Health Services]
                       Behavioral Mental Health Services

    SEC. 1912. STATE PLAN FOR COMPREHENSIVE [COMMUNITY MENTAL HEALTH
                        SERVICES] BEHAVIORAL MENTAL HEALTH SERVICES FOR
                        CERTAIN INDIVIDUALS.

      (a) In General.--The Secretary may make a grant under section
    1911 only if--
              (1) the State involved submits to the Secretary a
            plan for providing comprehensive [community mental
            health services] behavioral mental health services to
            adults with a serious mental illness and to children
            with a serious emotional disturbance;

               *       *       *       *       *       *       *

      (b) Criteria for Plan.--With respect to the provision of
    comprehensive [community mental health services] behavioral
    mental health services to individuals who are either adults
    with a serious mental illness or children with a serious
    emotional disturbance, the criteria referred to in subsection
    (a) regarding a plan are as follows:
              (1) * * *

               *       *       *       *       *       *       *

              (3) Children's services.--In the case of children
            with serious emotional disturbance, the plan--
                      (A) * * *
                      (B) provides that the grant under section
                    1911 for the fiscal year involved will not be
                    expended to provide any service under such
                    system other than comprehensive [community
                    mental health services] behavioral mental
                    health services; and

               *       *       *       *       *       *       *

    SEC. 1913. CERTAIN AGREEMENTS.

      (a) Allocation for Systems of Integrated Services for
    Children.--
              (1) * * *
              (2) Waiver.--
                      (A) Upon the request of a State, the
                    Secretary may provide to the State a waiver of
                    all or part of the requirement established in
                    paragraph (1) if the Secretary determines that
                    the State is providing an adequate level of
                    comprehensive [community mental health
                    services] behavioral health services for
                    children with a serious emotional distrubance,
                    as indicated by a comparison of the number of
                    such children for which such services are
                    sought with the availability in the State of
                    the services.

               *       *       *       *       *       *       *

      (b) Providers of Services.--A funding agreement for a grant
    under section 1911 for a State is that, with respect to the
    plan submitted under section 1912(a) for the fiscal year
    involved--
              [(1) services under the plan will be provided only
            through appropriate, qualified community programs
            (which may include community mental health centers,
            child mental-health programs, psychosocial
            rehabilitation programs, mental health peer-support
            programs, and mental-health primary consumer-directed
            programs); and]
              (1) services under the plan will be provided only
            through appropriate, qualified community programs
            (which may include federally qualified behavioral
            health centers, child mental health programs,
            psychosocial rehabilitation programs, mental health
            peer-support programs, and mental health primary
            consumer-directed programs); and
              (2) services under the plan will be provided through
            [community mental health centers] federally qualified
            behavioral health centers only if the centers meet the
            criteria specified in subsection (c).
      [(c) Criteria for Mental Health Centers.--The criteria
    referred to in subsection (b)(2) regarding community mental
    health centers are as follows:
              [(1) With respect to mental health services, the
            centers provide services as follows:
                      [(A) Services principally to individuals
                    residing in a defined geographic area
                    (hereafter in this subsection referred to as a
                    ``service area'').
                      [(B) Outpatient services, including
                    specialized outpatient services for children,
                    the elderly, individuals with a serious mental
                    illness, and residents of the service areas of
                    the centers who have been discharged from
                    inpatient treatment at a mental health
                    facility.
                      [(C) 24-hour-a-day emergency care services.
                      [(D) Day treatment or other partial
                    hospitalization services, or psychosocial
                    rehabilitation services.
                      [(E) Screening for patients being considered
                    for admission to State mental health facilities
                    to determine the appropriateness of such
                    admission.
              [(2) The mental health services of the centers are
            provided, within the limits of the capacities of the
            centers, to any individual residing or employed in the
            service area of the center regardless of ability to pay
            for such services.
              [(3) The mental health services of the centers are
            available and accessible promptly, as appropriate and
            in a manner which preserves human dignity and assures
            continuity and high quality care.]
      (c) Criteria for Federally Qualified Behavioral Health
    Centers.--
              (1) In general.--The Administrator shall certify, and
            recertify at least every 5 years, federally qualified
            behavioral health centers as meeting the criteria
            specified in this subsection.
              (2) Regulations.--Not later than 18 months after the
            date of the enactment of the America's Affordable
            Health Choices Act of 2009, the Administrator shall
            issue final regulations for certifying centers under
            paragraph (1).
              (3) Criteria.--The criteria referred to in subsection
            (b)(2) are that the center performs each of the
            following:
                      (A) Provide services in locations that ensure
                    services will be available and accessible
                    promptly and in a manner which preserves human
                    dignity and assures continuity of care.
                      (B) Provide services in a mode of service
                    delivery appropriate for the target population.
                      (C) Provide individuals with a choice of
                    service options where there is more than one
                    efficacious treatment.
                      (D) Employ a core staff of clinical staff
                    that is multidisciplinary and culturally and
                    linguistically competent.
                      (E) Provide services, within the limits of
                    the capacities of the center, to any individual
                    residing or employed in the service area of the
                    center.
                      (F) Provide, directly or through contract, to
                    the extent covered for adults in the State
                    Medicaid plan and for children in accordance
                    with section 1905(r) of the Social Security Act
                    regarding early and periodic screening,
                    diagnosis, and treatment, each of the following
                    services:
                              (i) Screening, assessment, and
                            diagnosis, including risk assessment.
                              (ii) Person-centered treatment
                            planning or similar processes,
                            including risk assessment and crisis
                            planning.
                              (iii) Outpatient clinic mental health
                            services, including screening,
                            assessment, diagnosis, psychotherapy,
                            substance abuse counseling, medication
                            management, and integrated treatment
                            for mental illness and substance abuse
                            which shall be evidence-based
                            (including cognitive behavioral
                            therapy, dialectical behavioral
                            therapy, motivational interviewing, and
                            other such therapies which are
                            evidence-based).
                              (iv) Outpatient clinic primary care
                            services, including screening and
                            monitoring of key health indicators and
                            health risk (including screening for
                            diabetes, hypertension, and
                            cardiovascular disease and monitoring
                            of weight, height, body mass index
                            (BMI), blood pressure, blood glucose or
                            HbA1C, and lipid profile).
                              (v) Crisis mental health services,
                            including 24-hour mobile crisis teams,
                            emergency crisis intervention services,
                            and crisis stabilization.
                              (vi) Targeted case management
                            (services to assist individuals gaining
                            access to needed medical, social,
                            educational, and other services and
                            applying for income security and other
                            benefits to which they may be
                            entitled).
                              (vii) Psychiatric rehabilitation
                            services including skills training,
                            assertive community treatment, family
                            psychoeducation, disability self-
                            management, supported employment,
                            supported housing services, therapeutic
                            foster care services, multisystemic
                            therapy, and such other evidence-based
                            practices as the Secretary may require.
                              (viii) Peer support and counselor
                            services and family supports.
                      (G) Maintain linkages, and where possible
                    enter into formal contracts with, inpatient
                    psychiatric facilities and substance abuse
                    detoxification and residential programs.
                      (H) Make available to individuals served by
                    the center, directly, through contract, or
                    through linkages with other programs, each of
                    the following:
                              (i) Adult and youth peer support and
                            counselor services.
                              (ii) Family support services for
                            families of children with serious
                            mental disorders.
                              (iii) Other community or regional
                            services, supports, and providers,
                            including schools, child welfare
                            agencies, juvenile and criminal justice
                            agencies and facilities, housing
                            agencies and programs, employers, and
                            other social services.
                              (iv) Onsite or offsite access to
                            primary care services.
                              (v) Enabling services, including
                            outreach, transportation, and
                            translation.
                              (vi) Health and wellness services,
                            including services for tobacco
                            cessation.

    SEC. 1915. ADDITIONAL PROVISIONS.

      (a) * * *
      (b) Maintenance of Effort Regarding State Expenditures for
    Mental Health.--
              (1) In general.--A funding agreement for a grant
            under section 1911 is that the State involved will
            maintain State expenditures for [community mental
            health services] behavioral mental health services at a
            level that is not less than the average level of such
            expenditures maintained by the State for the 2-year
            period preceding the fiscal year for which the State is
            applying for the grant.

               *       *       *       *       *       *       *

    SEC. 1918. DETERMINATION OF AMOUNT OF ALLOTMENT.

      (a) States.--
              (1) * * *

               *       *       *       *       *       *       *

              (8) Determination of certain factor.--
                      (A) The factor determined under this
                    paragraph for the State involved is a factor
                    whose purpose is to adjust the amount
                    determined under clause (i) of paragraph
                    (4)(A), and the amounts determined under each
                    of subparagraphs (B)(i) and (D)(ii)(I) of
                    paragraph (6), to reflect the differences that
                    exist between the State and other States in the
                    costs of providing comprehensive [community
                    mental health services] behavioral mental
                    health services to adults with a serious mental
                    illness and to children with a serious
                    emotional disturbance.

               *       *       *       *       *       *       *

        TITLE XXVII--REQUIREMENTS RELATING TO HEALTH INSURANCE COVERAGE

                          Part A--Group Market Reforms

         Subpart 1--Portability, Access, and Renewability Requirements

    SEC. 2701. INCREASED PORTABILITY THROUGH LIMITATION ON PREEXISTING
                        CONDITION EXCLUSIONS.

      (a) Limitation on Preexisting Condition Exclusion Period;
    Crediting for Periods of Previous Coverage.--Subject to
    subsection (d), a group health plan, and a health insurance
    issuer offering group health insurance coverage, may, with
    respect to a participant or beneficiary, impose a preexisting
    condition exclusion only if--
              (1) such exclusion relates to a condition (whether
            physical or mental), regardless of the cause of the
            condition, for which medical advice, diagnosis, care,
            or treatment was recommended or received within the [6-
            month period] 30-day period ending on the enrollment
            date;
              (2) such exclusion extends for a period of not more
            than [12 months] 3 months (or [18 months] 9 months in
            the case of a late enrollee) after the enrollment date;
            and

               *       *       *       *       *       *       *

    Subpart 2--Other Requirements

               *       *       *       *       *       *       *

    SEC. 2708. STANDARDS RELATING TO BENEFITS FOR MINOR CHILD'S CONGENITAL
                        OR DEVELOPMENTAL DEFORMITY OR DISORDER.

      (a) Requirements for Treatment for Children With
    Deformities.--
              (1) In general.--A group health plan, and a health
            insurance issuer offering group health insurance
            coverage, that provides coverage for surgical benefits
            shall provide coverage for outpatient and inpatient
            diagnosis and treatment of a minor child's congenital
            or developmental deformity, disease, or injury. A minor
            child shall include any individual who 21 years of age
            or younger.
              (2) Requirements.--Any coverage provided under
            paragraph (1) shall be subject to pre-authorization or
            pre-certification as required by the plan or issuer,
            and such coverage shall include any surgical treatment
            which, in the opinion of the treating physician, is
            medically necessary to approximate a normal appearance.
              (3) Treatment defined.--
                      (A) In general.--In this section, the term
                    ``treatment'' includes reconstructive surgical
                    procedures (procedures that are generally
                    performed to improve function, but may also be
                    performed to approximate a normal appearance)
                    that are performed on abnormal structures of
                    the body caused by congenital defects,
                    developmental abnormalities, trauma, infection,
                    tumors, or disease, including--
                              (i) procedures that do not materially
                            affect the function of the body part
                            being treated; and
                              (ii) procedures for secondary
                            conditions and follow-up treatment.
                      (B) Exception.--Such term does not include
                    cosmetic surgery performed to reshape normal
                    structures of the body to improve appearance or
                    self-esteem.
      (b) Notice.--A group health plan under this part shall comply
    with the notice requirement under section 714(b) of the
    Employee Retirement Income Security Act of 1974 with respect to
    the requirements of this section as if such section applied to
    such plan.

    Subpart 3--Provisions Applicable Only to Health Insurance Issuers

               *       *       *       *       *       *       *

    SEC. 2714. ENSURING VALUE AND LOWER PREMIUMS.

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

    Subpart 4--Exclusion of Plans; Enforcement; Preemption

               *       *       *       *       *       *       *

    SEC. 2723. PREEMPTION; STATE FLEXIBILITY; CONSTRUCTION.

      (a) * * *

               *       *       *       *       *       *       *

      (c) Rules of Construction.--Nothing in this part (other than
    [section 2704] sections 2704 and 2708) shall be construed as
    requiring a group health plan or health insurance coverage to
    provide specific benefits under the terms of such plan or
    coverage.

               *       *       *       *       *       *       *

                        Part B--Individual Market Rules

         Subpart 1--Portability, Access, and Renewability Requirements

    SEC. 2741. GUARANTEED AVAILABILITY OF INDIVIDUAL HEALTH INSURANCE
                        COVERAGE TO CERTAIN INDIVIDUALS WITH PRIOR GROUP
                        COVERAGE.

      (a) * * *
      (b) Eligible Individual Defined.--In this part, the term
    ``eligible individual'' means an individual--
              (1) * * *
              (2) who is not eligible for coverage under (A) a
            group health plan, (B) part A or part B of title XVIII
            of the Social Security Act, or (C) a State plan under
            title XIX of such Act (or any successor program), and
            does not have other health insurance coverage; and
              (3) with respect to whom the most recent coverage
            within the coverage period described in paragraph
            (1)(A) was not terminated based on a factor described
            in paragraph (1) or (2) of section 2712(b) (relating to
            nonpayment of premiums or fraud)[;].
              [(4) if the individual had been offered the option of
            continuation coverage under a COBRA continuation
            provision or under a similar State program, who elected
            such coverage; and
              [(5) who, if the individual elected such continuation
            coverage, has exhausted such continuation coverage
            under such provision or program.]

               *       *       *       *       *       *       *

      [(e)] (f) Market Requirements.--
              (1) * * *

               *       *       *       *       *       *       *

      [(f)] (g) Construction.--Nothing in this section shall be
    construed--
              (1)  * * *

               *       *       *       *       *       *       *

      (h) Application of Group Health Insurance Limitations on
    Imposition of Preexisting Condition Exclusions.--
              (1) In general.--Subject to paragraph (2), a health
            insurance issuer that provides individual health
            insurance coverage may not impose a preexisting
            condition exclusion (as defined in subsection (b)(1)(A)
            of section 2701) with respect to such coverage except
            to the extent that such exclusion could be imposed
            consistent with such section if such coverage were
            group health insurance coverage.
              (2) Limitation.--In the case of an individual who--
                      (A) is enrolled in individual health
                    insurance coverage;
                      (B) during the period of such enrollment has
                    a condition for which no medical advice,
                    diagnosis, care, or treatment had been
                    recommended or received as of the enrollment
                    date; and
                      (C) seeks to enroll under other individual
                    health insurance coverage which provides
                    benefits different from those provided under
                    the coverage referred to in subparagraph (A)
                    with respect to such condition,
            the issuer of the individual health insurance coverage
            described in subparagraph (C) may impose a preexisting
            condition exclusion with respect to such condition and
            any benefits in addition to those provided under the
            coverage referred to in subparagraph (A), but such
            exclusion may not extend for a period of more than 3
            months.

    SEC. 2742. GUARANTEED RENEWABILITY AND CONTINUATION IN FORCE, INCLUDING
                        PROHIBITION OF RESCISSION, OF INDIVIDUAL HEALTH
                        INSURANCE COVERAGE.

      (a) In General.--Except as provided in this section, a health
    insurance issuer that provides individual health insurance
    coverage to an individual shall renew or continue in force,
    including without rescission, such coverage at the option of
    the individual.

               *       *       *       *       *       *       *

      (f) Rescission.--A health insurance issuer may rescind health
    insurance coverage only upon clear and convincing evidence of
    fraud described in subsection (b)(2). The Secretary, no later
    than July 1, 2010, shall issue guidance implementing this
    requirement, including procedures for independent, external
    third party review.

               *       *       *       *       *       *       *

    SEC. 2744. STATE FLEXIBILITY IN INDIVIDUAL MARKET REFORMS.

      (a) Waiver of Requirements Where Implementation of Acceptable
    Alternative Mechanism.--
              (1) In general.--The requirements of section 2741
            (other than subsection (h)) shall not apply with
            respect to health insurance coverage offered in the
            individual market in the State so long as a State is
            found to be implementing, in accordance with this
            section and consistent with section 2762(b), an
            alternative mechanism (in this section referred to as
            an ``acceptable alternative mechanism'')--
                      (A) * * *

               *       *       *       *       *       *       *

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

      (a) Notice and Review Right.--If a health insurance issuer
    determines to rescind health insurance coverage for an
    individual in the individual market, before such rescission may
    take effect the issuer shall provide the individual with notice
    of such proposed rescission and an opportunity for a review of
    such determination by an independent, external third party
    under procedures specified by the Secretary under section
    2742(f).
      (b) Independent Determination.--If the individual requests
    such review by an independent, external third party of a
    rescission of health insurance coverage, the coverage shall
    remain in effect until such third party determines that the
    coverage may be rescinded under the guidance issued by the
    Secretary under section 2742(f).

    Subpart 2--Other Requirements

               *       *       *       *       *       *       *

    SEC. 2754. ENSURING VALUE AND LOWER PREMIUMS.

      The provisions of section 2714 shall apply to health
    insurance coverage offered in the individual market in the same
    manner as such provisions apply to health insurance coverage
    offered in the small or large group market.

    SEC. 2755. STANDARDS RELATING TO BENEFITS FOR MINOR CHILD'S CONGENITAL
                        OR DEVELOPMENTAL DEFORMITY OR DISORDER.

      (a) Requirements for Reconstructive Surgery.--
              (1) In general.--A health insurance issuer offering
            health insurance coverage in the individual market that
            provides coverage for surgical benefits shall provide
            coverage for outpatient and inpatient diagnosis and
            treatment of a minor child's congenital or
            developmental deformity, disease, or injury. A minor
            child shall include any individual through 21 years of
            age.
              (2) Requirements.--Any coverage provided under
            paragraph (1) shall be subject to pre-authorization or
            pre-certification as required by the insurance issuer
            offering such coverage, and such coverage shall include
            any surgical treatment which, in the opinion of the
            treating physician, is medically necessary to
            approximate a normal appearance.
              (3) Treatment defined.--
                      (A) In general.--In this section, the term
                    ``treatment'' includes reconstructive surgical
                    procedures (procedures that are generally
                    performed to improve function, but may also be
                    performed to approximate a normal appearance)
                    that are performed on abnormal structures of
                    the body caused by congenital defects,
                    developmental abnormalities, trauma, infection,
                    tumors, or disease, including--
                              (i) procedures that do not materially
                            affect the function of the body part
                            being treated; and
                              (ii) procedures for secondary
                            conditions and follow-up treatment.
                      (B) Exception.--Such term does not include
                    cosmetic surgery performed to reshape normal
                    structures of the body to improve appearance or
                    self-esteem.
      (b) Notice.--A health insurance issuer under this part shall
    comply with the notice requirement under section 714(b) of the
    Employee Retirement Income Security Act of 1974 with respect to
    the requirements referred to in subsection (a) as if such
    section applied to such issuer and such issuer were a group
    health plan.

    Subpart 3--General Provisions

               *       *       *       *       *       *       *

    SEC. 2762. PREEMPTION.

      (a) * * *
      (b) Rules of Construction.--(1) * * *
      (2) Nothing in this part (other than [section 2751] sections
    2751 and 2754) shall be construed as requiring health insurance
    coverage offered in the individual market to provide specific
    benefits under the terms of such coverage.

               *       *       *       *       *       *       *

    Part C--Definitions; Miscellaneous Provisions

               *       *       *       *       *       *       *

    SEC. 2793. NATIONAL HEALTH COVERAGE PARTICIPATION REQUIREMENTS.

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

               *       *       *       *       *       *       *

       TITLE XXVIII--NATIONAL ALL-HAZARDS PREPAREDNESS FOR PUBLIC HEALTH
                                  EMERGENCIES

     Subtitle A--National All-Hazards Preparedness and Response Planning,
    Coordinating, and Reporting

               *       *       *       *       *       *       *

    SEC. 2802. NATIONAL HEALTH SECURITY STRATEGY.

      (a) * * *
      (b) Preparedness Goals.--The National Health Security
    Strategy shall include provisions in furtherance of the
    following:
              (1) * * *

               *       *       *       *       *       *       *

              (3) Medical.--Increasing the preparedness, response
            capabilities, and surge capacity of hospitals, other
            health care facilities (including dental and mental
            health facilities), and trauma care and emergency
            medical service systems, with respect to public health
            emergencies, which shall include developing plans for
            the following:
                      (A)  * * *

               *       *       *       *       *       *       *

                      (D) Effective utilization of any available
                    public and private mobile medical and dental
                    assets and integration of other Federal assets.

               *       *       *       *       *       *       *

    Subtitle B--All-Hazards Emergency Preparedness and Response

               *       *       *       *       *       *       *

    SEC. 2816. EMERGENCY CARE COORDINATION.

      (a) Emergency Care Coordination Center.--
              (1) Establishment.--The Secretary shall establish,
            within the Office of the Assistant Secretary for
            Preparedness and Response, an Emergency Care
            Coordination Center (in this section referred to as the
            ``Center''), to be headed by a director.
              (2) Duties.--The Secretary, acting through the
            Director of the Center, in coordination with the
            Federal Interagency Committee on Emergency Medical
            Services, shall--
                      (A) promote and fund research in emergency
                    medicine and trauma health care;
                      (B) promote regional partnerships and more
                    effective emergency medical systems in order to
                    enhance appropriate triage, distribution, and
                    care of routine community patients; and
                      (C) promote local, regional, and State
                    emergency medical systems' preparedness for and
                    response to public health events.
      (b) Council of Emergency Care.--
              (1) Establishment.--The Secretary, acting through the
            Director of the Center, shall establish a Council of
            Emergency Care to provide advice and recommendations to
            the Director on carrying out this section.
              (2) Composition.--The Council shall be comprised of
            employees of the departments and agencies of the
            Federal Government who are experts in emergency care
            and management.
      (c) Report.--
              (1) Submission.--Not later than 12 months after the
            date of the enactment of the America's Affordable
            Health Choices Act of 2009, the Secretary shall submit
            to the Congress an annual report on the activities
            carried out under this section.
              (2) Considerations.--In preparing a report under
            paragraph (1), the Secretary shall consider factors
            including--
                      (A) emergency department crowding and
                    boarding; and
                      (B) delays in care following presentation.
      (d) 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.

               *       *       *       *       *       *       *

                      TITLE XXXI--PREVENTION AND WELLNESS

                   Subtitle A--Prevention and Wellness Trust

    SEC. 3111. PREVENTION AND WELLNESS TRUST.

      (a) Deposits Into Trust.--There is established a Prevention
    and Wellness Trust. There are authorized to be appropriated to
    the Trust--
              (1) amounts described in section 2002(b)(2)(A)(ii) of
            the America's Affordable Health Choices Act of 2009 for
            each fiscal year; and
              (2) in addition, out of any monies in the Public
            Health Investment Fund--
                      (A) for fiscal year 2010, $2,400,000,000;
                      (B) for fiscal year 2011, $2,845,000,000;
                      (C) for fiscal year 2012, $3,100,000,000;
                      (D) for fiscal year 2013, $3,455,000,000; and
                      (E) for fiscal year 2014, $3,600,000,000.
      (b) Availability of Funds.--Amounts in the Prevention and
    Wellness Trust shall be available, as provided in advance in
    appropriation Acts, for carrying out this title.
      (c) Allocation.--Of the amounts authorized to be appropriated
    in subsection (a)(2), there are authorized to be appropriated--
              (1) for carrying out subtitle C (Prevention Task
            Forces), $30,000,000 for each of fiscal years 2010
            through 2014;
              (2) for carrying out subtitle D (Prevention and
            Wellness Research)--
                      (A) for fiscal year 2010, $100,000,000;
                      (B) for fiscal year 2011, $150,000,000;
                      (C) for fiscal year 2012, $200,000,000;
                      (D) for fiscal year 2013, $250,000,000; and
                      (E) for fiscal year 2014, $300,000,000;
              (3) for carrying out subtitle E (Delivery of
            Community Preventive and Wellness Services)--
                      (A) for fiscal year 2010, $1,065,000,000;
                      (B) for fiscal year 2011, $1,260,000,000;
                      (C) for fiscal year 2012, $1,365,000,000;
                      (D) for fiscal year 2013, $1,570,000,000; and
                      (E) for fiscal year 2014, $1,600,000,000;
              (4) for carrying out section 3161 (Core Public Health
            Infrastructure for State, Local, and Tribal Health
            Departments)--
                      (A) for fiscal year 2010, $800,000,000;
                      (B) for fiscal year 2011, $1,000,000,000;
                      (C) for fiscal year 2012, $1,100,000,000;
                      (D) for fiscal year 2013, $1,200,000,000; and
                      (E) for fiscal year 2014, $1,265,000,000; and
              (5) for carrying out section 3162 (Core Public Health
            Infrastructure and Activities for CDC), $350,000,000
            for each of fiscal years 2010 through 2014.

             Subtitle B--National Prevention and Wellness Strategy

    SEC. 3121. NATIONAL PREVENTION AND WELLNESS STRATEGY.

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

                       Subtitle C--Prevention Task Forces

    SEC. 3131. TASK FORCE ON CLINICAL PREVENTIVE SERVICES.

      (a) In General.--The Secretary, acting through the Director
    of the Agency for Healthcare Research and Quality, shall
    establish a permanent task force to be known as the Task Force
    on Clinical Preventive Services (in this section referred to as
    the ``Task Force'').
      (b) Responsibilities.--The Task Force shall--
              (1) identify clinical preventive services for review;
              (2) review the scientific evidence related to the
            benefits, effectiveness, appropriateness, and costs of
            clinical preventive services identified under paragraph
            (1) for the purpose of developing, updating,
            publishing, and disseminating evidence-based
            recommendations on the use of such services;
              (3) as appropriate, take into account health
            disparities in developing, updating, publishing, and
            disseminating evidence-based recommendations on the use
            of such services;
              (4) identify gaps in clinical preventive services
            research and evaluation and recommend priority areas
            for such research and evaluation;
              (5) as appropriate, consult with the clinical
            prevention stakeholders board in accordance with
            subsection (f);
              (6) consult with the Task Force on Community
            Preventive Services established under section 3132; and
              (7) as appropriate, in carrying out this section,
            consider the national strategy under section 3121.
      (c) Role of Agency.--The Secretary shall provide ongoing
    administrative, research, and technical support for the
    operations of the Task Force, including coordinating and
    supporting the dissemination of the recommendations of the Task
    Force.
      (d) Membership.--
              (1) Number; appointment.--The Task Force shall be
            composed of 30 members, appointed by the Secretary.
              (2) Terms.--
                      (A) In general.--The Secretary shall appoint
                    members of the Task Force for a term of 6 years
                    and may reappoint such members, but the
                    Secretary may not appoint any member to serve
                    more than a total of 12 years.
                      (B) Staggered terms.--Notwithstanding
                    subparagraph (A), of the members first
                    appointed to serve on the Task Force after the
                    enactment of this title--
                              (i) 10 shall be appointed for a term
                            of 2 years;
                              (ii) 10 shall be appointed for a term
                            of 4 years; and
                              (iii) 10 shall be appointed for a
                            term of 6 years.
              (3) Qualifications.--Members of the Task Force shall
            be appointed from among individuals who possess
            expertise in at least one of the following areas:
                      (A) Health promotion and disease prevention.
                      (B) Evaluation of research and systematic
                    evidence reviews.
                      (C) Application of systematic evidence
                    reviews to clinical decisionmaking or health
                    policy.
                      (D) Clinical primary care in child and
                    adolescent health.
                      (E) Clinical primary care in adult health,
                    including women's health.
                      (F) Clinical primary care in geriatrics.
                      (G) Clinical counseling and behavioral
                    services for primary care patients.
              (4) Representation.--In appointing members of the
            Task Force, the Secretary shall ensure that--
                      (A) all areas of expertise described in
                    paragraph (3) are represented; and
                      (B) the members of the Task Force include
                    individuals with expertise in health
                    disparities.
      (e) Subgroups.--As appropriate to maximize efficiency, the
    Task Force may delegate authority for conducting reviews and
    making recommendations to subgroups consisting of Task Force
    members, subject to final approval by the Task Force.
      (f) Clinical Prevention Stakeholders Board.--
              (1) In general.--The Task Force shall convene a
            clinical prevention stakeholders board composed of
            representatives of appropriate public and private
            entities with an interest in clinical preventive
            services to advise the Task Force on developing,
            updating, publishing, and disseminating evidence-based
            recommendations on the use of clinical preventive
            services.
              (2) Membership.--The members of the clinical
            prevention stakeholders board shall include
            representatives of the following:
                      (A) Health care consumers and patient groups.
                      (B) Providers of clinical preventive
                    services, including community-based providers.
                      (C) Federal departments and agencies,
                    including--
                              (i) appropriate health agencies and
                            offices in the Department, including
                            the Office of the Surgeon General of
                            the Public Health Service, the Office
                            of Minority Health, the National Center
                            on Minority Health and Health
                            Disparities, and the Office on Women's
                            Health; and
                              (ii) as appropriate, other Federal
                            departments and agencies whose programs
                            have a significant impact upon health
                            (as determined by the Secretary).
                      (D) Private health care payors.
              (3) Responsibilities.--In accordance with subsection
            (b)(5), the clinical prevention stakeholders board
            shall--
                      (A) recommend clinical preventive services
                    for review by the Task Force;
                      (B) suggest scientific evidence for
                    consideration by the Task Force related to
                    reviews undertaken by the Task Force;
                      (C) provide feedback regarding draft
                    recommendations by the Task Force; and
                      (D) assist with efforts regarding
                    dissemination of recommendations by the
                    Director of the Agency for Healthcare Research
                    and Quality.
      (g) Disclosure and Conflicts of Interest.--Members of the
    Task Force or the clinical prevention stakeholders board shall
    not be considered employees of the Federal Government by reason
    of service on the Task Force or the clinical prevention
    stakeholders board, except members of the Task Force or the
    clinical prevention stakeholders board shall be considered to
    be special Government employees within the meaning of section
    107 of the Ethics in Government Act of 1978 (5 U.S.C. App.) and
    section 208 of title 18, United States Code, for the purposes
    of disclosure and management of conflicts of interest under
    those sections.
      (h) No Pay; Receipt of Travel Expenses.--Members of the Task
    Force or the clinical prevention stakeholders board shall not
    receive any pay for service on the Task Force, but may receive
    travel expenses, including a per diem, in accordance with
    applicable provisions of subchapter I of chapter 57 of title 5,
    United States Code.
      (i) Application of FACA.--The Federal Advisory Committee Act
    (5 U.S.C. App.) except for section 14 of such Act shall apply
    to the Task Force to the extent that the provisions of such Act
    do not conflict with the provisions of this title.
      (j) Report.--The Secretary shall submit to the Congress an
    annual report on the Task Force, including with respect to gaps
    identified and recommendations made under subsection (b)(4).
      (k) Definition.--In this section, the term ``health
    disparities'' has the meaning given the term in section 3171.

    SEC. 3132. TASK FORCE ON COMMUNITY PREVENTIVE SERVICES.

      (a) In General.--The Secretary, acting through the Director
    of the Centers for Disease Control and Prevention, shall
    establish a permanent task force to be known as the Task Force
    on Community Preventive Services (in this section referred to
    as the ``Task Force'').
      (b) Responsibilities.--The Task Force shall--
              (1) identify community preventive services for
            review;
              (2) review the scientific evidence related to the
            benefits, effectiveness, appropriateness, and costs of
            community preventive services identified under
            paragraph (1) for the purpose of developing, updating,
            publishing, and disseminating evidence-based
            recommendations on the use of such services;
              (3) as appropriate, take into account health
            disparities in developing, updating, publishing, and
            disseminating evidence-based recommendations on the use
            of such services;
              (4) identify gaps in community preventive services
            research and evaluation and recommend priority areas
            for such research and evaluation;
              (5) as appropriate, consult with the community
            prevention stakeholders board in accordance with
            subsection (f);
              (6) consult with the Task Force on Clinical
            Preventive Services established under section 3131; and
              (7) as appropriate, in carrying out this section,
            consider the national strategy under section 3121.
      (c) Role of Agency.--The Secretary shall provide ongoing
    administrative, research, and technical support for the
    operations of the Task Force, including coordinating and
    supporting the dissemination of the recommendations of the Task
    Force.
      (d) Membership.--
              (1) Number; appointment.--The Task Force shall be
            composed of 30 members, appointed by the Secretary.
              (2) Terms.--
                      (A) In general.--The Secretary shall appoint
                    members of the Task Force for a term of 6 years
                    and may reappoint such members, but the
                    Secretary may not appoint any member to serve
                    more than a total of 12 years.
                      (B) Staggered terms.--Notwithstanding
                    subparagraph (A), of the members first
                    appointed to serve on the Task Force after the
                    enactment of this section--
                              (i) 10 shall be appointed for a term
                            of 2 years;
                              (ii) 10 shall be appointed for a term
                            of 4 years; and
                              (iii) 10 shall be appointed for a
                            term of 6 years.
              (3) Qualifications.--Members of the Task Force shall
            be appointed from among individuals who possess
            expertise in at least one of the following areas:
                      (A) Public health.
                      (B) Evaluation of research and systematic
                    evidence reviews.
                      (C) Disciplines relevant to community
                    preventive services, including health
                    promotion; disease prevention; chronic disease;
                    worksite health; qualitative and quantitative
                    analysis; and health economics, policy, law,
                    and statistics.
              (4) Representation.--In appointing members of the
            Task Force, the Secretary--
                      (A) shall ensure that all areas of expertise
                    described in paragraph (3) are represented;
                      (B) shall ensure that such members include
                    sufficient representatives of each of--
                              (i) State health officers;
                              (ii) local health officers;
                              (iii) health care practitioners; and
                              (iv) public health practitioners; and
                      (C) shall appoint individuals who have
                    expertise in health disparities.
      (e) Subgroups.--As appropriate to maximize efficiency, the
    Task Force may delegate authority for conducting reviews and
    making recommendations to subgroups consisting of Task Force
    members, subject to final approval by the Task Force.
      (f) Community Prevention Stakeholders Board.--
              (1) In general.--The Task Force shall convene a
            community prevention stakeholders board composed of
            representatives of appropriate public and private
            entities with an interest in community preventive
            services to advise the Task Force on developing,
            updating, publishing, and disseminating evidence-based
            recommendations on the use of community preventive
            services.
              (2) Membership.--The members of the community
            prevention stakeholders board shall include
            representatives of the following:
                      (A) Health care consumers and patient groups.
                      (B) Providers of community preventive
                    services, including community-based providers.
                      (C) Federal departments and agencies,
                    including--
                              (i) appropriate health agencies and
                            offices in the Department, including
                            the Office of the Surgeon General of
                            the Public Health Service, the Office
                            of Minority Health, the National Center
                            on Minority Health and Health
                            Disparities, and the Office on Women's
                            Health; and
                              (ii) as appropriate, other Federal
                            departments and agencies whose programs
                            have a significant impact upon health
                            (as determined by the Secretary).
                      (D) Private health care payors.
              (3) Responsibilities.--In accordance with subsection
            (b)(5), the community prevention stakeholders board
            shall--
                      (A) recommend community preventive services
                    for review by the Task Force;
                      (B) suggest scientific evidence for
                    consideration by the Task Force related to
                    reviews undertaken by the Task Force;
                      (C) provide feedback regarding draft
                    recommendations by the Task Force; and
                      (D) assist with efforts regarding
                    dissemination of recommendations by the
                    Director of the Centers for Disease Control and
                    Prevention.
      (g) Disclosure and Conflicts of Interest.--Members of the
    Task Force or the community prevention stakeholders board shall
    not be considered employees of the Federal Government by reason
    of service on the Task Force or the community prevention
    stakeholders board, except members of the Task Force or the
    community prevention stakeholders board shall be considered to
    be special Government employees within the meaning of section
    107 of the Ethics in Government Act of 1978 (5 U.S.C. App.) and
    section 208 of title 18, United States Code, for the purposes
    of disclosure and management of conflicts of interest under
    those sections.
      (h) No Pay; Receipt of Travel Expenses.--Members of the Task
    Force or the community prevention stakeholders board shall not
    receive any pay for service on the Task Force, but may receive
    travel expenses, including a per diem, in accordance with
    applicable provisions of subchapter I of chapter 57 of title 5,
    United States Code.
      (i) Application of FACA.--The Federal Advisory Committee Act
    (5 U.S.C. App.) except for section 14 of such Act shall apply
    to the Task Force to the extent that the provisions of such Act
    do not conflict with the provisions of this title.
      (j) Report.--The Secretary shall submit to the Congress an
    annual report on the Task Force, including with respect to gaps
    identified and recommendations made under subsection (b)(4).
      (k) Definition.--In this section, the term ``health
    disparities'' has the meaning given the term in section 3171.

                  Subtitle D--Prevention and Wellness Research

    SEC. 3141. PREVENTION AND WELLNESS RESEARCH ACTIVITY COORDINATION.

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

    SEC. 3142. COMMUNITY PREVENTION AND WELLNESS RESEARCH GRANTS.

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

       Subtitle E--Delivery of Community Prevention and Wellness Services

    SEC. 3151. COMMUNITY PREVENTION AND WELLNESS SERVICES GRANTS.

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

                 Subtitle F--Core Public Health Infrastructure

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

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

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

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

                         Subtitle G--General Provisions

    SEC. 3171. DEFINITIONS.

      In this title:
              (1) The term ``core public health infrastructure''
            includes workforce capacity and competency; laboratory
            systems; health information, health information
            systems, and health information analysis;
            communications; financing; other relevant components of
            organizational capacity; and other related activities.
              (2) The terms ``Department'' and ``departmental''
            refer to the Department of Health and Human Services.
              (3) The term ``health disparities'' includes health
            and health care disparities and means population-
            specific differences in the presence of disease, health
            outcomes, or access to health care. For purposes of the
            preceding sentence, a population may be delineated by
            race, ethnicity, geographic setting, and other
            populations or subpopulations determined by the
            Secretary to experience significant gaps in disease,
            health outcomes, or access to health care.
              (4) The term ``tribal'' refers to an Indian tribe, a
            Tribal organization, or an Urban Indian organization,
            as such terms are defined in section 4 of the Indian
            Health Care Improvement Act.

         TITLE XXXII--COMMUNITY LIVING ASSISTANCE SERVICES AND SUPPORTS

    SEC. 3201. IN GENERAL.

      The Secretary shall establish a national voluntary insurance
    program to be known as the CLASS Independence Benefit Plan for
    purchasing community living assistance services and supports.
    Such program shall--
              (1) provide individuals who have functional
            limitations with tools that will allow them--
                      (A) to maintain their personal and financial
                    independence; and
                      (B) to 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. DEVELOPMENT AND MANAGEMENT OF PROGRAM.

      The Secretary shall develop the CLASS Independence Benefit
    Plan in an actuarially sound manner and--
              (1) set criteria for participation in the CLASS
            Independence Benefit Plan that do not restrict
            eligibility based on underwriting;
              (2) establish criteria for eligibility for benefits;
              (3) establish benefit levels;
              (4) establish mechanisms for collecting and
            distributing payments;
              (5) provide mechanisms to assist beneficiaries in the
            use of benefits;
              (6) promulgate such regulations as are necessary to
            carry out the CLASS program in accordance with this
            title; and
              (7) take any other action appropriate to develop,
            manage, and maintain the CLASS Independence Benefit
            Plan, including making adjustments to benefits paid out
            and premiums collected in order to--
                      (A) maintain program solvency; and
                      (B) ensure the program remains deficit
                    neutral.

    SEC. 3203. REPORT.

      The Secretary shall submit to the Congress an annual report
    on the program under this title.

               *       *       *       *       *       *       *

                                  ----------

    SECTION 104 OF THE HEALTH INSURANCE PORTABILITY AND ACCOUNTABILITY ACT
                                    OF 1996

    SEC. 104. ASSURING COORDINATION.

      The Secretary of the Treasury, the Secretary of Health and
    Human Services, and the Secretary of Labor shall ensure,
    through the execution of an interagency memorandum of
    understanding among such Secretaries, that--
              (1) regulations, rulings, and interpretations issued
            by such Secretaries relating to the same matter over
            which two or more such Secretaries have responsibility
            under [this subtitle (and the amendments made by this
            subtitle and section 401)] the provisions of part 7 of
            subtitle B of title I of the Employee Retirement Income
            Security Act of 1974, the provisions of parts A and C
            of title XXVII of the Public Health Service Act, and
            chapter 100 of the Internal Revenue Code of 1986 are
            administered so as to have the same effect at all
            times; and

               *       *       *       *       *       *       *

                                  ----------

    SOCIAL SECURITY ACT

               *       *       *       *       *       *       *

    TITLE II--FEDERAL OLD-AGE, SURVIVORS, AND DISABILITY INSURANCE BENEFITS

               *       *       *       *       *       *       *

    SPECIAL PROVISIONS RELATING TO COVERAGE UNDER MEDICARE PROGRAM FOR END
                              STAGE RENAL DISEASE

      Sec. 226A. (a) * * *
      (b) Subject to subsection (c), entitlement of an individual
    to benefits under part A and eligibility to enroll under part B
    of title XVIII by reasons of this section on the basis of end
    stage renal disease--
              (1) * * *
              (2) shall end, in the case of an individual who
            receives a kidney transplant (except for coverage of
            immunosuppressive drugs under section 1861(s)(2)(J)),
            with the thirty-sixth month after the month in which
            such individual receives such transplant or, in the
            case of an individual who has not received a kidney
            transplant and no longer requires a regular course of
            dialysis, with the twelfth month after the month in
            which such course of dialysis is terminated.

               *       *       *       *       *       *       *

      [(c)] (d) For purposes of this section, each person whose
    monthly insurance benefit for any month is terminated or is
    otherwise not payable solely by reason of paragraph (1) or (7)
    of section 225(c) shall be treated as entitled to such benefit
    for such month.

               *       *       *       *       *       *       *

    TITLE IV--GRANTS TO STATES FOR AID AND SERVICES TO NEEDY FAMILIES WITH
    CHILDREN AND FOR CHILD-WELFARE SERVICES

               *       *       *       *       *       *       *

    PART B--CHILD AND FAMILY SERVICES

               *       *       *       *       *       *       *

            Subpart 3--Support for Quality Home Visitation Programs

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

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

               *       *       *       *       *       *       *

         TITLE XI--GENERAL PROVISIONS, PEER REVIEW, AND ADMINISTRATIVE
                                 SIMPLIFICATION

    PART A--GENERAL PROVISIONS

               *       *       *       *       *       *       *

    SEC. 1108. ADDITIONAL GRANTS TO PUERTO RICO, THE VIRGIN ISLANDS, GUAM,
                        AND AMERICAN SAMOA; LIMITATION ON TOTAL PAYMENTS.

      (a) * * *

               *       *       *       *       *       *       *

      (f) Subject to [subsection (g)] subsections (g) and (h) and
    section 1935(e)(1)(B), the total amount certified by the
    Secretary under title XIX with respect to a fiscal year for
    payment to--
              (1) * * *

               *       *       *       *       *       *       *

      (g) Medicaid Payments to Territories for Fiscal Year 1998 and
    Thereafter.--
              (1) Fiscal year 1998.--[With respect to] Subject to
            subsection (h), with respect to fiscal year 1998, the
            amounts otherwise determined for Puerto Rico, the
            Virgin Islands, Guam, the Northern Mariana Islands, and
            American Samoa under subsection (f) for such fiscal
            year shall be increased by the following amounts:
                      (A) * * *

               *       *       *       *       *       *       *

              (5) Disregarding medical assistance for optional low-
            income hiv-infected individuals.--The limitations under
            subsection (f) and the previous provisions of this
            subsection shall not apply to amounts expended for
            medical assistance for individuals described in section
            1902(ii) who are only eligible for such assistance on
            the basis of section 1902(a)(10)(A)(ii)(XXI).
      (h) Additional Increase for Fiscal Years 2011 Through 2019.--
    With respect to fiscal years 2011 through 2019, the amounts
    otherwise determined under subsections (f) and (g) for Puerto
    Rico, the Virgin Islands, Guam, the Northern Mariana Islands
    and American Samoa shall be increased by the following amounts:
              (1) For Puerto Rico, for fiscal year 2011,
            $727,600,000; for fiscal year 2012, $775,000,000; for
            fiscal year 2013, $850,000,000; for fiscal year 2014,
            $925,000,000; for fiscal year 2015, $1,000,000,000; for
            fiscal year 2016, $1,075,000,000; for fiscal year 2017,
            $1,150,000,000; for fiscal year 2018, $1,225,000,000;
            and for fiscal year 2019, $1,396,400,000.
              (2) For the Virgin Islands, for fiscal year 2011,
            $34,000,000; for fiscal year 2012, $37,000,000; for
            fiscal year 2013, $40,000,000; for fiscal year 2014,
            $43,000,000; for fiscal year 2015, $46,000,000; for
            fiscal year 2016, $49,000,000; for fiscal year 2017,
            $52,000,000; for fiscal year 2018, $55,000,000; and for
            fiscal year 2019, $58,000,000.
              (3) For Guam, for fiscal year 2011, $34,000,000; for
            fiscal year 2012, $37,000,000; for fiscal year 2013,
            $40,000,000; for fiscal year 2014, $43,000,000; for
            fiscal year 2015, $46,000,000; for fiscal year 2016,
            $49,000,000; for fiscal year 2017, $52,000,000; for
            fiscal year 2018, $55,000,000; and for fiscal year
            2019, $58,000,000.
              (4) For the Northern Mariana Islands, for fiscal year
            2011, $13,500,000; fiscal year 2012, $14,500,000; for
            fiscal year 2013, $15,500,000; for fiscal year 2014,
            $16,500,000; for fiscal year 2015, $17,500,000; for
            fiscal year 2016, $18,500,000; for fiscal year 2017,
            $19,500,000; for fiscal year 2018, $21,000,000; and for
            fiscal year 2019, $22,000,000.
              (5) For American Samoa, fiscal year 2011,
            $22,000,000; fiscal year 2012, $23,687,500; for fiscal
            year 2013, $24,687,500; for fiscal year 2014,
            $25,687,500; for fiscal year 2015, $26,687,500; for
            fiscal year 2016, $27,687,500; for fiscal year 2017,
            $28,687,500; for fiscal year 2018, $29,687,500; and for
            fiscal year 2019, $30,687,500.

               *       *       *       *       *       *       *

                             DEMONSTRATION PROJECTS

      Sec. 1115. (a) In the case of any experimental, pilot, or
    demonstration project which, in the judgment of the Secretary,
    is likely to assist in promoting the objectives of title I, X,
    XIV, XVI, or XIX, or part A or D of title IV, in a State or
    States--
              (1) * * *

               *       *       *       *       *       *       *

    In addition, not to exceed $4,000,000 of the aggregate amount
    appropriated for payments to States under such titles for any
    fiscal year beginning after June 30, 1967, shall be available,
    under such terms and conditions as the Secretary may establish,
    for payments to States to cover so much of the cost of such
    projects as is not covered by payments under such titles and is
    not included as part of the cost of projects for purposes of
    section 1110. If an experimental, pilot, or demonstration
    project that relates to title XIX is approved pursuant to any
    part of this subsection, such project shall be treated as part
    of the State plan, all medical assistance provided on behalf of
    any individuals affected by such project shall be medical
    assistance provided under the State plan, and all provisions of
    this Act not explicitly waived in approving such project shall
    remain fully applicable to all individuals receiving benefits
    under the State plan.

               *       *       *       *       *       *       *

              CENTER FOR MEDICARE AND MEDICAID PAYMENT INNOVATION

      Sec. 1115A. (a) Center for Medicare and Medicaid Payment
    Innovation Established.--
              (1) In general.--There is created within the Centers
            for Medicare & Medicaid Services a Center for Medicare
            and Medicaid Payment Innovation (in this section
            referred to as the ``CMPI'') to carry out the duties
            described in paragraph (4).
              (2) Director.--The CMPI shall be headed by a Director
            who shall report directly to the Administrator of the
            Centers for Medicare & Medicaid Services.
              (3) Deadline.--The Secretary shall ensure that the
            CMPI is carrying out the duties described in paragraph
            (4) by not later than January 1, 2011.
              (4) Duties.--The duties described in this paragraph
            are the following:
                      (A) To carry out the duties described in this
                    section.
                      (B) Such other duties as the Secretary may
                    specify.
              (5) Consultation.--In carrying out the duties under
            paragraph (4), the CMPI shall consult representatives
            of relevant Federal agencies and outside clinical and
            analytical experts with expertise in medicine and
            health care management. The CMPI shall use open door
            forums or other mechanisms to seek input from
            interested parties.
      (b) Testing of Models (Phase I).--
              (1) In general.--The CMPI shall test payment models
            in accordance with selection criteria under paragraph
            (2) to determine the effect of applying such models
            under title XVIII, title XIX, or both titles on program
            expenditures under such titles and the quality of care
            received by individuals receiving benefits under such
            titles.
              (2) Selection of models to be tested.--
                      (A) In general.--The Secretary shall give
                    preference to testing models for which, as
                    determined by the professional staff at the
                    Centers for Medicare & Medicaid Services and
                    using such input from outside the Centers as
                    the Secretary determines appropriate, 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
                    Secretary shall focus on models expected to
                    reduce program costs under title XVIII, title
                    XIX, or both titles while preserving or
                    enhancing the quality of care received by
                    individuals receiving benefits under such
                    titles.
                      (B) Application to other demonstrations.--The
                    Secretary shall operate the demonstration
                    programs under sections 1222 and 1236 of the
                    America's Affordable Health Choices Act of 2009
                    through the CMPI in accordance with the rules
                    applicable under this section, including those
                    relating to evaluations, terminations, and
                    expansions.
              (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 the
                    model ensure that the model is budget neutral
                    initially with respect to expenditures under
                    titles XVIII and XIX.
                      (B) Termination.--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 spending under such titles,
                    certifies), after testing has begun, that the
                    model is expected to--
                              (i) improve the quality of patient
                            care (as determined by the
                            Administrator of the Centers for
                            Medicare & Medicaid Services) without
                            increasing spending under such titles;
                              (ii) reduce spending under such
                            titles without reducing the quality of
                            patient care; or
                              (iii) do both.
                    Such termination may occur at any time after
                    such testing has begun and before completion of
                    the testing.
              (4) Evaluation.--The Secretary shall conduct an
            evaluation of each model tested under this subsection.
            Such evaluation shall include an analysis of--
                      (A) the quality of patient care furnished
                    under the model, including through the use of
                    patient-level outcomes measures; and
                      (B) the changes in spending under titles
                    XVIII and XIX by reason of the model.
            The Secretary shall make the results of each evaluation
            under this paragraph available to the public in a
            timely fashion.
      (c) Expansion of Models (Phase II).--The Secretary may expand
    the duration and the scope of a model that is being tested
    under subsection (b) (including implementation on a nationwide
    basis), to the extent determined appropriate by the Secretary,
    if--
              (1) the Secretary determines that such expansion is
            expected--
                      (A) to improve the quality of patient care
                    without increasing spending under titles XVIII
                    and XIX;
                      (B) to reduce spending under such titles
                    without reducing the quality of patient care;
                    or
                      (C) to do both; and
              (2) the Chief Actuary of the Centers for Medicare &
            Medicaid Services certifies that such expansion would
            reduce (or not result in any increase in) net program
            spending under such titles.
      (d) Implementation.--
              (1) Waiver authority.--The Secretary may waive such
            requirements of title 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 elements, parameters, scope, and
                    duration of such models for testing or
                    dissemination;
                      (C) the termination or modification of the
                    design and implementation of a model under
                    subsection (b)(3)(B); and
                      (D) 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
                    paragraphs (1) or (2) of such subsection.
              (3) Administration.--Chapter 35 of title 44, United
            States Code shall not apply to this section and testing
            and evaluation of models or expansion of such models
            under this section.
              (4) Funding for testing items and services and
            administrative costs.--There shall be available from
            the Federal Supplementary Medical Insurance Trust Fund
            for payments for designing, conducting, and evaluating
            payment models, as well as for additional benefits for
            items and services under models tested under subsection
            (b) not otherwise covered under this title and the
            evaluation of such models, $350,000,000 for fiscal year
            2010 and, for a subsequent fiscal year, the amount
            determined under this sentence for the preceding fiscal
            year increased by the annual percentage rate of
            increase in total expenditures under this title for the
            previous fiscal year. There are also appropriated, from
            any amounts in the Treasury not otherwise appropriated,
            $25,000,000 for each fiscal year (beginning with fiscal
            year 2010) for administrative costs of administering
            this section with respect to the Medicaid program under
            title XIX of the Social Security Act.
      (e) 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 payment models tested under
    subsection (b), 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 believes are appropriate
    for legislative action to facilitate the development and
    expansion of successful payment models.

               *       *       *       *       *       *       *

                DISCLOSURE OF OWNERSHIP AND RELATED INFORMATION

      Sec. 1124. (a) * * *

               *       *       *       *       *       *       *

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

               *       *       *       *       *       *       *

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

      Sec. 1128. (a) * * *
      (b) Permissive Exclusion.--The Secretary may exclude the
    following individuals and entities from participation in any
    Federal health care program (as defined in section 1128B(f)):
              (1) * * *
              (2) Conviction relating to obstruction of an
            investigation or audit.--Any individual or entity that
            has been convicted, under Federal or State law, in
            connection with the interference with or obstruction of
            any [investigation into any criminal offense described
            in paragraph (1) or in subsection (a).] investigation
            or audit related to--
                      (A) any offense described in paragraph (1) or
                    in subsection (a); or
                      (B) the use of funds received, directly or
                    indirectly, from any Federal health care
                    program (as defined in section 1128B(f)).

               *       *       *       *       *       *       *

              (11) Failure to supply payment information.--Any
            individual or entity furnishing, ordering, referring
            for furnishing, or certifying the need for items or
            services for which payment may be made under title
            XVIII or a State health care program that fails to
            provide such information as the Secretary or the
            appropriate State agency finds necessary to determine
            whether such payments are or were due and the amounts
            thereof, or has refused to permit such examination of
            its records by or on behalf of the Secretary or that
            agency as may be necessary to verify such information.

               *       *       *       *       *       *       *

      (c) Notice, Effective Date, [and Period] Period, and Effect
    of Exclusion.--(1) * * *

               *       *       *       *       *       *       *

      (3)(A) * * *
      (B) Subject to subparagraph (G), in the case of an exclusion
    under subsection (a), the minimum period of exclusion shall be
    not less than five years, except that, upon the request of the
    administrator of a Federal health care program (as defined in
    section 1128B(f)) who determines that the exclusion would
    impose a hardship on [individuals entitled to benefits under
    part A of title XVIII or enrolled under part B of such title,
    or both] beneficiaries (as defined in section 1128A(i)(5)) of
    that program, the Secretary may, after consulting with the
    Inspector General of the Department of Health and Human
    Services, waive the exclusion under subsection (a)(1), (a)(3),
    or (a)(4) with respect to that program in the case of an
    individual or entity that is the sole community physician or
    sole source of essential specialized services in a community.
    The Secretary's decision whether to waive the exclusion shall
    not be reviewable.

               *       *       *       *       *       *       *

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

               *       *       *       *       *       *       *

      (f) Notice, Hearing, and Judicial Review.--(1) * * *

               *       *       *       *       *       *       *

      (4) The provisions of subsections (d) and (e) of section 205
    shall apply with respect to this section to the same extent as
    they are applicable with respect to title II. The Secretary may
    delegate the authority granted by section 205(d) (as made
    applicable to this section) to the Inspector General of the
    Department of Health and Human Services or the Administrator of
    the Centers for Medicare & Medicaid Services for purposes of
    any investigation under this section.

               *       *       *       *       *       *       *

                            CIVIL MONETARY PENALTIES

      Sec. 1128A. (a) Any person (including an organization,
    agency, or other entity, but excluding a beneficiary, as
    defined in subsection (i)(5)) that--
              (1) knowingly presents or causes to be presented [to
            an officer, employee, or agent of the United States, or
            of any department or agency thereof, or of any State
            agency (as defined in subsection (i)(1))], a claim (as
            defined in subsection (i)(2)) that the Secretary
            determines--
                      (A) * * *

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                      (D) is for a medical or other item or service
                    furnished during a period in which the person
                    was excluded [from the program under which the
                    claim was made pursuant to a determination by
                    the Secretary under this section or under
                    section 1128, 1156, 1160(b) (as in effect on
                    September 2, 1982), 1862(d) (as in effect on
                    the date of the enactment of the Medicare and
                    Medicaid Patient and Program Protection Act of
                    1987), or 1866(b) or as a result of the
                    application of the provisions of section
                    1842(j)(2), or] under Federal law from the
                    Federal health care program under which the
                    claim was made, or

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              (4) in the case of a person who is not an
            organization, agency, or other entity, is excluded from
            [participating in a program under title XVIII or a
            State health care program] participating in a Federal
            health care program (as defined in section 1128B(f)) in
            accordance with this subsection or under section 1128
            and who, at the time of a violation of this
            subsection--
                      (A) retains a direct or indirect ownership or
                    control interest in an entity that is
                    participating in a program under [title XVIII
                    or a State health care program] a Federal
                    health care program (as defined in section
                    1128B(f)), and who knows or should know of the
                    action constituting the basis for the
                    exclusion; or

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              (6) arranges or contracts (by employment or
            otherwise) with an individual or entity that the person
            knows or should know is excluded from participation in
            a Federal health care program (as defined in section
            1128B(f)), for the provision of items or services for
            which payment may be made under such a program; [or]
              (7) commits an act described in paragraph (1) or (2)
            of section 1128B(b);
              (8) knowingly makes or causes to be made any false
            statement, omission, or misrepresentation of a material
            fact in any application, agreement, bid, or contract to
            participate or enroll as a provider of services or
            supplier under a Federal health care program, including
            managed care organizations under title XIX, Medicare
            Advantage organizations under part C of title XVIII,
            prescription drug plan sponsors under part D of title
            XVIII, and entities that apply to participate as
            providers of services or suppliers in such managed care
            organizations and such plans;
              (9) knowingly makes, uses, or causes to be made or
            used, a false record or statement material to a false
            or fraudulent claim for payment for items and services
            furnished under a Federal health care program;
              (10) fails to grant timely access, upon reasonable
            request (as defined by the Secretary in regulations),
            to the Inspector General of the Department of Health
            and Human Services, for the purpose of audits,
            investigations, evaluations, or other statutory
            functions of the Inspector General of the Department of
            Health and Human Services;
              (11) orders or prescribes an item or service,
            including without limitation home health care,
            diagnostic and clinical lab tests, prescription drugs,
            durable medical equipment, ambulance services, physical
            or occupational therapy, or any other item or service,
            during a period when the person has been excluded from
            participation in a Federal health care program, and the
            person knows or should know that a claim for such item
            or service will be presented to such a program;
              (12) conspires to commit a violation of this section;
            or
              (13) knowingly makes, uses, or causes to be made or
            used, a false record or statement material to an
            obligation to pay or transmit money or property to a
            Federal health care program, or knowingly conceals or
            knowingly and improperly avoids or decreases an
            obligation to pay or transmit money or property to a
            Federal health care program;
    shall be subject, in addition to any other penalties that may
    be prescribed by law, to a civil money penalty of not more than
    $10,000 for each item or service (or, in cases under paragraph
    (3), $15,000 for each individual with respect to whom false or
    misleading information was given; in cases under paragraph (4),
    $10,000 for each day the prohibited relationship occurs; [or in
    cases under paragraph (7), $50,000 for each such act)] in cases
    under paragraph (7), $50,000 for each such act, in cases under
    paragraph (8), $50,000 for each false statement, omission, or
    misrepresentation of a material fact, in cases under paragraph
    (9), $50,000 for each false record or statement, in cases under
    paragraph (10), $15,000 for each day of the failure described
    in such paragraph, in cases under paragraph (11), $50,000 for
    each order or prescription for an item or service by an
    excluded individual, in cases under paragraph (12), $50,000 for
    any violation described in this section committed in
    furtherance of the conspiracy involved; or in cases under
    paragraph (13), $50,000 for each false record or statement, or
    concealment, avoidance, or decrease). In addition, such a
    person shall be subject to an assessment of not more than 3
    times the amount claimed for each such item or service in lieu
    of damages sustained by the United States or a State agency
    because of such claim (or, in cases under paragraph (7),
    damages of not more than 3 times the total amount of
    remuneration offered, paid, solicited, or received, without
    regard to whether a portion of such remuneration was offered,
    paid, solicited, or received [for a lawful purpose)] for a
    lawful purpose, in cases under paragraph (8), an assessment of
    not more than 3 times the amount claimed as the result of the
    false statement, omission, or misrepresentation of material
    fact claimed by a provider of services or supplier whose
    application to participate contained such false statement or
    misrepresentation, in cases under paragraph (12), an assessment
    of not more than 3 times the total amount that would otherwise
    apply for any violation described in this section committed in
    furtherance of the conspiracy involved, or in cases under
    paragraph (13), an assessment of not more than 3 times the
    total amount of the obligation to which the false record or
    statment was material or that was avoided or decreased). In
    addition the Secretary may make a determination in the same
    proceeding to exclude the person from participation in the
    Federal health care programs (as defined in section
    1128B(f)(1)) and to direct the appropriate State agency to
    exclude the person from participation in any State health care
    program.

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      (c)(1) The Secretary may initiate a proceeding to determine
    whether to impose a civil money penalty, assessment, or
    exclusion under subsection (a) or (b) only as authorized by the
    Attorney General pursuant to procedures agreed upon by them.
    The Secretary may not initiate an action under this section
    with respect to any claim, request for payment, or other
    occurrence described in this section later than [six years] 10
    years after the date the claim was presented, the request for
    payment was made, or the occurrence took place. The Secretary
    may initiate an action under this section by serving notice of
    the action in any manner authorized by Rule 4 of the Federal
    Rules of Civil Procedure.

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      (i) For the purposes of this section:
              (1) * * *
              [(2) The term ``claim'' means an application for
            payments for items and services under a Federal health
            care program (as defined in section 1128B(f)).
              [(3) The term ``item or service'' includes (A) any
            particular item, device, medical supply, or service
            claimed to have been provided to a patient and listed
            in an itemized claim for payment, and (B) in the case
            of a claim based on costs, any entry in the cost
            report, books of account or other documents sup-
            porting such claim.]
              (2) The term ``claim'' means any application,
            request, or demand, whether under contract, or
            otherwise, for money or property for items and services
            under a Federal health care program (as defined in
            section 1128B(f)), whether or not the United States or
            a State agency has title to the money or property,
            that--
                      (A) is presented or caused to be presented to
                    an officer, employee, or agent of the United
                    States, or of any department or agency thereof,
                    or of any State agency (as defined in
                    subsection (i)(1)); or
                      (B) is made to a contractor, grantee, or
                    other recipient if the money or property is to
                    be spent or used on the Federal health care
                    program's behalf or to advance a Federal health
                    care program interest, and if the Federal
                    health care program--
                              (i) provides or has provided any
                            portion of the money or property
                            requested or demanded; or
                              (ii) will reimburse such contractor,
                            grantee, or other recipient for any
                            portion of the money or property which
                            is requested or demanded.
              (3) The term ``item or service'' means, without
            limitation, any medical, social, management,
            administrative, or other item or service used in
            connection with or directly or indirectly related to a
            Federal health care program.

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              (6) The term ``remuneration'' includes the waiver of
            coinsurance and deductible amounts (or any part
            thereof), and transfers of items or services for free
            or for other than fair market value. The term
            ``remuneration'' does not include--
                      (A) * * *

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                      (C) differentials in coinsurance and
                    deductible amounts as part of a benefit plan
                    design as long as the differentials have been
                    disclosed in writing to all beneficiaries,
                    third party payers, and providers, to whom
                    claims are presented and as long as the
                    differentials meet the standards as defined in
                    regulations promulgated by the Secretary not
                    later than 180 days after the date of the
                    enactment of the Health Insurance Portability
                    and Accountability Act of 1996; [or]

               *       *       *       *       *       *       *

                      (D) incentives given to individuals to
                    promote the delivery of preventive care as
                    determined by the Secretary in regulations so
                    promulgated[.]; or
                      [(D)] (E) a reduction in the copayment amount
                    for covered OPD services under section
                    1833(t)(5)(B).
              [(7) The term ``should know'' means that a person,
            with respect to information--
                      [(A) acts in deliberate ignorance of the
                    truth or falsity of the information; or
                      [(B) acts in reckless disregard of the truth
                    or falsity of the information,
            and no proof of specific intent to defraud is
            required.]
              (7) The terms ``knowing'', ``knowingly'', and
            ``should know'' mean that a person, with respect to
            information--
                      (A) has actual knowledge of the information;
                      (B) acts in deliberate ignorance of the truth
                    or falsity of the information; or
                      (C) acts in reckless disregard of the truth
                    or falsity of the information;
            and require no proof of specific intent to defraud.
              (8) The term ``obligation'' means an established
            duty, whether or not fixed, arising from an express or
            implied contractual, grantor-grantee, or licensor-
            licensee relationship, from a fee-based or similar
            relationship, from statute or regulation, or from the
            retention of any overpayment.
              (9) The term ``material'' means having a natural
            tendency to influence, or be capable of influencing,
            the payment or receipt of money or property.

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                        FRAUD AND ABUSE CONTROL PROGRAM

      Sec. 1128C. (a) Establishment of Program.--
              (1) In general.--Not later than January 1, 1997, the
            Secretary, acting through the Office of the Inspector
            General of the Department of Health and Human Services,
            and the Attorney General shall establish a program--
                      (A) * * *

               *       *       *       *       *       *       *

                      (C) to facilitate the enforcement of the
                    provisions of sections 1128, 1128A, and 1128B
                    and other statutes applicable to health care
                    fraud and abuse, and
                      (D) to provide for the modification and
                    establishment of safe harbors and to issue
                    advisory opinions and special fraud alerts
                    pursuant to section 1128D[, and].
                      [(E) to provide for the reporting and
                    disclosure of certain final adverse actions
                    against health care providers, suppliers, or
                    practitioners pursuant to the data collection
                    system established under section 1128E.]

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              HEALTH CARE FRAUD AND ABUSE DATA COLLECTION PROGRAM

      Sec. 1128E. (a) General Purpose.--[Not later than] Subject to
    subsection (h), not later than January 1, 1997, the Secretary
    shall establish a national health care fraud and abuse data
    collection program for the reporting of 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 (c), and shall maintain a database of the
    information collected under this section.

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      (d) Access to Reported Information.--
              (1) * * *
              (2) Fees for disclosure.--The Secretary may establish
            or approve reasonable fees for the disclosure of
            information in such database [(other than with respect
            to requests by Federal agencies)]. The amount of such a
            fee shall be sufficient to recover the full costs of
            operating the database. Such fees shall be available to
            the Secretary or, in the Secretary's discretion to the
            agency designated under this section to cover such
            costs.

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      (h) Sunset of the Healthcare Integrity and Protection Data
    Bank; Transition Process.--Effective upon the enactment of this
    subsection, the Secretary shall implement a process to
    eliminate duplication between the Healthcare Integrity and
    Protection Data Bank (in this subsection referred to as the
    ``HIPDB'' established pursuant to subsection (a) and the
    National Practitioner Data Bank (in this subsection referred to
    as the ``NPDB'') as implemented under the Health Care Quality
    Improvement Act of 1986 and section 1921 of this Act, including
    systems testing necessary to ensure that information formerly
    collected in the HIPDB will be accessible through the NPDB, and
    other activities necessary to eliminate duplication between the
    two data banks. Upon the completion of such process,
    notwithstanding any other provision of law, the Secretary shall
    cease the operation of the HIPDB and shall collect information
    required to be reported under the preceding provisions of this
    section in the NPDB. Except as otherwise provided in this
    subsection, the provisions of subsections (a) through (g) shall
    continue to apply with respect to the reporting of (or failure
    to report), access to, and other treatment of the information
    specified in this section.

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

      (a) Certain Authorized Screening, Enhanced Oversight Periods,
    and Enrollment Moratoria.--
              (1) In general.--For periods beginning after January
            1, 2011, in the case that the Secretary determines
            there is a significant risk of fraudulent activity (as
            determined by the Secretary based on relevant
            complaints, reports, referrals by law enforcement or
            other sources, data analysis, trending information, or
            claims submissions by providers of services and
            suppliers) with respect to a category of provider of
            services or supplier of items or services, including a
            category within a geographic area, under title XVIII,
            XIX, or XXI, the Secretary may impose any of the
            following requirements with respect to a provider of
            services or a supplier (whether such provider or
            supplier is initially enrolling in the program or is
            renewing such enrollment):
                      (A) Screening under paragraph (2).
                      (B) Enhanced oversight periods under
                    paragraph (3).
                      (C) Enrollment moratoria under paragraph (4).
            In applying this subsection for purposes of title XIX
            and XXI the Secretary may require a State to carry out
            the provisions of this subsection as a requirement of
            the State plan under title XIX or the child health plan
            under title XXI. Actions taken and determinations made
            under this subsection shall not be subject to review by
            a judicial tribunal.
              (2) Screening.--For purposes of paragraph (1), the
            Secretary shall establish procedures under which
            screening is conducted with respect to providers of
            services and suppliers described in such paragraph.
            Such screening may include--
                      (A) licensing board checks;
                      (B) screening against the list of individuals
                    and entities excluded from the program under
                    title XVIII, XIX, or XXI;
                      (C) the excluded provider list system;
                      (D) background checks; and
                      (E) unannounced pre-enrollment or other site
                    visits.
              (3) Enhanced oversight period.--For purposes of
            paragraph (1), the Secretary shall establish procedures
            to provide for a period of not less than 30 days and
            not more than 365 days during which providers of
            services and suppliers described in such paragraph, as
            the Secretary determines appropriate, would be subject
            to enhanced oversight, such as required or unannounced
            (or required and unannounced) site visits or
            inspections, prepayment review, enhanced review of
            claims, and such other actions as specified by the
            Secretary, under the programs under titles XVIII, XIX,
            and XXI. Under such procedures, the Secretary may
            extend such period for more than 365 days if the
            Secretary determines that after the initial period such
            additional period of oversight is necessary.
              (4) Moratorium on enrollment of providers and
            suppliers.--For purposes of paragraph (1), the
            Secretary, based upon a finding of a risk of serious
            ongoing fraud within a program under title XVIII, XIX,
            or XXI, may impose a moratorium on the enrollment of
            providers of services and suppliers within a category
            of providers of services and suppliers (including a
            category within a specific geographic area) under such
            title. Such a moratorium may only be imposed if the
            Secretary makes a determination that the moratorium
            would not adversely impact access of individuals to
            care under such program.
              (5) Clarification.--Nothing in this subsection shall
            be interpreted to preclude or limit the ability of a
            State to engage in provider screening or enhanced
            provider oversight activities beyond those required by
            the Secretary.
      (b) Enhanced Program Disclosure Requirements.--
              (1) Disclosure.--A provider of services or supplier
            who submits on or after July 1, 2011, an application
            for enrollment and renewing enrollment in a program
            under title XVIII, XIX, or XXI shall disclose (in a
            form and manner determined by the Secretary) any
            current affiliation or affiliation within the previous
            10-year period with a provider of services or supplier
            that has uncollected debt or with a person or entity
            that has been suspended or excluded under such program,
            subject to a payment suspension, or has had its billing
            privileges revoked.
              (2) Enhanced safeguards.--If the Secretary determines
            that such previous affiliation of such provider or
            supplier poses a risk of fraud, waste, or abuse, the
            Secretary may apply such enhanced safeguards as the
            Secretary determines necessary to reduce such risk
            associated with such provider or supplier enrolling or
            participating in the program under title XVIII, XIX, or
            XXI. Such safeguards may include enhanced oversight,
            such as enhanced screening of claims, required or
            unannounced (or required and unannounced) site visits
            or inspections, additional information reporting
            requirements, and conditioning such enrollment on the
            provision of a surety bond.
              (3) Authority to deny participation.--If the
            Secretary determines that there has been at least one
            such affiliation and that such affiliation or
            affiliations, as applicable, of such provider or
            supplier poses a serious risk of fraud, waste, or
            abuse, the Secretary may deny the application of such
            provider or supplier.
      (c) Reports on and Repayment of Overpayments Identified
    Through Internal Audits and Reviews.--
              (1) Reporting and returning overpayments.--If a
            person knows of an overpayment, the person must--
                      (A) report and return the overpayment to the
                    Secretary, the State, an intermediary, a
                    carrier, or a contractor, as appropriate, at
                    the correct address, and
                      (B) notify the Secretary, the State,
                    intermediary, carrier, or contractor to whom
                    the overpayment was returned in writing of the
                    reason for the overpayment.
              (2) Timing.--An overpayment must be reported and
            returned under paragraph (1)(A) by not later than the
            date that is 60 days after the date the person knows of
            the overpayment. Any known overpayment retained later
            than the applicable date specified in this paragraph
            creates an obligation as defined in section 3729(b)(3)
            of title 31 of the United States Code.
              (3) Clarification.--Repayment of any overpayments (or
            refunding by withholding of future payments) by a
            provider of services or supplier does not otherwise
            limit the provider or supplier's potential liability
            for administrative obligations such as applicable
            interests, fines, and specialties or civil or criminal
            sanctions involving the same claim if it is determined
            later that the reason for the overpayment was related
            to fraud by the provider or supplier or the employees
            or agents of such provider or supplier.
              (4) Definitions.--In this subsection:
                      (A) Knows.--The term ``knows'' has the
                    meaning given the terms ``knowing'' and
                    ``knowingly'' in section 3729(b) of title 31 of
                    the United States Code.
                      (B) Overpayment.--The term ``overpayment''
                    means any finally determined funds that a
                    person receives or retains under title XVIII,
                    XIX, or XXI to which the person, after
                    applicable reconciliation, is not entitled
                    under such title.
                      (C) Person.--The term ``person'' means a
                    provider of services, supplier, Medicaid
                    managed care organization (as defined in
                    section 1903(m)(1)(A)), Medicare Advantage
                    organization (as defined in section
                    1859(a)(1)), or PDP sponsor (as defined in
                    section 1860D-41(a)(13)), but excluding a
                    beneficiary.
      (d) Access to Information Necessary to Identify Fraud, Waste,
    and Abuse.--For purposes of law enforcement activity, and to
    the extent consistent with applicable disclosure, privacy, and
    security laws, including the Health Insurance Portability and
    Accountability Act of 1996 and the Privacy Act of 1974, and
    subject to any information systems security requirements
    enacted by law or otherwise required by the Secretary, the
    Attorney General shall have access, facilitation by the
    Inspector General of the Department of Health and Human
    Services, to claims and payment data relating to titles XVIII
    and XIX, in consultation with the Centers for Medicare &
    Medicaid Services or the owner of such data.

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

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

               *       *       *       *       *       *       *

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

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

               *       *       *       *       *       *       *

    SEC. 1139B. QUALITY MEASURES FOR MATERNITY AND ADULT HEALTH SERVICES
                        UNDER MEDICAID AND CHIP.

      (a) Maternity Care Quality Measures Under Medicaid and
    CHIP.--
              (1) Development of measures.--No later than January
            1, 2011, the Secretary shall develop and publish for
            comment a proposed set of measures that accurately
            describe the quality of maternity care provided under
            State plans under titles XIX and XXI. The Secretary
            shall publish a final recommended set of such measures
            no later than July 1, 2011.
              (2) Standardized reporting format.--No later than
            January 1, 2012, the Secretary shall develop and
            publish a standardized reporting format for maternity
            care quality measures for use by State programs under
            titles XIX and XXI to collect data from managed care
            entities and providers and practitioners that
            participate in such programs and to report maternity
            care quality measures to the Secretary.
      (b) Other Adult Health Quality Measures Under Medicaid.--
              (1) Development of measures.--The Secretary shall
            develop quality measures that are not otherwise
            developed under section 1192 for services received
            under State plans under title XIX by individuals who
            are 21 years of age or older but have not attained age
            65. The Secretary shall publish such quality measures
            through notice and comment rulemaking.
              (2) Standardized reporting format.--The Secretary
            shall develop and publish a standardized reporting
            format for quality measures developed under paragraph
            (1) and section 1192 for services furnished under State
            plans under title XIX to individuals who are 21 years
            of age or older but have not attained age 65 for use
            under such plans and State plans under title XXI. The
            format shall enable State agencies administering such
            plans to collect data from managed care entities and
            providers and practitioners that participate in such
            plans and to report quality measures to the Secretary.
      (c) Development Process.--With respect to the development of
    quality measures under subsections (a) and (b)--
              (1) Use of qualified entities.--The Secretary may
            enter into agreements with public, nonprofit, or
            academic institutions with technical expertise in the
            area of health quality measurement to assist in such
            development. The Secretary may carry out these
            agreements by contract, grant, or otherwise.
              (2) Multi-stakeholder pre-rulemaking input.--The
            Secretary shall obtain the input of stakeholders with
            respect to such quality measures using a process
            similar to that described in section 1808(d).
              (3) Coordination.--The Secretary shall coordinate the
            development of such measures under such subsections and
            with the development of child health quality measures
            under section 1139A.
      (d) Annual Report to Congress.--No later than January 1,
    2013, and annually thereafter, the Secretary shall report to
    the Committee on Energy and Commerce of the House of
    Representatives the Committee on Finance of the Senate
    regarding--
              (1) the availability of reliable data relating to the
            quality of maternity care furnished under State plans
            under titles XIX and XXI;
              (2) the availability of reliable data relating to the
            quality of services furnished under State plans under
            title XIX to adults who are 21 years of age or older
            but have not attained age 65; and
              (3) recommendations for improving the quality of such
            care and services furnished under such State plans.
      (e) Rule of Construction.--Notwithstanding any other
    provision in this section, no quality measure developed,
    published, or used as a basis of measurement or reporting under
    this section may be used to establish an irrefutable
    presumption regarding either the medical necessity of care or
    the maximum permissible coverage for any individual who
    receives medical assistance under title XIX or child health
    assistance under title XXI.
      (f) Appropriation.--For purposes of carrying out this
    section, in addition to funds otherwise available, out of any
    funds in the Treasury not otherwise appropriated, there are
    appropriated $40,000,000 for the 5-fiscal-year period beginning
    with fiscal year 2010. Funds appropriated under this subsection
    shall remain available until expended.

               *       *       *       *       *       *       *

    OUTREACH EFFORTS TO INCREASE AWARENESS OF THE AVAILABILITY OF MEDICARE
    COST-SHARING AND SUBSIDIES FOR LOW-INCOME INDIVIDUALS UNDER TITLE XVIII

      Sec. 1144. (a) * * *

               *       *       *       *       *       *       *

      (c) Assistance With Medicare Savings Program and Low-Income
    Subsidy Program Applications.--
              (1) * * *

               *       *       *       *       *       *       *

              (3) Transmittal of data to states.--Beginning on
            January 1, 2010, with the consent of an individual
            completing an application for benefits described in
            paragraph (1)(B), the Commissioner shall electronically
            transmit to the appropriate State Medicaid agency data
            from such application, as determined by the
            Commissioner, which [transmittal] shall initiate an
            application of the individual for benefits under the
            Medicare Savings Program with the State Medicaid agency
            as specified in section 1935(a)(4). In order to ensure
            that such data transmittal provides effective
            assistance for purposes of State adjudication of
            applications for benefits under the Medicare Savings
            Program, the Commissioner shall consult with the
            Secretary, after the Secretary has consulted with the
            States, regarding the content, form, frequency, and
            manner in which data (on a uniform basis for all
            States) shall be transmitted under this subparagraph.

               *       *       *       *       *       *       *

            IMPROVED COORDINATION AND PROTECTION FOR DUAL ELIGIBLES

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

               *       *       *       *       *       *       *

                     Part C--Administrative Simplification

                                  DEFINITIONS

      Sec. 1171. For purposes of this part:
              (1) * * *

               *       *       *       *       *       *       *

              (7) Standard.--The term ``standard'', when used [with
            reference to a data element of health information or a
            transaction referred to in section 1173(a)(1), means
            any such data element or transaction that meets each of
            the standards and implementation specifications adopted
            or established by the Secretary with respect to the
            data element or transaction under sections 1172 through
            1174.] with reference to a transaction or data element
            of health information in section 1173 means
            implementation specifications, certification criteria,
            operating rules, messaging formats, codes, and code
            sets adopted or established by the Secretary for the
            electronic exchange and use of information.

               *       *       *       *       *       *       *

              (9) Operating rules.--The term ``operating rules''
            means business rules for using and processing
            transactions. Operating rules should address the
            following:
                      (A) Requirements for data content using
                    available and established national standards.
                      (B) Infrastructure requirements that
                    establish best practices for streamlining data
                    flow to yield timely execution of transactions.
                      (C) Policies defining the transaction related
                    rights and responsibilities for entities that
                    are transmitting or receiving data.

               *       *       *       *       *       *       *

    SEC. 1173A. STANDARDIZE ELECTRONIC ADMINISTRATIVE TRANSACTIONS.

      (a) Standards for Financial and Administrative
    Transactions.--
              (1) In general.--The Secretary shall adopt and
            regularly update standards consistent with the goals
            described in paragraph (2).
              (2) Goals for financial and administrative
            transactions.--The goals for standards under paragraph
            (1) are that such standards shall--
                      (A) be unique with no conflicting or
                    redundant standards;
                      (B) be authoritative, permitting no additions
                    or constraints for electronic transactions,
                    including companion guides;
                      (C) be comprehensive, efficient and robust,
                    requiring minimal augmentation by paper
                    transactions or clarification by further
                    communications;
                      (D) enable the real-time (or near real-time)
                    determination of an individual's financial
                    responsibility at the point of service and, to
                    the extent possible, prior to service,
                    including whether the individual is eligible
                    for a specific service with a specific
                    physician at a specific facility, which may
                    include utilization of a machine-readable
                    health plan beneficiary identification card;
                      (E) enable, where feasible, near real-time
                    adjudication of claims;
                      (F) provide for timely acknowledgment,
                    response, and status reporting applicable to
                    any electronic transaction deemed appropriate
                    by the Secretary;
                      (G) describe all data elements (such as
                    reason and remark codes) in unambiguous terms,
                    not permit optional fields, require that data
                    elements be either required or conditioned upon
                    set values in other fields, and prohibit
                    additional conditions; and
                      (H) harmonize all common data elements across
                    administrative and clinical transaction
                    standards.
              (3) Time for adoption.--Not later than 2 years after
            the date of implementation of the X12 Version 5010
            transaction standards implemented under this part, the
            Secretary shall adopt standards under this section.
              (4) Requirements for specific standards.--The
            standards under this section shall be developed,
            adopted, and enforced so as to--
                      (A) clarify, refine, complete, and expand, as
                    needed, the standards required under section
                    1173;
                      (B) require paper versions of standardized
                    transactions to comply with the same standards
                    as to data content such that a fully compliant,
                    equivalent electronic transaction can be
                    populated from the data from a paper version;
                      (C) enable electronic funds transfers, in
                    order to allow automated reconciliation with
                    the related health care payment and remittance
                    advice;
                      (D) require timely and transparent claim and
                    denial management processes, including
                    tracking, adjudication, and appeal processing;
                      (E) require the use of a standard electronic
                    transaction with which health care providers
                    may quickly and efficiently enroll with a
                    health plan to conduct the other electronic
                    transactions provided for in this part; and
                      (F) provide for other requirements relating
                    to administrative simplification as identified
                    by the Secretary, in consultation with
                    stakeholders.
              (5) Building on existing standards.--In developing
            the standards under this section, the Secretary shall
            build upon existing and planned standards.
              (6) Implementation and enforcement.--Not later than 6
            months after the date of the enactment of this section,
            the Secretary shall submit to the appropriate
            committees of Congress a plan for the implementation
            and enforcement, by not later than 5 years after such
            date of enactment, of the standards under this section.
            Such plan shall include--
                      (A) a process and timeframe with milestones
                    for developing the complete set of standards;
                      (B) an expedited upgrade program for
                    continually developing and approving additions
                    and modifications to the standards as often as
                    annually to improve their quality and extend
                    their functionality to meet evolving
                    requirements in health care;
                      (C) programs to provide incentives for, and
                    ease the burden of, implementation for certain
                    health care providers, with special
                    consideration given to such providers serving
                    rural or underserved areas and ensure
                    coordination with standards, implementation
                    specifications, and certification criteria
                    being adopted under the HITECH Act;
                      (D) programs to provide incentives for, and
                    ease the burden of, health care providers who
                    volunteer to participate in the process of
                    setting standards for electronic transactions;
                      (E) an estimate of total funds needed to
                    ensure timely completion of the implementation
                    plan; and
                      (F) an enforcement process that includes
                    timely investigation of complaints, random
                    audits to ensure compliance, civil monetary and
                    programmatic penalties for non-compliance
                    consistent with existing laws and regulations,
                    and a fair and reasonable appeals process
                    building off of enforcement provisions under
                    this part.
      (b) Limitations on Use of Data.--Nothing in this section
    shall be construed to permit the use of information collected
    under this section in a manner that would adversely affect any
    individual.
      (c) Protection of Data.--The Secretary shall ensure (through
    the promulgation of regulations or otherwise) that all data
    collected pursuant to subsection (a) are--
              (1) used and disclosed in a manner that meets the
            HIPAA privacy and security law (as defined in section
            3009(a)(2) of the Public Health Service Act), including
            any privacy or security standard adopted under section
            3004 of such Act; and
              (2) protected from all inappropriate internal use by
            any entity that collects, stores, or receives the data,
            including use of such data in determinations of
            eligibility (or continued eligibility) in health plans,
            and from other inappropriate uses, as defined by the
            Secretary.

    SEC. 1173B. OPERATING RULES.

      (a) In General.--The Secretary shall adopt operating rules
    for each transaction described in section 1173(a)(2) of the
    Social Security Act (42 U.S.C. 1320d-2(a))
      (b) Operating Rules Development.--In adopting such rules, the
    Secretary shall take into account the development of operating
    rules that have been developed by a nonprofit entity that meets
    the following criteria:
              (1) The entity focuses its mission on administrative
            simplification.
              (2) The entity demonstrates a established multi-
            stakeholder process that creates consensus based
            operating rules using a voting policy with balanced
            representation by the critical stakeholders (including
            health plans and health care providers) so that no one
            group dominates the entity and shall include others
            such as standards development organizations, and
            relevant Federal agencies.
              (3) The entity has in place a public set of guiding
            principles that ensure the operating rules and process
            are open and transparent.
              (4) The entity shall coordinate its activities with
            the HIT Policy Committee and the HIT Standards
            Committee (established under title XXX of the Public
            Health Service Act) and complements the efforts of the
            Office of the National Healthcare Coordinator and its
            related health information exchange goals.
              (5) The entity incorporates national standards,
            including the transaction standards issued under Health
            Insurance Portability and Accountability Act of 1996.
              (6) The entity uses existing market research and
            proven best practices.
              (7) The entity has a set of measures that allow for
            the evaluation of their market impact and public
            reporting of aggregate stakeholder impact.
              (8) The entity supports nondiscrimination and
            conflict of interest policies that demonstrate a
            commitment to open, fair, and nondiscriminatory
            practices.
              (9) The entity allows for public reviews and updates
            of the operating rules.
      (c) Implementation.--The Secretary shall adopt operating
    rules under this section, by regulation or otherwise, only
    after taking into account the rules developed by the entity
    under subsection (b) and having ensured consultation with
    providers. The first set of operating rules for the
    transactions for eligibility for health plan and health claims
    status under this section shall be adopted not later than
    October 1, 2011, in a manner such that such set of rules is
    effective beginning not later than January 1, 2013. The second
    set of operating rules for the remainder of the transactions
    described in section 1173(a)(2) of the Social Security Act (42
    U.S.C. 1320d-2(a)) shall be adopted not later than October 1,
    2012, in a manner such that such set of rules is effective
    beginning not later than January 1, 2014.

               *       *       *       *       *       *       *

           PROCESSING PAYMENT TRANSACTIONS BY FINANCIAL INSTITUTIONS

      Sec. 1179. To the extent that an entity is engaged in
    activities of a financial institution (as defined in section
    1101 of the Right to Financial Privacy Act of 1978) on behalf
    of an individual, [or is engaged] and is engaged in
    authorizing, processing, clearing, settling, billing,
    transferring, reconciling, or collecting payments, for a
    financial institution  (other than as a business associate for
    a covered entity) on behalf of an individual, this part, and
    any standard adopted under this part, shall not apply to the
    entity with respect to such activities, including the
    following:
              (1)  * * *

               *       *       *       *       *       *       *

                   Part D--Comparative Effectiveness Research

                       COMPARATIVE EFFECTIVENESS RESEARCH

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

                          Part E--Quality Improvement

        ESTABLISHMENT OF NATIONAL PRIORITIES FOR PERFORMANCE IMPROVEMENT

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

    SEC. 1192. DEVELOPMENT OF NEW QUALITY MEASURES.

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

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

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

               *       *       *       *       *       *       *

    TITLE XVIII--HEALTH INSURANCE FOR THE AGED AND DISABLED

               *       *       *       *       *       *       *

                      MEDICARE PAYMENT ADVISORY COMMISSION

      Sec. 1805. (a) * * *

               *       *       *       *       *       *       *

      (c) Membership.--
              (1) * * *
              (2) Qualifications.--
                      (A) In general.--The membership of the
                    Commission 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
                    consistent with subparagraph (E).

               *       *       *       *       *       *       *

                      (E) Proportional representation of interests
                    of rural areas.--In order to provide a balance
                    between urban and rural representatives under
                    subparagraph (A), the proportion of members of
                    the Commission who represent the interests of
                    health care providers and Medicare
                    beneficiaries located in rural areas shall be
                    no less than the proportion of the total number
                    of Medicare beneficiaries who reside in rural
                    areas.

               *       *       *       *       *       *       *

                     PROVISIONS RELATING TO ADMINISTRATION

      Sec. 1808. (a) * * *

               *       *       *       *       *       *       *

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

               *       *       *       *       *       *       *

    Part A--Hospital Insurance Benefits for the Aged and Disabled

               *       *       *       *       *       *       *

             CONDITIONS OF AND LIMITATIONS ON PAYMENT FOR SERVICES

      Sec. 1814. (a) Requirement of Requests and Certifications.--
    Except as provided in subsections (d) and (g) and in section
    1876, payment for services furnished an individual may be made
    only to providers of services which are eligible therefor under
    section 1866 and only if--
              (1) written request, signed by such individual,
            except in cases in which the Secretary finds it
            impracticable for the individual to do so, is filed for
            such payment in such form, in such manner, and by such
            person or persons as the Secretary may by regulation
            prescribe, no later than the close of the [period of 3
            calendar years following the year in which such
            services are furnished (deeming any services furnished
            in the last 3 calendar months of any calendar year to
            have been furnished in the succeeding calendar year)
            except that where the Secretary deems that efficient
            administration so requires, such period may be reduced
            to not less than 1 calendar year;] period of 1 calendar
            year from which such services are furnished; and
              (2) a physician, 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), or, in the case of services described in
            subparagraph (B), a physician, or a nurse practitioner
            or clinical nurse specialist who does not have a direct
            or indirect employment relationship with the facility
            but is working in collaboration with a physician,
            certifies (and recertifies, where such services are
            furnished over a period of time, in such cases, with
            such frequency, and accompanied by such supporting
            material, appropriate to the case involved, as may be
            provided by regulations, except that the first of such
            recertifications shall be required in each case of
            inpatient hospital services not later than the 20th day
            of such period) that--
                      (A)  * * *

               *       *       *       *       *       *       *

                      (C) in the case of home health services, such
                    services are or were required because the
                    individual is or was confined to his home
                    (except when receiving items and services
                    referred to in section 1861(m)(7)) and needs or
                    needed skilled nursing care (other than solely
                    venipuncture for the purpose of obtaining a
                    blood sample) on an intermittent basis or
                    physical or speech therapy or, in the case of
                    an individual who has been furnished home
                    health services based on such a need and who no
                    longer has such a need for such care or
                    therapy, continues or continued to need
                    occupational therapy; a plan for furnishing
                    such services to such individual has been
                    established and is periodically reviewed by a
                    physician; [and such services] such services
                    are or were furnished while the individual was
                    under the care of a physician, and, in the case
                    of a certification or recertification made by a
                    physician after January 1, 2010, prior to
                    making such certification the physician must
                    document that the physician has had a face-to-
                    face encounter (including through use of
                    telehealth and other than with respect to
                    encounters that are incident to services
                    involved) with the individual during the 6-
                    month period preceding such certification, or
                    other reasonable timeframe as determined by the
                    Secretary; or

               *       *       *       *       *       *       *

    To the extent provided by regulations, the certification and
    recertification requirements of paragraph (2) shall be deemed
    satisfied where, at a later date, a physician, nurse
    practitioner, or clinical nurse specialist (as the case may be)
    makes certification of the kind provided in subparagraph (A),
    (B), (C), or (D) of paragraph (2) (whichever would have
    applied), but only where such certification is accompanied by
    such medical and other evidence as may be required by such
    regulations. With respect to the physician certification
    required by paragraph (2) for home health services furnished to
    any individual by a home health agency (other than an agency
    which is a governmental entity) and with respect to the
    establishment and review of a plan for such services, the
    Secretary shall prescribe regulations which shall become
    effective no later than July 1, 1981, and which prohibit a
    physician who has a significant ownership interest in, or a
    significant financial or contractual relationship with, such
    home health agency from performing such certification and from
    establishing or reviewing such plan, except that such
    prohibition shall not apply with respect to a home health
    agency which is a sole community home health agency (as
    determined by the Secretary). For purposes of the preceding
    sentence, service by a physician as an uncompensated officer or
    director of a home health agency shall not constitute having a
    significant ownership interest in, or a significant financial
    or contractual relationship with, such agency. For purposes of
    paragraph (2)(C), an individual shall be considered to be
    ``confined to his home'' if the individual has a condition, due
    to an illness or injury, that restricts the ability of the
    individual to leave his or her home except with the assistance
    of another individual or the aid of a supportive device (such
    as crutches, a cane, a wheelchair, or a walker), or if the
    individual has a condition such that leaving his or her home is
    medically contraindicated. While an individual does not have to
    be bedridden to be considered ``confined to his home'', the
    condition of the individual should be such that there exists a
    normal inability to leave home and that leaving home requires a
    considerable and taxing effort by the individual. Any absence
    of an individual from the home attributable to the need to
    receive health care treatment, including regular absences for
    the purpose of participating in therapeutic, psychosocial, or
    medical treatment in an adult day-care program that is licensed
    or certified by a State, or accredited, to furnish adult day-
    care services in the State shall not disqualify an individual
    from being considered to be ``confined to his home''. Any other
    absence of an individual from the home shall not so disqualify
    an individual if the absence is of infrequent or of relatively
    short duration. For purposes of the preceding sentence, any
    absence for the purpose of attending a religious service shall
    be deemed to be an absence of infrequent or short duration. In
    applying paragraph (1), the Secretary may specify exceptions to
    the 1 calendar year period specified in such paragraph.

               *       *       *       *       *       *       *

                            Payment for Hospice Care

      (i)(1)(A)  * * *
      (C)(i)  * * *
      (ii) With respect to routine home care and other services
    included in hospice care furnished during a subsequent fiscal
    year, the payment rates for such care and services shall be the
    payment rates in effect under this subparagraph during the
    previous fiscal year increased by--
              (I)  * * *

               *       *       *       *       *       *       *

              (VII) for a subsequent fiscal year, the market basket
            percentage increase (which is subject to the
            productivity adjustment described in section
            1886(b)(3)(B)(iii)(II)) for the fiscal year.

               *       *       *       *       *       *       *

      (l) Payment for Inpatient Critical Access Hospital
    Services.--(1) * * *

               *       *       *       *       *       *       *

      (5) The adjustment factor described in section 1886(p)(3)
    shall apply to payments with respect to a critical access
    hospital with respect to a cost reporting period beginning in
    fiscal year 2012 and each subsequent fiscal year (after
    application of paragraph (4) of this subsection) in a manner
    similar to the manner in which such section applies with
    respect to a fiscal year to an applicable hospital as described
    in section 1886(p)(2).
      [(5)] (6) There shall be no administrative or judicial review
    under section 1869, section 1878, or otherwise, of--
              (A) * * *

               *       *       *       *       *       *       *

              (C) the specification of EHR reporting periods under
            section 1886(n)(6)(B) as applied under paragraphs (3)
            and (4); [and]
              (D) the identification of costs for purposes of
            paragraph (3)(C)[.]; and
              (E) the methodology for determining the adjustment
            factor under paragraph (5), including the determination
            of aggregate payments for actual and expected
            readmissions, applicable periods, applicable conditions
            and measures of readmissions.

               *       *       *       *       *       *       *

                     FEDERAL HOSPITAL INSURANCE TRUST FUND

      Sec. 1817. (a) * * *

               *       *       *       *       *       *       *

      (k) Health Care Fraud and Abuse Control Account.--
              (1) * * *

               *       *       *       *       *       *       *

              (4) Appropriated amounts to account for medicare
            integrity program.--
                      (A) In general.--There are hereby
                    appropriated to the Account from the Trust Fund
                    for each fiscal year such amounts as are
                    necessary for activities described in paragraph
                    (3)(C) and to carry out the Medicare Integrity
                    Program under section 1893, subject to
                    subparagraphs (B), (C), and (D) and to be
                    available without further appropriation until
                    expended.

               *       *       *       *       *       *       *

              (7) Additional funding.--In addition to the funds
            otherwise appropriated to the Account from the Trust
            Fund under paragraphs (3) and (4) and for purposes
            described in paragraphs (3)(C) and (4)(A), there are
            hereby appropriated an additional $100,000,000 to such
            Account from such Trust Fund for each fiscal year
            beginning with 2011. The funds appropriated under this
            paragraph shall be allocated in the same proportion as
            the total funding appropriated with respect to
            paragraphs (3)(A) and (4)(A) was allocated with respect
            to fiscal year 2010, and shall be available without
            further appropriation until expended.

               *       *       *       *       *       *       *

      REQUIREMENTS FOR, AND ASSURING QUALITY OF CARE IN, SKILLED NURSING
                                   FACILITIES

      Sec. 1819. (a) * * *
      (b) Requirements Relating to Provision of Services.--
              (1) Quality of life.--
                      (A) * * *
                      (B) Quality assessment and [assurance]
                    assurance and quality assurance and performance
                    improvement program.--
                              (i) In general.--A skilled nursing
                            facility must maintain a quality
                            assessment and assurance committee,
                            consisting of the director of nursing
                            services, a physician designated by the
                            facility, and at least 3 other members
                            of the facility's staff, which [(i)]
                            (I) meets at least quarterly to
                            identify issues with respect to which
                            quality assessment and assurance
                            activities are necessary and [(ii)]
                            (II) develops and implements
                            appropriate plans of action to correct
                            identified quality deficiencies.
                              (ii) Quality assurance and
                            performance improvement program.--
                                      (I) In general.--Not later
                                    than December 31, 2011, the
                                    Secretary shall establish and
                                    implement a quality assurance
                                    and performance improvement
                                    program (in this clause
                                    referred to as the ``QAPI
                                    program'') for skilled nursing
                                    facilities, including multi-
                                    unit chains of such facilities.
                                    Under the QAPI program, the
                                    Secretary shall establish
                                    standards relating to such
                                    facilities and provide
                                    technical assistance to such
                                    facilities on the development
                                    of best practices in order to
                                    meet such standards. Not later
                                    than 1 year after the date on
                                    which the regulations are
                                    promulgated under subclause
                                    (II), a skilled nursing
                                    facility must submit to the
                                    Secretary a plan for the
                                    facility to meet such standards
                                    and implement such best
                                    practices, including how to
                                    coordinate the implementation
                                    of such plan with quality
                                    assessment and assurance
                                    activities conducted under
                                    clause (i).
                                      (II) Regulations.--The
                                    Secretary shall promulgate
                                    regulations to carry out this
                                    clause.

               *       *       *       *       *       *       *

              (8) Information on nurse staffing.--
                      (A) * * *

               *       *       *       *       *       *       *

                      (C) Submission of staffing information based
                    on payroll data in a uniform format.--Beginning
                    not later than 2 years after the date of the
                    enactment of this subparagraph, and after
                    consulting with State long-term care ombudsman
                    programs, consumer advocacy groups, provider
                    stakeholder groups, employees and their
                    representatives, and other parties the
                    Secretary deems appropriate, the Secretary
                    shall require a skilled nursing facility to
                    electronically submit to the Secretary direct
                    care staffing information (including
                    information with respect to agency and contract
                    staff) based on payroll and other verifiable
                    and auditable data in a uniform format
                    (according to specifications established by the
                    Secretary in consultation with such programs,
                    groups, and parties). Such specifications shall
                    require that the information submitted under
                    the preceding sentence--
                              (i) specify the category of work a
                            certified employee performs (such as
                            whether the employee is a registered
                            nurse, licensed practical nurse,
                            licensed vocational nurse, certified
                            nursing assistant, therapist, or other
                            medical personnel);
                              (ii) include resident census data and
                            information on resident case mix;
                              (iii) include a regular reporting
                            schedule; and
                              (iv) include information on employee
                            turnover and tenure and on the hours of
                            care provided by each category of
                            certified employees referenced in
                            clause (i) per resident per day.
                    Nothing in this subparagraph shall be construed
                    as preventing the Secretary from requiring
                    submission of such information with respect to
                    specific categories, such as nursing staff,
                    before other categories of certified employees.
                    Information under this subparagraph with
                    respect to agency and contract staff shall be
                    kept separate from information on employee
                    staffing.
      (c) Requirements Relating to Residents' Rights.--
              (1) * * *

               *       *       *       *       *       *       *

              (7) Notification of facility closure.--
                      (A) In general.--Any individual who is the
                    administrator of a skilled nursing facility
                    must--
                              (i) submit to the Secretary, the
                            State long-term care ombudsman,
                            residents of the facility, and the
                            legal representatives of such residents
                            or other responsible parties, written
                            notification of an impending closure--
                                      (I) subject to subclause
                                    (II), not later than the date
                                    that is 60 days prior to the
                                    date of such closure; and
                                      (II) in the case of a
                                    facility where the Secretary
                                    terminates the facility's
                                    participation under this title,
                                    not later than the date that
                                    the Secretary determines
                                    appropriate;
                              (ii) ensure that the facility does
                            not admit any new residents on or after
                            the date on which such written
                            notification is submitted; and
                              (iii) include in the notice a plan
                            for the transfer and adequate
                            relocation of the residents of the
                            facility by a specified date prior to
                            closure that has been approved by the
                            State, including assurances that the
                            residents will be transferred to the
                            most appropriate facility or other
                            setting in terms of quality, services,
                            and location, taking into consideration
                            the needs and best interests of each
                            resident.
                      (B) Relocation.--
                              (i) In general.--The State shall
                            ensure that, before a facility closes,
                            all residents of the facility have been
                            successfully relocated to another
                            facility or an alternative home and
                            community-based setting.
                              (ii) Continuation of payments until
                            residents relocated.--The Secretary
                            may, as the Secretary determines
                            appropriate, continue to make payments
                            under this title with respect to
                            residents of a facility that has
                            submitted a notification under
                            subparagraph (A) during the period
                            beginning on the date such notification
                            is submitted and ending on the date on
                            which the resident is successfully
                            relocated.
      (d) Requirements Relating to Administration and Other
    Matters.--
              (1) Administration.--
                      (A) * * *
                      [(B) Required notices.--If a change occurs
                    in--
                              [(i) the persons with an ownership or
                            control interest (as defined in section
                            1124(a)(3)) in the facility,
                              [(ii) the persons who are officers,
                            directors, agents, or managing
                            employees (as defined in section
                            1126(b)) of the facility,
                              [(iii) the corporation, association,
                            or other company responsible for the
                            management of the facility, or
                              [(iv) the individual who is the
                            administrator or director of nursing of
                            the facility,--the skilled nursing
                            facility must provide notice to the
                            State agency responsible for the
                            licensing of the facility, at the time
                            of the change, of the change and of the
                            identity of each new person, company,
                            or individual described in the
                            respective clause.]
                      [(C)] (B) Skilled nursing facility
                    administrator.--The administrator of a skilled
                    nursing facility must meet standards
                    established by the Secretary under subsection
                    (f)(4).
                      (C) Compliance and ethics programs.--
                              (i) Requirement.--On or after the
                            date that is 36 months after the date
                            of the enactment of this subparagraph,
                            a skilled nursing facility shall, with
                            respect to the entity that operates the
                            facility (in this subparagraph referred
                            to as the ``operating organization'' or
                            ``organization''), have in operation a
                            compliance and ethics program that is
                            effective in preventing and detecting
                            criminal, civil, and administrative
                            violations under this Act and in
                            promoting quality of care consistent
                            with regulations developed under clause
                            (ii).
                              (ii) Development of regulations.--
                                      (I) In general.--Not later
                                    than the date that is 2 years
                                    after such date of the
                                    enactment, the Secretary, in
                                    consultation with the Inspector
                                    General of the Department of
                                    Health and Human Services,
                                    shall promulgate regulations
                                    for an effective compliance and
                                    ethics program for operating
                                    organizations, which may
                                    include a model compliance
                                    program.
                                      (II) Design of regulations.--
                                    Such regulations with respect
                                    to specific elements or
                                    formality of a program may vary
                                    with the size of the
                                    organization, such that larger
                                    organizations should have a
                                    more formal and rigorous
                                    program and include established
                                    written policies defining the
                                    standards and procedures to be
                                    followed by its employees. Such
                                    requirements shall specifically
                                    apply to the corporate level
                                    management of multi-unit
                                    nursing home chains.
                                      (III) Evaluation.--Not later
                                    than 3 years after the date of
                                    promulgation of regulations
                                    under this clause, the
                                    Secretary shall complete an
                                    evaluation of the compliance
                                    and ethics programs required to
                                    be established under this
                                    subparagraph. Such evaluation
                                    shall determine if such
                                    programs led to changes in
                                    deficiency citations, changes
                                    in quality performance, or
                                    changes in other metrics of
                                    resident quality of care. The
                                    Secretary shall submit to
                                    Congress a report on such
                                    evaluation and shall include in
                                    such report such
                                    recommendations regarding
                                    changes in the requirements for
                                    such programs as the Secretary
                                    determines appropriate.
                              (iii) Requirements for compliance and
                            ethics programs.--In this subparagraph,
                            the term ``compliance and ethics
                            program'' means, with respect to a
                            skilled nursing facility, a program of
                            the operating organization that--
                                      (I) has been reasonably
                                    designed, implemented, and
                                    enforced so that it generally
                                    will be effective in preventing
                                    and detecting criminal, civil,
                                    and administrative violations
                                    under this Act and in promoting
                                    quality of care; and
                                      (II) includes at least the
                                    required components specified
                                    in clause (iv).
                              (iv) Required components of
                            program.--The required components of a
                            compliance and ethics program of an
                            organization are the following:
                                      (I) The organization must
                                    have established compliance
                                    standards and procedures to be
                                    followed by its employees,
                                    contractors, and other agents
                                    that are reasonably capable of
                                    reducing the prospect of
                                    criminal, civil, and
                                    administrative violations under
                                    this Act.
                                      (II) Specific individuals
                                    within high-level personnel of
                                    the organization must have been
                                    assigned overall responsibility
                                    to oversee compliance with such
                                    standards and procedures and
                                    have sufficient resources and
                                    authority to assure such
                                    compliance.
                                      (III) The organization must
                                    have used due care not to
                                    delegate substantial
                                    discretionary authority to
                                    individuals whom the
                                    organization knew, or should
                                    have known through the exercise
                                    of due diligence, had a
                                    propensity to engage in
                                    criminal, civil, and
                                    administrative violations under
                                    this Act.
                                      (IV) The organization must
                                    have taken steps to communicate
                                    effectively its standards and
                                    procedures to all employees and
                                    other agents, such as by
                                    requiring participation in
                                    training programs or by
                                    disseminating publications that
                                    explain in a practical manner
                                    what is required.
                                      (V) The organization must
                                    have taken reasonable steps to
                                    achieve compliance with its
                                    standards, such as by utilizing
                                    monitoring and auditing systems
                                    reasonably designed to detect
                                    criminal, civil, and
                                    administrative violations under
                                    this Act by its employees and
                                    other agents and by having in
                                    place and publicizing a
                                    reporting system whereby
                                    employees and other agents
                                    could report violations by
                                    others within the organization
                                    without fear of retribution.
                                      (VI) The standards must have
                                    been consistently enforced
                                    through appropriate
                                    disciplinary mechanisms,
                                    including, as appropriate,
                                    discipline of individuals
                                    responsible for the failure to
                                    detect an offense.
                                      (VII) After an offense has
                                    been detected, the organization
                                    must have taken all reasonable
                                    steps to respond appropriately
                                    to the offense and to prevent
                                    further similar offenses,
                                    including repayment of any
                                    funds to which it was not
                                    entitled and any necessary
                                    modification to its program to
                                    prevent and detect criminal,
                                    civil, and administrative
                                    violations under this Act.
                                      (VIII) The organization must
                                    periodically undertake
                                    reassessment of its compliance
                                    program to identify changes
                                    necessary to reflect changes
                                    within the organization and its
                                    facilities.
                              (v) Coordination.--The provisions of
                            this subparagraph shall apply with
                            respect to a skilled nursing facility
                            in lieu of section 1874(d).
                      (D) Availability of survey, certification,
                    and complaint investigation reports.--A skilled
                    nursing facility must--
                              (i) have reports with respect to any
                            surveys, certifications, and complaint
                            investigations made respecting the
                            facility during the 3 preceding years
                            available for any individual to review
                            upon request; and
                              (ii) post notice of the availability
                            of such reports in areas of the
                            facility that are prominent and
                            accessible to the public.
                    The facility shall not make available under
                    clause (i) identifying information about
                    complainants or residents.

               *       *       *       *       *       *       *

      (e) State Requirements Relating to Skilled Nursing Facility
    Requirements.--The requirements, referred to in section
    1864(d), with respect to a State are as follows:
              (1) * * *

               *       *       *       *       *       *       *

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

               *       *       *       *       *       *       *

              (2) Requirements for nurse aide training and
            competency evaluation programs and for nurse aide
            competency evaluation programs.--
                      (A) In general.--For purposes of subsections
                    (b)(5) and (e)(1)(A), the Secretary shall
                    establish, by not later than September 1,
                    1988--
                              (i) requirements for the approval of
                            nurse aide training and competency
                            evaluation programs, including
                            requirements relating to (I) the areas
                            to be covered in such a program
                            (including at least basic nursing
                            skills, personal care skills,
                            recognition of mental health and social
                            service needs, care of cognitively
                            impaired residents, basic restorative
                            services, and residents' rights) and
                            content of the curriculum (including,
                            in the case of initial training and, if
                            the Secretary determines appropriate,
                            in the case of ongoing training,
                            dementia management training and
                            resident abuse prevention training),
                            (II) minimum hours of initial and
                            ongoing training and retraining
                            (including not less than 75 hours in
                            the case of initial training), (III)
                            qualifications of instructors, and (IV)
                            procedures for determination of
                            competency;

               *       *       *       *       *       *       *

              (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.
              (9) Standardized complaint form.--The Secretary shall
            develop a standardized complaint form for use by a
            resident (or a person acting on the resident's behalf)
            in filing a complaint with a State survey and
            certification agency and a State long-term care
            ombudsman program with respect to a skilled nursing
            facility.
      (g) Survey and Certification Process.--
              (1) * * *

               *       *       *       *       *       *       *

              (5) Disclosure of results of inspections and
            activities.--
                      (A) * * *

               *       *       *       *       *       *       *

                      (E) Submission of survey and certification
                    information to the secretary.--In order to
                    improve the timeliness of information made
                    available to the public under subparagraph (A)
                    and provided on the Nursing Home Compare
                    Medicare website under subsection (i), each
                    State shall submit information respecting any
                    survey or certification made respecting a
                    skilled nursing facility (including any
                    enforcement actions taken by the State) to the
                    Secretary not later than the date on which the
                    State sends such information to the facility.
                    The Secretary shall use the information
                    submitted under the preceding sentence to
                    update the information provided on the Nursing
                    Home Compare Medicare website as expeditiously
                    as practicable but not less frequently than
                    quarterly.
      (h) Enforcement Process.--
              (1) * * *
              (2) Secretarial authority.--
                      (A) * * *
                      (B) Specified remedies.--The Secretary may
                    take the following actions with respect to a
                    finding that a facility has not met an
                    applicable requirement:
                              (i) * * *
                              [(ii) Authority with respect to civil
                            money penalties.--The Secretary may
                            impose a civil money penalty in an
                            amount not to exceed $10,000 for each
                            day of noncompliance. The provisions of
                            section 1128A (other than subsections
                            (a) and (b)) shall apply to a civil
                            money penalty under the previous
                            sentence in the same manner as such
                            provisions apply to a penalty or
                            proceeding under section 1128A(a).]
                              (ii) Authority with respect to civil
                            money penalties.--
                                      (I) Amount.--The Secretary
                                    may impose a civil money
                                    penalty in the applicable per
                                    instance or per day amount (as
                                    defined in subclause (II) and
                                    (III)) for each day or
                                    instance, respectively, of
                                    noncompliance (as determined
                                    appropriate by the Secretary).
                                      (II) Applicable per instance
                                    amount.--In this clause, the
                                    term ``applicable per instance
                                    amount'' means--
                                              (aa) in the case
                                            where the deficiency is
                                            found to be a direct
                                            proximate cause of
                                            death of a resident of
                                            the facility, an amount
                                            not to exceed $100,000;
                                              (bb) in each case of
                                            a deficiency where the
                                            facility is cited for
                                            actual harm or
                                            immediate jeopardy, an
                                            amount not less than
                                            $3,050 and not more
                                            than $25,000; and
                                              (cc) in each case of
                                            any other deficiency,
                                            an amount not less than
                                            $250 and not to exceed
                                            $3050.
                                      (III) Applicable per day
                                    amount.--In this clause, the
                                    term ``applicable per day
                                    amount'' means--
                                              (aa) in each case of
                                            a deficiency where the
                                            facility is cited for
                                            actual harm or
                                            immediate jeopardy, an
                                            amount not less than
                                            $3,050 and not more
                                            than $25,000; and
                                              (bb) in each case of
                                            any other deficiency,
                                            an amount not less than
                                            $250 and not to exceed
                                            $3,050.
                                      (IV) Reduction of civil money
                                    penalties in certain
                                    circumstances.--Subject to
                                    subclauses (V) and (VI), in the
                                    case where a facility self-
                                    reports and promptly corrects a
                                    deficiency for which a penalty
                                    was imposed under this clause
                                    not later than 10 calendar days
                                    after the date of such
                                    imposition, the Secretary may
                                    reduce the amount of the
                                    penalty imposed by not more
                                    than 50 percent.
                                      (V) Prohibition on reduction
                                    for certain deficiencies.--
                                              (aa) Repeat
                                            deficiencies.--The
                                            Secretary may not
                                            reduce under subclause
                                            (IV) the amount of a
                                            penalty if the
                                            deficiency is a repeat
                                            deficiency.
                                              (bb) Certain other
                                            deficiencies.--The
                                            Secretary may not
                                            reduce under subclause
                                            (IV) the amount of a
                                            penalty if the penalty
                                            is imposed for a
                                            deficiency described in
                                            subclause (II)(aa) or
                                            (III)(aa) and the
                                            actual harm or
                                            widespread harm
                                            immediately jeopardizes
                                            the health or safety of
                                            a resident or residents
                                            of the facility, or if
                                            the penalty is imposed
                                            for a deficiency
                                            described in subclause
                                            (II)(bb).
                                      (VI) Limitation on aggregate
                                    reductions.--The aggregate
                                    reduction in a penalty under
                                    subclause (IV) may not exceed
                                    35 percent on the basis of
                                    self-reporting, on the basis of
                                    a waiver or an appeal (as
                                    provided for under regulations
                                    under section 488.436 of title
                                    42, Code of Federal
                                    Regulations), or on the basis
                                    of both.
                                      (VII) Collection of civil
                                    money penalties.--In the case
                                    of a civil money penalty
                                    imposed under this clause, the
                                    Secretary--
                                              (aa) subject to item
                                            (cc), shall, not later
                                            than 30 days after the
                                            date of imposition of
                                            the penalty, provide
                                            the opportunity for the
                                            facility to participate
                                            in an independent
                                            informal dispute
                                            resolution process
                                            which generates a
                                            written record prior to
                                            the collection of such
                                            penalty, but such
                                            opportunity shall not
                                            affect the
                                            responsibility of the
                                            State survey agency for
                                            making final
                                            recommendations for
                                            such penalties;
                                              (bb) in the case
                                            where the penalty is
                                            imposed for each day of
                                            noncompliance, shall
                                            not impose a penalty
                                            for any day during the
                                            period beginning on the
                                            initial day of the
                                            imposition of the
                                            penalty and ending on
                                            the day on which the
                                            informal dispute
                                            resolution process
                                            under item (aa) is
                                            completed;
                                              (cc) may provide for
                                            the collection of such
                                            civil money penalty and
                                            the placement of such
                                            amounts collected in an
                                            escrow account under
                                            the direction of the
                                            Secretary on the
                                            earlier of the date on
                                            which the informal
                                            dispute resolution
                                            process under item (aa)
                                            is completed or the
                                            date that is 90 days
                                            after the date of the
                                            imposition of the
                                            penalty;
                                              (dd) may provide that
                                            such amounts collected
                                            are kept in such
                                            account pending the
                                            resolution of any
                                            subsequent appeals;
                                              (ee) in the case
                                            where the facility
                                            successfully appeals
                                            the penalty, may
                                            provide for the return
                                            of such amounts
                                            collected (plus
                                            interest) to the
                                            facility; and
                                              (ff) in the case
                                            where all such appeals
                                            are unsuccessful, may
                                            provide that some
                                            portion of such amounts
                                            collected may be used
                                            to support activities
                                            that benefit residents,
                                            including assistance to
                                            support and protect
                                            residents of a facility
                                            that closes
                                            (voluntarily or
                                            involuntarily) or is
                                            decertified (including
                                            offsetting costs of
                                            relocating residents to
                                            home and community-
                                            based settings or
                                            another facility),
                                            projects that support
                                            resident and family
                                            councils and other
                                            consumer involvement in
                                            assuring quality care
                                            in facilities, and
                                            facility improvement
                                            initiatives approved by
                                            the Secretary
                                            (including joint
                                            training of facility
                                            staff and surveyors,
                                            technical assistance
                                            for facilities under
                                            quality assurance
                                            programs, the
                                            appointment of
                                            temporary management,
                                            and other activities
                                            approved by the
                                            Secretary).
                                      (VIII) Procedure.--The
                                    provisions of section 1128A
                                    (other than subsections (a) and
                                    (b) and except to the extent
                                    that such provisions require a
                                    hearing prior to the imposition
                                    of a civil money penalty) shall
                                    apply to a civil money penalty
                                    under this clause in the same
                                    manner as such provisions apply
                                    to a penalty or proceeding
                                    under section 1128A(a).

               *       *       *       *       *       *       *

              (4) Immediate termination of participation for
            facility where secretary finds noncompliance and
            immediate jeopardy.--If the Secretary finds that a
            skilled nursing facility has not met a requirement of
            subsection (b), (c), or (d), and finds that the failure
            immediately jeopardizes the health or safety of its
            residents, the Secretary shall take immediate action to
            remove the jeopardy and correct the deficiencies
            through the remedy specified in paragraph (2)(B)(iii),
            or [the Secretary shall terminate] the Secretary,
            subject to subsection (c)(7), shall terminate the
            facility's participation under this title. If the
            facility's participation under this title is
            terminated, the State shall provide for the safe and
            orderly transfer of the residents eligible under this
            title consistent with the requirements of [subsection
            (c)(2)] paragraphs (2) and (7) of subsection (c).
              (5) Construction.--The remedies provided under this
            subsection are in addition to those otherwise available
            under State or Federal law and shall not be construed
            as limiting such other remedies, including any remedy
            available to an individual at common law. The remedies
            described in clauses (i), (ii), and (iii) of paragraph
            (2)(B) may be imposed during the pendency of any
            hearing.

               *       *       *       *       *       *       *

      (i) Nursing Home Compare Website.--
              (1) Inclusion of additional information.--
                      (A) In general.--The Secretary shall ensure
                    that the Department of Health and Human
                    Services includes, as part of the information
                    provided for comparison of nursing homes on the
                    official Internet website of the Federal
                    Government for Medicare beneficiaries (commonly
                    referred to as the ``Nursing Home Compare''
                    Medicare website) (or a successor website), the
                    following information in a manner that is
                    prominent, easily accessible, readily
                    understandable to consumers of long-term care
                    services, and searchable:
                              (i) Information that is reported to
                            the Secretary under section 1124(c)(4).
                              (ii) Information on the ``Special
                            Focus Facility program'' (or a
                            successor program) established by the
                            Centers for Medicare and Medicaid
                            Services, according to procedures
                            established by the Secretary. Such
                            procedures shall provide for the
                            inclusion of information with respect
                            to, and the names and locations of,
                            those facilities that, since the
                            previous quarter--
                                      (I) were newly enrolled in
                                    the program;
                                      (II) are enrolled in the
                                    program and have failed to
                                    significantly improve;
                                      (III) are enrolled in the
                                    program and have significantly
                                    improved;
                                      (IV) have graduated from the
                                    program; and
                                      (V) have closed voluntarily
                                    or no longer participate under
                                    this title.
                              (iii) Staffing data for each facility
                            (including resident census data and
                            data on the hours of care provided per
                            resident per day) based on data
                            submitted under subsection (b)(8)(C),
                            including information on staffing
                            turnover and tenure, in a format that
                            is clearly understandable to consumers
                            of long-term care services and allows
                            such consumers to compare differences
                            in staffing between facilities and
                            State and national averages for the
                            facilities. Such format shall include--
                                      (I) concise explanations of
                                    how to interpret the data (such
                                    as a plain English explanation
                                    of data reflecting ``nursing
                                    home staff hours per resident
                                    day'');
                                      (II) differences in types of
                                    staff (such as training
                                    associated with different
                                    categories of staff);
                                      (III) the relationship
                                    between nurse staffing levels
                                    and quality of care; and
                                      (IV) an explanation that
                                    appropriate staffing levels
                                    vary based on patient case mix.
                              (iv) Links to State Internet websites
                            with information regarding State survey
                            and certification programs, links to
                            Form 2567 State inspection reports (or
                            a successor form) on such websites,
                            information to guide consumers in how
                            to interpret and understand such
                            reports, and the facility plan of
                            correction or other response to such
                            report.
                              (v) The standardized complaint form
                            developed under subsection (f)(8),
                            including explanatory material on what
                            complaint forms are, how they are used,
                            and how to file a complaint with the
                            State survey and certification program
                            and the State long-term care ombudsman
                            program.
                              (vi) Summary information on the
                            number, type, severity, and outcome of
                            substantiated complaints.
                              (vii) The number of adjudicated
                            instances of criminal violations by
                            employees of a a nursing facility--
                                      (I) that were committed
                                    inside the facility;
                                      (II) with respect to such
                                    instances of violations or
                                    crimes committed inside of the
                                    facility that were the
                                    violations or crimes of abuse,
                                    neglect, and exploitation,
                                    criminal sexual abuse, or other
                                    violations or crimes that
                                    resulted in serious bodily
                                    injury; and
                                      (III) the number of civil
                                    monetary penalties levied
                                    against the facility,
                                    employees, contractors, and
                                    other agents.
                      (B) Deadline for provision of information.--
                              (i) In general.--Except as provided
                            in clause (ii), the Secretary shall
                            ensure that the information described
                            in subparagraph (A) is included on such
                            website (or a successor website) not
                            later than 1 year after the date of the
                            enactment of this subsection.
                              (ii) Exception.--The Secretary shall
                            ensure that the information described
                            in subparagraph (A)(i) and (A)(iii) is
                            included on such website (or a
                            successor website) not later than the
                            date on which the requirements under
                            section 1124(c)(4) and subsection
                            (b)(8)(C)(ii) are implemented.
              (2) Review and modification of website.--
                      (A) In general.--The Secretary shall
                    establish a process--
                              (i) to review the accuracy, clarity
                            of presentation, timeliness, and
                            comprehensiveness of information
                            reported on such website as of the day
                            before the date of the enactment of
                            this subsection; and
                              (ii) not later than 1 year after the
                            date of the enactment of this
                            subsection, to modify or revamp such
                            website in accordance with the review
                            conducted under clause (i).
                      (B) Consultation.--In conducting the review
                    under subparagraph (A)(i), the Secretary shall
                    consult with--
                              (i) State long-term care ombudsman
                            programs;
                              (ii) consumer advocacy groups;
                              (iii) provider stakeholder groups;
                            and
                              (iv) any other representatives of
                            programs or groups the Secretary
                            determines appropriate.
      [(i)] (j) Construction.--Where requirements or obligations
    under this section are identical to those provided under
    section 1919 of this Act, the fulfillment of those requirements
    or obligations under section 1919 shall be considered to be the
    fulfillment of the corresponding requirements or obligations
    under this section.

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

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

               *       *       *       *       *       *       *

       Part B--Supplementary Medical Insurance Benefits for the Aged and
    Disabled

               *       *       *       *       *       *       *

                               SCOPE OF BENEFITS

      Sec. 1832. (a) The benefits provided to an individual by the
    insurance program established by this part shall consist of--
              (1) * * *
              (2) entitlement to have payment made on his behalf
            (subject to the provisions of this part) for--
                      (A) * * *
                      (B) medical and other health services (other
                    than items described in subparagraph (G) or
                    subparagraph (I)) furnished by a provider of
                    services or by others under arrangement with
                    them made by a provider of services,
                    excluding--
                              (i) * * *

               *       *       *       *       *       *       *

                              (iv) services of a nurse practitioner
                            or clinical nurse specialist but only
                            if no facility or other provider
                            charges or is paid any amounts with
                            respect to the furnishing of such
                            services; [and]
                              (v) marriage and family therapist
                            services; and
                              (vi) mental health counselor
                            services;

               *       *       *       *       *       *       *

                              PAYMENT OF BENEFITS

      Sec. 1833. (a) Except as provided in section 1876, and
    subject to the succeeding provisions of this section, there
    shall be paid from the Federal Supplementary Medical Insurance
    Trust Fund, in the case of each individual who is covered under
    the insurance program established by this part and incurs
    expenses for services with respect to which benefits are
    payable under this part, amounts equal to--
              (1) in the case of services described in section
            1832(a)(1)--80 percent of the reasonable charges for
            the services; except that (A) an organization which
            provides medical and other health services (or arranges
            for their availability) on a prepayment basis (and
            either is sponsored by a union or employer, or does not
            provide, or arrange for the provision of, any inpatient
            hospital services) may elect to be paid 80 percent of
            the reasonable cost of services for which payment may
            be made under this part on behalf of individuals
            enrolled in such organization in lieu of 80 percent of
            the reasonable charges for such services if the
            organization undertakes to charge such individuals no
            more than 20 percent of such reasonable cost plus any
            amounts payable by them as a result of subsection (b),
            (B) with respect to items and services described in
            section [1861(s)(10)(A)] 1861(s)(10), the amounts paid
            shall be 100 percent of the reasonable charges for such
            items and services, (C) with respect to expenses
            incurred for those physicians' services for which
            payment may be made under this part that are described
            in section 1862(a)(4), the amounts paid shall be
            subject to such limitations as may be prescribed by
            regulations, (D) with respect to clinical diagnostic
            laboratory tests for which payment is made under this
            part (i) on the basis of a fee schedule under
            subsection (h)(1) or section 1834(d)(1), the amount
            paid shall be equal to 80 percent (or 100 percent, in
            the case of such tests for which payment is made on an
            assignment-related basis) of the lesser of the amount
            determined under such fee schedule, the limitation
            amount for that test determined under subsection
            (h)(4)(B), or the amount of the charges billed for the
            tests, or (ii) on the basis of a negotiated rate
            established under subsection (h)(6), the amount paid
            shall be equal to 100 percent of such negotiated rate,,
            (E) with respect to services furnished to individuals
            who have been determined to have end stage renal
            disease, the amounts paid shall be determined subject
            to the provisions of section 1881, (F) with respect to
            clinical social worker services under section
            1861(s)(2)(N), the amounts paid shall be 80 percent of
            the lesser of (i) the actual charge for the services or
            (ii) 75 percent of the amount determined for payment of
            a psychologist under clause (L),
                      (G) * * *
              (H) with respect to services of a certified
            registered nurse anesthetist under section 1861(s)(11),
            the amounts paid shall be 80 percent of the least of
            the actual charge, the prevailing charge that would be
            recognized (or, for services furnished on or after
            January 1, 1992, the fee schedule amount provided under
            section 1848) if the services had been performed by an
            anesthesiologist, or the fee schedule for such services
            established by the Secretary in accordance with
            subsection (l), (I) with respect to covered items
            (described in section 1834(a)(13)), the amounts paid
            shall be the amounts described in section 1834(a)(1),
            and (J) with respect to expenses incurred for
            radiologist services (as defined in section
            1834(b)(6)), subject to section 1848, the amounts paid
            shall be 80 percent of the lesser of the actual charge
            for the services or the amount provided under the fee
            schedule established under section 1834(b), (K) with
            respect to certified nurse-midwife services under
            section 1861(s)(2)(L), the amounts paid shall be 80
            percent of the lesser of the actual charge for the
            services or the amount determined by a fee schedule
            established by the Secretary for the purposes of this
            subparagraph [(but in no event shall such fee schedule
            exceed 65 percent of the prevailing charge that would
            be allowed for the same service performed by a
            physician, or, for services furnished on or after
            January 1, 1992, 65 percent of the fee schedule amount
            provided under section 1848 for the same service
            performed by a physician)], (L) with respect to
            qualified psychologist services under section
            1861(s)(2)(M), the amounts paid shall be 80 percent of
            the lesser of the actual charge for the services or the
            amount determined by a fee schedule established by the
            Secretary for the purposes of this subparagraph, (M)
            with respect to prosthetic devices and orthotics and
            prosthetics (as defined in section 1834(h)(4)), the
            amounts paid shall be the amounts described in section
            1834(h)(1), (N) with respect to expenses incurred for
            physicians' services (as defined in section
            1848(j)(3)), the amounts paid shall be 80 percent of
            the payment basis determined under section 1848(a)(1),
            (O) with respect to services described in section
            1861(s)(2)(K) (relating to services furnished by
            physician assistants, nurse practitioners, or clinic
            nurse specialists), the amounts paid shall be equal to
            80 percent of (i) the lesser of the actual charge or 85
            percent of the fee schedule amount provided under
            section 1848, or (ii) in the case of services as an
            assistant at surgery, the lesser of the actual charge
            or 85 percent of the amount that would otherwise be
            recognized if performed by a physician who is serving
            as an assistant at surgery, (P) with respect to
            surgical dressings, the amounts paid shall be the
            amounts determined under section 1834(i), (Q) with
            respect to items or services for which fee schedules
            are established pursuant to section 1842(s), the
            amounts paid shall be 80 percent of the lesser of the
            actual charge or the fee schedule established in such
            section, (R) with respect to ambulance services, (i)
            the amounts paid shall be 80 percent of the lesser of
            the actual charge for the services or the amount
            determined by a fee schedule established by the
            Secretary under section 1834(l) and (ii) with respect
            to ambulance services described in section 1834(l)(8),
            the amounts paid shall be the amounts determined under
            section 1834(g) for outpatient critical access hospital
            services, (S) with respect to drugs and biologicals
            (including intravenous immune globulin (as defined in
            section 1861(zz))) not paid on a cost or prospective
            payment basis as otherwise provided in this part (other
            than items and services described in subparagraph (B)),
            the amounts paid shall be 80 percent of the lesser of
            the actual charge or the payment amount established in
            section 1842(o) (or, if applicable, under section 1847,
            1847A, or 1847B), (T) with respect to medical nutrition
            therapy services (as defined in section 1861(vv)), the
            amount paid shall be 80 percent of the lesser of the
            actual charge for the services or 85 percent of the
            amount determined under the fee schedule established
            under section 1848(b) for the same services if
            furnished by a physician, (U) with respect to facility
            fees described in section 1834(m)(2)(B), the amounts
            paid shall be 80 percent of the lesser of the actual
            charge or the amounts specified in such section, (V)
            notwithstanding subparagraphs (I) (relating to durable
            medical equipment), (M) (relating to prosthetic devices
            and orthotics and prosthetics), and (Q) (relating to
            1842(s) items), with respect to competitively priced
            items and services (described in section 1847(a)(2))
            that are furnished in a competitive area, the amounts
            paid shall be the amounts described in section
            1847(b)(5), [and] (W) with respect to additional
            preventive services (as defined in section
            1861(ddd)(1)), the amount paid shall be (i) in the case
            of such services which are clinical diagnostic
            laboratory tests, the amount determined under
            subparagraph (D), and (ii) in the case of all other
            such services, 80 percent of the lesser of the actual
            charge for the service or the amount determined under a
            fee schedule established by the Secretary for purposes
            of this subparagraph, (X) with respect to marriage and
            family therapist services under section 1861(s)(2)(GG),
            the amounts paid shall be 80 percent of the lesser of
            the actual charge for the services or 75 percent of the
            amount determined for payment of a psychologist under
            clause (L), (Y) with respect to mental health counselor
            services under section 1861(s)(2)(HH), the amounts paid
            shall be 80 percent of the lesser of the actual charge
            for the services or 75 percent of the amount determined
            for payment of a psychologist under clause (L), and (Z)
            with respect to services described in section
            1861(s)(2)(II) (relating to services furnished by a
            respiratory therapist) that are furnished by a
            respiratory therapist (as defined in section
            1861(mmm)), the amount paid shall be equal to 80
            percent of the lesser of the actual charge for the
            services or 85 percent of the fee schedule amount
            provided under section 1848 for the same services if
            furnished by a physician;
              (2) in the case of services described in section
            1832(a)(2) (except those services described in
            subparagraphs (C), (D), (E), (F), (G), (H), and (I) of
            such section and unless otherwise specified in section
            1881)--
                      (A) * * *

               *       *       *       *       *       *       *

                      (F) with respect to a covered osteoporosis
                    drug (as defined in section 1861(kk)) furnished
                    by a home health agency, 80 percent of the
                    reasonable cost of such service, as determined
                    under section 1861(v); [and]
                      (G) with respect to items and services
                    described in section [1861(s)(10)(A)]
                    1861(s)(10), the lesser of--
                              (i) * * *

               *       *       *       *       *       *       *

                    or, if such services are furnished by a public
                    provider of services, or by another provider
                    which demonstrates to the satisfaction of the
                    Secretary that a significant portion of its
                    patients are low-income (and requests that
                    payment be made under this provision), free of
                    charge or at nominal charges to the public, the
                    amount determined in accordance with section
                    1814(b)(2); and
                      (H) with respect to additional preventive
                    services (as defined in section 1861(ddd))
                    furnished by an outpatient department of a
                    hospital, the amount determined under paragraph
                    (1)(W);
              (3) in the case of services described in section
            1832(a)(2)(D)--
                      (A) except as provided in subparagraph (B),
                    the costs which are reasonable and related to
                    the cost of furnishing such services or which
                    are based on such other tests of reasonableness
                    as the Secretary may prescribe in regulations,
                    including those authorized under section
                    1861(v)(1)(A), less the amount a provider may
                    charge as described in clause (ii) of section
                    1866(a)(2)(A), but in no case may the payment
                    for such services (other than for items and
                    services described in section [1861(s)(10)(A)]
                    1861(s)(10)) exceed 80 percent of such costs;
                    or

               *       *       *       *       *       *       *

    With respect to Medicare covered preventive services, in any
    case in which the payment rate otherwise provided under this
    part is computed as a percent of less than 100 percent of an
    actual charge, fee schedule rate, or other rate, such
    percentage shall be increased to 100 percent.
      (b) Before applying subsection (a) with respect to expenses
    incurred by an individual during any calendar year, the total
    amount of the expenses incurred by such individual during such
    year (which would, except for this subsection, constitute
    incurred expenses from which benefits payable under subsection
    (a) are determinable) shall be reduced by a deductible of $75
    for calendar years before 1991, $100 for 1991 through 2004,
    $110 for 2005, and for a subsequent year the amount of such
    deductible for the previous year increased by the annual
    percentage increase in the monthly actuarial rate under section
    1839(a)(1) ending with such subsequent year (rounded to the
    nearest $1); except that (1) such total amount shall not
    include expenses incurred for [items and services described in
    section 1861(s)(10)(A)] Medicare covered preventive services
    (as defined in section 1861(iii)), (2) such deductible shall
    not apply with respect to home health services (other than a
    covered osteoporosis drug (as defined in section 1861(kk))),
    (3) such deductible shall not apply with respect to clinical
    diagnostic laboratory tests for which payment is made under
    this part (A) under subsection (a)(1)(D)(i) or (a)(2)(D)(i) on
    an assignment-related basis, or to a provider having an
    agreement under section 1866, or (B) on the basis of a
    negotiated rate determined under subsection (h)(6), (4) such
    deductible shall not apply to Federally qualified health center
    services, [(5) such deductible shall not apply with respect to
    screening mammography (as described in section 1861(jj)), (6)
    such deductible shall not apply with respect to screening pap
    smear and screening pelvic exam (as described in section
    1861(nn)), (7) such deductible shall not apply with respect to
    ultrasound screening for abdominal aortic aneurysm (as defined
    in section 1861(bbb)), (8) such deductible shall not apply with
    respect to colorectal cancer screening tests (as described in
    section 1861(pp)(1)), and (9)] and (5) such deductible shall
    not apply with respect to an initial preventive physical
    examination (as defined in section 1861(ww)). The total amount
    of the expenses incurred by an individual as determined under
    the preceding sentence shall, after the reduction specified in
    such sentence, be further reduced by an amount equal to the
    expenses incurred for the first three pints of whole blood (or
    equivalent quantities of packed red blood cells, as defined
    under regulations) furnished to the individual during the
    calendar year, except that such deductible for such blood shall
    in accordance with regulations be appropriately reduced to the
    extent that there has been a replacement of such blood (or
    equivalent quantities of packed red blood cells, as so
    defined); and for such purposes blood (or equivalent quantities
    of packed red blood cells, as so defined) furnished such
    individual shall be deemed replaced when the institution or
    other person furnishing such blood (or such equivalent
    quantities of packed red blood cells, as so defined) is given
    one pint of blood for each pint of blood (or equivalent
    quantities of packed red blood cells, as so defined) furnished
    such individual with respect to which a deduction is made under
    this sentence. The deductible under the previous sentence for
    blood or blood cells furnished an individual in a year shall be
    reduced to the extent that a deductible has been imposed under
    section 1813(a)(2) to blood or blood cells furnished the
    individual in the year. Clause (1) of the first sentence of
    this subsection shall apply with respect to a colorectal cancer
    screening test regardless of the code that is billed for the
    establishment of a diagnosis as a result of the test, or for
    the removal of tissue or other matter or other procedure that
    is furnished in connection with, as a result of, and in the
    same clinical encounter as, the screening test.

               *       *       *       *       *       *       *

      (g)(1) * * *

               *       *       *       *       *       *       *

      (5) With respect to expenses incurred during the period
    beginning on January 1, 2006, and ending on [December 31, 2009]
    December 31, 2011, for services, the Secretary shall implement
    a process under which an individual enrolled under this part
    may, upon request of the individual or a person on behalf of
    the individual, obtain an exception from the uniform dollar
    limitation specified in paragraph (2), for services described
    in paragraphs (1) and (3) if the provision of such services is
    determined to be medically necessary. Under such process, if
    the Secretary does not make a decision on such a request for an
    exception within 10 business days of the date of the
    Secretary's receipt of the request, the Secretary shall be
    deemed to have found the services to be medically necessary.
      (h)(1) * * *
      (2)(A)(i) Except as provided in paragraph (4), the Secretary
    shall set the fee schedules at 60 percent (or, in the case of a
    test performed by a qualified hospital laboratory (as defined
    in paragraph (1)(D)) for outpatients of such hospital, 62
    percent) of the prevailing charge level determined pursuant to
    the third and fourth sentences of section 1842(b)(3) for
    similar clinical diagnostic laboratory tests for the applicable
    region, State, or area for the 12-month period beginning July
    1, 1984, adjusted annually (to become effective on January 1 of
    each year) by a percentage increase or decrease equal to the
    percentage increase or decrease in the Consumer Price Index for
    All Urban Consumers (United States city average) minus, [for
    each of the years 2009 through 2013] for 2009, 0.5 percentage
    points, and subject to such other adjustments as the Secretary
    determines are justified by technological changes.
      (ii) Notwithstanding clause (i)--
              (I) * * *

               *       *       *       *       *       *       *

              (III) the annual adjustment in the fee schedules
            determined under clause (i) for each of the years 1991,
            1992, and 1993 shall be 2 percent, [and]
              (IV) the annual adjustment in the fee schedules
            determined under clause (i) for each of the years 1994
            and 1995, 1998 through 2002, and 2004 through 2008
            shall be 0 percent[.]; and
              (V) the annual adjustment in the fee schedules
            determined under clause (i) for years beginning with
            2010 shall be subject to the productivity adjustment
            described in section 1886(b)(3)(B)(iii)(II).

               *       *       *       *       *       *       *

      (i)(1) * * *
      (2)(A) * * *

               *       *       *       *       *       *       *

      (D)(i) * * *

               *       *       *       *       *       *       *

      (v) In implementing the system described in clause (i), for
    services furnished during 2010 or any subsequent year, to the
    extent that an annual percentage change factor applies, such
    factor shall be subject to the productivity adjustment
    described in section 1886(b)(3)(B)(iii)(II).
      [(v)] (vi) There shall be no administrative or judicial
    review under section 1869, 1878, or otherwise, of the
    classification system, the relative weights, payment amounts,
    and the geographic adjustment factor, if any, under this
    subparagraph.

               *       *       *       *       *       *       *

      (7)(A)  * * *
      (B) Except as the Secretary may otherwise provide, subject to
    subparagraph (C), the provisions of subparagraphs (B), (C),
    (D), and (E) of paragraph (17) of section 1833(t) shall apply
    with respect to services of ambulatory surgical centers under
    this paragraph in a similar manner to the manner in which they
    apply under such paragraph and, for purposes of this
    subparagraph, any reference to a hospital, outpatient setting,
    or outpatient hospital services is deemed a reference to an
    ambulatory surgical center, the setting of such a center, or
    services of such a center, respectively.
      (C) Under subparagraph (B) the Secretary shall require the
    reporting of such additional data relating to quality of
    services furnished in an ambulatory surgical facility,
    including data on health care associated infections, as the
    Secretary may specify.
      (8) The Secretary shall require, as a condition of the
    agreement described in section 1832(a)(2)(F)(i), the submission
    of such cost report as the Secretary may specify, taking into
    account the requirements for such reports under section 1815 in
    the case of a hospital.

               *       *       *       *       *       *       *

      (m)(1) * * *

               *       *       *       *       *       *       *

      (4) The provisions of this subsection shall not be taken into
    account in applying subsections (m) or (u) and any payment
    under such subsections shall not be taken into account in
    computing payments under this subsection.
      [(4)] (5) There shall be no administrative or judicial review
    under section 1869, section 1878, or otherwise, respecting--
              (A) * * *

               *       *       *       *       *       *       *

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

               *       *       *       *       *       *       *

      (t) Prospective Payment System for Hospital Outpatient
    Department Services.--
              (1) Amount of payment.--
                      (A) * * *
                      (B) Definition of covered opd services.--For
                    purposes of this subsection, the term ``covered
                    OPD services''--
                              (i) * * *

               *       *       *       *       *       *       *

                              (iv) does not include any therapy
                            services described in subsection (a)(8)
                            or ambulance services, for which
                            payment is made under a fee schedule
                            described in section 1834(k) or section
                            1834(l) and does not include [screening
                            mammography (as defined in section
                            1861(jj)) and diagnostic mammography]
                            diagnostic mammograms and Medicare
                            covered preventive services (as defined
                            in section 1861(iii)(1)).

               *       *       *       *       *       *       *

              (3) Calculation of base amounts.--
                      (A) * * *

               *       *       *       *       *       *       *

                      (C) Calculation of conversion factors.--
                              (i) * * *

               *       *       *       *       *       *       *

                              (iv) OPD fee schedule increase
                            factor.--For purposes of this
                            subparagraph, subject to paragraph
                            (17), the ``OPD fee schedule increase
                            factor'' for services furnished in a
                            year is equal to the market basket
                            percentage increase applicable under
                            section 1886(b)(3)(B)(iii) (which is
                            subject to the productivity adjustment
                            described in subclause (II) of such
                            section) to hospital discharges
                            occurring during the fiscal year ending
                            in such year, reduced (but not below 0)
                            by 1 percentage point for such factor
                            for services furnished in each of 2000
                            and 2002. In applying the previous
                            sentence for years beginning with 2000,
                            the Secretary may substitute for the
                            market basket percentage increase an
                            annual percentage increase that is
                            computed and applied with respect to
                            covered OPD services furnished in a
                            year in the same manner as the market
                            basket percentage increase is
                            determined and applied to inpatient
                            hospital services for discharges
                            occurring in a fiscal year.

               *       *       *       *       *       *       *

              (7) Transitional adjustment to limit decline in
            payment.--
                      (A) * * *

               *       *       *       *       *       *       *

                      (D) Hold harmless provisions.--
                              (i) Temporary treatment for certain
                            rural hospitals.--(I) * * *
                              (II) In the case of a hospital
                            located in a rural area and that has
                            not more than 100 beds and that is not
                            a sole community hospital (as defined
                            in section 1886(d)(5)(D)(iii)), for
                            covered OPD services furnished on or
                            after January 1, 2006, and before
                            January 1, [2010] 2012, for which the
                            PPS amount is less than the pre-BBA
                            amount, the amount of payment under
                            this subsection shall be increased by
                            the applicable percentage of the amount
                            of such difference. For purposes of the
                            preceding sentence, the applicable
                            percentage shall be 95 percent with
                            respect to covered OPD services
                            furnished in 2006, 90 percent with
                            respect to such services furnished in
                            2007, and 85 percent with respect to
                            such services furnished in 2008 [or
                            2009], 2009, 2010, or 2011.
                              (III) In the case of a sole community
                            hospital (as defined in section
                            1886(d)(5)(D)(iii)) that has not more
                            than 100 beds, for covered OPD services
                            furnished on or after January 1, 2009,
                            and before [January 1, 2010] January 1,
                            2012, for which the PPS amount is less
                            than the pre-BBA amount, the amount of
                            payment under this subsection shall be
                            increased by 85 percent of the amount
                            of such difference.

               *       *       *       *       *       *       *

              (16) Miscellaneous provisions.--
                      (A) * * *

               *       *       *       *       *       *       *

                      (C) Payment for devices of brachytherapy and
                    therapeutic radiopharmaceuticals at charges
                    adjusted to cost.--Notwithstanding the
                    preceding provisions of this subsection, for a
                    device of brachytherapy consisting of a seed or
                    seeds (or radioactive source) furnished on or
                    after January 1, 2004, and before [January 1,
                    2010] January 1, 2012, and for therapeutic
                    radiopharmaceuticals furnished on or after
                    January 1, 2008, and before January 1, 2010,
                    the payment basis for the device or therapeutic
                    radiopharmaceutical under this subsection shall
                    be equal to the hospital's charges for each
                    device or therapeutic radiopharmaceutical
                    furnished, adjusted to cost. Charges for such
                    devices or therapeutic radiopharmaceuticals
                    shall not be included in determining any
                    outlier payment under this subsection.
              (17) Quality reporting.--
                      (A) * * *

               *       *       *       *       *       *       *

                      (F) Use of endorsed quality measures.--The
                    provisions of clause (x) of section
                    1886(b)(3)(C) shall apply to quality measures
                    for covered OPD services under this paragraph
                    in the same manner as such provisions apply to
                    quality measures for inpatient hospital
                    services.
              (18) Authorization of adjustment for cancer
            hospitals.--
                      (A) Study.--The Secretary shall conduct a
                    study to determine if, under the system under
                    this subsection, costs incurred by hospitals
                    described in section 1886(d)(1)(B)(v) with
                    respect to ambulatory payment classification
                    groups exceed those costs incurred by other
                    hospitals furnishing services under this
                    subsection (as determined appropriate by the
                    Secretary).
                      (B) Authorization of adjustment.--Insofar as
                    the Secretary determines under subparagraph (A)
                    that costs incurred by hospitals described in
                    section 1886(d)(1)(B)(v) exceed those costs
                    incurred by other hospitals furnishing services
                    under this subsection, the Secretary shall
                    provide for an appropriate adjustment under
                    paragraph (2)(E) to reflect those higher costs
                    effective for services furnished on or after
                    January 1, 2011.

               *       *       *       *       *       *       *

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

            SPECIAL PAYMENT RULES FOR PARTICULAR ITEMS AND SERVICES

      Sec. 1834. (a) Payment for Durable Medical Equipment.--
              (1) * * *

               *       *       *       *       *       *       *

              (5) Payment for oxygen and oxygen equipment.--
                      (A) * * *

               *       *       *       *       *       *       *

                      (F) Rental cap.--
                              (i) * * *
                              (ii) Payments and rules after rental
                            cap.--[After the] Except as provided in
                            clause (iii), after the 36th continuous
                            month during which payment is made for
                            the equipment under this paragraph--
                                      (I) * * *

               *       *       *       *       *       *       *

                              (iii) Continuation of supply.--In the
                            case of a supplier furnishing such
                            equipment to an individual under this
                            subsection as of the 27th month of the
                            36 months described in clause (i), the
                            supplier furnishing such equipment as
                            of such month shall continue to furnish
                            such equipment to such individual
                            (either directly or though arrangements
                            with other suppliers of such equipment)
                            during any subsequent period of medical
                            need for the remainder of the
                            reasonable useful lifetime of the
                            equipment, as determined by the
                            Secretary, regardless of the location
                            of the individual, unless another
                            supplier has accepted responsibility
                            for continuing to furnish such
                            equipment during the remainder of such
                            period.
                              (iv) Exception for bankruptcy.--If a
                            supplier of oxygen to an individual is
                            declared bankrupt and its assets are
                            liquidated and at the time of such
                            declaration and liquidation more than
                            24 months of rental payments have been
                            made, the individual may begin under
                            this subparagraph a new 36-month rental
                            period with another supplier of oxygen.

               *       *       *       *       *       *       *

              (7) Payment for other items of durable medical
            equipment.--
                      (A) Payment.--In the case of an item of
                    durable medical equipment not described in
                    paragraphs (2) through (6), the following rules
                    shall apply:
                              (i) * * *
                              (ii) Ownership after [Rental.--On]
                            Rental.--
                                      (I) In general.--Except as
                                    provided in subclause (II), on
                                    the first day that begins after
                                    the 13th continuous month
                                    during which payment is made
                                    for the rental of an item under
                                    clause (i), the supplier of the
                                    item shall transfer title to
                                    the item to the individual.
                                      (II) Option to accept or
                                    reject transfer of title to
                                    group 3 support surface.--
                                              (aa) In general.--
                                            During the 10th
                                            continuous month during
                                            which payment is made
                                            for the rental of a
                                            Group 3 Support Surface
                                            under clause (i), the
                                            supplier of such item
                                            shall offer the
                                            individual the option
                                            to accept or reject
                                            transfer of title to a
                                            Group 3 Support Surface
                                            after the 13th
                                            continuous month during
                                            which payment is made
                                            for the rental of the
                                            Group 3 Support Surface
                                            under clause (i). Such
                                            title shall be
                                            transferred to the
                                            individual only if the
                                            individual notifies the
                                            supplier not later than
                                            1 month after the
                                            supplier makes such
                                            offer that the
                                            individual agrees to
                                            accept transfer of the
                                            title to the Group 3
                                            Support Surface. Unless
                                            the individual accepts
                                            transfer of title to
                                            the Group 3 Support
                                            Surface in the manner
                                            set forth in this
                                            subclause, the
                                            individual shall be
                                            deemed to have rejected
                                            transfer of title. If
                                            the individual agrees
                                            to accept the transfer
                                            of the title to the
                                            Group 3 Support
                                            Surface, the supplier
                                            shall transfer such
                                            title to the individual
                                            on the first day that
                                            begins after the 13th
                                            continuous month during
                                            which payment is made
                                            for the rental of the
                                            Group 3 Support Surface
                                            under clause (i). If
                                            the supplier transfers
                                            title to the Group 3
                                            Support Surface under
                                            this subclause,
                                            payments for
                                            maintenance and
                                            servicing after the
                                            transfer of title shall
                                            be made in accordance
                                            with clause (iv). If
                                            the individual rejects
                                            transfer of title under
                                            this subclause,
                                            payments for
                                            maintenance and
                                            servicing after the end
                                            of the period of
                                            medical need during
                                            which payment is made
                                            under clause (i) shall
                                            be made in accordance
                                            with clause (v).
                                              (bb) Special rule.--
                                            If, on the effective
                                            date of this subclause,
                                            an individual's rental
                                            period for a Group 3
                                            Support Surface has
                                            exceeded 10 continuous
                                            months, but the first
                                            day that begins after
                                            the 13th continuous
                                            month during which
                                            payment is made for the
                                            rental under clause (i)
                                            has not been reached,
                                            the supplier shall,
                                            within 1 month
                                            following such
                                            effective date, offer
                                            the individual the
                                            option to accept or
                                            reject transfer of
                                            title to a Group 3
                                            Support Surface. Such
                                            title shall be
                                            transferred to the
                                            individual only if the
                                            individual notifies the
                                            supplier not later than
                                            1 month after the
                                            supplier makes such
                                            offer that the
                                            individual agrees to
                                            accept transfer of
                                            title to the Group 3
                                            Support Surface. Unless
                                            the individual accepts
                                            transfer of title to
                                            the Group 3 Support
                                            Surface in the manner
                                            set forth in this
                                            subclause, the
                                            individual shall be
                                            deemed to have rejected
                                            transfer of title. If
                                            the individual agrees
                                            to accept the transfer
                                            of the title to the
                                            Group 3 Support
                                            Surface, the supplier
                                            shall transfer such
                                            title to the individual
                                            on the first day that
                                            begins after the 13th
                                            continuous month during
                                            which payment is made
                                            for the rental of the
                                            Group 3 Support Surface
                                            under clause (i) unless
                                            that day has passed, in
                                            which case the supplier
                                            shall transfer such
                                            title to the individual
                                            not later than 1 month
                                            after notification that
                                            the individual accepts
                                            transfer of title. If
                                            the supplier transfers
                                            title to the Group 3
                                            Support Surface under
                                            this subclause,
                                            payments for
                                            maintenance and
                                            servicing after the
                                            transfer of title shall
                                            be made in accordance
                                            with clause (iv). If
                                            the individual rejects
                                            transfer of title under
                                            this subclause,
                                            payments for
                                            maintenance and
                                            servicing after the end
                                            of the period of
                                            medical need during
                                            which payment is made
                                            under clause (i) shall
                                            be made in accordance
                                            with clause (v).
                              (iii) Purchase agreement option for
                            certain complex rehabilitative power-
                            driven wheelchairs.--In the case of a
                            [power-driven wheelchair] complex
                            rehabilitative power-driven wheelchair
                            recognized by the Secretary as
                            classified within group 3 or higher, at
                            the time the supplier furnishes the
                            item, the supplier shall offer the
                            individual the option to purchase the
                            item, and payment for such item shall
                            be made on a lump-sum basis if the
                            individual exercises such option.
                              (iv) Maintenance and servicing after
                            transfer of title.--After the supplier
                            transfers title to the item under
                            clause (ii) or in the case of a power-
                            driven wheelchair for which a purchase
                            agreement has been entered into under
                            clause (iii), maintenance and servicing
                            payments shall, if the Secretary
                            determines such payments are reasonable
                            and necessary, be made (for parts and
                            labor not covered by the supplier's or
                            manufacturer's warranty, as determined
                            by the Secretary to be appropriate for
                            the particular type of durable medical
                            equipment), and such payments shall be
                            in an amount determined to be
                            appropriate by the Secretary.
                              (v) Maintenance and servicing of
                            group 3 support surface if individual
                            rejects transfer of title.--In the case
                            of a Group 3 Support Surface for which
                            the individual has rejected transfer of
                            title under subclause (ii)(II)--
                                      (I) during the first 6-month
                                    period of medical need that
                                    follows the period of medical
                                    need during which payment is
                                    made under clause (i), no
                                    payment shall be made for
                                    rental or maintenance and
                                    servicing of the Group 3
                                    Support Surface; and
                                      (II) during the first month
                                    of each succeeding 6-month
                                    period of medical need, a
                                    maintenance and servicing
                                    payment may be made (for parts
                                    and labor not covered by the
                                    supplier's or manufacturer's
                                    warranty, as determined by the
                                    Secretary to be appropriate for
                                    the Group 3 Support Surface)
                                    and the amount recognized for
                                    each such 6-month period is the
                                    lower of--
                                              (aa) a reasonable and
                                            necessary maintenance
                                            and servicing fee or
                                            fees established by the
                                            Secretary; or
                                              (bb) 10 percent of
                                            the total of the
                                            purchase price
                                            recognized under
                                            paragraph (8) with
                                            respect to the Group 3
                                            Support Surface.

               *       *       *       *       *       *       *

              (11) Improper billing and requirement of physician
            order.--
                      (A) * * *
                      (B) Requirement of physician order.--The
                    Secretary is authorized to require, for
                    specified covered items, that payment may be
                    made under this subsection with respect to the
                    item only if a [physician] physician enrolled
                    under section 1866(j) or an eligible
                    professional under section 1848(k)(3)(B) has
                    communicated to the supplier, before delivery
                    of the item, a written order for the item and
                    shall require that such an order be written
                    pursuant to the physician documenting that the
                    physician has had a face-to-face encounter
                    (including through use of telehealth and other
                    than with respect to encounters that are
                    incident to services involved) with the
                    individual involved during the 6-month period
                    preceding such written order, or other
                    reasonable timeframe as determined by the
                    Secretary.

               *       *       *       *       *       *       *

              (14) Covered item update.--In this subsection, the
            term ``covered item update'' means, with respect to a
            year--
                      (A) * * *

               *       *       *       *       *       *       *

                      (K) for 2010, 2011, 2012, and 2013, the
                    percentage increase in the consumer price index
                    for all urban consumers (U.S. urban average)
                    for the 12-month period ending with June of the
                    previous year, subject to the productivity
                    adjustment described in section
                    1886(b)(3)(B)(iii)(II), -0.5 percent;
                      (L) for 2014--
                              (i) in the case of items and services
                            described in subparagraph (J)(i) for
                            which a payment adjustment has not been
                            made under subsection (a)(1)(F)(ii) in
                            any previous year, the percentage
                            increase in the consumer price index
                            for all urban consumers (U.S. urban
                            average) for the 12-month period ending
                            with June 2013, subject to the
                            productivity adjustment described in
                            section 1886(b)(3)(B)(iii)(II), plus
                            2.0 percentage points; or
                              (ii) in the case of other items and
                            services, the percentage increase in
                            the consumer price index for all urban
                            consumers (U.S. urban average) for the
                            12-month period ending with June 2013,
                            subject to the productivity adjustment
                            described in section
                            1886(b)(3)(B)(iii)(II); and
                      (M) for a subsequent year, the percentage
                    increase in the consumer price index for all
                    urban consumers (U.S. urban average) for the
                    12-month period ending with June of the
                    previous year, subject to the productivity
                    adjustment described in section
                    1886(b)(3)(B)(iii)(II).

               *       *       *       *       *       *       *

              (16) Disclosure of information and surety bond.--The
            Secretary shall not provide for the issuance (or
            renewal) of a provider number for a supplier of durable
            medical equipment, for purposes of payment under this
            part for durable medical equipment furnished by the
            supplier, unless the supplier provides the Secretary on
            a continuing basis--
                      (A) * * *

               *       *       *       *       *       *       *

            The Secretary may waive the requirement of a bond under
            subparagraph (B) in the case of a supplier that
            provides a comparable surety bond under State law. The
            Secretary, at the Secretary's discretion, may impose
            the requirements of the first sentence with respect to
            some or all providers of items or services under part A
            or some or all suppliers or other persons (other than
            physicians or other practitioners, as defined in
            section 1842(b)(18)(C)) who furnish items or services
            under this part. The requirement for a surety bond
            described in subparagraph (B) shall not apply in the
            case of a pharmacy (i) that has been enrolled under
            section 1866(j) as a supplier of durable medical
            equipment, prosthetics, orthotics, and supplies and has
            been issued (which may include renewal of) a provider
            number (as described in the first sentence of this
            paragraph) for at least 5 years, and (ii) for which a
            final adverse action (as defined in section 424.57(a)
            of title 42, Code of Federal Regulations) has never
            been imposed.

               *       *       *       *       *       *       *

              (20) Identification of quality standards.--
                      (A) * * *

               *       *       *       *       *       *       *

                      (F) Application of accreditation
                    requirement.--In implementing quality standards
                    under this paragraph--
                              (i) subject to [clause (ii)] clauses
                            (ii) and (iii), the Secretary shall
                            require suppliers furnishing items and
                            services described in subparagraph (D)
                            on or after October 1, 2009, directly
                            or as a subcontractor for another
                            entity, to have submitted to the
                            Secretary evidence of accreditation by
                            an accreditation organization
                            designated under subparagraph (B) as
                            meeting applicable quality standards;
                            [and]
                              (ii) in applying such standards and
                            the accreditation requirement of clause
                            (i) with respect to eligible
                            professionals (as defined in section
                            1848(k)(3)(B)), and including such
                            other persons, such as orthotists and
                            prosthetists, as specified by the
                            Secretary, furnishing such items and
                            services--
                                      (I) * * *
                                      (II) the Secretary may exempt
                                    such professionals and persons
                                    from such standards and
                                    requirement if the Secretary
                                    determines that licensing,
                                    accreditation, or other
                                    mandatory quality requirements
                                    apply to such professionals and
                                    persons with respect to the
                                    furnishing of such items and
                                    services[.]; and
                              (iii) the requirement for
                            accreditation described in clause (i)
                            shall not apply for purposes of
                            supplying diabetic testing supplies,
                            canes, and crutches in the case of a
                            pharmacy that is enrolled under section
                            1866(j) as a supplier of durable
                            medical equipment, prosthetics,
                            orthotics, and supplies.
                    Any supplier that has submitted an application
                    for accreditation before August 1, 2009, shall
                    be deemed as meeting applicable standards and
                    accreditation requirement under this
                    subparagraph until such time as the independent
                    accreditation organization takes action on the
                    supplier's application.

               *       *       *       *       *       *       *

      (d) Frequency Limits and Payment for Colorectal Cancer
    Screening Tests.--
              (1) * * *
              (2) Screening flexible sigmoidoscopies.--
                      (A) * * *

               *       *       *       *       *       *       *

                      (C) Facility payment limit.--
                              (i) * * *
                              [(ii) Limitation on coinsurance.--
                            Notwithstanding any other provision of
                            this title, in the case of a
                            beneficiary who receives the services
                            described in clause (i)--
                                      [(I) in computing the amount
                                    of any applicable copayment,
                                    the computation of such
                                    coinsurance shall be based upon
                                    the fee schedule under which
                                    payment is made for the
                                    services, and
                                      [(II) the amount of such
                                    coinsurance is equal to 25
                                    percent of the payment amount
                                    under the fee schedule
                                    described in subclause (I).]
                              (ii) No coinsurance.--In the case of
                            a beneficiary who receives services
                            described in clause (i), there shall be
                            no coinsurance applied.

               *       *       *       *       *       *       *

              (3) Screening colonoscopy.--
                      (A) * * *

               *       *       *       *       *       *       *

                      (C) Facility payment limit.--
                              (i) * * *
                              [(ii) Limitation on coinsurance.--
                            Notwithstanding any other provision of
                            this title, in the case of a
                            beneficiary who receives the services
                            described in clause (i)--
                                      [(I) in computing the amount
                                    of any applicable coinsurance,
                                    the computation of such
                                    coinsurance shall be based upon
                                    the fee schedule under which
                                    payment is made for the
                                    services, and
                                      [(II) the amount of such
                                    coinsurance is equal to 25
                                    percent of the payment amount
                                    under the fee schedule
                                    described in subclause (I).]
                              (ii) No coinsurance.--In the case of
                            a beneficiary who receives services
                            described in clause (i), there shall be
                            no coinsurance applied.

               *       *       *       *       *       *       *

      (h) Payment for Prosthetic Devices and Orthotics and
    Prosthetics.--
              (1) General rule for payment.--
                      (A) * * *

               *       *       *       *       *       *       *

                      (H) Special payment rule for postmastectomy
                    external breast prosthesis garments.--Payment
                    for postmastectomy external breast prosthesis
                    garments shall be made regardless of whether
                    such items are supplied to the beneficiary
                    prior to or after the mastectomy procedure or
                    other breast cancer surgical procedure. The
                    Secretary shall develop policies to ensure
                    appropriate beneficiary access and utilization
                    safeguards for such items supplied to a
                    beneficiary prior to the mastectomy or other
                    breast cancer surgical procedure.
                      [(H)] (I) Application of competitive
                    acquisition to orthotics; limitation of
                    inherent reasonableness authority.--In the case
                    of orthotics described in paragraph (2)(C) of
                    section 1847(a) furnished on or after January
                    1, 2009, that are included in a competitive
                    acquisition program in a competitive
                    acquisition area under such section--
                              (i) * * *

               *       *       *       *       *       *       *

      (l) Establishment of Fee Schedule for Ambulance Services.--
              (1) * * *

               *       *       *       *       *       *       *

              (3) Savings.--In establishing such fee schedule, the
            Secretary shall--
                      (A) * * *
                      (B) set the payment amounts provided under
                    the fee schedule for services furnished in 2001
                    and each subsequent year at amounts equal to
                    the payment amounts under the fee schedule for
                    services furnished during the previous year,
                    increased by the percentage increase in the
                    consumer price index for all urban consumers
                    (U.S. city average) for the 12-month period
                    ending with June of the previous year reduced
                    in the case of 2002 by 1.0 percentage points
                    and, in the case of years beginning with 2010,
                    subject to the productivity adjustment
                    described in section 1886(b)(3)(B)(iii)(II).

               *       *       *       *       *       *       *

              (13) Temporary increase for ground ambulance
            services.--
                      (A) In general.--After computing the rates
                    with respect to ground ambulance services under
                    the other applicable provisions of this
                    subsection, in the case of such services
                    furnished on or after July 1, 2004, and before
                    January 1, 2007, and for such services
                    furnished on or after July 1, 2008, and [before
                    January 1, 2010] before January 1, 2012 for
                    which the transportation originates in--
                              (i) a rural area described in
                            paragraph (9) or in a rural census
                            tract described in such paragraph, the
                            fee schedule established under this
                            section shall provide that the rate for
                            the service otherwise established,
                            after the application of any increase
                            under paragraphs (11) and (12), shall
                            be increased by 2 percent (or 3 percent
                            if such service is furnished on or
                            after July 1, 2008, and [before January
                            1, 2010] before January 1, 2012); and
                              (ii) an area not described in clause
                            (i), the fee schedule established under
                            this subsection shall provide that the
                            rate for the service otherwise
                            established, after the application of
                            any increase under paragraph (11),
                            shall be increased by 1 percent (or 2
                            percent if such service is furnished on
                            or after July 1, 2008, and [before
                            January 1, 2010] before January 1,
                            2012).

               *       *       *       *       *       *       *

      (m) Payment for Telehealth Services.--
              (1) * * *

               *       *       *       *       *       *       *

              (4) Definitions.--For purposes of this subsection:
                      (A) * * *

               *       *       *       *       *       *       *

                      (C) Originating site.--
                              (i) * * *
                              (ii) Sites described.--The sites
                            referred to in clause (i) are the
                            following sites:
                                      (I) * * *

               *       *       *       *       *       *       *

                                      (IX) A renal dialysis
                                    facility.

               *       *       *       *       *       *       *

                      (F) Telehealth service.--
                              (i) * * *

               *       *       *       *       *       *       *

                              (iii) Recommendations of the
                            telehealth advisory committee.--In
                            making determinations under clauses (i)
                            and (ii), the Secretary shall take into
                            account the recommendations of the
                            Telehealth Advisory Committee
                            (established under section 1868(c))
                            when adding or deleting services (and
                            HCPCS codes) and in establishing
                            policies of the Centers for Medicare &
                            Medicaid Services regarding the
                            delivery of telehealth services. If the
                            Secretary does not implement such a
                            recommendation, the Secretary shall
                            publish in the Federal Register a
                            statement regarding the reason such
                            recommendation was not implemented.

            PROCEDURE FOR PAYMENT OF CLAIMS OF PROVIDERS OF SERVICES

      Sec. 1835. (a) Except as provided in subsections (b), (c),
    and (e), payment for services described in section 1832(a)(2)
    furnished an individual may be made only to providers of
    services which are eligible therefor under section 1866(a), and
    only if--
              (1) written request, signed by such individual,
            except in cases in which the Secretary finds it
            impracticable for the individual to do so, is filed for
            such payment in such form, in such manner and by such
            person or persons as the Secretary may by regulation
            prescribe, no later than the close of the [period of 3
            calendar years following the year in which such
            services are furnished (deeming any services furnished
            in the last 3 calendar months of any calendar year to
            have been furnished in the succeeding calendar year)
            except that, where the Secretary deems that efficient
            administration so requires, such period may be reduced
            to not less than 1 calendar year; and] period of 1
            calendar year from which such services are furnished;
            and
              (2) a physician, 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), certifies (and recertifies, where such
            services are furnished over a period of time, in such
            cases, with such frequency, and accompanied by such
            supporting material, appropriate to the case involved,
            as may be provided by regulations) that--
                      (A) in the case of home health services (i)
                    such services are or were required because the
                    individual is or was confined to his home
                    (except when receiving items and services
                    referred to in section 1861(m)(7)) and needs or
                    needed skilled nursing care (other than solely
                    venipuncture for the purpose of obtaining a
                    blood sample) on an intermittent basis or
                    physical or speech therapy or, in the case of
                    an individual who has been furnished home
                    health services based on such a need and who no
                    longer has such a need for such care or
                    therapy, continues or continued to need
                    occupational therapy, (ii) a plan for
                    furnishing such services to such individual has
                    been established and is periodically reviewed
                    by a physician, [and] (iii) such services are
                    or were furnished while the individual is or
                    was under the care of a physician, and (iv) in
                    the case of a certification or recertification
                    after January 1, 2010, prior to making such
                    certification the physician must document that
                    the physician has had a face-to-face encounter
                    (including through use of telehealth and other
                    than with respect to encounters that are
                    incident to services involved) with the
                    individual during the 6-month period preceding
                    such certification or recertification, or other
                    reasonable timeframe as determined by the
                    Secretary;

               *       *       *       *       *       *       *

    To the extent provided by regulations, the certification and
    recertification requirements of paragraph (2) shall be deemed
    satisfied where, at a later date, a physician makes a
    certification of the kind provided in subparagraph (A) or (B)
    of paragraph (2) (whichever would have applied), but only where
    such certification is accompanied by such medical and other
    evidence as may be required by such regulations. With respect
    to the physician certification required by paragraph (2) for
    home health services furnished to any individual by a home
    health agency (other than an agency which is a governmental
    entity) and with respect to the establishment and review of a
    plan for such services, the Secretary shall prescribe
    regulations which shall become effective no later than July 1,
    1981, and which prohibit a physician who has a significant
    ownership interest in, or a significant financial or
    contractual relationship with, such home health agency from
    performing such certification and from establishing or
    reviewing such plan, except that such prohibition shall not
    apply with respect to a home health agency which is a sole
    community home health agency (as determined by the Secretary).
    For purposes of the preceding sentence, service by a physician
    as an uncompensated officer or director of a home health agency
    shall not constitute having a significant ownership interest
    in, or a significant financial or contractual relationship
    with, such agency. For purposes of paragraph (2)(A), an
    individual shall be considered to be ``confined to his home''
    if the individual has a condition, due to an illness or injury,
    that restricts the ability of the individual to leave his or
    her home except with the assistance of another individual or
    the aid of a supportive device (such as crutches, a cane, a
    wheelchair, or a walker), or if the individual has a condition
    such that leaving his or her home is medically contraindicated.
    While an individual does not have to be bedridden to be
    considered ``confined to his home'', the condition of the
    individual should be such that there exists a normal inability
    to leave home and that leaving home requires a considerable and
    taxing effort by the individual. Any absence of an individual
    from the home attributable to the need to receive health care
    treatment, including regular absences for the purpose of
    participating in therapeutic, psychosocial, or medical
    treatment in an adult day-care program that is licensed or
    certified by a State, or accredited, to furnish adult day-care
    services in the State shall not disqualify an individual from
    being considered to be ``confined to his home''. Any other
    absence of an individual from the home shall not so disqualify
    an individual if the absence is of infrequent or of relatively
    short duration. For purposes of the preceding sentence, any
    absence for the purpose of attending a religious service shall
    be deemed to be an absence of infrequent or short duration. In
    applying paragraph (1), the Secretary may specify exceptions to
    the 1 calendar year period specified in such paragraph.

               *       *       *       *       *       *       *

                              ELIGIBLE INDIVIDUALS

      Sec. 1836. [Every individual who] (a) In General.--Every
    individual who--
              (1) * * *

               *       *       *       *       *       *       *

      (b) Special Rules Applicable to Individuals Only Eligible for
    Coverage of Immunosuppressive Drugs.--
              (1) In general.--In the case of an individual whose
            eligibility for benefits under this title has ended on
            or after January 1, 2012, except for the coverage of
            immunosuppressive drugs by reason of section
            226A(b)(2), the following rules shall apply:
                      (A) The individual shall be deemed to be
                    enrolled under this part for purposes of
                    receiving coverage of such drugs.
                      (B) The individual shall be responsible for
                    providing for payment of the portion of the
                    premium under section 1839 which is not covered
                    under the Medicare savings program (as defined
                    in section 1144(c)(7)) in order to receive such
                    coverage.
                      (C) The provision of such drugs shall be
                    subject to the application of--
                              (i) the deductible under section
                            1833(b); and
                              (ii) the coinsurance amount
                            applicable for such drugs (as
                            determined under this part).
                      (D) If the individual is an inpatient of a
                    hospital or other entity, the individual is
                    entitled to receive coverage of such drugs
                    under this part.
              (2) Establishment of procedures in order to implement
            coverage.--The Secretary shall establish procedures
            for--
                      (A) identifying individuals that are entitled
                    to coverage of immunosuppressive drugs by
                    reason of section 226A(b)(2); and
                      (B) distinguishing such individuals from
                    individuals that are enrolled under this part
                    for the complete package of benefits under this
                    part.

                               ENROLLMENT PERIODS

      Sec. 1837. (a) * * *

               *       *       *       *       *       *       *

      (l)(1) In the case of any individual who is a covered
    beneficiary (as defined in section 1072(5) of title 10, United
    States Code) at the time the individual is entitled to hospital
    insurance benefits under part A under section 226(b) or section
    226A and who is eligible to enroll but who has elected not to
    enroll (or to be deemed enrolled) during the individual's
    initial enrollment period, there shall be a special enrollment
    period described in paragraph (2).
      (2) The special enrollment period described in this
    paragraph, with respect to an individual, is the 12-month
    period beginning on the day after the last day of the initial
    enrollment period of the individual or, if later, the 12-month
    period beginning with the month the individual is notified of
    enrollment under this section.
      (3) In the case of an individual who enrolls during the
    special enrollment period provided under paragraph (1), the
    coverage period under this part shall begin on the first day of
    the month in which the individual enrolls or, at the option of
    the individual, on the first day of the second month following
    the last month of the individual's initial enrollment period.
      (4) The Secretary of Defense shall establish a method for
    identifying individuals described in paragraph (1) and
    providing notice to them of their eligibility for enrollment
    during the special enrollment period described in paragraph
    (2).

               *       *       *       *       *       *       *

                              AMOUNTS OF PREMIUMS

      Sec. 1839. (a) * * *
      (b) In the case of an individual whose coverage period began
    pursuant to an enrollment after his initial enrollment period
    (determined pursuant to subsection (c) or (d) of section 1837)
    and not pursuant to a special enrollment period under [section
    1837(i)(4)] subsection (i)(4) or (l) of section 1837, the
    monthly premium determined under subsection (a) (without regard
    to any adjustment under subsection (i)) shall be increased by
    10 percent of the monthly premium so determined for each full
    12 months (in the same continuous period of eligibility) in
    which he could have been but was not enrolled. For purposes of
    the preceding sentence, there shall be taken into account (1)
    the months which elapsed between the close of his initial
    enrollment period and the close of the enrollment period in
    which he enrolled, plus (in the case of an individual who
    reenrolls) (2) the months which elapsed between the date of
    termination of a previous coverage period and the close of the
    enrollment period in which he reenrolled, but there shall not
    be taken into account months for which the individual can
    demonstrate that the individual was enrolled in a group health
    plan described in section 1862(b)(1)(A)(v) by reason of the
    individual's (or the individual's spouse's) current employment
    or months during which the individual has not attained the age
    of 65 and for which the individual can demonstrate that the
    individual was enrolled in a large group health plan as an
    active individual (as those terms are defined in section
    1862(b)(1)(B)(iii)) or months for which the individual can
    demonstrate that the individual was an individual described in
    section 1837(k)(3). Any increase in an individual's monthly
    premium under the first sentence of this subsection with
    respect to a particular continuous period of eligibility shall
    not be applicable with respect to any other continuous period
    of eligibility which such individual may have. No increase in
    the premium shall be effected for a month in the case of an
    individual who enrolls under this part during 2001, 2002, 2003,
    or 2004 and who demonstrates to the Secretary before December
    31, 2004, that the individual is a covered beneficiary (as
    defined in section 1072(5) of title 10, United States Code).
    The Secretary of Health and Human Services shall consult with
    the Secretary of Defense in identifying individuals described
    in the previous sentence.

               *       *       *       *       *       *       *

      (i) Reduction in Premium Subsidy Based on Income.--
              (1) * * *

               *       *       *       *       *       *       *

              (4) Modified adjusted gross income.--
                      (A) * * *

               *       *       *       *       *       *       *

                      (C) Use of more recent taxable year.--
                              (i) * * *
                              (ii) Standard for granting
                            requests.--A request under clause
                            (i)(I) to use a more recent taxable
                            year may be granted only if--
                                      (I) * * *
                                      (II) the individual's
                                    modified adjusted gross income
                                    for such year is significantly
                                    less than such income for the
                                    taxable year determined under
                                    subparagraph (B) by reason of
                                    the death of such individual's
                                    spouse, the marriage or divorce
                                    of such individual, sale of
                                    primary residence, or other
                                    major life changing events
                                    specified in regulations
                                    prescribed by the Commissioner
                                    in consultation with the
                                    Secretary.

               *       *       *       *       *       *       *

              PROVISIONS RELATING TO THE ADMINISTRATION OF PART B

      Sec. 1842. (a) * * *
      (b)(2) * * *

               *       *       *       *       *       *       *

      (18)(A) * * *

               *       *       *       *       *       *       *

      (C) A practitioner described in this subparagraph is any of
    the following:
              (i) * * *

               *       *       *       *       *       *       *

              (vii) A marriage and family therapist (as defined in
            section 1861(jjj)(2)).
              (viii) A mental health counselor (as defined in
            section 1861(kkk)(2)).

               *       *       *       *       *       *       *

      (h)(1) * * *

               *       *       *       *       *       *       *

      (10) The Secretary may disenroll, for a period of not more
    than one year for each act, a physician or supplier under
    section 1866(j) if such physician or supplier fails to maintain
    and, upon request of the Secretary, provide access to
    documentation relating to written orders or requests for
    payment for durable medical equipment, certifications for home
    health services, or referrals for other items or services
    written or ordered by such physician or supplier under this
    title, as specified by the Secretary.

               *       *       *       *       *       *       *

      (o)(1) If a physician's, supplier's, or any other person's
    bill or request for payment for services includes a charge for
    a drug or biological for which payment may be made under this
    part and the drug or biological is not paid on a cost or
    prospective payment basis as otherwise provided in this part,
    the amount payable for the drug or biological is equal to the
    following:
              (A) In the case of any of the following drugs or
            biologicals, 95 percent of the average wholesale price:
                      (i) * * *

               *       *       *       *       *       *       *

                      (iv) A vaccine described in [subparagraph (A)
                    or (B) of] section 1861(s)(10) furnished on or
                    after January 1, 2004 and before January 1,
                    2011, and influenza vaccines furnished on or
                    after January 1, 2011.

               *       *       *       *       *       *       *

                 USE OF AVERAGE SALES PRICE PAYMENT METHODOLOGY

      Sec. 1847A. (a) * * *

               *       *       *       *       *       *       *

      (c) Manufacturer's Average Sales Price.--
              (1) * * *

               *       *       *       *       *       *       *

              (3) Sale price net of discounts.--In calculating the
            manufacturer's average sales price under this
            subsection, such price shall include volume discounts,
            prompt pay discounts (other than, for drugs and
            biologicals that are sold on or after January 1, 2011,
            and before January 1, 2016, customary prompt pay
            discounts extended to wholesalers, but only to the
            extent such discounts do not exceed 2 percent of the
            wholesale acquisition cost), cash discounts, free goods
            that are contingent on any purchase requirement,
            chargebacks, and rebates (other than rebates under
            section 1927). For years after 2004, the Secretary may
            include in such price other price concessions (other
            than, for drugs and biologicals that are sold on or
            after January 1, 2011, and before January 1, 2016,
            customary prompt pay discounts extended to wholesalers,
            but only to the extent such discounts do not exceed 2
            percent of the wholesale acquisition cost), which may
            be based on recommendations of the Inspector General,
            that would result in a reduction of the cost to the
            purchaser.

               *       *       *       *       *       *       *

              (6) Definitions and other rules.--In this section:
                      (A) * * *

               *       *       *       *       *       *       *

                      [(G) Inclusion of vaccines.--In applying
                    provisions of section 1927 under this section,
                    ``other than a vaccine'' is deemed deleted from
                    section 1927(k)(2)(B).]
                      (G) Implementation.--Chapter 35 of title 44,
                    United States Code shall not apply to
                    manufacturer provision of information pursuant
                    to section 1927(b)(3)(A)(iii) for purposes of
                    implementation of this section.

               *       *       *       *       *       *       *

                        PAYMENT FOR PHYSICIANS' SERVICES

      Sec. 1848. (a) * * *
      (b) Establishment of Fee Schedules.--
              (1) * * *

               *       *       *       *       *       *       *

              (4) Special rule for imaging services.--
                      (A) * * *
                      (B) Imaging services described.--For purposes
                    of [subparagraph (A)] this paragraph, imaging
                    services described in this subparagraph are
                    imaging and computer-assisted imaging services,
                    including X-ray, ultrasound (including
                    echocardiography), nuclear medicine (including
                    positron emission tomography), magnetic
                    resonance imaging, computed tomography, and
                    fluoroscopy, but excluding diagnostic and
                    screening mammography.
                      (C) Adjustment in practice expense to reflect
                    higher presumed utilization.--In computing the
                    number of practice expense relative value units
                    under subsection (c)(2)(C)(ii) with respect to
                    advanced diagnostic imaging services (as
                    defined in section 1834(e)(1)(B)), the
                    Secretary shall adjust such number of units so
                    it reflects a 75 percent (rather than 50
                    percent) presumed rate of utilization of
                    imaging equipment.
                      (D) Adjustment in technical component
                    discount on single-session imaging involving
                    consecutive body parts.--The Secretary shall
                    increase the reduction in expenditures
                    attributable to the multiple procedure payment
                    reduction applicable to the technical component
                    for imaging under the final rule published by
                    the Secretary in the Federal Register on
                    November 21, 2005 (part 405 of title 42, Code
                    of Federal Regulations) from 25 percent to 50
                    percent.

               *       *       *       *       *       *       *

      (c) Determination of Relative Values for Physicians'
    Services.--
              (1) * * *
              (2) Determination of relative values.--
                      (A) * * *
                      (B) Periodic review and adjustments in
                    relative values.--
                              (i) * * *

               *       *       *       *       *       *       *

                              (v) Exemption of certain reduced
                            expenditures from budget-neutrality
                            calculation.--The following reduced
                            expenditures, as estimated by the
                            Secretary, shall not be taken into
                            account in applying clause (ii)(II):
                                      (I) * * *
                                      (II) OPD payment cap and
                                    other provisions for imaging
                                    services.--Effective for fee
                                    schedules established beginning
                                    with 2007, reduced expenditures
                                    attributable to subsection
                                    (b)(4).

               *       *       *       *       *       *       *

                      (K) Potentially misvalued codes.--
                              (i) In general.--The Secretary
                            shall--
                                      (I) periodically identify
                                    services as being potentially
                                    misvalued using criteria
                                    specified in clause (ii); and
                                      (II) review and make
                                    appropriate adjustments to the
                                    relative values established
                                    under this paragraph for
                                    services identified as being
                                    potentially misvalued under
                                    subclause (I).
                              (ii) Identification of potentially
                            misvalued codes.--For purposes of
                            identifying potentially misvalued
                            services pursuant to clause (i)(I), the
                            Secretary shall examine (as the
                            Secretary determines to be appropriate)
                            codes (and families of codes as
                            appropriate) for which there has been
                            the fastest growth; codes (and families
                            of codes as appropriate) that have
                            experienced substantial changes in
                            practice expenses; codes for new
                            technologies or services within an
                            appropriate period (such as three
                            years) after the relative values are
                            initially established for such codes;
                            multiple codes that are frequently
                            billed in conjunction with furnishing a
                            single service; codes with low relative
                            values, particularly those that are
                            often billed multiple times for a
                            single treatment; codes which have not
                            been subject to review since the
                            implementation of the RBRVS (the so-
                            called ``Harvard-valued codes''); and
                            such other codes determined to be
                            appropriate by the Secretary.
                              (iii) Review and adjustments.--
                                      (I) The Secretary may use
                                    existing processes to receive
                                    recommendations on the review
                                    and appropriate adjustment of
                                    potentially misvalued services
                                    described clause (i)(II).
                                      (II) The Secretary may
                                    conduct surveys, other data
                                    collection activities, studies,
                                    or other analyses as the
                                    Secretary determines to be
                                    appropriate to facilitate the
                                    review and appropriate
                                    adjustment described in clause
                                    (i)(II).
                                      (III) The Secretary may use
                                    analytic contractors to
                                    identify and analyze services
                                    identified under clause (i)(I),
                                    conduct surveys or collect
                                    data, and make recommendations
                                    on the review and appropriate
                                    adjustment of services
                                    described in clause (i)(II).
                                      (IV) The Secretary may
                                    coordinate the review and
                                    appropriate adjustment
                                    described in clause (i)(II)
                                    with the periodic review
                                    described in subparagraph (B).
                                      (V) As part of the review and
                                    adjustment described in clause
                                    (i)(II), including with respect
                                    to codes with low relative
                                    values described in clause
                                    (ii), the Secretary may make
                                    appropriate coding revisions
                                    (including using existing
                                    processes for consideration of
                                    coding changes) which may
                                    include consolidation of
                                    individual services into
                                    bundled codes for payment under
                                    the fee schedule under
                                    subsection (b).
                                      (VI) The provisions of
                                    subparagraph (B)(ii)(II) shall
                                    apply to adjustments to
                                    relative value units made
                                    pursuant to this subparagraph
                                    in the same manner as such
                                    provisions apply to adjustments
                                    under subparagraph (B)(ii)(II).
                      (L) Validating relative value units.--
                              (i) In general.--The Secretary shall
                            establish a process to validate
                            relative value units under the fee
                            schedule under subsection (b).
                              (ii) Components and elements of
                            work.--The process described in clause
                            (i) may include validation of work
                            elements (such as time, mental effort
                            and professional judgment, technical
                            skill and physical effort, and stress
                            due to risk) involved with furnishing a
                            service and may include validation of
                            the pre, post, and intra-service
                            components of work.
                              (iii) Scope of codes.--The validation
                            of work relative value units shall
                            include a sampling of codes for
                            services that is the same as the codes
                            listed under subparagraph (K)(ii)
                              (iv) Methods.--The Secretary may
                            conduct the validation under this
                            subparagraph using methods described in
                            subclauses (I) through (V) of
                            subparagraph (K)(iii) as the Secretary
                            determines to be appropriate.
                              (v) Adjustments.--The Secretary shall
                            make appropriate adjustments to the
                            work relative value units under the fee
                            schedule under subsection (b). The
                            provisions of subparagraph (B)(ii)(II)
                            shall apply to adjustments to relative
                            value units made pursuant to this
                            subparagraph in the same manner as such
                            provisions apply to adjustments under
                            subparagraph (B)(ii)(II).

               *       *       *       *       *       *       *

      (d) Conversion Factors.--
              (1) Establishment.--
                      (A) In general.--[The conversion factor]
                              (i) Application of single conversion
                            factor.--Subject to clause (ii), the
                            conversion factor for each year shall
                            be the conversion factor established
                            under this subsection for the previous
                            year (or, in the case of 1992,
                            specified in subparagraph (B)) adjusted
                            by the update (established under
                            paragraph (3)) for the year involved
                            (for years before 2001) and, for years
                            beginning with 2001, multiplied by the
                            update (established under paragraph
                            (4)) for the year involved.
                              (ii) Application of multiple
                            conversion factors beginning with
                            2011.--
                                      (I) In general.--In applying
                                    clause (i) for years beginning
                                    with 2011, separate conversion
                                    factors shall be established
                                    for each service category of
                                    physicians' services (as
                                    defined in subsection (j)(5))
                                    and any reference in this
                                    section to a conversion factor
                                    for such years shall be deemed
                                    to be a reference to the
                                    conversion factor for each of
                                    such categories.
                                      (II) Initial conversion
                                    factors.--Such factors for 2011
                                    shall be based upon the single
                                    conversion factor for the
                                    previous year multiplied by the
                                    update established under
                                    paragraph (11) for such
                                    category for 2011.
                                      (III) Updating of conversion
                                    factors.--Such factor for a
                                    service category for a
                                    subsequent year shall be based
                                    upon the conversion factor for
                                    such category for the previous
                                    year and adjusted by the update
                                    established for such category
                                    under paragraph (11) for the
                                    year involved.

               *       *       *       *       *       *       *

                      (D) Special rules for anesthesia services.--
                    The separate conversion factor for anesthesia
                    services for a year shall be equal to 46
                    percent of the single conversion factor
                    established for [other physicians' services]
                    physicians' services described in the service
                    category described in subsection (j)(5)(B),
                    except as adjusted for changes in work,
                    practice expense, or malpractice relative value
                    units.
                      (E) Publication and dissemination of
                    information.--The Secretary shall--
                              (i) * * *
                              (ii) make available to the Medicare
                            Payment Advisory Commission and the
                            public by March 1 of each year
                            (beginning with 2000) an estimate of
                            the sustainable or target growth rate
                            and of the conversion factor which will
                            apply to physicians' services for the
                            succeeding year and data used in making
                            such estimate.

               *       *       *       *       *       *       *

              (4) Update for years beginning with 2001.--
                      (A) * * *
                      (B) Update adjustment factor.--For purposes
                    of subparagraph (A)(ii), subject to
                    [subparagraph (D)] subparagraphs (D) and (G)
                    and the succeeding paragraphs of this
                    subsection, the ``update adjustment factor''
                    for a year is equal (as estimated by the
                    Secretary) to the sum of the following:
                              (i) * * *
                              (ii) Cumulative adjustment
                            component.--An amount determined by--
                                      (I) * * *
                                      (II) dividing that difference
                                    by actual expenditures for such
                                    services for the prior year as
                                    increased by the sustainable or
                                    target growth rate under
                                    subsection (f) for the year for
                                    which the update adjustment
                                    factor is to be determined; and

               *       *       *       *       *       *       *

                      (C) Determination of allowed expenditures.--
                    For purposes of this paragraph:
                              (i) * * *

               *       *       *       *       *       *       *

                              (iii) Years beginning with 2000.--
                            [The allowed] Subject to paragraph
                            (11)(B), the allowed expenditures for a
                            year (beginning with 2000) is equal to
                            the allowed expenditures for
                            physicians' services for the previous
                            year, increased by the sustainable
                            growth rate under subsection (f) for
                            the year involved.

               *       *       *       *       *       *       *

                      (G) Rebasing using 2009 for future update
                    adjustments.--In determining the update
                    adjustment factor under subparagraph (B) for
                    2011 and subsequent years--
                              (i) the allowed expenditures for 2009
                            shall be equal to the amount of the
                            actual expenditures for physicians'
                            services during 2009; and
                              (ii) the reference in subparagraph
                            (B)(ii)(I) to ``April 1, 1996'' shall
                            be treated as a reference to ``January
                            1, 2009 (or, if later, the first day of
                            the fifth year before the year
                            involved)''.

               *       *       *       *       *       *       *

              (10) Update for 2010.--The update to the single
            conversion factor established in paragraph (1)(C) for
            2010 shall be the percentage increase in the MEI (as
            defined in section 1842(i)(3)) for that year.
              (11) Updates for service categories beginning with
            2011.--
                      (A) In general.--In applying paragraph (4)
                    for a year beginning with 2011, the following
                    rules apply:
                              (i) Application of separate update
                            adjustments for each service
                            category.--Pursuant to paragraph
                            (1)(A)(ii)(I), the update shall be made
                            to the conversion factor for each
                            service category (as defined in
                            subsection (j)(5)) based upon an update
                            adjustment factor for the respective
                            category and year and the update
                            adjustment factor shall be computed,
                            for a year, separately for each service
                            category.
                              (ii) Computation of allowed and
                            actual expenditures based on service
                            categories.--In computing the prior
                            year adjustment component and the
                            cumulative adjustment component under
                            clauses (i) and (ii) of paragraph
                            (4)(B), the following rules apply:
                                      (I) Application based on
                                    service categories.--The
                                    allowed expenditures and actual
                                    expenditures shall be the
                                    allowed and actual expenditures
                                    for the service category, as
                                    determined under subparagraph
                                    (B).
                                      (II) Application of category
                                    specific target growth rate.--
                                    The growth rate applied under
                                    clause (ii)(II) of such
                                    paragraph shall be the target
                                    growth rate for the service
                                    category involved under
                                    subsection (f)(5).
                      (B) Determination of allowed expenditures.--
                    In applying paragraph (4) for a year beginning
                    with 2010, notwithstanding subparagraph
                    (C)(iii) of such paragraph, the allowed
                    expenditures for a service category for a year
                    is an amount computed by the Secretary as
                    follows:
                              (i) For 2010.--For 2010:
                                      (I) Total 2009 actual
                                    expenditures for all services
                                    included in sgr computation for
                                    each service category.--Compute
                                    total actual expenditures for
                                    physicians' services (as
                                    defined in subsection
                                    (f)(4)(A)) for 2009 for each
                                    service category.
                                      (II) Increase by growth rate
                                    to obtain 2010 allowed
                                    expenditures for service
                                    category.--Compute allowed
                                    expenditures for the service
                                    category for 2010 by increasing
                                    the allowed expenditures for
                                    the service category for 2009
                                    computed under subclause (I) by
                                    the target growth rate for such
                                    service category under
                                    subsection (f) for 2010.
                              (ii) For subsequent years.--For a
                            subsequent year, take the amount of
                            allowed expenditures for such category
                            for the preceding year (under clause
                            (i) or this clause) and increase it by
                            the target growth rate determined under
                            subsection (f) for such category and
                            year.
      (e) Geographic Adjustment Factors.--
              (1) Establishment of geographic indices.--
                      (A) * * *

               *       *       *       *       *       *       *

                      (E) Floor at 1.0 on work geographic index.--
                    After calculating the work geographic index in
                    subparagraph (A)(iii), for purposes of payment
                    for services furnished on or after January 1,
                    2004, and [before January 1, 2010] before
                    January 1, 2012, the Secretary shall increase
                    the work geographic index to 1.00 for any
                    locality for which such work geographic index
                    is less than 1.00.

               *       *       *       *       *       *       *

              (6) Transition to use of msas as fee schedule areas
            in california.--
                      (A) In general.--
                              (i) Revision.--Subject to clause (ii)
                            and notwithstanding the previous
                            provisions of this subsection, for
                            services furnished on or after January
                            1, 2011, the Secretary shall revise the
                            fee schedule areas used for payment
                            under this section applicable to the
                            State of California using the
                            Metropolitan Statistical Area (MSA)
                            iterative Geographic Adjustment Factor
                            methodology as follows:
                                      (I) The Secretary shall
                                    configure the physician fee
                                    schedule areas using the Core-
                                    Based Statistical Areas-
                                    Metropolitan Statistical Areas
                                    (each in this paragraph
                                    referred to as an ``MSA''), as
                                    defined by the Director of the
                                    Office of Management and
                                    Budget, as the basis for the
                                    fee schedule areas. The
                                    Secretary shall employ an
                                    iterative process to transition
                                    fee schedule areas. First, the
                                    Secretary shall list all MSAs
                                    within the State by Geographic
                                    Adjustment Factor described in
                                    paragraph (2) (in this
                                    paragraph referred to as a
                                    ``GAF'') in descending order.
                                    In the first iteration, the
                                    Secretary shall compare the GAF
                                    of the highest cost MSA in the
                                    State to the weighted-average
                                    GAF of the group of remaining
                                    MSAs in the State. If the ratio
                                    of the GAF of the highest cost
                                    MSA to the weighted-average GAF
                                    of the rest of State is 1.05 or
                                    greater then the highest cost
                                    MSA becomes a separate fee
                                    schedule area.
                                      (II) In the next iteration,
                                    the Secretary shall compare the
                                    MSA of the second-highest GAF
                                    to the weighted-average GAF of
                                    the group of remaining MSAs. If
                                    the ratio of the second-highest
                                    MSA's GAF to the weighted-
                                    average of the remaining lower
                                    cost MSAs is 1.05 or greater,
                                    the second-highest MSA becomes
                                    a separate fee schedule area.
                                    The iterative process continues
                                    until the ratio of the GAF of
                                    the highest-cost remaining MSA
                                    to the weighted-average of the
                                    remaining lower-cost MSAs is
                                    less than 1.05, and the
                                    remaining group of lower cost
                                    MSAs form a single fee schedule
                                    area. If two MSAs have
                                    identical GAFs, they shall be
                                    combined in the iterative
                                    comparison.
                              (ii) Transition.--For services
                            furnished on or after January 1, 2011,
                            and before January 1, 2016, in the
                            State of California, after calculating
                            the work, practice expense, and
                            malpractice geographic indices
                            described in clauses (i), (ii), and
                            (iii) of paragraph (1)(A) that would
                            otherwise apply through application of
                            this paragraph, the Secretary shall
                            increase any such index to the county-
                            based fee schedule area value on
                            December 31, 2009, if such index would
                            otherwise be less than the value on
                            January 1, 2010.
                      (B) Subsequent revisions.--
                              (i) Periodic review and adjustments
                            in fee schedule areas.--Subsequent to
                            the process outlined in paragraph
                            (1)(C), not less often than every three
                            years, the Secretary shall review and
                            update the California Rest-of-State fee
                            schedule area using MSAs as defined by
                            the Director of the Office of
                            Management and Budget and the iterative
                            methodology described in subparagraph
                            (A)(i).
                              (ii) Link with geographic index data
                            revision.--The revision described in
                            clause (i) shall be made effective
                            concurrently with the application of
                            the periodic review of the adjustment
                            factors required under paragraph (1)(C)
                            for California for 2012 and subsequent
                            periods. Upon request, the Secretary
                            shall make available to the public any
                            county-level or MSA derived data used
                            to calculate the geographic practice
                            cost index.
                      (C) References to fee schedule areas.--
                    Effective for services furnished on or after
                    January 1, 2010, for the State of California,
                    any reference in this section to a fee schedule
                    area shall be deemed a reference to an MSA in
                    the State.
      (f) Sustainable Growth Rate and Target Growth Rate.--
              (1) Publication.--The Secretary shall cause to have
            published in the Federal Register not later than--
                      (A) November 1, 2000, the sustainable growth
                    rate for 2000 and 2001; [and]
                      (B) November 1 of each succeeding year before
                    2010 the sustainable growth rate for such
                    succeeding year and each of the preceding 2
                    years[.]; and
                      (C) November 1 of each succeeding year the
                    target growth rate for such succeeding year and
                    each of the 2 preceding years.
              (2) Specification of growth rate.--The sustainable
            growth rate for all physicians' services for a fiscal
            year (beginning with fiscal year 1998 and ending with
            fiscal year 2000) and a year beginning with 2000 and
            ending with 2009 shall be equal to the product of--
                      (A)  * * *

               *       *       *       *       *       *       *

              (4) Definitions.--In this subsection:
                      (A) Services included in physicians'
                    services.--The term ``physicians' services''
                    includes other items and services [(such as
                    clinical diagnostic laboratory tests and
                    radiology services), specified by the
                    Secretary, that are commonly performed or
                    furnished by a physician or in a physician's
                    office] for which payment under this part is
                    made under the fee schedule under this section,
                    for services for practitioners described in
                    section 1842(b)(18)(C) on a basis related to
                    such fee schedule, or for services described in
                    section 1861(p) (other than such services when
                    furnished in the facility of a provider of
                    services), but does not include services
                    furnished to a Medicare+Choice plan enrollee.

               *       *       *       *       *       *       *

              (5) Application of separate target growth rates for
            each service category beginning with 2010.--The target
            growth rate for a year beginning with 2010 shall be
            computed and applied separately under this subsection
            for each service category (as defined in subsection
            (j)(5)) and shall be computed using the same method for
            computing the target growth rate except that the factor
            described in paragraph (2)(C) for--
                      (A) the service category described in
                    subsection (j)(5)(A) shall be increased by
                    0.02; and
                      (B) the service category described in
                    subsection (j)(5)(B) shall be increased by
                    0.01.

               *       *       *       *       *       *       *

      (j) Definitions.--In this section:
              (1) * * *
              (2) Fee schedule area.--[The term] Except as provided
            in subsection (e)(6)(C), the term ``fee schedule area''
            means a locality used under section 1842(b) for
            purposes of computing payment amounts for physicians'
            services.
              (3) Physicians' services.--The term ``physicians'
            services'' includes items and services described in
            paragraphs (1), (2)(A), (2)(D), (2)(G), (2)(P) (with
            respect to services described in subparagraphs (A) and
            (C) of section 1861(oo)(2)), (2)(R) (with respect to
            services described in suparagraphs (B), (C), and (D) of
            section 1861(pp)(1)), (2)(S), (2)(W), (2)(AA), (2)(DD),
            (2)(EE), (2)(FF), (3), (4), (13), (14) (with respect to
            services described in section 1861(nn)(2)), and (15) of
            section 1861(s) (other than clinical diagnostic
            laboratory tests and, except for purposes of subsection
            (a)(3), (g), and (h) such other items and services as
            the Secretary may specify).

               *       *       *       *       *       *       *

              (5) Service categories.--For services furnished on or
            after January 1, 2009, each of the following categories
            of physicians' services (as defined in paragraph (3))
            shall be treated as a separate ``service category'':
                      (A) Evaluation and management services that
                    are procedure codes (for services covered under
                    this title) for--
                              (i) services in the category
                            designated Evaluation and Management in
                            the Health Care Common Procedure Coding
                            System (established by the Secretary
                            under subsection (c)(5) as of December
                            31, 2009, and as subsequently modified
                            by the Secretary); and
                              (ii) preventive services (as defined
                            in section 1861(iii)) for which payment
                            is made under this section.
                      (B) All other services not described in
                    subparagraph (A).
            Service categories established under this paragraph
            shall apply without regard to the specialty of the
            physician furnishing the service.
      (k) Quality Reporting System.--
              (1) * * *
              (2) Use of consensus-based quality measures.--
                      (A) * * *

               *       *       *       *       *       *       *

                      (C) For 2010 and subsequent years.--
                              (i) * * *
                              (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, such as
                            the AQA alliance. The Secretary shall
                            submit such a non-endorsed measure to
                            the entity for consideration for
                            endorsement. If the entity considers
                            but does not endorse such a measure and
                            if the Secretary does not phase-out use
                            of such measure, the Secretary shall
                            include the rationale for continued use
                            of such a measure in rulemaking.

               *       *       *       *       *       *       *

                      (E) Physician's quality reporting
                    initiative.--
                              (i) In general.--For purposes of
                            reporting data on quality measures for
                            covered professional services furnished
                            during 2011 and any subsequent year, to
                            the extent that measures are available,
                            the Secretary shall include quality
                            measures on end of life care and
                            advanced care planning that have been
                            adopted or endorsed by a consensus-
                            based organization, if appropriate.
                            Such measures shall measure both the
                            creation of and adherence to orders for
                            life-sustaining treatment.
                              (ii) Proposed set of measures.--The
                            Secretary shall publish in the Federal
                            Register proposed quality measures on
                            end of life care and advanced care
                            planning that the Secretary determines
                            are described in subparagraph (A) and
                            would be appropriate for eligible
                            professionals to use to submit data to
                            the Secretary. The Secretary shall
                            provide for a period of public comment
                            on such set of measures before
                            finalizing such proposed measures.

               *       *       *       *       *       *       *

      (m) Incentive Payments for Quality Reporting.--
              (1) Incentive payments.--
                      (A) In general.--For 2007 through [2010]
                    2012, with respect to covered professional
                    services furnished during a reporting period by
                    an eligible professional, if--
                              (i) * * *

               *       *       *       *       *       *       *

                      (B) Applicable quality percent.--For purposes
                    of subparagraph (A), the term ``applicable
                    quality percent'' means--
                              (i) * * *
                              (ii) for [2009 and 2010] each of the
                            years 2009 through 2012, 2.0 percent.

               *       *       *       *       *       *       *

              (5) Application.--
                      (A) * * *
                      (B) Coordination with other bonus payments.--
                    The provisions of this subsection shall not be
                    taken into account in applying subsections (m),
                    (p), and (u) of section 1833 and any payment
                    under such subsections shall not be taken into
                    account in computing allowable charges under
                    this subsection.

               *       *       *       *       *       *       *

                      (E) Limitations on review.--[There shall be]
                    Subject to subparagraph (I), there shall be no
                    administrative or judicial review under 1869,
                    section 1878, or otherwise of
                              (i)  * * *

               *       *       *       *       *       *       *

                      (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.
                      (I) Informal appeals process.--
                    Notwithstanding subparagraph (E), by not later
                    than January 1, 2011, the Secretary shall
                    establish and have in place an informal process
                    for eligible professionals to appeal the
                    determination that an eligible professional did
                    not satisfactorily submit data on quality
                    measures under this subsection.

               *       *       *       *       *       *       *

              (7) Integration of physician quality reporting and
            ehr reporting.--Not later than January 1, 2012, the
            Secretary shall develop a plan to integrate clinical
            reporting on quality measures under this subsection
            with reporting requirements under subsection (o)
            relating to the meaningful use of electronic health
            records. Such integration shall consist of the
            following:
                      (A) The development of measures, the
                    reporting of which would both demonstrate--
                              (i) meaningful use of an electronic
                            health record for purposes of
                            subsection (o); and
                              (ii) clinical quality of care
                            furnished to an individual.
                      (B) The collection of health data to identify
                    deficiencies in the quality and coordination of
                    care for individuals eligible for benefits
                    under this part.
                      (C) Such other activities as specified by the
                    Secretary.

               *       *       *       *       *       *       *

      (o) Incentives for Adoption and Meaningful Use of Certified
    EHR Technology.--
              (1) Incentive payments.--
                      (A) * * *
                      (B) Limitations on amounts of incentive
                    payments.--
                              (i) * * *

               *       *       *       *       *       *       *

                              (iv) Increase for certain eligible
                            professionals.--In the case of an
                            eligible professional who predominantly
                            furnishes services under this part in
                            an area that is designated by the
                            Secretary (under section 332(a)(1)(A)
                            of the Public Health Service Act) as a
                            primary care health professional
                            shortage area, the amount that would
                            otherwise apply for a payment year for
                            such professional under subclauses (I)
                            through (V) of clause (ii) shall be
                            increased by 10 percent. In
                            implementing the preceding sentence,
                            the Secretary may, as determined
                            appropriate, apply provisions of
                            subsections (m) and (u) of section 1833
                            in a similar manner as such provisions
                            apply under such subsection.

               *       *       *       *       *       *       *

      (p) Payment Modifier for Certain Evaluation and Management
    Services.--The Secretary shall establish a payment modifier
    under the fee schedule under this section for evaluation and
    management services (as specified in section
    1842(b)(16)(B)(ii)) that result in the ordering of additional
    services (such as lab tests), the prescription of drugs, the
    furnishing or ordering of durable medical equipment in order to
    enable better monitoring of claims for payment for such
    additional services under this title, or the ordering,
    furnishing, or prescribing of other items and services
    determined by the Secretary to pose a high risk of waste,
    fraud, and abuse. The Secretary may require providers of
    services or suppliers to report such modifier in claims
    submitted for payment.

                        Part C--Medicare+choice Program

                     ELIGIBILITY, ELECTION, AND ENROLLMENT

      Sec. 1851. (a) * * *

               *       *       *       *       *       *       *

      (e) Coverage Election Periods.--
              (1) * * *
              (2) Open enrollment and disenrollment
            opportunities.--Subject to paragraph (5)--
                      (A) * * *

               *       *       *       *       *       *       *

                      [(C) Continuous open enrollment and
                    disenrollment for first 3 months in subsequent
                    years.--
                              [(i) In general.--Subject to clauses
                            (ii) and (iii) and subparagraph (D), at
                            any time during the first 3 months of a
                            year after 2006, or, if the individual
                            first becomes a Medicare+Choice
                            eligible individual during a year after
                            2006, during the first 3 months of such
                            year in which the individual is a
                            Medicare+Choice eligible individual, a
                            Medicare+Choice eligible individual may
                            change the election under subsection
                            (a)(1).
                              [(ii) Limitation of one change during
                            open enrollment period each year.--An
                            individual may exercise the right under
                            clause (i) only once during the
                            applicable 3-month period described in
                            such clause in each year. The
                            limitation under this clause shall not
                            apply to changes in elections effected
                            during an annual, coordinated election
                            period under paragraph (3) or during a
                            special enrollment period under
                            paragraph (4).
                              [(iii) Limitation on exercise of
                            right with respect to prescription drug
                            coverage.--Effective for plan years
                            beginning on or after January 1, 2006,
                            in applying clause (i) (and clause (i)
                            of subparagraph (B)) in the case of an
                            individual who--
                                      [(I) is enrolled in an MA
                                    plan that does provide
                                    qualified prescription drug
                                    coverage, the individual may
                                    exercise the right under such
                                    clause only with respect to
                                    coverage under the original
                                    fee-for-service plan or
                                    coverage under another MA plan
                                    that does not provide such
                                    coverage and may not exercise
                                    such right to obtain coverage
                                    under an MA-PD plan or under a
                                    prescription drug plan under
                                    part D; or
                                      [(II) is enrolled in an MA-PD
                                    plan, the individual may
                                    exercise the right under such
                                    clause only with respect to
                                    coverage under another MA-PD
                                    plan (and not an MA plan that
                                    does not provide qualified
                                    prescription drug coverage) or
                                    under the original fee-for-
                                    service plan and coverage under
                                    a prescription drug plan under
                                    part D.]

               *       *       *       *       *       *       *

              (3) Annual, coordinated election period.--
                      (A) * * *
                      (B) Annual, coordinated election period.--For
                    purposes of this section, the term ``annual,
                    coordinated election period'' means--
                              (i) * * *

               *       *       *       *       *       *       *

                              (iii) with respect to 2006, the
                            period beginning on November 15, 2005,
                            and ending on May 15, 2006; [and]
                              (iv) with respect to 2007 [and
                            succeeding years], 2008, 2009, and
                            2010, the period beginning on November
                            15 and ending on December 31 of the
                            year before such year[.]; and
                              (v) with respect to 2011 and
                            succeeding years, the period beginning
                            on November 1 and ending on December 15
                            of the year before such year.

               *       *       *       *       *       *       *

              (4) Special election periods.--Effective as of
            January 1, 2006, an individual may discontinue an
            election of a Medicare+Choice plan offered by a
            Medicare+Choice organization other than during an
            annual, coordinated election period and make a new
            election under this section if--
                      (A) * * *

               *       *       *       *       *       *       *

                      (C) the individual demonstrates (in
                    accordance with guidelines established by the
                    Secretary) that--
                              (i) * * *
                              (ii) the organization (or an agent or
                            other entity acting on the
                            organization's behalf) materially
                            misrepresented the plan's provisions in
                            marketing the plan to the individual;
                            [or]
                      (D) the individual is enrolled in an MA plan
                    and enrollment in the plan is suspended under
                    paragraph (2)(B) or (3)(C) of section 1857(g)
                    because of a failure of the plan to meet
                    applicable requirements; or
                      [(D)] (E) the individual meets such other
                    exceptional conditions as the Secretary may
                    provide, taking into account the health or
                    well-being of the individual.

               *       *       *       *       *       *       *

      (h) Approval of Marketing Material and Application Forms.--
              (1) * * *

               *       *       *       *       *       *       *

              (4) Prohibition of certain marketing practices.--Each
            Medicare+Choice organization shall conform to fair
            marketing standards, in relation to Medicare+Choice
            plans offered under this part, included in the
            standards established under section 1856. Such
            standards--
                      (A) * * *

               *       *       *       *       *       *       *

            Beginning on the effective date of the implementation
            of the regulations under subparagraph (A) or (B) of
            section 1856(c)(2), each Medicare Advantage
            organization with respect to a Medicare Advantage plan
            offered by the organization (and agents of such
            organization) shall comply with the standardized
            marketing requirements under section 1856(c).

               *       *       *       *       *       *       *

      (p) Publication of Medical Loss Ratios and Other Cost-Related
    Information.--
              (1) In general.--The Secretary shall publish, not
            later than November 1 of each year (beginning with
            2011), for each MA plan contract, the medical loss
            ratio of the plan in the previous year.
              (2) Submission of data.--
                      (A) In general.--Each MA organization shall
                    submit to the Secretary, in a form and manner
                    specified by the Secretary, data necessary for
                    the Secretary to publish the medical loss ratio
                    on a timely basis.
                      (B) Data for 2010 and 2011.--The data
                    submitted under subparagraph (A) for 2010 and
                    for 2011 shall be consistent in content with
                    the data reported as part of the MA plan bid in
                    June 2009 for 2010.
                      (C) Use of standardized elements and
                    definitions.--The data to be submitted under
                    subparagraph (A) relating to medical loss ratio
                    for a year, beginning with 2012, shall be
                    submitted based on the standardized elements
                    and definitions developed under paragraph (3).
              (3) Development of data reporting standards.--
                      (A) In general.--The Secretary shall develop
                    and implement standardized data elements and
                    definitions for reporting under this
                    subsection, for contract years beginning with
                    2012, of data necessary for the calculation of
                    the medical loss ratio for MA plans. Not later
                    than December 31, 2010, the Secretary shall
                    publish a report describing the elements and
                    definitions so developed.
                      (B) Consultation.--The Secretary shall
                    consult with the Health Choices Commissioner,
                    representatives of MA organizations, experts on
                    health plan accounting systems, and
                    representatives of the National Association of
                    Insurance Commissioners, in the development of
                    such data elements and definitions.
              (4) Medical loss ratio to be defined.--For purposes
            of this part, the term ``medical loss ratio'' has the
            meaning given such term by the Secretary, taking into
            account the meaning given such term by the Health
            Choices Commissioner under section 116 of the America's
            Affordable Health Choices Act of 2009.

                      BENEFITS AND BENEFICIARY PROTECTIONS

      Sec. 1852. (a) Basic Benefits.--
              (1) Requirement.--
                      (A) In general.--Except as provided in
                    section 1859(b)(3) for MSA plans and except as
                    provided in paragraph (6) for MA regional
                    plans, each Medicare+Choice plan shall provide
                    to members enrolled under this part, through
                    providers and other persons that meet the
                    applicable requirements of this title and part
                    A of title XI, benefits under the original
                    medicare fee-for-service program option (and,
                    for plan years before 2006, additional benefits
                    required under section 1854(f)(1)(A)) with
                    cost-sharing that is no greater (and may be
                    less) than the cost-sharing that would
                    otherwise be imposed under such program option.
                      (B) Benefits under the original medicare fee-
                    for-service program option defined.--
                              (i) In general.--For purposes of this
                            part, the term ``benefits under the
                            original medicare fee-for-service
                            program option'' means those items and
                            services (other than hospice care) for
                            which benefits are available under
                            parts A and B to individuals entitled
                            to benefits under part A and enrolled
                            under part B, with cost-sharing for
                            those services as required under parts
                            A and B [or an actuarially equivalent
                            level of cost-sharing as determined in
                            this part].
                              [(ii) Special rule for regional
                            plans.--In the case of an MA regional
                            plan in determining an actuarially
                            equivalent level of cost-sharing with
                            respect to benefits under the original
                            medicare fee-for-service program
                            option, there shall only be taken into
                            account, with respect to the
                            application of section 1858(b)(2), such
                            expenses only with respect to
                            subparagraph (A) of such section.]
                              (ii) Permitting use of flat copayment
                            or per diem rate.--Nothing in clause
                            (i) shall be construed as prohibiting a
                            Medicare Advantage plan from using a
                            flat copayment or per diem rate, in
                            lieu of the cost-sharing that would be
                            imposed under part A or B, so long as
                            the amount of the cost-sharing imposed
                            does not exceed the amount of the cost-
                            sharing that would be imposed under the
                            respective part if the individual were
                            not enrolled in a plan under this part.

               *       *       *       *       *       *       *

              [(7) Limitation on cost-sharing for dual eligibles
            and qualified medicare beneficiaries.--In the case of
            an individual who is a full-benefit dual eligible
            individual (as defined in section 1935(c)(6)) or a
            qualified medicare beneficiary (as defined in section
            1905(p)(1)) and who is enrolled in a specialized
            Medicare Advantage plan for special needs individuals
            described in section 1859(b)(6)(B)(ii), the plan may
            not impose cost-sharing that exceeds the amount of
            cost-sharing that would be permitted with respect to
            the individual under title XIX if the individual were
            not enrolled in such plan.]
              (7) Limitation on cost-sharing for dual eligibles and
            qualified medicare beneficiaries.--In the case of a
            individual who is a full-benefit dual eligible
            individual (as defined in section 1935(c)(6)) or a
            qualified medicare beneficiary (as defined in section
            1905(p)(1)) who is enrolled in a Medicare Advantage
            plan, the plan may not impose cost-sharing that exceeds
            the amount of cost-sharing that would be permitted with
            respect to the individual under this title and title
            XIX if the individual were not enrolled with such plan.

               *       *       *       *       *       *       *

                   PAYMENTS TO MEDICARE+CHOICE ORGANIZATIONS

      Sec. 1853. (a) Payments to Organizations.--
              (1) Monthly payments.--
                      (A) * * *

               *       *       *       *       *       *       *

                      (C) Demographic adjustment, including
                    adjustment for health status.--
                              (i) * * *
                              (ii) Application during phase-out of
                            budget neutrality factor.--For 2006
                            [through 2010] and each subsequent
                            year:
                                      (I)  * * *
                                      (II) In order to ensure
                                    payment accuracy, the Secretary
                                    shall periodically conduct an
                                    analysis of the differences
                                    described in subclause (I). The
                                    Secretary shall complete such
                                    analysis by a date necessary to
                                    ensure that the results of such
                                    analysis are incorporated on a
                                    timely basis into the risk
                                    scores [only for 2008, 2009,
                                    and 2010] for 2008 and
                                    subsequent years. In conducting
                                    such analysis, the Secretary
                                    shall use data submitted with
                                    respect to 2004 and subsequent
                                    years, as available.

               *       *       *       *       *       *       *

      (j) Computation of Benchmark Amounts.--For purposes of this
    part, subject to subsection (o), the term ``MA area-specific
    non-drug monthly benchmark amount'' means for a month in a
    year--
              (1) with respect to--
                      (A) a service area that is entirely within an
                    MA local area, subject to section 1860C-
                    1(d)(2)(A), an amount equal to \1/12\ of the
                    annual MA capitation rate under section
                    1853(c)(1) (or, [beginning with 2007] for 2007,
                    2008, 2009, and 2010, \1/12\ of the applicable
                    amount determined under subsection (k)(1), or,
                    beginning with 2011, \1/12\ of the blended
                    benchmark amount determined under subsection
                    (n)(1)) for the area for the year, adjusted as
                    appropriate (for years before 2007) for the
                    purpose of risk adjustment; or

               *       *       *       *       *       *       *

      (n) Determination of Blended Benchmark Amount.--
              (1) In general.--For purposes of subsection (j),
            subject to paragraphs (3) and (4), the term ``blended
            benchmark amount'' means for an area--
                      (A) for 2011 the sum of--
                              (i) \2/3\ of the applicable amount
                            (as defined in subsection (k)) for the
                            area and year; and
                              (ii) \1/3\ of the amount specified in
                            paragraph (2) for the area and year;
                      (B) for 2012 the sum of--
                              (i) \1/3\ of the applicable amount
                            for the area and year; and
                              (ii) \2/3\ of the amount specified in
                            paragraph (2) for the area and year;
                            and
                      (C) for a subsequent year the amount
                    specified in paragraph (2) for the area and
                    year.
              (2) Specified amount.--The amount specified in this
            paragraph for an area and year is the amount specified
            in subsection (c)(1)(D)(i) for the area and year
            adjusted (in a manner specified by the Secretary) to
            take into account the phase-out in the indirect costs
            of medical education from capitation rates described in
            subsection (k)(4).
              (3) Fee-for-service payment floor.--In no case shall
            the blended benchmark amount for an area and year be
            less than the amount specified in paragraph (2).
              (4) Exception for pace plans.--This subsection shall
            not apply to payments to a PACE program under section
            1894.
      (o) Quality Based Payment Adjustment.--
              (1) High quality plan adjustment.--For years
            beginning with 2011, in the case of a Medicare
            Advantage plan that is identified (under paragraph
            (3)(E)(ii)) as a high quality MA plan with respect to
            the year, the blended benchmark amount under subsection
            (n)(1) shall be increased--
                      (A) for 2011, by 1.0 percent;
                      (B) for 2012, by 2.0 percent; and
                      (C) for a subsequent year, by 3.0 percent.
              (2) Improved quality plan adjustment.--For years
            beginning with 2011, in the case of a Medicare
            Advantage plan that is identified (under paragraph
            (3)(E)(iii)) as an improved quality MA plan with
            respect to the year, blended benchmark amount under
            subsection (n)(1) shall be increased--
                      (A) for 2011, by 0.33 percent;
                      (B) for 2012, by 0.66 percent; and
                      (C) for a subsequent year, by 1.0 percent.
              (3) Determinations of quality.--
                      (A) Quality performance.--The Secretary shall
                    provide for the computation of a quality
                    performance score for each Medicare Advantage
                    plan to be applied for each year beginning with
                    2010.
                      (B) Computation of score.--
                              (i) For years before 2014.--For years
                            before 2014, the quality performance
                            score for a Medicare Advantage plan
                            shall be computed based on a blend (as
                            designated by the Secretary) of the
                            plan's performance on--
                                      (I) HEDIS effectiveness of
                                    care quality measures;
                                      (II) CAHPS quality measures;
                                    and
                                      (III) such other measures of
                                    clinical quality as the
                                    Secretary may specify.
                            Such measures shall be risk-adjusted as
                            the Secretary deems appropriate.
                              (ii) Establishment of outcome-based
                            measures.--By not later than for 2013
                            the Secretary shall implement reporting
                            requirements for quality under this
                            section on measures selected under
                            clause (iii) that reflect the outcomes
                            of care experienced by individuals
                            enrolled in Medicare Advantage plans
                            (in addition to measures described in
                            clause (i)). Such measures may
                            include--
                                      (I) measures of rates of
                                    admission and readmission to a
                                    hospital;
                                      (II) measures of prevention
                                    quality, such as those
                                    established by the Agency for
                                    Healthcare Research and Quality
                                    (that include hospital
                                    admission rates for specified
                                    conditions);
                                      (III) measures of patient
                                    mortality and morbidity
                                    following surgery;
                                      (IV) measures of health
                                    functioning (such as
                                    limitations on activities of
                                    daily living) and survival for
                                    patients with chronic diseases;
                                      (V) measures of patient
                                    safety; and
                                      (VI) other measure of
                                    outcomes and patient quality of
                                    life as determined by the
                                    Secretary.
                            Such measures shall be risk-adjusted as
                            the Secretary deems appropriate. In
                            determining the quality measures to be
                            used under this clause, the Secretary
                            shall take into consideration the
                            recommendations of the Medicare Payment
                            Advisory Commission in its report to
                            Congress under section 168 of the
                            Medicare Improvements for Patients and
                            Providers Act of 2008 (Public Law 110-
                            275) and shall provide preference to
                            measures collected on and comparable to
                            measures used in measuring quality
                            under parts A and B.
                              (iii) Rules for selection of
                            measures.--The Secretary shall select
                            measures for purposes of clause (ii)
                            consistent with the following:
                                      (I) The Secretary shall
                                    provide preference to clinical
                                    quality measures that have been
                                    endorsed by the entity with a
                                    contract with the Secretary
                                    under section 1890(a).
                                      (II) Prior to any measure
                                    being selected under this
                                    clause, the Secretary shall
                                    publish in the Federal Register
                                    such measure and provide for a
                                    period of public comment on
                                    such measure.
                              (iv) Transitional use of blend.--For
                            payments for 2014 and 2015, the
                            Secretary may compute the quality
                            performance score for a Medicare
                            Advantage plan based on a blend of the
                            measures specified in clause (i) and
                            the measures described in clause (ii)
                            and selected under clause (iii).
                              (v) Use of quality outcomes
                            measures.--For payments beginning with
                            2016, the preponderance of measures
                            used under this paragraph shall be
                            quality outcomes measures described in
                            clause (ii) and selected under clause
                            (iii).
                      (C) Data used in computing score.--Such score
                    for application for--
                              (i) payments in 2011 shall be based
                            on quality performance data for plans
                            for 2009; and
                              (ii) payments in 2012 and a
                            subsequent year shall be based on
                            quality performance data for plans for
                            the second preceding year.
                      (D) Reporting of data.--Each Medicare
                    Advantage organization shall provide for the
                    reporting to the Secretary of quality
                    performance data described in subparagraph (B)
                    (in order to determine a quality performance
                    score under this paragraph) in such time and
                    manner as the Secretary shall specify.
                      (E) Ranking of plans.--
                              (i) Initial ranking.--Based on the
                            quality performance score described in
                            subparagraph (B) achieved with respect
                            to a year, the Secretary shall rank
                            plan performance--
                                      (I) from highest to lowest
                                    based on absolute scores; and
                                      (II) from highest to lowest
                                    based on percentage improvement
                                    in the score for the plan from
                                    the previous year.
                            A plan which does not report quality
                            performance data under subparagraph (D)
                            shall be counted, for purposes of such
                            ranking, as having the lowest plan
                            performance and lowest percentage
                            improvement.
                              (ii) Identification of high quality
                            plans in top quintile based on
                            projected enrollment.--The Secretary
                            shall, based on the scores for each
                            plan under clause (i)(I) and the
                            Secretary's projected enrollment for
                            each plan and subject to clause (iv),
                            identify those Medicare Advantage plans
                            with the highest score that, based upon
                            projected enrollment, are projected to
                            include in the aggregate 20 percent of
                            the total projected enrollment for the
                            year. For purposes of this subsection,
                            a plan so identified shall be referred
                            to in this subsection as a ``high
                            quality MA plan''.
                              (iii) Identification of improved
                            quality plans in top quintile based on
                            projected enrollment.--The Secretary
                            shall, based on the percentage
                            improvement score for each plan under
                            clause (i)(II) and the Secretary's
                            projected enrollment for each plan and
                            subject to clause (iv), identify those
                            Medicare Advantage plans with the
                            greatest percentage improvement score
                            that, based upon projected enrollment,
                            are projected to include in the
                            aggregate 20 percent of the total
                            projected enrollment for the year. For
                            purposes of this subsection, a plan so
                            identified that is not a high quality
                            plan for the year shall be referred to
                            in this subsection as an ``improved
                            quality MA plan''.
                              (iv) Authority to disqualify certain
                            plans.--In applying clauses (ii) and
                            (iii), the Secretary may determine not
                            to identify a Medicare Advantage plan
                            if the Secretary has identified
                            deficiencies in the plan's compliance
                            with rules for such plans under this
                            part.
                      (F) Notification.--The Secretary, in the
                    annual announcement required under subsection
                    (b)(1)(B) in 2011 and each succeeding year,
                    shall notify the Medicare Advantage
                    organization that is offering a high quality
                    plan or an improved quality plan of such
                    identification for the year and the quality
                    performance payment adjustment for such plan
                    for the year. The Secretary shall provide for
                    publication on the website for the Medicare
                    program of the information described in the
                    previous sentence.

                            PREMIUMS AND BID AMOUNTS

      Sec. 1854. (a) Submission of Proposed Premiums, Bid Amounts,
    and Related Information.--
              (1) * * *

               *       *       *       *       *       *       *

              (5) Review.--
                      (A) * * *

               *       *       *       *       *       *       *

                      (C) Rejection of bids.--Nothing in this
                    section shall be construed as requiring the
                    Secretary to accept any or every bid by an MA
                    organization under this subsection.

               *       *       *       *       *       *       *

                           ESTABLISHMENT OF STANDARDS

      Sec. 1856. (a) * * *
      (b) Establishment of Other Standards.--
              (1) In general.--The Secretary shall establish by
            regulation other standards (not described in subsection
            (a) or subsection (c)) for Medicare+Choice
            organizations and plans consistent with, and to carry
            out, this part. The Secretary shall publish such
            regulations by June 1, 1998. In order to carry out this
            requirement in a timely manner, the Secretary may
            promulgate regulations that take effect on an interim
            basis, after notice and pending opportunity for public
            comment.

               *       *       *       *       *       *       *

              (3) Relation to state laws.--The standards
            established under this part shall supersede any State
            law or regulation (other than State licensing laws [or
            State], State laws relating to plan solvency, or State
            laws or regulations enacting the standardized marketing
            requirements under subsection (c)) with respect to MA
            plans which are offered by MA organizations under this
            part.

               *       *       *       *       *       *       *

      (c) Standardized Marketing Requirements.--
              (1) Development by the naic.--
                      (A) Requirements.--The Secretary shall
                    request the National Association of Insurance
                    Commissioners (in this subsection referred to
                    as the ``NAIC'') to--
                              (i) develop standardized marketing
                            requirements for Medicare Advantage
                            organizations with respect to Medicare
                            Advantage plans and PDP sponsors with
                            respect to prescription drug plans
                            under part D; and
                              (ii) submit a report containing such
                            requirements to the Secretary by not
                            later than the date that is 9 months
                            after the date of the enactment of this
                            subsection.
                      (B) Prohibited activities.--Such requirements
                    shall include prohibitions on the prohibited
                    activities described in section 1851(j)(1).
                      (C) Limitations.--Such requirements shall
                    establish limitations that include at least the
                    limitations described in section 1851(j)(2),
                    except for those relating to compensation.
                      (D) Election form.--Such requirements may
                    prohibit a Medicare Advantage organization or a
                    PDP sponsor (or an agent of such an
                    organization or sponsor) from completing any
                    portion of any election form used to carry out
                    elections under section 1851 or 1860D-1 on
                    behalf of any individual.
                      (E) Agent and broker commissions and
                    compensation.--Such requirements shall
                    establish standards--
                              (i) for fair and appropriate
                            commissions for agents and brokers of
                            Medicare Advantage organizations and
                            PDP sponsors, including a prohibition
                            on extra bonuses or incentives;
                              (ii) for the disclosure of such
                            commissions; and
                              (iii) for the use of compensation for
                            agents and brokers other than such
                            commissions.
                    Such standards shall ensure that the use of
                    compensation creates incentives for agents and
                    brokers to enroll individuals in the Medicare
                    Advantage plan that is intended to best meet
                    their health care needs.
                      (F) Certain conduct of agents.--Such
                    requirements shall address the conduct of
                    agents engaged in on-site promotion at a
                    facility of an organization with which the
                    Medicare Advantage organization or PDP sponsor
                    has a co-branding relationship.
                      (G) Other standards.--Such requirements may
                    establish such other standards relating to
                    unfair trade practices and marketing under
                    Medicare Advantage plans and prescription drug
                    plans under part D as the NAIC determines
                    appropriate.
              (2) Implementation of requirements.--
                      (A) Adoption of naic developed
                    requirements.--If the NAIC develops
                    standardized marketing requirements and submits
                    the report pursuant to paragraph (1), the
                    Secretary shall promulgate regulations for the
                    adoption of such requirements. The Secretary
                    shall ensure that such regulations take effect
                    beginning with the first open enrollment period
                    beginning 12 months after the date of the
                    enactment of this subsection.
                      (B) Requirements if naic does not submit
                    report.--If the NAIC does not develop
                    standardized marketing requirements and submit
                    the report pursuant to paragraph (1), the
                    Secretary shall promulgate regulations for
                    standardized marketing requirements for
                    Medicare Advantage organizations with respect
                    to Medicare Advantage plans and PDP sponsors
                    with respect to prescription drug plans under
                    part D. Such regulations shall meet the
                    requirements of subparagraphs (B) through (F)
                    of paragraph (1), and may establish such other
                    standards relating to marketing under Medicare
                    Advantage plans and prescription drug plans as
                    the Secretary determines appropriate. The
                    Secretary shall ensure that such regulations
                    take effect beginning with the first open
                    enrollment period beginning 12 months after the
                    date of the enactment of this subsection.
                      (C) Consultation.--In establishing
                    requirements under this subsection, the NAIC or
                    Secretary (as the case may be) shall consult
                    with a working group composed of
                    representatives of Medicare Advantage
                    organizations and PDP sponsors, consumer
                    groups, and other qualified individuals. Such
                    representatives shall be selected in a manner
                    so as to insure balanced representation among
                    the interested groups.
              (3) State reporting of violations of standardized
            marketing requirements.--The Secretary shall request
            that States report any violations of the standardized
            marketing requirements under the regulations under
            subparagraph (A) or (B) of paragraph (2) to national
            and regional offices of the Centers for Medicare &
            Medicaid Services.
              (4) Report.--The Secretary shall submit an annual
            report to Congress on the enforcement of the
            standardized marketing requirements under the
            regulations under subparagraph (A) or (B) of paragraph
            (2), together with such recommendations as the
            Secretary determines appropriate. Such report shall
            include--
                      (A) a list of any alleged violations of such
                    requirements reported to the Secretary by a
                    State, a Medicare Advantage organization, or a
                    PDP sponsor; and
                      (B) the disposition of such reported
                    violations.

                  CONTRACTS WITH MEDICARE+CHOICE ORGANIZATIONS

      Sec. 1857. (a) * * *

               *       *       *       *       *       *       *

      (d) Protections Against Fraud and Beneficiary Protections.--
              (1) Periodic auditing.--The Secretary shall provide
            for the annual auditing of the financial records
            (including data relating to medicare utilization and
            costs, including allowable costs under section
            1858(c)), and data submitted with respect to risk
            adjustment under section 1853(a)(3) of at least one-
            third of the Medicare+Choice organizations offering
            Medicare+Choice plans under this part. The Comptroller
            General shall monitor auditing activities conducted
            under this subsection.
              (2) Inspection and audit.--Each contract under this
            section shall provide that the Secretary, or any person
            or organization designated by the Secretary--
                      (A) shall have the right to timely inspect or
                    otherwise evaluate (i) the quality,
                    appropriateness, and timeliness of services
                    performed under the contract, and (ii) the
                    facilities of the organization when there is
                    reasonable evidence of some need for such
                    inspection, and
                      (B) shall have the right to timely audit and
                    inspect any books and records of the
                    Medicare+Choice organization that pertain (i)
                    to the ability of the organization to bear the
                    risk of potential financial losses, or (ii) to
                    services performed or determinations of amounts
                    payable under the contract.

               *       *       *       *       *       *       *

              (7) Period for submission of claims.--The contract
            shall require an MA organization or PDP sponsor to
            require any provider of services under contract with,
            in partnership with, or affiliated with such
            organization or sponsor to ensure that, with respect to
            items and services furnished by such provider to an
            enrollee of such organization, written request, signed
            by such enrollee, except in cases in which the
            Secretary finds it impracticable for the enrollee to do
            so, is filed for payment for such items and services in
            such form, in such manner, and by such person or
            persons as the Secretary may by regulation prescribe,
            no later than the close of the 1 calendar year period
            after such items and services are furnished. In
            applying the previous sentence, the Secretary may
            specify exceptions to the 1 calendar year period
            specified.
      (e) Additional Contract Terms.--
              (1) * * *

               *       *       *       *       *       *       *

              (4) Requirement for minimum medical loss ratio.--If
            the Secretary determines for a contract year (beginning
            with 2014) that an MA plan has failed to have a medical
            loss ratio (as defined in section 1851(p)(4)) of at
            least .85--
                      (A) the Secretary shall require the Medicare
                    Advantage organization offering the plan to
                    give enrollees a rebate (in the second
                    succeeding contract year) of premiums under
                    this part (or part B or part D, if applicable)
                    by such amount as would provide for a benefits
                    ratio of at least .85;
                      (B) for 3 consecutive contract years, the
                    Secretary shall not permit the enrollment of
                    new enrollees under the plan for coverage
                    during the second succeeding contract year; and
                      (C) the Secretary shall terminate the plan
                    contract if the plan fails to have such a
                    medical loss ratio for 5 consecutive contract
                    years.
              (5) Enforcement of audits and deficiencies.--
                      (A) Information in contract.--The Secretary
                    shall require that each contract with an MA
                    organization under this section shall include
                    terms that inform the organization of the
                    provisions in subsection (d).
                      (B) Enforcement authority.--The Secretary is
                    authorized, in connection with conducting
                    audits and other activities under subsection
                    (d), to take such actions, including pursuit of
                    financial recoveries, necessary to address
                    deficiencies identified in such audits or other
                    activities.
      (f) Prompt Payment by Medicare+choice Organization.--
              (1) * * *

               *       *       *       *       *       *       *

              (3) Incorporation of certain prescription drug plan
            contract requirements.--The following provisions shall
            apply to contracts with a Medicare Advantage
            organization offering an MA-PD plan in the same manner
            as they apply to contracts with a PDP sponsor offering
            a prescription drug plan under part D:
                      (A) * * *
                      [(B) Submission of claims by pharmacies
                    located in or contracting with long-term care
                    facilities.--Section 1860D-12(b)(5).]
                      [(C)] (B) Regular update of prescription drug
                    pricing standard.--Section 1860D-12(b)(6).
                      (C) Reporting requirement related to rebate
                    for full-benefit dual eligible medicare drug
                    plan enrollees.--Section 1860D-12(b)(7).
      (g) Intermediate Sanctions.--
              (1) In general.--If the Secretary determines that a
            Medicare+Choice organization with a contract under this
            section--
                      (A) * * *

               *       *       *       *       *       *       *

                      (F) fails to comply with the applicable
                    requirements of section 1852(j)(3) or
                    1852(k)(2)(A)(ii); [or]
                      (G) employs or contracts with any individual
                    or entity that is excluded from participation
                    under this title under section 1128 or 1128A
                    for the provision of health care, utilization
                    review, medical social work, or administrative
                    services or employs or contracts with any
                    entity for the provision (directly or
                    indirectly) through such an excluded individual
                    or entity of such services;
                      (H) fails substantially to provide language
                    services to limited English proficient
                    beneficiaries enrolled in the plan that are
                    required under law;
                      (I) except as provided under subparagraph (C)
                    or (D) of section 1860D-1(b)(1), enrolls an
                    individual in any plan under this part without
                    the prior consent of the individual or the
                    designee of the individual;
                      (J) transfers an individual enrolled under
                    this part from one plan to another without the
                    prior consent of the individual or the designee
                    of the individual or solely for the purpose of
                    earning a commission;
                      (K) fails to comply with marketing
                    restrictions described in subsections (h) and
                    (j) of section 1851 or applicable implementing
                    regulations or guidance; or
                      (L) employs or contracts with any individual
                    or entity who engages in the conduct described
                    in subparagraphs (A) through (K) of this
                    paragraph;
            the Secretary may provide, in addition to any other
            remedies authorized by law, for any of the remedies
            described in paragraph (2). The Secretary may provide,
            in addition to any other remedies authorized by law,
            for any of the remedies described in paragraph (2), if
            the Secretary determines that any employee or agent of
            such organization, or any provider or supplier who
            contracts with such organization, has engaged in any
            conduct described in subparagraphs (A) through (L) of
            this paragraph.
              (2) Remedies.--The remedies described in this
            paragraph are--
                      (A) civil money penalties of not more than
                    $25,000 for each determination under paragraph
                    (1) or, with respect to a determination under
                    subparagraph (D) or (E)(i) of such paragraph,
                    of not more than $100,000 for each such
                    determination, except with respect to a
                    determination under subparagraph (E), an
                    assessment of not more than 3 times the amount
                    claimed by such plan or plan sponsor based upon
                    the misrepresentation or falsified information
                    involved, plus, with respect to a determination
                    under paragraph (1)(B), double the excess
                    amount charged in violation of such paragraph
                    (and the excess amount charged shall be
                    deducted from the penalty and returned to the
                    individual concerned), and plus, with respect
                    to a determination under paragraph (1)(D),
                    $15,000 for each individual not enrolled as a
                    result of the practice involved,

               *       *       *       *       *       *       *

      (i) Medicare+choice Program Compatibility With Employer or
    Union Group Health Plans.--
              (1) * * *
              (2) Employer sponsored ma plans.--To facilitate the
            offering of MA plans by employers, labor organizations,
            or the trustees of a fund established by one or more
            employers or labor organizations (or combination
            thereof) to furnish benefits to the entity's employees,
            former employees (or combination thereof) or members or
            former members (or combination thereof) of the labor
            organizations, the Secretary may waive or modify
            requirements that hinder the design of, the offering
            of, or the enrollment in such MA plans, but only if 90
            percent of the Medicare Advantage eligible individuals
            enrolled under such plan reside in a county in which
            the MA organization offers an MA local plan.
            Notwithstanding section 1851(g), an MA plan described
            in the previous sentence may restrict the enrollment of
            individuals under this part to individuals who are
            beneficiaries and participants in such plan.

                      SPECIAL RULES FOR MA REGIONAL PLANS

      Sec. 1858. (a) * * *

               *       *       *       *       *       *       *

      [(e) Stabilization Fund.--
              [(1) Establishment.--The Secretary shall establish
            under this subsection an MA Regional Plan Stabilization
            Fund (in this subsection referred to as the ``Fund'')
            which shall be available for two purposes:
                      [(A) Plan entry.--To provide incentives to
                    have MA regional plans offered in each MA
                    region under paragraph (3).
                      [(B) Plan retention.--To provide incentives
                    to retain MA regional plans in certain MA
                    regions with below-national-average MA market
                    penetration under paragraph (4).
              [(2) Funding.--
                      [(A) Initial funding.--
                              [(i) In general.--There shall be
                            available to the Fund, for expenditures
                            from the Fund during 2014, $1.
                              [(ii) Payment from trust funds.--Such
                            amount shall be available to the Fund,
                            as expenditures are made from the Fund,
                            from the Federal Hospital Insurance
                            Trust Fund and the Federal
                            Supplementary Medical Insurance Trust
                            Fund in the proportion specified in
                            section 1853(f).
                      [(B) Additional funding from savings.--
                              [(i) In general.--There shall also be
                            made available to the Fund, 50 percent
                            of savings described in clause (ii).
                              [(ii) Savings.--The savings described
                            in this clause are 25 percent of the
                            average per capita savings described in
                            section 1854(b)(4)(C) for which monthly
                            rebates are provided under section
                            1854(b)(1)(C) in the fiscal year
                            involved that are attributable to MA
                            regional plans.
                              [(iii) Availability.--Funds made
                            available under this subparagraph shall
                            be transferred into a special account
                            in the Treasury from the Federal
                            Hospital Insurance Trust Fund and the
                            Federal Supplementary Medical Insurance
                            Trust Fund in the proportion specified
                            in section 1853(f) on a monthly basis.
                      [(C) Obligations.--Amounts in the Fund shall
                    be available in advance of appropriations to MA
                    regional plans in qualifying MA regions only in
                    accordance with paragraph (5).
                      [(D) Ordering.--Expenditures from the Fund
                    shall first be made from amounts made available
                    under subparagraph (A).
              [(3) Plan entry funding.--
                      [(A) In general.--Funding is available under
                    this paragraph for a year only as follows:
                              [(i) National plan.--For a national
                            bonus payment described in subparagraph
                            (B) for the offering by a single MA
                            organization of an MA regional plan in
                            each MA region in the year, but only if
                            there was not such a plan offered in
                            each such region in the previous year.
                            Funding under this clause is only
                            available with respect to any
                            individual MA organization for a single
                            year, but may be made available to more
                            than one such organization in the same
                            year.
                              [(ii) Regional plans.--Subject to
                            clause (iii), for an increased amount
                            under subparagraph (C) for an MA
                            regional plan offered in an MA region
                            which did not have any MA regional plan
                            offered in the prior year.
                              [(iii) Limitation on regional plan
                            funding in case of national plan.--In
                            no case shall there be any payment
                            adjustment under subparagraph (C) for a
                            year for which a national payment
                            adjustment is made under subparagraph
                            (B).
                      [(B) National bonus payment.--The national
                    bonus payment under this subparagraph shall--
                              [(i) be available to an MA
                            organization only if the organization
                            offers MA regional plans in every MA
                            region;
                              [(ii) be available with respect to
                            all MA regional plans of the
                            organization regardless of whether any
                            other MA regional plan is offered in
                            any region; and
                              [(iii) subject to amounts available
                            under paragraph (5) for a year, be
                            equal to 3 percent of the benchmark
                            amount otherwise applicable for each MA
                            regional plan offered by the
                            organization.
                      [(C) Regional payment adjustment.--
                              [(i) In general.--The increased
                            amount under this subparagraph for an
                            MA regional plan in an MA region for a
                            year shall be an amount, determined by
                            the Secretary, based on the bid
                            submitted for such plan (or plans) and
                            shall be available to all MA regional
                            plans offered in such region and year.
                            Such amount may be based on the mean,
                            mode, or median, or other measure of
                            such bids and may vary from region to
                            region. The Secretary may not limit the
                            number of plans or bids in a region.
                              [(ii) Multi-year funding.--
                                      [(I) In general.--Subject to
                                    amounts available under
                                    paragraph (5), funding under
                                    this subparagraph shall be
                                    available for a period
                                    determined by the Secretary.
                                      [(II) Report.--If the
                                    Secretary determines that
                                    funding will be provided for a
                                    second consecutive year with
                                    respect to an MA region, the
                                    Secretary shall submit to the
                                    Congress a report that
                                    describes the underlying market
                                    dynamics in the region and that
                                    includes recommendations
                                    concerning changes in the
                                    payment methodology otherwise
                                    provided for MA regional plans
                                    under this part.
                              [(iii) Application to all plans in a
                            region.--Funding under this
                            subparagraph with respect to an MA
                            region shall be made available with
                            respect to all MA regional plans
                            offered in the region.
                              [(iv) Limitation on availability of
                            plan retention funding in next year.--
                            If an increased amount is made
                            available under this subparagraph with
                            respect to an MA region for a period
                            determined by the Secretary under
                            clause (ii)(I), in no case shall
                            funding be available under paragraph
                            (4) with respect to MA regional plans
                            offered in the region in the year
                            following such period.
                      [(D) Application.--Any additional payment
                    under this paragraph provided for an MA
                    regional plan for a year shall be treated as if
                    it were an addition to the benchmark amount
                    otherwise applicable to such plan and year, but
                    shall not be taken into account in the
                    computation of any benchmark amount for any
                    subsequent year.
              [(4) Plan retention funding.--
                      [(A) In general.--Funding is available under
                    this paragraph for a year with respect to MA
                    regional plans offered in an MA region for the
                    increased amount specified in subparagraph (B)
                    but only if the region meets the requirements
                    of subparagraphs (C) and (E).
                      [(B) Payment increase.--The increased amount
                    under this subparagraph for an MA regional plan
                    in an MA region for a year shall be an amount,
                    determined by the Secretary, that does not
                    exceed the greater of--
                              [(i) 3 percent of the benchmark
                            amount applicable in the region; or
                              [(ii) such amount as (when added to
                            the benchmark amount applicable to the
                            region) will result in the ratio of--
                                      [(I) such additional amount
                                    plus the benchmark amount
                                    computed under section
                                    1854(b)(4)(B)(i) for the region
                                    and year, to the adjusted
                                    average per capita cost for the
                                    region and year, as estimated
                                    by the Secretary under section
                                    1876(a)(4) and adjusted as
                                    appropriate for the purpose of
                                    risk adjustment; being equal to
                                      [(II) the weighted average of
                                    such benchmark amounts for all
                                    the regions and such year, to
                                    the average per capita cost for
                                    the United States and such
                                    year, as estimated by the
                                    Secretary under section
                                    1876(a)(4) and adjusted as
                                    appropriate for the purpose of
                                    risk adjustment.
                      [(C) Regional requirements.--The requirements
                    of this subparagraph for an MA region for a
                    year are as follows:
                              [(i) Notification of plan exit.--The
                            Secretary has received notice (in such
                            form and manner as the Secretary
                            specifies) before a year that one or
                            more MA regional plans that were
                            offered in the region in the previous
                            year will not be offered in the
                            succeeding year.
                              [(ii) Regional plans available from
                            fewer than 2 ma organizations in the
                            region.--The Secretary determines that
                            if the plans referred to in clause (i)
                            are not offered in the year, fewer than
                            2 MA organizations will be offering MA
                            regional plans in the region in the
                            year involved.
                              [(iii) Percentage enrollment in ma
                            regional plans below national
                            average.--For the previous year, the
                            Secretary determines that the average
                            percentage of MA eligible individuals
                            residing in the region who are enrolled
                            in MA regional plans is less than the
                            average percentage of such individuals
                            in the United States enrolled in such
                            plans.
                      [(D) Application.--Any additional payment
                    under this paragraph provided for an MA
                    regional plan for a year shall be treated as if
                    it were an addition to the benchmark amount
                    otherwise applicable to such plan and year, but
                    shall not be taken into account in the
                    computation of any benchmark amount for any
                    subsequent year.
                      [(E) 2-consecutive-year limitation.--
                              [(i) In general.--In no case shall
                            any funding be available under this
                            paragraph in an MA region in a period
                            of consecutive years that exceeds 2
                            years.
                              [(ii) Report.--If the Secretary
                            determines that funding will be
                            provided under this paragraph for a
                            second consecutive year with respect to
                            an MA region, the Secretary shall
                            submit to the Congress a report that
                            describes the underlying market
                            dynamics in the region and that
                            includes recommendations concerning
                            changes in the payment methodology
                            otherwise provided for MA regional
                            plans under this part.
              [(5) Funding limitation.--
                      [(A) In general.--The total amount expended
                    from the Fund as a result of the application of
                    this subsection through the end of a calendar
                    year may not exceed the amount available to the
                    Fund as of the first day of such year. For
                    purposes of this subsection, amounts that are
                    expended under this title insofar as such
                    amounts would not have been expended but for
                    the application of this subsection shall be
                    counted as amounts expended as a result of such
                    application.
                      [(B) Application of limitation.--The
                    Secretary may obligate funds from the Fund for
                    a year only if the Secretary determines (and
                    the Chief Actuary of the Centers for Medicare &
                    Medicaid Services and the appropriate budget
                    officer certify) that there are available in
                    the Fund at the beginning of the year
                    sufficient amounts to cover all such
                    obligations incurred during the year consistent
                    with subparagraph (A). The Secretary shall take
                    such steps, in connection with computing
                    additional payment amounts under paragraphs (3)
                    and (4) and including limitations on enrollment
                    in MA regional plans receiving such payments,
                    as will ensure that sufficient funds are
                    available to make such payments for the entire
                    year. Funds shall only be made available from
                    the Fund pursuant to an apportionment made in
                    accordance with applicable procedures.
              [(6) Secretary reports.--Not later than April 1 of
            each year (beginning in 2008), the Secretary shall
            submit a report to Congress and the Comptroller General
            of the United States that includes--
                      [(A) a detailed description of--
                              [(i) the total amount expended as a
                            result of the application of this
                            subsection in the previous year
                            compared to the total amount that would
                            have been expended under this title in
                            the year if this subsection had not
                            been enacted;
                              [(ii) the projections of the total
                            amount that will be expended as a
                            result of the application of this
                            subsection in the year in which the
                            report is submitted compared to the
                            total amount that would have been
                            expended under this title in the year
                            if this subsection had not been
                            enacted;
                              [(iii) amounts remaining within the
                            funding limitation specified in
                            paragraph (5); and
                              [(iv) the steps that the Secretary
                            will take under paragraph (5)(B) to
                            ensure that the application of this
                            subsection will not cause expenditures
                            to exceed the amount available in the
                            Fund; and
                      [(B) a certification from the Chief Actuary
                    of the Centers for Medicare & Medicaid Services
                    that the description provided under
                    subparagraph (A) is reasonable, accurate, and
                    based on generally accepted actuarial
                    principles and methodologies.]

               *       *       *       *       *       *       *

                     DEFINITIONS; MISCELLANEOUS PROVISIONS

      Sec. 1859. (a) * * *

               *       *       *       *       *       *       *

      (f) Requirements Regarding Enrollment in Specialized MA Plans
    for Special Needs Individuals.--
              (1) Requirements for enrollment.--In the case of a
            specialized MA plan for special needs individuals (as
            defined in subsection (b)(6)), notwithstanding any
            other provision of this part and in accordance with
            regulations of the Secretary and for periods before
            [January 1, 2011] January 1, 2013 (or January 1, 2016,
            in the case of a plan described in section 1177(b)(1)
            of the America's Affordable Health Choices Act of
            2009), the plan may restrict the enrollment of
            individuals under the plan to individuals who are
            within one or more classes of special needs
            individuals.

               *       *       *       *       *       *       *

              (4) Additional requirements for severe or disabling
            chronic condition snps.--In the case of a specialized
            MA plan for special needs individuals described in
            subsection (b)(6)(B)(iii), the applicable requirements
            described in this paragraph are as follows:
                      (A) * * *

               *       *       *       *       *       *       *

                      (C) The plan does not enroll an individual on
                    or after January 1, 2011, other than during an
                    annual, coordinated open enrollment period or
                    when at the time of the diagnosis of the
                    disease or condition that qualifies the
                    individual as an individual described in
                    subsection (b)(6)(B)(iii).

               *       *       *       *       *       *       *

                   [COMPARATIVE COST ADJUSTMENT (CCA) PROGRAM

      [Sec. 1860C-1. (a) Establishment of Program.--
              [(1) In general.--The Secretary shall establish a
            program under this section (in this section referred to
            as the ``CCA program'') for the application of
            comparative cost adjustment in CCA areas selected under
            this section.
              [(2) Duration.--The CCA program shall begin January
            1, 2010, and shall extend over a period of 6 years, and
            end on December 31, 2015.
              [(3) Report.--Upon the completion of the CCA program,
            the Secretary shall submit a report to Congress. Such
            report shall include the following, with respect to
            both this part and the original medicare fee-for-
            service program:
                      [(A) An evaluation of the financial impact of
                    the CCA program.
                      [(B) An evaluation of changes in access to
                    physicians and other health care providers.
                      [(C) Beneficiary satisfaction.
                      [(D) Recommendations regarding any extension
                    or expansion of the CCA program.
      [(b) Requirements for Selection of CCA Areas.--
              [(1) CCA area defined.--
                      [(A) In general.--For purposes of this
                    section, the term ``CCA area'' means an MSA
                    that meets the requirements of paragraph (2)
                    and is selected by the Secretary under
                    subsection (c).
                      [(B) MSA defined.--For purposes of this
                    section, the term ``MSA'' means a Metropolitan
                    Statistical Area (or such similar area as the
                    Secretary recognizes).
              [(2) Requirements for cca areas.--The requirements of
            this paragraph for an MSA to be a CCA area are as
            follows:
                      [(A) MA enrollment requirement.--For the
                    reference month (as defined under section
                    1858(f)(4)(B)) with respect to 2010, at least
                    25 percent of the total number of MA eligible
                    individuals who reside in the MSA were enrolled
                    in an MA local plan described in section
                    1851(a)(2)(A)(i).
                      [(B) 2 plan requirement.--There will be
                    offered in the MSA during the annual,
                    coordinated election period under section
                    1851(e)(3)(B) before the beginning of 2010 at
                    least 2 MA local plans described in section
                    1851(a)(2)(A)(i) (in addition to the fee-for-
                    service program under parts A and B), each
                    offered by a different MA organization and each
                    of which met the minimum enrollment
                    requirements of paragraph (1) of section
                    1857(b) (as applied without regard to paragraph
                    (3) thereof) as of the reference month.
      [(c) Selection of CCA Areas.--
              [(1) General selection criteria.--The Secretary shall
            select CCA areas from among those MSAs qualifying under
            subsection (b) in a manner that--
                      [(A) seeks to maximize the opportunity to
                    test the application of comparative cost
                    adjustment under this title;
                      [(B) does not seek to maximize the number of
                    MA eligible individuals who reside in such
                    areas; and
                      [(C) provides for geographic diversity
                    consistent with the criteria specified in
                    paragraph (2).
              [(2) Selection criteria.--With respect to the
            selection of MSAs that qualify to be CCA areas under
            subsection (b), the following rules apply, to the
            maximum extent feasible:
                      [(A) Maximum number.--The number of such MSAs
                    selected may not exceed the lesser of (i) 6, or
                    (ii) 25 percent of the number of MSAs that meet
                    the requirement of subsection (b)(2)(A).
                      [(B) One of 4 largest areas by population.--
                    At least one such qualifying MSA shall be
                    selected from among the 4 such qualifying MSAs
                    with the largest total population of MA
                    eligible individuals.
                      [(C) One of 4 areas with lowest population
                    density.--At least one such qualifying MSA
                    shall be selected from among the 4 such
                    qualifying MSAs with the lowest population
                    density (as measured by residents per square
                    mile or similar measure of density).
                      [(D) Multistate area.--At least one such
                    qualifying MSA shall be selected that includes
                    a multi-State area. Such an MSA may be an MSA
                    described in subparagraph (B) or (C).
                      [(E) Limitation within same geographic
                    region.--No more than 2 such MSAs shall be
                    selected that are, in whole or in part, within
                    the same geographic region (as specified by the
                    Secretary) of the United States.
                      [(F) Priority to areas not within certain
                    demonstration projects.--Priority shall be
                    provided for those qualifying MSAs that do not
                    have a demonstration project in effect as of
                    the date of the enactment of this section for
                    medicare preferred provider organization plans
                    under this part.
      [(d) Application of Comparative Cost Adjustment.--
              [(1) In general.--In the case of a CCA area for a
            year--
                      [(A) for purposes of applying this part with
                    respect to payment for MA local plans, any
                    reference to an MA area-specific non-drug
                    monthly benchmark amount shall be treated as a
                    reference to such benchmark computed as if the
                    CCA area-specific non-drug monthly benchmark
                    amount (as defined in subsection (e)(1)) were
                    substituted for the amount described in section
                    1853(j)(1)(A) for the CCA area and year
                    involved, as phased in under paragraph (3); and
                      [(B) with respect to months in the year for
                    individuals residing in the CCA area who are
                    not enrolled in an MA plan, the amount of the
                    monthly premium under section 1839 is subject
                    to adjustment under subsection (f).
              [(2) Exclusion of ma local areas with fewer than 2
            organizations offering ma plans.--
                      [(A) In general.--In no case shall an MA
                    local area that is within an MSA be included as
                    part of a CCA area unless for 2010 (and, except
                    as provided in subparagraph (B), for a
                    subsequent year) there is offered in each part
                    of such MA local area at least 2 MA local plans
                    described in section 1851(a)(2)(A)(i) each of
                    which is offered by a different MA
                    organization.
                      [(B) Continuation.--If an MA local area meets
                    the requirement of subparagraph (A) and is
                    included in a CCA area for 2010, such local
                    area shall continue to be included in such CCA
                    area for a subsequent year notwithstanding that
                    it no longer meets such requirement so long as
                    there is at least one MA local plan described
                    in section 1851(a)(2)(A)(i) that is offered in
                    such local area.
              [(3) Phase-in of cca benchmark.--
                      [(A) In general.--In applying this section
                    for a year before 2013, paragraph (1)(A) shall
                    be applied as if the phase-in fraction under
                    subparagraph (B) of the CCA non-drug monthly
                    benchmark amount for the year were substituted
                    for such fraction of the MA area-specific non-
                    drug monthly benchmark amount.
                      [(B) Phase-in fraction.--The phase-in
                    fraction under this subparagraph is--
                              [(i) for 2010 \1/4\; and
                              [(ii) for a subsequent year is the
                            phase-in fraction under this
                            subparagraph for the previous year
                            increased by \1/4\, but in no case more
                            than 1.
      [(e) Computation of CCA Benchmark Amount.--
              [(1) CCA non-drug monthly benchmark amount.--For
            purposes of this section, the term ``CCA non-drug
            monthly benchmark amount'' means, with respect to a CCA
            area for a month in a year, the sum of the 2 components
            described in paragraph (2) for the area and year. The
            Secretary shall compute such benchmark amount for each
            such CCA area before the beginning of each annual,
            coordinated election period under section 1851(e)(3)(B)
            for each year (beginning with 2010) in which the CCA
            area is so selected.
              [(2) 2 Components.--For purposes of paragraph (1),
            the 2 components described in this paragraph for a CCA
            area and a year are the following:
                      [(A) MA local component.--The product of the
                    following:
                              [(i) Weighted average of medicare
                            advantage plan bids in area.--The
                            weighted average of the plan bids for
                            the area and year (as determined under
                            paragraph (3)(A)).
                              [(ii) Non-ffs market share.--One
                            minus the fee-for-service market share
                            percentage, determined under paragraph
                            (4) for the area and year.
                      [(B) Fee-for-service component.--The product
                    of the following:
                              [(i) Fee-for-service area-specific
                            non-drug amount.--The fee-for-service
                            area-specific non-drug amount (as
                            defined in paragraph (5)) for the area
                            and year.
                              [(ii) Fee-for-service market share.--
                            The fee-for-service market share
                            percentage, determined under paragraph
                            (4) for the area and year.
              [(3) Determination of weighted average ma bids for a
            cca area.--
                      [(A) In general.--For purposes of paragraph
                    (2)(A)(i), the weighted average of plan bids
                    for a CCA area and a year is, subject to
                    subparagraph (D), the sum of the following
                    products for MA local plans described in
                    subparagraph (C) in the area and year:
                              [(i) Monthly medicare advantage
                            statutory non-drug bid amount.--The
                            accepted unadjusted MA statutory non-
                            drug monthly bid amount.
                              [(ii) Plan's share of medicare
                            advantage enrollment in area.--The
                            number of individuals described in
                            subparagraph (B), divided by the total
                            number of such individuals for all MA
                            plans described in subparagraph (C) for
                            that area and year.
                      [(B) Counting of individuals.--The Secretary
                    shall count, for each MA local plan described
                    in subparagraph (C) for an area and year, the
                    number of individuals who reside in the area
                    and who were enrolled under such plan under
                    this part during the reference month for that
                    year.
                      [(C) Exclusion of plans not offered in
                    previous year.--For an area and year, the MA
                    local plans described in this subparagraph are
                    MA local plans described in section
                    1851(a)(2)(A)(i) that are offered in the area
                    and year and were offered in the CCA area in
                    the reference month.
                      [(D) Computation of weighted average of plan
                    bids.--In calculating the weighted average of
                    plan bids for a CCA area under subparagraph
                    (A)--
                              [(i) in the case of an MA local plan
                            that has a service area only part of
                            which is within such CCA area, the MA
                            organization offering such plan shall
                            submit a separate bid for such plan for
                            the portion within such CCA area; and
                              [(ii) the Secretary shall adjust such
                            separate bid (or, in the case of an MA
                            local plan that has a service area
                            entirely within such CCA area, the plan
                            bid) as may be necessary to take into
                            account differences between the service
                            area of such plan within the CCA area
                            and the entire CCA area and the
                            distribution of plan enrollees of all
                            MA local plans offered within the CCA
                            area.
              [(4) Computation of fee-for-service market share
            percentage.--The Secretary shall determine, for a year
            and a CCA area, the proportion (in this subsection
            referred to as the ``fee-for-service market share
            percentage'') equal to--
                      [(A) the total number of MA eligible
                    individuals residing in such area who during
                    the reference month for the year were not
                    enrolled in any MA plan; divided by
                      [(B) the sum of such number and the total
                    number of MA eligible individuals residing in
                    such area who during such reference month were
                    enrolled in an MA local plan described in
                    section 1851(a)(2)(A)(i),
            or, if greater, such proportion determined for
            individuals nationally.
              [(5) Fee-for-service area-specific non-drug amount.--
                      [(A) In general.--For purposes of paragraph
                    (2)(B)(i) and subsection (f)(2)(A), subject to
                    subparagraph (C), the term ``fee-for-service
                    area-specific non-drug amount'' means, for a
                    CCA area and a year, the adjusted average per
                    capita cost for such area and year involved,
                    determined under section 1876(a)(4) and
                    adjusted as appropriate for the purpose of risk
                    adjustment for benefits under the original
                    medicare fee-for-service program option for
                    individuals entitled to benefits under part A
                    and enrolled under part B who are not enrolled
                    in an MA plan for the year, but adjusted to
                    exclude costs attributable to payments under
                    section 1886(h).
                      [(B) Use of full risk adjustment to
                    standardize fee-for-service costs to typical
                    beneficiary.--In determining the adjusted
                    average per capita cost for an area and year
                    under subparagraph (A), such costs shall be
                    adjusted to fully take into account the
                    demographic and health status risk factors
                    established under section 1853(a)(1)(A)(iv) so
                    that such per capita costs reflect the average
                    costs for a typical beneficiary residing in the
                    CCA area.
                      [(C) Inclusion of costs of va and dod
                    military facility services to medicare-eligible
                    beneficiaries.--In determining the adjusted
                    average per capita cost under subparagraph (A)
                    for a year, such cost shall be adjusted to
                    include the Secretary's estimate, on a per
                    capita basis, of the amount of additional
                    payments that would have been made in the area
                    involved under this title if individuals
                    entitled to benefits under this title had not
                    received services from facilities of the
                    Department of Veterans Affairs or the
                    Department of Defense.
      [(f) Premium Adjustment.--
              [(1) Application.--
                      [(A) In general.--Except as provided in
                    subparagraph (B), in the case of an individual
                    who is enrolled under part B, who resides in a
                    CCA area, and who is not enrolled in an MA plan
                    under this part, the monthly premium otherwise
                    applied under part B (determined without regard
                    to subsections (b), (f), and (i) of section
                    1839 or any adjustment under this subsection)
                    shall be adjusted in accordance with paragraph
                    (2), but only in the case of premiums for
                    months during the period in which the CCA
                    program under this section for such area is in
                    effect.
                      [(B) No premium adjustment for subsidy
                    eligible beneficiaries.--No premium adjustment
                    shall be made under this subsection for a
                    premium for a month if the individual is
                    determined to be a subsidy eligible individual
                    (as defined in section 1860D-14(a)(3)(A)) for
                    the month.
              [(2) Amount of adjustment.--
                      [(A) In general.--Under this paragraph,
                    subject to the exemption under paragraph (1)(B)
                    and the limitation under subparagraph (B), if
                    the fee-for-service area-specific non-drug
                    amount (as defined in section (e)(5)) for a CCA
                    area in which an individual resides for a
                    month--
                              [(i) does not exceed the CCA non-drug
                            monthly benchmark amount (as determined
                            under subsection (e)(1)) for such area
                            and month, the amount of the premium
                            for the individual for the month shall
                            be reduced, by an amount equal to 75
                            percent of the amount by which such CCA
                            benchmark exceeds such fee-for-service
                            area-specific non-drug amount; or
                              [(ii) exceeds such CCA non-drug
                            benchmark, the amount of the premium
                            for the individual for the month shall
                            be adjusted to ensure, that--
                                      [(I) the sum of the amount of
                                    the adjusted premium and the
                                    CCA non-drug benchmark for the
                                    area; is equal to
                                      [(II) the sum of the
                                    unadjusted premium plus the
                                    amount of such fee-for-service
                                    area-specific non-drug amount
                                    for the area.
                      [(B) Limitation.--In no case shall the actual
                    amount of an adjustment under subparagraph (A)
                    for an area and month in a year result in an
                    adjustment that exceeds the maximum adjustment
                    permitted under subparagraph (C) for the area
                    and year, or, if less, the maximum annual
                    adjustment permitted under subparagraph (D) for
                    the area and year.
                      [(C) Phase-in of adjustment.--The amount of
                    an adjustment under subparagraph (A) for a CCA
                    area and year may not exceed the product of the
                    phase-in fraction for the year under subsection
                    (d)(3)(B) multiplied by the amount of the
                    adjustment otherwise computed under
                    subparagraph (A) for the area and year,
                    determined without regard to this subparagraph
                    and subparagraph (D).
                      [(D) 5-percent limitation on adjustment.--The
                    amount of the adjustment under this subsection
                    for months in a year shall not exceed 5 percent
                    of the amount of the monthly premium amount
                    determined for months in the year under section
                    1839 without regard to subsections (b), (f),
                    and (i) of such section and this subsection.]

              Part D--Voluntary Prescription Drug Benefit Program

     Subpart 1--Part D Eligible Individuals and Prescription Drug Benefits

                    ELIGIBILITY, ENROLLMENT, AND INFORMATION

      Sec. 1860D-1. (a) * * *
      (b) Enrollment Process for Prescription Drug Plans.--
              (1) Establishment of process.--
                      (A) * * *

               *       *       *       *       *       *       *

                      (C) Special rule.--The process established
                    under subparagraph (A) shall include, in the
                    case of a part D eligible individual who is a
                    full-benefit dual eligible individual (as
                    defined in section 1935(c)(6)) who has failed
                    to enroll in a prescription drug plan or an MA-
                    PD plan, for the enrollment in a prescription
                    drug plan that has a monthly beneficiary
                    premium that does not exceed the premium
                    assistance available under section 1860D-
                    14(a)(1)(A)). If there is more than one such
                    plan available, the Secretary shall enroll such
                    an individual on a random basis among all such
                    plans in the PDP region or through use of an
                    intelligent assignment process that is designed
                    to maximize the access of such individual to
                    necessary prescription drugs while minimizing
                    costs to such individual and to the program
                    under this part to the greatest extent
                    possible. In the case the Secretary enrolls
                    such individuals through use of an intelligent
                    assignment process, such process shall take
                    into account the extent to which prescription
                    drugs necessary for the individual are covered
                    in the case of a PDP sponsor of a prescription
                    drug plan that uses a formulary, the use of
                    prior authorization or other restrictions on
                    access to coverage of such prescription drugs
                    by such a sponsor, and the overall quality of a
                    prescription drug plan as measured by quality
                    ratings established by the Secretary. Nothing
                    in the previous sentence shall prevent such an
                    individual from declining or changing such
                    enrollment.
                      (D) Special rule for subsidy eligible
                    individuals.--The process established under
                    subparagraph (A) shall include, in the case of
                    an individual described in subsection (b)(3)(D)
                    who fails to enroll in a prescription drug plan
                    or an MA-PD plan during the special enrollment
                    established under such section applicable to
                    such individual, the application of the
                    assignment process described in subparagraph
                    (C) to such individual in the same manner as
                    such assignment process applies to a part D
                    eligible individual described in such
                    subparagraph (C). Nothing in the previous
                    sentence shall prevent an individual described
                    in such sentence from declining enrollment in a
                    plan determined appropriate by the Secretary
                    (or in the program under this part) or from
                    changing such enrollment.

               *       *       *       *       *       *       *

              (3) Additional special enrollment periods.--The
            Secretary shall establish special enrollment periods,
            including the following:
                      (A) * * *

               *       *       *       *       *       *       *

                      [(D) Medicaid coverage.--In the case of an
                    individual (as determined by the Secretary) who
                    is a full-benefit dual eligible individual (as
                    defined in section 1935(c)(6)).]
                      (D) Subsidy eligible individuals.--In the
                    case of an individual (as determined by the
                    Secretary) who is determined under subparagraph
                    (B) of section 1860D-14(a)(3) to be a subsidy
                    eligible individual.

               *       *       *       *       *       *       *

                      (F) Change in formulary resulting in increase
                    in cost-sharing.--
                              (i) In general.--Except as provided
                            in clause (ii), in the case of an
                            individual enrolled in a prescription
                            drug plan (or MA-PD plan) who has been
                            prescribed and is using a covered part
                            D drug while so enrolled, if the
                            formulary of the plan is materially
                            changed (other than at the end of a
                            contract year) so to reduce the
                            coverage (or increase the cost-sharing)
                            of the drug under the plan.
                              (ii) Exception.--Clause (i) shall not
                            apply in the case that a drug is
                            removed from the formulary of a plan
                            because of a recall or withdrawal of
                            the drug issued by the Food and Drug
                            Administration, because the drug is
                            replaced with a generic drug that is a
                            therapeutic equivalent, or because of
                            utilization management applied to--
                                      (I) a drug whose labeling
                                    includes a boxed warning
                                    required by the Food and Drug
                                    Administration under section
                                    210.57(c)(1) of title 21, Code
                                    of Federal Regulations (or a
                                    successor regulation); or
                                      (II) a drug required under
                                    subsection (c)(2) of section
                                    505-1 of the Federal Food,
                                    Drug, and Cosmetic Act to have
                                    a Risk Evaluation and
                                    Management Strategy that
                                    includes elements under
                                    subsection (f) of such section.

               *       *       *       *       *       *       *

                           PRESCRIPTION DRUG BENEFITS

      Sec. 1860D-2. (a) * * *
      (b) Standard Prescription Drug Coverage.--For purposes of
    this part and part C, the term ``standard prescription drug
    coverage'' means coverage of covered part D drugs that meets
    the following requirements:
              (1) * * *

               *       *       *       *       *       *       *

              (3) Initial coverage limit.--
                      (A) In general.--Except as provided in
                    [paragraph (4)] paragraphs (4) and (7), the
                    coverage has an initial coverage limit on the
                    maximum costs that may be recognized for
                    payment purposes (including the annual
                    deductible)--
                              (i) * * *

               *       *       *       *       *       *       *

              (4) Protection against high out-of-pocket
            expenditures.--
                      (A) * * *
                      (B) Annual out-of-pocket threshold.--
                              (i) In general.--For purposes of this
                            part, subject to paragraph (7), the
                            ``annual out-of-pocket threshold''
                            specified in this subparagraph--
                                      (I) * * *

               *       *       *       *       *       *       *

                      (C) Application.--In applying subparagraph
                    (A)--
                              (i) incurred costs shall only include
                            costs incurred with respect to covered
                            part D drugs for the annual deductible
                            described in paragraph (1), for cost-
                            sharing described in paragraph (2), and
                            for amounts for which benefits are not
                            provided because of the application of
                            the initial coverage limit described in
                            paragraph (3), but does not include any
                            costs incurred for covered part D drugs
                            which are not included (or treated as
                            being included) in the plan's
                            formulary; [and]
                              (ii) [such costs shall be treated as
                            incurred only if] subject to subsection
                            (g)(2)(C), subject to clause (iii),
                            such costs shall be treated as incurred
                            only if they are paid by the part D
                            eligible individual (or by another
                            person, such as a family member, on
                            behalf of the individual)[, under
                            section 1860D-14, or under a State
                            Pharmaceutical Assistance Program] and
                            the part D eligible individual (or
                            other person) is not reimbursed through
                            insurance or otherwise, a group health
                            plan, or other third-party payment
                            arrangement (other than under such
                            section or such a Program) for such
                            costs[.]; and
                              (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.

               *       *       *       *       *       *       *

              (7) Phased-in elimination of coverage gap.--
                      (A) In general.--For each year beginning with
                    2011, the Secretary shall consistent with this
                    paragraph progressively increase the initial
                    coverage limit (described in subsection (b)(3))
                    and decrease the annual out-of-pocket threshold
                    from the amounts otherwise computed until there
                    is a continuation of coverage from the initial
                    coverage limit for expenditures incurred
                    through the total amount of expenditures at
                    which benefits are available under paragraph
                    (4).
                      (B) Increase in initial coverage limit.--For
                    a year beginning with 2011, the initial
                    coverage limit otherwise computed without
                    regard to this paragraph shall be increased by
                    \1/2\ of the cumulative phase-in percentage (as
                    defined in subparagraph (D)(ii) for the year)
                    times the out-of-pocket gap amount (as defined
                    in subparagraph (E)) for the year.
                      (C) Decrease in annual out-of-pocket
                    threshold.--For a year beginning with 2011, the
                    annual out-of-pocket threshold otherwise
                    computed without regard to this paragraph shall
                    be decreased by \1/2\ of the cumulative phase-
                    in percentage of the out-of-pocket gap amount
                    for the year multiplied by 1.75.
                      (D) Phase-in.--For purposes of this
                    paragraph:
                              (i) Annual phase-in percentage.--The
                            term ``annual phase-in percentage''
                            means--
                                      (I) for 2011, 13 percent;
                                      (II) for 2012, 2013, 2014,
                                    and 2015, 5 percent;
                                      (III) for 2016 through 2018,
                                    7.5 percent; and
                                      (IV) for 2019 and each
                                    subsequent year, 10 percent.
                              (ii) Cumulative phase-in
                            percentage.--The term ``cumulative
                            phase-in percentage'' means for a year
                            the sum of the annual phase-in
                            percentage for the year and the annual
                            phase-in percentages for each previous
                            year beginning with 2011, but in no
                            case more than 100 percent.
                      (E) Out-of-pocket gap amount.--For purposes
                    of this paragraph, the term ``out-of-pocket gap
                    amount'' means for a year the amount by which--
                              (i) the annual out-of-pocket
                            threshold specified in paragraph (4)(B)
                            for the year (as determined as if this
                            paragraph did not apply), exceeds
                              (ii) the sum of--
                                      (I) the annual deductible
                                    under paragraph (1) for the
                                    year; and
                                      (II) \1/4\ of the amount by
                                    which the initial coverage
                                    limit under paragraph (3) for
                                    the year (as determined as if
                                    this paragraph did not apply)
                                    exceeds such annual deductible.

               *       *       *       *       *       *       *

      (e) Covered Part D Drug Defined.--
              (1) In general.--Except as provided in this
            subsection and subsections (f)and (g), for purposes of
            this part, the term ``covered part D drug'' means--
                      (A)  * * *

               *       *       *       *       *       *       *

            and [such term includes a vaccine licensed under
            section 351 of the Public Health Service Act (and, for
            vaccines administered on or after January 1, 2008, its
            administration) and] any use of a covered part D drug
            for a medically accepted indication (as defined in
            paragraph (4)).

               *       *       *       *       *       *       *

      (f) Prescription Drug Rebate Agreement for Full-Benefit Dual
    Eligible Individuals.--
              (1) In general.--In this part, the term ``covered
            part D drug'' does not include any drug or biologic
            that is manufactured by a manufacturer that has not
            entered into and have in effect a rebate agreement
            described in paragraph (2).
              (2) Rebate agreement.--A rebate agreement under this
            subsection shall require the manufacturer to provide to
            the Secretary a rebate for each rebate period (as
            defined in paragraph (6)(B)) ending after December 31,
            2010, in the amount specified in paragraph (3) for any
            covered part D drug of the manufacturer dispensed after
            December 31, 2010, to any full-benefit dual eligible
            individual (as defined in paragraph (6)(A)) for which
            payment was made by a PDP sponsor under part D or a MA
            organization under part C for such period. Such rebate
            shall be paid by the manufacturer to the Secretary not
            later than 30 days after the date of receipt of the
            information described in section 1860D-12(b)(7),
            including as such section is applied under section
            1857(f)(3).
              (3) Rebate for full-benefit dual eligible medicare
            drug plan enrollees.--
                      (A) In general.--The amount of the rebate
                    specified under this paragraph for a
                    manufacturer for a rebate period, with respect
                    to each dosage form and strength of any covered
                    part D drug provided by such manufacturer and
                    dispensed to a full-benefit dual eligible
                    individual, shall be equal to the product of--
                              (i) the total number of units of such
                            dosage form and strength of the drug so
                            provided and dispensed for which
                            payment was made by a PDP sponsor under
                            part D or a MA organization under part
                            C for the rebate period (as reported
                            under section 1860D-12(b)(7), including
                            as such section is applied under
                            section 1857(f)(3)); and
                              (ii) the amount (if any) by which--
                                      (I) the Medicaid rebate
                                    amount (as defined in
                                    subparagraph (B)) for such
                                    form, strength, and period,
                                    exceeds
                                      (II) the average Medicare
                                    drug program full-benefit dual
                                    eligible rebate amount (as
                                    defined in subparagraph (C))
                                    for such form, strength, and
                                    period.
                      (B) Medicaid rebate amount.--For purposes of
                    this paragraph, the term ``Medicaid rebate
                    amount'' means, with respect to each dosage
                    form and strength of a covered part D drug
                    provided by the manufacturer for a rebate
                    period--
                              (i) in the case of a single source
                            drug or an innovator multiple source
                            drug, the amount specified in paragraph
                            (1)(A)(ii) of section 1927(c) plus the
                            amount, if any, specified in paragraph
                            (2)(A)(ii) of such section, for such
                            form, strength, and period; or
                              (ii) in the case of any other covered
                            outpatient drug, the amount specified
                            in paragraph (3)(A)(i) of such section
                            for such form, strength, and period.
                      (C) Average medicare drug program full-
                    benefit dual eligible rebate amount.--For
                    purposes of this subsection, the term ``average
                    Medicare drug program full-benefit dual
                    eligible rebate amount'' means, with respect to
                    each dosage form and strength of a covered part
                    D drug provided by a manufacturer for a rebate
                    period, the sum, for all PDP sponsors under
                    part D and MA organizations administering a MA-
                    PD plan under part C, of--
                              (i) the product, for each such
                            sponsor or organization, of--
                                      (I) the sum of all rebates,
                                    discounts, or other price
                                    concessions (not taking into
                                    account any rebate provided
                                    under paragraph (2) for such
                                    dosage form and strength of the
                                    drug dispensed, calculated on a
                                    per-unit basis, but only to the
                                    extent that any such rebate,
                                    discount, or other price
                                    concession applies equally to
                                    drugs dispensed to full-benefit
                                    dual eligible Medicare drug
                                    plan enrollees and drugs
                                    dispensed to PDP and MA-PD
                                    enrollees who are not full-
                                    benefit dual eligible
                                    individuals; and
                                      (II) the number of the units
                                    of such dosage and strength of
                                    the drug dispensed during the
                                    rebate period to full-benefit
                                    dual eligible individuals
                                    enrolled in the prescription
                                    drug plans administered by the
                                    PDP sponsor or the MA-PD plans
                                    administered by the MA-PD
                                    organization; divided by
                              (ii) the total number of units of
                            such dosage and strength of the drug
                            dispensed during the rebate period to
                            full-benefit dual eligible individuals
                            enrolled in all prescription drug plans
                            administered by PDP sponsors and all
                            MA-PD plans administered by MA-PD
                            organizations.
              (4) Length of agreement.--The provisions of paragraph
            (4) of section 1927(b) (other than clauses (iv) and (v)
            of subparagraph (B)) shall apply to rebate agreements
            under this subsection in the same manner as such
            paragraph applies to a rebate agreement under such
            section.
              (5) Other terms and conditions.--The Secretary shall
            establish other terms and conditions of the rebate
            agreement under this subsection, including terms and
            conditions related to compliance, that are consistent
            with this subsection.
              (6) Definitions.--In this subsection and section
            1860D-12(b)(7):
                      (A) Full-benefit dual eligible individual.--
                    The term ``full-benefit dual eligible
                    individual'' has the meaning given such term in
                    section 1935(c)(6).
                      (B) Rebate period.--The term ``rebate
                    period'' has the meaning given such term in
                    section 1927(k)(8).
      (g) Requirement for Manufacturer Discount Agreement for
    Certain Qualifying Drugs.--
              (1) In general.--In this part, the term ``covered
            part D drug'' does not include any drug or biologic
            that is manufactured by a manufacturer that has not
            entered into and have in effect for all qualifying
            drugs (as defined in paragraph (5)(A)) a discount
            agreement described in paragraph (2).
              (2) Discount agreement.--
                      (A) Periodic discounts.--A discount agreement
                    under this paragraph shall require the
                    manufacturer involved to provide, to each PDP
                    sponsor with respect to a prescription drug
                    plan or each MA organization with respect to
                    each MA-PD plan, a discount in an amount
                    specified in paragraph (3) for qualifying drugs
                    (as defined in paragraph (5)(A)) of the
                    manufacturer dispensed to a qualifying enrollee
                    after December 31, 2010, insofar as the
                    individual is in the original gap in coverage
                    (as defined in paragraph (5)(E)).
                      (B) Discount agreement.--Insofar as not
                    inconsistent with this subsection, the
                    Secretary shall establish terms and conditions
                    of such agreement, including terms and
                    conditions relating to compliance, similar to
                    the terms and conditions for rebate agreements
                    under paragraphs (2), (3), and (4) of section
                    1927(b), except that--
                              (i) discounts shall be applied under
                            this subsection to prescription drug
                            plans and MA-PD plans instead of State
                            plans under title XIX;
                              (ii) PDP sponsors and MA
                            organizations shall be responsible,
                            instead of States, for provision of
                            necessary utilization information to
                            drug manufacturers; and
                              (iii) sponsors and MA organizations
                            shall be responsible for reporting
                            information on drug-component
                            negotiated price, instead of other
                            manufacturer prices.
                      (C) Counting discount toward true out-of-
                    pocket costs.--Under the discount agreement, in
                    applying subsection (b)(4), with regard to
                    subparagraph (C)(i) of such subsection, if a
                    qualified enrollee purchases the qualified drug
                    insofar as the enrollee is in an actual gap of
                    coverage (as defined in paragraph (5)(D)), the
                    amount of the discount under the agreement
                    shall be treated and counted as costs incurred
                    by the plan enrollee.
              (3) Discount amount.--The amount of the discount
            specified in this paragraph for a discount period for a
            plan is equal to 50 percent of the amount of the drug-
            component negotiated price (as defined in paragraph
            (5)(C)) for qualifying drugs for the period involved.
              (4) Additional terms.--In the case of a discount
            provided under this subsection with respect to a
            prescription drug plan offered by a PDP sponsor or an
            MA-PD plan offered by an MA organization, if a
            qualified enrollee purchases the qualified drug--
                      (A) insofar as the enrollee is in an actual
                    gap of coverage (as defined in paragraph
                    (5)(D)), the sponsor or plan shall provide the
                    discount to the enrollee at the time the
                    enrollee pays for the drug; and
                      (B) insofar as the enrollee is in the portion
                    of the original gap in coverage (as defined in
                    paragraph (5)(E)) that is not in the actual gap
                    in coverage, the discount shall not be applied
                    against the negotiated price (as defined in
                    subsection (d)(1)(B)) for the purpose of
                    calculating the beneficiary payment.
              (5) Definitions.--In this subsection:
                      (A) Qualifying drug.--The term ``qualifying
                    drug'' means, with respect to a prescription
                    drug plan or MA-PD plan, a drug or biological
                    product that--
                              (i)(I) is a drug produced or
                            distributed under an original new drug
                            application approved by the Food and
                            Drug Administration, including a drug
                            product marketed by any cross-licensed
                            producers or distributors operating
                            under the new drug application;
                              (II) is a drug that was originally
                            marketed under an original new drug
                            application approved by the Food and
                            Drug Administration; or
                              (III) is a biological product as
                            approved under section 351(a) of the
                            Public Health Services Act;
                              (ii) is covered under the formulary
                            of the plan; and
                              (iii) is dispensed to an individual
                            who is in the original gap in coverage.
                      (B) Qualifying enrollee.--The term
                    ``qualifying enrollee'' means an individual
                    enrolled in a prescription drug plan or MA-PD
                    plan other than such an individual who is a
                    subsidy-eligible individual (as defined in
                    section 1860D-14(a)(3)).
                      (C) Drug-component negotiated price.--The
                    term ``drug-component negotiated price'' means,
                    with respect to a qualifying drug, the
                    negotiated price (as defined in subsection
                    (d)(1)(B)), as determined without regard to any
                    dispensing fee, of the drug under the
                    prescription drug plan or MA-PD plan involved.
                      (D) Actual gap in coverage.--The term
                    ``actual gap in coverage'' means the gap in
                    prescription drug coverage that occurs between
                    the initial coverage limit (as modified under
                    subparagraph (B) of subsection (b)(7)) and the
                    annual out-of-pocket threshold (as modified
                    under subparagraph (C) of such subsection).
                      (E) Original gap in coverage.--The term
                    ``original in gap coverage'' means the gap in
                    prescription drug coverage that would occur
                    between the initial coverage limit (described
                    in subsection (b)(3)) and the out-of-pocket
                    threshold (as defined in subsection (b)(4)(B))
                    if subsection (b)(7) did not apply.

               *       *       *       *       *       *       *

        BENEFICIARY PROTECTIONS FOR QUALIFIED PRESCRIPTION DRUG COVERAGE

      Sec. 1860D-4. (a) * * *

               *       *       *       *       *       *       *

      (m) Standardized Marketing Requirements.--A PDP sponsor with
    respect to a prescription drug plan offered by the sponsor (and
    agents of such sponsor) shall comply with the standardized
    marketing requirements under section 1856(c).

          Subpart 2--Prescription Drug Plans; PDP Sponsors; Financing

                 PDP REGIONS; SUBMISSION OF BIDS; PLAN APPROVAL

      Sec. 1860D-11. (a) * * *

               *       *       *       *       *       *       *

      (d) Review of Information and Negotiation.--
              (1) * * *

               *       *       *       *       *       *       *

              (3) Rejection of bids.--Paragraph (5)(C) of section
            1854(a) shall apply with respect to bids under this
            section in the same manner as it applies to bids by an
            MA organization under such section.

               *       *       *       *       *       *       *

      [(i) Noninterference.--In order to promote competition under
    this part and in carrying out this part, the Secretary--
              [(1) may not interfere with the negotiations between
            drug manufacturers and pharmacies and PDP sponsors; and
              [(2) may not require a particular formulary or
            institute a price structure for the reimbursement of
            covered part D drugs.]
      (i) Negotiation of Lower Drug Prices.--
              (1) In general.--Notwithstanding any other provision
            of law, the Secretary shall negotiate with
            pharmaceutical manufacturers the prices (including
            discounts, rebates, and other price concessions) that
            may be charged to PDP sponsors and MA organizations for
            covered part D drugs for part D eligible individuals
            who are enrolled under a prescription drug plan or
            under an MA-PD plan.
              (2) No change in rules for formularies.--
                      (A) In general.--Nothing in paragraph (1)
                    shall be construed to authorize the Secretary
                    to establish or require a particular formulary.
                      (B) Construction.--Subparagraph (A) shall not
                    be construed as affecting the Secretary's
                    authority to ensure appropriate and adequate
                    access to covered part D drugs under
                    prescription drug plans and under MA-PD plans,
                    including compliance of such plans with
                    formulary requirements under section 1860D-
                    4(b)(3).
              (3) Construction.--Nothing in this subsection shall
            be construed as preventing the sponsor of a
            prescription drug plan, or an organization offering an
            MA-PD plan, from obtaining a discount or reduction of
            the price for a covered part D drug below the price
            negotiated under paragraph (1).
              (4) Semi-annual reports to congress.--Not later than
            June 1, 2011, and every six months thereafter, the
            Secretary shall submit to the Committees on Ways and
            Means, Energy and Commerce, and Oversight and
            Government Reform of the House of Representatives and
            the Committee on Finance of the Senate a report on
            negotiations conducted by the Secretary to achieve
            lower prices for Medicare beneficiaries, and the prices
            and price discounts achieved by the Secretary as a
            result of such negotiations.

               *       *       *       *       *       *       *

       REQUIREMENTS FOR AND CONTRACTS WITH PRESCRIPTION DRUG PLAN (PDP)
                                    SPONSORS

      Sec. 1860D-12. (a) * * *
      (b) Contract Requirements.--
              (1) * * *

               *       *       *       *       *       *       *

              [(5) Submission of claims by pharmacies located in or
            contracting with long-term care facilities.--Each
            contract entered into with a PDP sponsor under this
            part with respect to a prescription drug plan offered
            by such sponsor shall provide that a pharmacy located
            in, or having a contract with, a long-term care
            facility shall have not less than 30 days (but not more
            than 90 days) to submit claims to the sponsor for
            reimbursement under the plan.]
              [(6)] (5) Regular update of prescription drug pricing
            standard.--If the PDP sponsor of a prescription drug
            plan uses a standard for reimbursement of pharmacies
            based on the cost of a drug, each contract entered into
            with such sponsor under this part with respect to the
            plan shall provide that the sponsor shall update such
            standard not less frequently than once every 7 days,
            beginning with an initial update on January 1 of each
            year, to accurately reflect the market price of
            acquiring the drug.
              (6) Reporting requirement for the determination and
            payment of rebates by manufacturers related to rebate
            for full-benefit dual eligible medicare drug plan
            enrollees.--
                      (A) In general.--For purposes of the rebate
                    under section 1860D-2(f) for contract years
                    beginning on or after January 1, 2011, each
                    contract entered into with a PDP sponsor under
                    this part with respect to a prescription drug
                    plan shall require that the sponsor comply with
                    subparagraphs (B) and (C).
                      (B) Report form and contents.--Not later than
                    60 days after the end of each rebate period (as
                    defined in section 1860D-2(f)(6)(B)) within
                    such a contract year to which such section
                    applies, a PDP sponsor of a prescription drug
                    plan under this part shall report to each
                    manufacturer--
                              (i) information (by National Drug
                            Code number) on the total number of
                            units of each dosage, form, and
                            strength of each drug of such
                            manufacturer dispensed to full-benefit
                            dual eligible Medicare drug plan
                            enrollees under any prescription drug
                            plan operated by the PDP sponsor during
                            the rebate period;
                              (ii) information on the price
                            discounts, price concessions, and
                            rebates for such drugs for such form,
                            strength, and period;
                              (iii) information on the extent to
                            which such price discounts, price
                            concessions, and rebates apply equally
                            to full-benefit dual eligible Medicare
                            drug plan enrollees and PDP enrollees
                            who are not full-benefit dual eligible
                            Medicare drug plan enrollees; and
                              (iv) any additional information that
                            the Secretary determines is necessary
                            to enable the Secretary to calculate
                            the average Medicare drug program full-
                            benefit dual eligible rebate amount (as
                            defined in paragraph (3)(C) of such
                            section), and to determine the amount
                            of the rebate required under this
                            section, for such form, strength, and
                            period.
                    Such report shall be in a form consistent with
                    a standard reporting format established by the
                    Secretary.
                      (C) Submission to secretary.--Each PDP
                    sponsor shall promptly transmit a copy of the
                    information reported under subparagraph (B) to
                    the Secretary for the purpose of audit
                    oversight and evaluation.
                      (D) Confidentiality of information.--The
                    provisions of subparagraph (D) of section
                    1927(b)(3), relating to confidentiality of
                    information, shall apply to information
                    reported by PDP sponsors under this paragraph
                    in the same manner that such provisions apply
                    to information disclosed by manufacturers or
                    wholesalers under such section, except--
                              (i) that any reference to ``this
                            section'' in clause (i) of such
                            subparagraph shall be treated as being
                            a reference to this section;
                              (ii) the reference to the Director of
                            the Congressional Budget Office in
                            clause (iii) of such subparagraph shall
                            be treated as including a reference to
                            the Medicare Payment Advisory
                            Commission; and
                              (iii) clause (iv) of such
                            subparagraph shall not apply.
                      (E) Oversight.--Information reported under
                    this paragraph may be used by the Inspector
                    General of the Department of Health and Human
                    Services for the statutorily authorized
                    purposes of audit, investigation, and
                    evaluations.
                      (F) Penalties for failure to provide timely
                    information and provision of false
                    information.--In the case of a PDP sponsor--
                              (i) that fails to provide information
                            required under subparagraph (B) on a
                            timely basis, the sponsor is subject to
                            a civil money penalty in the amount of
                            $10,000 for each day in which such
                            information has not been provided; or
                              (ii) that knowingly (as defined in
                            section 1128A(i)) provides false
                            information under such subparagraph,
                            the sponsor is subject to a civil money
                            penalty in an amount not to exceed
                            $100,000 for each item of false
                            information.
                    Such civil money penalties are in addition to
                    other penalties as may be prescribed by law.
                    The provisions of section 1128A (other than
                    subsections (a) and (b)) shall apply to a civil
                    money penalty under this subparagraph in the
                    same manner as such provisions apply to a
                    penalty or proceeding under section 1128A(a).
      (c) Waiver of Certain Requirements To Expand Choice.--
              (1) Authorizing waiver.--
                      (A) In general.--[In the case] Subject to
                    paragraph (5), in the case of an entity that
                    seeks to offer a prescription drug plan in a
                    State, the Secretary shall waive the
                    requirement of subsection (a)(1) that the
                    entity be licensed in that State if the
                    Secretary determines, based on the application
                    and other evidence presented to the Secretary,
                    that any of the grounds for approval of the
                    application described in paragraph (2) have
                    been met.

               *       *       *       *       *       *       *

              (5) State certification required.--
                      (A) In general.--The Secretary may only grant
                    a waiver under paragraph (1)(A) if the
                    Secretary has received a certification from the
                    State insurance commissioner that the
                    prescription drug plan has a substantially
                    complete application pending in the State.
                      (B) Revocation of waiver upon finding of
                    fraud and abuse.--The Secretary shall revoke a
                    waiver granted under paragraph (1)(A) if the
                    State insurance commissioner submits a
                    certification to the Secretary that the
                    recipient of such a waiver--
                              (i) has committed fraud or abuse with
                            respect to such waiver;
                              (ii) has failed to make a good faith
                            effort to satisfy State licensing
                            requirements; or
                              (iii) was determined ineligible for
                            licensure by the State.

               *       *       *       *       *       *       *

         PREMIUM AND COST-SHARING SUBSIDIES FOR LOW-INCOME INDIVIDUALS

      Sec. 1860D-14. (a) Income-Related Subsidies for Individuals
    With Income Up to 150 Percent of Poverty Line.--
              (1) Individuals with income below 135 percent of
            poverty line.--In the case of a subsidy eligible
            individual (as defined in paragraph (3)) who is
            determined to have income that is below 135 percent of
            the poverty line applicable to a family of the size
            involved and who meets the resources requirement
            described in paragraph (3)(D) (or, beginning with 2012,
            paragraph (3)(E)) or who is covered under this
            paragraph under paragraph (3)(B)(i), the individual is
            entitled under this section to the following:
                      (A)  * * *

               *       *       *       *       *       *       *

                      (D) Reduction in cost-sharing below out-of-
                    pocket threshold.--
                              (i) [Institutionalized individuals.--
                            In] Elimination of cost-sharing for
                            certain full-benefit dual eligible
                            individuals.--
                                      (I) Institutionalized
                                    individuals.--In the case of an
                                    individual who is a full-
                                    benefit dual eligible
                                    individual and who is an
                                    institutionalized individual or
                                    couple (as defined in section
                                    1902(q)(1)(B)), the elimination
                                    of any beneficiary coinsurance
                                    described in section 1860D-
                                    2(b)(2) (for all amounts
                                    through the total amount of
                                    expenditures at which benefits
                                    are available under section
                                    1860D-2(b)(4)).
                                      (II) Certain other
                                    individuals.--In the case of an
                                    individual who is a full-
                                    benefit dual eligible
                                    individual and with respect to
                                    whom there has been a
                                    determination that but for the
                                    provision of home and community
                                    based care (whether under
                                    section 1915, 1932, or under a
                                    waiver under section 1115) the
                                    individual would require the
                                    level of care provided in a
                                    hospital or a nursing facility
                                    or intermediate care facility
                                    for the mentally retarded the
                                    cost of which could be
                                    reimbursed under the State plan
                                    under title XIX, the
                                    elimination of any beneficiary
                                    coinsurance described in
                                    section 1860D-2(b)(2) (for all
                                    amounts through the total
                                    amount of expenditures at which
                                    benefits are available under
                                    section 1860D-2(b)(4)).

               *       *       *       *       *       *       *

              (3) Determination of eligibility.--
                      (A) * * *

               *       *       *       *       *       *       *

                      (E) Alternative resource standard.--
                              (i) In general.--The resources
                            requirement of this subparagraph is
                            that an individual's resources (as
                            determined under section 1613 for
                            purposes of the supplemental security
                            income program subject to the life
                            insurance policy exclusion provided
                            under subparagraph (G)) do not exceed--
                                      (I) for 2006, $10,000 (or
                                    $20,000 in the case of the
                                    combined value of the
                                    individual's assets or
                                    resources and the assets or
                                    resources of the individual's
                                    spouse); [and]
                                      (II) for a subsequent year
                                    (before 2012) the dollar
                                    amounts specified in this
                                    subclause (or subclause (I))
                                    for the previous year increased
                                    by the annual percentage
                                    increase in the consumer price
                                    index (all items; U.S. city
                                    average) as of September of
                                    such previous year[.];
                                      (III) for 2012, $17,000 (or
                                    $34,000 in the case of the
                                    combined value of the
                                    individual's assets or
                                    resources and the assets or
                                    resources of the individual's
                                    spouse); and
                                      (IV) for a subsequent year,
                                    the dollar amounts specified in
                                    this subclause (or subclause
                                    (III)) for the previous year
                                    increased by the annual
                                    percentage increase in the
                                    consumer price index (all
                                    items; U.S. city average) as of
                                    September of such previous
                                    year.
                            Any dollar amount established under
                            subclause (II) or (IV) that is not a
                            multiple of $10 shall be rounded to the
                            nearest multiple of $10.

               *       *       *       *       *       *       *

                              [(iii) Documentation and
                            safeguards.--Under such process--
                                      [(I) the application form
                                    shall consist of an attestation
                                    under penalty of perjury
                                    regarding the level of assets
                                    or resources (or combined
                                    assets and resources in the
                                    case of a married part D
                                    eligible individual) and
                                    valuations of general classes
                                    of assets or resources;
                                      [(II) such form shall be
                                    accompanied by copies of recent
                                    statements (if any) from
                                    financial institutions in
                                    support of the application; and
                                      [(III) matters attested to in
                                    the application shall be
                                    subject to appropriate methods
                                    of verification.]
                              (iii) Certification of income and
                            resources.--For purposes of applying
                            this section--
                                      (I) an individual shall be
                                    permitted to apply on the basis
                                    of self-certification of income
                                    and resources; and
                                      (II) matters attested to in
                                    the application shall be
                                    subject to appropriate methods
                                    of verification without the
                                    need of the individual to
                                    provide additional
                                    documentation, except in
                                    extraordinary situations as
                                    determined by the Commissioner.

               *       *       *       *       *       *       *

      (b) Premium Subsidy Amount.--
              (1) * * *
              (2) Low-income benchmark premium amount defined.--
                      (A) * * *
                      (B) Premium amounts described.--The premium
                    amounts described in this subparagraph are, in
                    the case of--
                              (i) * * *

               *       *       *       *       *       *       *

                              (iii) an MA-PD plan, the portion of
                            the MA monthly prescription drug
                            beneficiary premium that is
                            attributable to basic prescription drug
                            benefits (described in section
                            1852(a)(6)(B)(ii)) before the
                            application of the monthly rebate
                            computed under section 1854(b)(1)(C)(i)
                            for that plan and year involved.

               *       *       *       *       *       *       *

    MEDICARE PRESCRIPTION DRUG ACCOUNT IN THE FEDERAL SUPPLEMENTARY MEDICAL
                              INSURANCE TRUST FUND

      Sec. 1860D-16. (a) * * *

               *       *       *       *       *       *       *

      (c) Deposits Into Account.--
              (1) * * *

               *       *       *       *       *       *       *

              (6) Rebate for full-benefit dual eligible medicare
            drug plan enrollees.--Amounts paid under a rebate
            agreement under section 1860D-2(f) shall be deposited
            into the Account and shall be used to pay for all or
            part of the gradual elimination of the coverage gap
            under section 1860D-2(b)(7).

               *       *       *       *       *       *       *

                        Part E--Miscellaneous Provisions

                  DEFINITIONS OF SERVICES, INSTITUTIONS, ETC.

      Sec. 1861. For purposes of this title--
      (a) * * *

               *       *       *       *       *       *       *

      (s) Medical and Other Health Services.--The term ``medical
    and other health services'' means any of the following items or
    services:
              (1) * * *
              (2)(A) * * *

               *       *       *       *       *       *       *

              (AA) ultrasound screening for abdominal aortic
            aneurysm (as defined in subsection (bbb)) for an
            individual--
                      (i) * * *

               *       *       *       *       *       *       *

                      (iii) who--
                              (I) * * *
                              (II) manifests risk factors included
                            in a beneficiary category recommended
                            for screening by the [United States
                            Preventive Services Task Force] Task
                            Force on Clinical Preventive Services
                            regarding abdominal aortic aneurysms;

               *       *       *       *       *       *       *

              (DD) items and services furnished under an intensive
            cardiac rehabilitation program (as defined in
            subsection (eee)(4)); [and]
              (EE) kidney disease education services (as defined in
            subsection (ggg));
              (FF) advance care planning consultation (as defined
            in subsection (hhh)(1));
              (GG) marriage and family therapist services (as
            defined in subsection (jjj));
              (HH) mental health counselor services (as defined in
            subsection (kkk)(1)); and
              (II) respiratory therapy services which would be
            physicians' services if furnished by a physician (as
            defined in subsection (r)(1)) for the diagnosis and
            treatment of respiratory illnesses and which are
            performed by a respiratory therapist (as defined in
            subsection (mmm)) under the general supervision of a
            physician and which the respiratory therapist is
            legally authorized to perform by the State in which the
            services are performed, but only if no facility or
            other provider charges or is paid any amounts with
            respect to the furnishing of such services;

               *       *       *       *       *       *       *

              [(10)(A) pneumococcal vaccine and its administration
            and, subject to section 4071(b) of the Omnibus Budget
            Reconciliation Act of 1987, influenza vaccine and its
            administration; and
              [(B) hepatitis B vaccine and its administration,
            furnished to an individual who is at high or
            intermediate risk of contracting hepatitis B (as
            determined by the Secretary under regulations);]
              (10) federally recommended vaccines (as defined in
            subsection (lll)) and their respective administration;

               *       *       *       *       *       *       *

      (aa) Rural Health Clinic Services and Federally Qualified
    Health Center Services.--(1) The term ``rural health clinic
    services'' means --
              (A) * * *
              (B) such services furnished by a physician assistant
            or a nurse practitioner (as defined in paragraph (5)),
            by a clinical psychologist (as defined by the
            Secretary) [or by a clinical social worker (as defined
            in subsection (hh)(1)),], by a clinical social worker
            (as defined in subsection (hh)(1)), by a marriage and
            family therapist (as defined in subsection (jjj)(2)),
            or a mental health counselor (as defined in subsection
            (kkk)(2)), and such services and supplies furnished as
            an incident to his service as would otherwise be
            covered if furnished by a physician or as an incident
            to a physician's service, and

               *       *       *       *       *       *       *

      (hh) Clinical Social Worker; Clinical Social Worker
    Services.--(1) * * *
      (2) The term ``clinical social worker services'' means
    services performed by a clinical social worker (as defined in
    paragraph (1)) for the diagnosis and treatment of mental
    illnesses (other than services furnished to an inpatient of a
    hospital [and other than services furnished to an inpatient of
    a skilled nursing facility which the facility is required to
    provide as a requirement for participation]) which the clinical
    social worker is legally authorized to perform under State law
    (or the State regulatory mechanism provided by State law) of
    the State in which such services are performed as would
    otherwise be covered if furnished by a physician or as an
    incident to a physician's professional service.

               *       *       *       *       *       *       *

      (qq) Diabetes Outpatient Self-Management Training Services.--
    (1) The term ``diabetes outpatient self-management training
    services'' means educational and training services furnished
    (at such times as the Secretary determines appropriate) to an
    individual with diabetes by a certified provider (as described
    in paragraph (2)(A)) in an outpatient setting by an individual
    or entity who meets the quality standards described in
    paragraph (2)(B) or by a certified diabetes educator (as
    defined in paragraph (3)), but only if the physician who is
    managing the individual's diabetic condition certifies that
    such services are needed under a comprehensive plan of care
    related to the individual's diabetic condition to ensure
    therapy compliance or to provide the individual with necessary
    skills and knowledge (including skills related to the self-
    administration of injectable drugs) to participate in the
    management of the individual's condition.

               *       *       *       *       *       *       *

      (3) For purposes of paragraph (1), the term ``certified
    diabetes educator'' means an individual who--
              (A) is licensed or registered by the State in which
            the services are performed as a health care
            professional;
              (B) specializes in teaching individuals with diabetes
            to develop the necessary skills and knowledge to manage
            the individual's diabetic condition; and
              (C) is certified as a diabetes educator by a
            recognized certifying body (as defined in paragraph
            (4)).
      (4)(A) For purposes of paragraph (3)(C), the term
    ``recognized certifying body'' means--
              (i) the National Certification Board for Diabetes
            Educators, or
              (ii) a certifying body for diabetes educators, which
            is recognized by the Secretary as authorized to grant
            certification of diabetes educators for purposes of
            this subsection pursuant to standards established by
            the Secretary, if the Secretary determines such Board
            or body, respectively, meets the requirement of
            subparagraph (B).
      (B) The National Certification Board for Diabetes Educators
    or a certifying body for diabetes educators meets the
    requirement of this subparagraph, with respect to the
    certification of an individual, if the Board or body,
    respectively, is incorporated and registered to do business in
    the United States and requires as a condition of such
    certification each of the following:
              (i) The individual has a qualifying credential in a
            specified health care profession.
              (ii) The individual has professional practice
            experience in diabetes self-management training that
            includes a minimum number of hours and years of
            experience in such training.
              (iii) The individual has successfully completed a
            national certification examination offered by such
            entity.
              (iv) The individual periodically renews certification
            status following initial certification.

               *       *       *       *       *       *       *

      (ww) Initial Preventive Physical Examination.--(1) * * *
      (2) The screening and other preventive services described in
    this paragraph include the following:
              (A) [Pneumococcal, influenza, and hepatitis B vaccine
            and administration] Federally recommended vaccines (as
            defined in subsection (lll)) and their respective
            administration under subsection (s)(10).

               *       *       *       *       *       *       *

      (xx)(1) The term ``cardiovascular screening blood test''
    means a blood test for the early detection of cardiovascular
    disease (or abnormalities associated with an elevated risk of
    cardiovascular disease) that tests for the following:
              (A)  * * *

               *       *       *       *       *       *       *

    The Secretary may not approve an indication under subparagraph
    (B) for any individual unless a blood test for such is
    recommended by the [United States Preventive Services Task
    Force] Task Force on Clinical Preventive Services.

               *       *       *       *       *       *       *

      (ddd)(1) The term ``additional preventive services'' means
    services not otherwise described in this title that identify
    medical conditions or risk factors and that the Secretary
    determines are--
              (A)  * * *
              (B) recommended with a grade of A or B by the [United
            States Preventive Services Task Force] Task Force on
            Clinical Preventive Services ; and

               *       *       *       *       *       *       *

                       Advance Care Planning Consultation

      (hhh)(1) Subject to paragraphs (3) and (4), the term
    ``advance care planning consultation'' means a consultation
    between the individual and a practitioner described in
    paragraph (2) regarding advance care planning, if, subject to
    paragraph (3), the individual involved has not had such a
    consultation within the last 5 years. Such consultation shall
    include the following:
              (A) An explanation by the practitioner of advance
            care planning, including key questions and
            considerations, important steps, and suggested people
            to talk to.
              (B) An explanation by the practitioner of advance
            directives, including living wills and durable powers
            of attorney, and their uses.
              (C) An explanation by the practitioner of the role
            and responsibilities of a health care proxy.
              (D) The provision by the practitioner of a list of
            national and State-specific resources to assist
            consumers and their families with advance care
            planning, including the national toll-free hotline, the
            advance care planning clearinghouses, and State legal
            service organizations (including those funded through
            the Older Americans Act of 1965).
              (E) An explanation by the practitioner of the
            continuum of end-of-life services and supports
            available, including palliative care and hospice, and
            benefits for such services and supports that are
            available under this title.
              (F)(i) Subject to clause (ii), an explanation of
            orders regarding life sustaining treatment or similar
            orders, which shall include--
                      (I) the reasons why the development of such
                    an order is beneficial to the individual and
                    the individual's family and the reasons why
                    such an order should be updated periodically as
                    the health of the individual changes;
                      (II) the information needed for an individual
                    or legal surrogate to make informed decisions
                    regarding the completion of such an order; and
                      (III) the identification of resources that an
                    individual may use to determine the
                    requirements of the State in which such
                    individual resides so that the treatment wishes
                    of that individual will be carried out if the
                    individual is unable to communicate those
                    wishes, including requirements regarding the
                    designation of a surrogate decisionmaker (also
                    known as a health care proxy).
              (ii) The Secretary shall limit the requirement for
            explanations under clause (i) to consultations
            furnished in a State--
                      (I) in which all legal barriers have been
                    addressed for enabling orders for life
                    sustaining treatment to constitute a set of
                    medical orders respected across all care
                    settings; and
                      (II) that has in effect a program for orders
                    for life sustaining treatment described in
                    clause (iii).
              (iii) A program for orders for life sustaining
            treatment for a States described in this clause is a
            program that--
                      (I) ensures such orders are standardized and
                    uniquely identifiable throughout the State;
                      (II) distributes or makes accessible such
                    orders to physicians and other health
                    professionals that (acting within the scope of
                    the professional's authority under State law)
                    may sign orders for life sustaining treatment;
                      (III) provides training for health care
                    professionals across the continuum of care
                    about the goals and use of orders for life
                    sustaining treatment; and
                      (IV) is guided by a coalition of stakeholders
                    includes representatives from emergency medical
                    services, emergency department physicians or
                    nurses, state long-term care association, state
                    medical association, state surveyors, agency
                    responsible for senior services, state
                    department of health, state hospital
                    association, home health association, state bar
                    association, and state hospice association.
      (2) A practitioner described in this paragraph is--
              (A) a physician (as defined in subsection (r)(1));
            and
              (B) a nurse practitioner or physician assistant who
            has the authority under State law to sign orders for
            life sustaining treatments.
      (3)(A) An initial preventive physical examination under
    subsection (WW), including any related discussion during such
    examination, shall not be considered an advance care planning
    consultation for purposes of applying the 5-year limitation
    under paragraph (1).
      (B) An advance care planning consultation with respect to an
    individual may be conducted more frequently than provided under
    paragraph (1) if there is a significant change in the health
    condition of the individual, including diagnosis of a chronic,
    progressive, life-limiting disease, a life-threatening or
    terminal diagnosis or life-threatening injury, or upon
    admission to a skilled nursing facility, a long-term care
    facility (as defined by the Secretary), or a hospice program.
      (4) A consultation under this subsection may include the
    formulation of an order regarding life sustaining treatment or
    a similar order.
      (5)(A) For purposes of this section, the term ``order
    regarding life sustaining treatment'' means, with respect to an
    individual, an actionable medical order relating to the
    treatment of that individual that--
              (i) is signed and dated by a physician (as defined in
            subsection (r)(1)) or another health care professional
            (as specified by the Secretary and who is acting within
            the scope of the professional's authority under State
            law in signing such an order, including a nurse
            practitioner or physician assistant) and is in a form
            that permits it to stay with the individual and be
            followed by health care professionals and providers
            across the continuum of care;
              (ii) effectively communicates the individual's
            preferences regarding life sustaining treatment,
            including an indication of the treatment and care
            desired by the individual;
              (iii) is uniquely identifiable and standardized
            within a given locality, region, or State (as
            identified by the Secretary); and
              (iv) may incorporate any advance directive (as
            defined in section 1866(f)(3)) if executed by the
            individual.
      (B) The level of treatment indicated under subparagraph
    (A)(ii) may range from an indication for full treatment to an
    indication to limit some or all or specified interventions.
    Such indicated levels of treatment may include indications
    respecting, among other items--
              (i) the intensity of medical intervention if the
            patient is pulse less, apneic, or has serious cardiac
            or pulmonary problems;
              (ii) the individual's desire regarding transfer to a
            hospital or remaining at the current care setting;
              (iii) the use of antibiotics; and
              (iv) the use of artificially administered nutrition
            and hydration.

                      Medicare Covered Preventive Services

      (iii)(1) Subject to the succeeding provisions of this
    subsection, the term ``Medicare covered preventive services''
    means the following:
              (A) Prostate cancer screening tests (as defined in
            subsection (oo)).
              (B) Colorectal cancer screening tests (as defined in
            subsection (pp) and when applicable as described in
            section 1305).
              (C) Diabetes outpatient self-management training
            services (as defined in subsection (qq)).
              (D) Screening for glaucoma for certain individuals
            (as described in subsection (s)(2)(U)).
              (E) Medical nutrition therapy services for certain
            individuals (as described in subsection (s)(2)(V)).
              (F) An initial preventive physical examination (as
            defined in subsection (ww)).
              (G) Cardiovascular screening blood tests (as defined
            in subsection (xx)(1)).
              (H) Diabetes screening tests (as defined in
            subsection (yy)).
              (I) Ultrasound screening for abdominal aortic
            aneurysm for certain individuals (as described in
            described in subsection (s)(2)(AA)).
              (J) Federally recommended vaccines (as defined in
            subsection (lll)) and their respective administration.
              (K) Screening mammography (as defined in subsection
            (jj)).
              (L) Screening pap smear and screening pelvic exam (as
            defined in subsection (nn)).
              (M) Bone mass measurement (as defined in subsection
            (rr)).
              (N) Kidney disease education services (as defined in
            subsection (ggg)).
              (O) Additional preventive services (as defined in
            subsection (ddd)).
      (2) With respect to specific Medicare covered preventive
    services, the limitations and conditions described in the
    provisions referenced in paragraph (1) with respect to such
    services shall apply.

                     Marriage and Family Therapist Services

      (jjj)(1) The term ``marriage and family therapist services''
    means services performed by a marriage and family therapist (as
    defined in paragraph (2)) for the diagnosis and treatment of
    mental illnesses, which the marriage and family therapist is
    legally authorized to perform under State law (or the State
    regulatory mechanism provided by State law) of the State in
    which such services are performed, as would otherwise be
    covered if furnished by a physician or as incident to a
    physician's professional service, but only if no facility or
    other provider charges or is paid any amounts with respect to
    the furnishing of such services.
      (2) The term ``marriage and family therapist'' means an
    individual who--
              (A) possesses a master's or doctoral degree which
            qualifies for licensure or certification as a marriage
            and family therapist pursuant to State law;
              (B) after obtaining such degree has performed at
            least 2 years of clinical supervised experience in
            marriage and family therapy; and
              (C) is licensed or certified as a marriage and family
            therapist in the State in which marriage and family
            therapist services are performed.

                        Mental Health Counselor Services

      (kkk)(1) The term ``mental health counselor services'' means
    services performed by a mental health counselor (as defined in
    paragraph (2)) for the diagnosis and treatment of mental
    illnesses which the mental health counselor is legally
    authorized to perform under State law (or the State regulatory
    mechanism provided by the State law) of the State in which such
    services are performed, as would otherwise be covered if
    furnished by a physician or as incident to a physician's
    professional service, but only if no facility or other provider
    charges or is paid any amounts with respect to the furnishing
    of such services.
      (2) The term ``mental health counselor'' means an individual
    who--
              (A) possesses a master's or doctor's degree which
            qualifies the individual for licensure or certification
            for the practice of mental health counseling in the
            State in which the services are performed;
              (B) after obtaining such a degree has performed at
            least 2 years of supervised mental health counselor
            practice; and
              (C) is licensed or certified as a mental health
            counselor or professional counselor by the State in
            which the services are performed.

                         Federally Recommended Vaccines

      (lll) The term ``federally recommended vaccine'' means an
    approved vaccine recommended by the Advisory Committee on
    Immunization Practices (an advisory committee established by
    the Secretary, acting through the Director of the Centers for
    Disease Control and Prevention).

                             Respiratory Therapist

      (mmm) For purposes of subsection (s)(2)(II) and section
    1833(a)(1)(X) only, the term ``respiratory therapist'' means an
    individual who--
              (1) is credentialed by a national credentialing board
            recognized by the Secretary;
              (2)(A) is licensed to practice respiratory therapy in
            the State in which the respiratory therapy services are
            performed, or
              (B) in the case of an individual in a State which
            does not provide for such licensure, is legally
            authorized to perform respiratory therapy services (in
            the State in which the individual performed such
            services) under State law (or the State regulatory
            mechanism provided by State law);
              (3) is a registered respiratory therapist; and
              (4) holds a bachelor's degree.

               *       *       *       *       *       *       *

            EXCLUSIONS FROM COVERAGE AND MEDICARE AS SECONDARY PAYER

      Sec. 1862. (a) Notwithstanding any other provision of this
    title, no payment may be made under part A or part B for any
    expenses incurred for items or services--
              (1)(A) * * *

               *       *       *       *       *       *       *

              (N) in the case of ultrasound screening for abdominal
            aortic aneurysm which is performed more frequently than
            is provided for under section 1861(s)(2)(AA), [and]
              (O) in the case of kidney disease education services
            (as defined in paragraph (1) of section 1861(ggg)),
            which are furnished in excess of the number of sessions
            covered under paragraph (4) of such section[;], and
              (P) in the case of advance care planning
            consultations (as defined in section 1861(hhh)(1)),
            which are performed more frequently than is covered
            under such section;

               *       *       *       *       *       *       *

              (7) where such expenses are for routine physical
            checkups, eyeglasses (other than eyewear described in
            section 1861(s)(8)) or eye examinations for the purpose
            of prescribing, fitting, or changing eyeglasses,
            procedures performed (during the course of any eye
            examination) to determine the refractive state of the
            eyes, hearing aids or examinations therefor, or
            immunizations (except as otherwise allowed under
            section 1861(s)(10) and subparagraph (B), (F), (G),
            (H), [or (K)] (K), or (P) of paragraph (1));

               *       *       *       *       *       *       *

              (23) which are the technical component of advanced
            diagnostic imaging services described in section
            1834(e)(1)(B) for which payment is made under the fee
            schedule established under section 1848(b) and that are
            furnished by a supplier (as defined in section
            1861(d)), if such supplier is not accredited by an
            accreditation organization designated by the Secretary
            under section 1834(e)(2)(B); [or]
              (24) where such expenses are for renal dialysis
            services (as defined in subparagraph (B) of section
            1881(b)(14)) for which payment is made under such
            section unless such payment is made under such section
            to a provider of services or a renal dialysis facility
            for such services[.]; or
              (25) subject to subsection (h), not later than
            January 1, 2015, 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.

               *       *       *       *       *       *       *

      (b) Medicare as Secondary Payer.--
              (1) Requirements of group health plans.--
                      (A) * * *

               *       *       *       *       *       *       *

                      (C) Individuals with end stage renal
                    disease.--A group health plan (as defined in
                    subparagraph (A)(v))--
                              (i) * * *

               *       *       *       *       *       *       *

                    except that clause (ii) shall not prohibit a
                    plan from paying benefits secondary to this
                    title when an individual is entitled to or
                    eligible for benefits under this title under
                    section 226A after the end of the 12-month
                    period described in clause (i). Effective for
                    items and services furnished on or after
                    February 1, 1991, and before the date of
                    enactment of the Balanced Budget Act of 1997
                    (with respect to periods beginning on or after
                    February 1, 1990), this subparagraph shall be
                    applied by substituting ``18- month'' for ``12-
                    month'' each place it appears. Effective for
                    items and services furnished on or after the
                    date of enactment of the Balanced Budget Act of
                    1997, (with respect to periods beginning on or
                    after the date that is 18 months prior to such
                    date), clauses (i) and (ii) shall be applied by
                    substituting ``30-month'' for ``12-month'' each
                    place it appears. With regard to
                    immunosuppressive drugs furnished on or after
                    the date of the enactment of the America's
                    Affordable Health Choices Act of 2009, this
                    subparagraph shall be applied without regard to
                    any time limitation.

               *       *       *       *       *       *       *

              (U) in the case of hospitals which furnish inpatient
            hospital services for which payment may be made under
            this title, to be a participating provider of medical
            care both--
                      (i) * * *

               *       *       *       *       *       *       *

            in accordance with regulations promulgated by the
            Secretary regarding admission practices, payment
            methodology, and rates of payment (including the
            acceptance of no more than such payment rate as payment
            in full for such items and services, [and]
              (V) in the case of hospitals that are not otherwise
            subject to the Occupational Safety and Health Act of
            1970 (or a State occupational safety and health plan
            that is approved under 18(b) of such Act), to comply
            with the Bloodborne Pathogens standard under section
            1910.1030 of title 29 of the Code of Federal
            Regulations (or as subsequently redesignated)[.], and
              (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.

               *       *       *       *       *       *       *

      (2)(A) A provider of services may charge such individual or
    other person (i) the amount of any deduction or coinsurance
    amount imposed pursuant to section 1813(a)(1), (a)(3), or
    (a)(4), section 1833(b), or section 1861(y)(3) with respect to
    such items and services (not in excess of the amount
    customarily charged for such items and services by such
    provider), and (ii) an amount equal to 20 per centum of the
    reasonable charges for such items and services (other than for
    Medicare covered preventive services and not in excess of 20
    per centum of the amount customarily charged for such items and
    services by such provider) for which payment is made under part
    B or which are durable medical equipment furnished as home
    health services (but in the case of items and services
    furnished to individuals with end-stage renal disease, an
    amount equal to 20 percent of the estimated amounts for such
    items and services calculated on the basis established by the
    Secretary). In the case of items and services described in
    section 1833(c), clause (ii) of the preceding sentence shall be
    applied by substituting for 20 percent the proportion which is
    appropriate under such section. A provider of services may not
    impose a charge under clause (ii) of the first sentence of this
    subparagraph with respect to items and services described in
    section 1861(s)(10)(A) and with respect to clinical diagnostic
    laboratory tests for which payment is made under part B.
    Notwithstanding the first sentence of this subparagraph, a home
    health agency may charge such an individual or person, with
    respect to covered items subject to payment under section
    1834(a), the amount of any deduction imposed under section
    1833(b) and 20 percent of the payment basis described in
    section 1834(a)(1)(B). In the case of items and services for
    which payment is made under part B under the prospective
    payment system established under section 1833(t), clause (ii)
    of the first sentence shall be applied by substituting for 20
    percent of the reasonable charge, the applicable copayment
    amount established under section 1833(t)(5). In the case of
    services described in section 1833(a)(8) or section 1833(a)(9)
    for which payment is made under part B under section 1834(k),
    clause (ii) of the first sentence shall be applied by
    substituting for 20 percent of the reasonable charge for such
    services 20 percent of the lesser of the actual charge or the
    applicable fee schedule amount (as defined in such section) for
    such services.

               *       *       *       *       *       *       *

      (j) Enrollment Process for Providers of Services and
    Suppliers.--
              (1) Enrollment process.--
                      (A) * * *

               *       *       *       *       *       *       *

                      (D) Billing agents and clearinghouses
                    required to be registered under medicare.--Any
                    agent, clearinghouse, or other alternate payee
                    that submits claims on behalf of a health care
                    provider must be registered with the Secretary
                    in a form and manner specified by the
                    Secretary.

               *       *       *       *       *       *       *

              (3) Program integrity.--The provisions of section
            1128G(a) apply to enrollments and renewals of
            enrollments of providers of services and suppliers
            under this title.

               *       *       *       *       *       *       *

                   HEALTH CARE QUALITY DEMONSTRATION PROGRAM

      Sec. 1866C. (a) * * *
      (b) Demonstration Projects.--[The Secretary] Subject to
    section 1866D, the Secretary shall establish a 5-year
    demonstration program under which the Secretary shall approve
    demonstration projects that examine health delivery factors
    that encourage the delivery of improved quality in patient
    care, including--
              (1) * * *

               *       *       *       *       *       *       *

      CONVERSION OF ACUTE CARE EPISODE DEMONSTRATION TO PILOT PROGRAM AND
                    EXPANSION TO INCLUDE POST ACUTE SERVICES

      Sec. 1866D.  (a) In General.--By not later than January 1,
    2011, the Secretary shall, for the purpose of promoting the use
    of bundled payments to promote efficient and high quality
    delivery of care--
              (1) convert the acute care episode demonstration
            program conducted under section 1866C to a pilot
            program; and
              (2) subject to subsection (c), expand such program as
            so converted to include post acute services and such
            other services the Secretary determines to be
            appropriate, which may include transitional services.
      (b) Scope.--The Secretary shall set specific goals for the
    number of acute and post-acute bundling test sites under the
    pilot program to ensure that the pilot program is of sufficient
    size and scope to--
              (1) test the approaches under the pilot program in a
            variety of settings, including urban, rural, and
            underserved areas;
              (2) include geographic areas and additional
            conditions that account for significant program
            spending, as defined by the Secretary; and
              (3) subject to subsection (d), disseminate the pilot
            program rapidly on a national basis.
    To the extent that the Secretary finds inpatient and post-acute
    care bundling to be successful in improving quality and
    reducing costs, the Secretary shall implement such mechanisms
    and reforms under the pilot program on as large a geographic
    scale as practical and economical, consistent with subsection
    (e).
      (c) Limitation.--The Secretary shall only expand the pilot
    program under subsection (a)(2) if the Secretary finds that--
              (1) the demonstration program under section 1866C and
            pilot program under this section maintain or increase
            the quality of care received by individuals enrolled
            under this title; and
              (2) such demonstration program and pilot program
            reduce program expenditures and, based on the
            certification under subsection (d), that the expansion
            of such pilot program would result in estimated
            spending that would be less than what spending would
            otherwise be in the absence of this section.
      (d) Certification.--For purposes of subsection (c), the Chief
    Actuary of the Centers for Medicare & Medicaid Services shall
    certify whether expansion of the pilot program under this
    section would result in estimated spending that would be less
    than what spending would otherwise be in the absence of this
    section.
      (e) Voluntary Participation.--Nothing in this paragraph shall
    be construed as requiring the participation of an entity in the
    pilot program under this section.

                  ACCOUNTABLE CARE ORGANIZATION PILOT PROGRAM

      Sec. 1866E.  (a) Establishment.--
              (1) In general.--The Secretary shall conduct a pilot
            program (in this section referred to as the ``pilot
            program'') to test different payment incentive models,
            including (to the extent practicable) the specific
            payment incentive models described in subsection (c),
            designed to reduce the growth of expenditures and
            improve health outcomes in the provision of items and
            services under this title to applicable beneficiaries
            (as defined in subsection (d)) by qualifying
            accountable care organizations (as defined in
            subsection (b)(1)) in order to--
                      (A) promote accountability for a patient
                    population and coordinate items and services
                    under parts A and B;
                      (B) encourage investment in infrastructure
                    and redesigned care processes for high quality
                    and efficient service delivery; and
                      (C) reward physician practices and other
                    physician organizational models for the
                    provision of high quality and efficient health
                    care services.
              (2) Scope.--The Secretary shall set specific goals
            for the number of accountable care organizations,
            participating practitioners, and patients served in the
            initial tests under the pilot program to ensure that
            the pilot program is of sufficient size and scope to--
                      (A) test the approach involved in a variety
                    of settings, including urban, rural, and
                    underserved areas; and
                      (B) subject to subsection (f)(1), disseminate
                    such approach rapidly on a national basis.
            To the extent that the Secretary finds a qualifying
            accountable care organization model to be successful in
            improving quality and reducing costs, the Secretary
            shall attempt to attract at least 10 percent of all
            eligible providers to act as accountable care
            organizations and implement such mechanisms and reforms
            within 5 years after the date of the enactment of this
            section. If the Secretary further finds such
            accountable care organization models to be successful,
            the Secretary shall seek to implement such mechanisms
            and reforms on as large a geographic scale as practical
            and economical.
      (b) Qualifying Accountable Care Organizations (ACOs).--
              (1) Qualifying aco defined.--In this section:
                      (A) In general.--The terms ``qualifying
                    accountable care organization'' and
                    ``qualifying ACO'' mean a group of physicians
                    or other physician organizational model (as
                    defined in subparagraph (D)) that--
                              (i) is organized at least in part for
                            the purpose of providing physicians'
                            services; and
                              (ii) meets such criteria as the
                            Secretary determines to be appropriate
                            to participate in the pilot program,
                            including the criteria specified in
                            paragraph (2).
                      (B) Inclusion of other providers.--Nothing in
                    this subsection shall be construed as
                    preventing a qualifying ACO from including a
                    hospital or any other provider of services or
                    supplier furnishing items or services for which
                    payment may be made under this title that is
                    affiliated with the ACO under an arrangement
                    structured so that such provider or supplier
                    participates in the pilot program and shares in
                    any incentive payments under the pilot program.
                      (C) Physician.--The term ``physician''
                    includes, except as the Secretary may otherwise
                    provide, any individual who furnishes services
                    for which payment may be made as physicians'
                    services.
                      (D) Other physician organizational model.--
                    The term ``other physician organization model''
                    means, with respect to a qualifying ACO any
                    model of organization under which physicians
                    enter into agreements with other providers for
                    the purposes of participation in the pilot
                    program in order to provide high quality and
                    efficient health care services and share in any
                    incentive payments under such program
                      (E) Other services.--Nothing in this
                    paragraph shall be construed as preventing a
                    qualifying ACO from furnishing items or
                    services, for which payment may not be made
                    under this title, for purposes of achieving
                    performance goals under the pilot program.
              (2) Qualifying criteria.--The following are criteria
            described in this paragraph for an organized group of
            physicians to be a qualifying ACO:
                      (A) The group has a legal structure that
                    would allow the group to receive and distribute
                    incentive payments under this section.
                      (B) The group includes a sufficient number of
                    primary care physicians (regardless of
                    specialty) for the applicable beneficiaries for
                    whose care the group is accountable (as
                    determined by the Secretary).
                      (C) The group reports on quality measures in
                    such form, manner, and frequency as specified
                    by the Secretary (which may be for the group,
                    for providers of services and suppliers, or
                    both).
                      (D) The group reports to the Secretary (in a
                    form, manner and frequency as specified by the
                    Secretary) such data as the Secretary
                    determines appropriate to monitor and evaluate
                    the pilot program.
                      (E) The group provides notice to applicable
                    beneficiaries regarding the pilot program (as
                    determined appropriate by the Secretary).
                      (F) The group contributes to a best practices
                    network or website, that shall be maintained by
                    the Secretary for the purpose of sharing
                    strategies on quality improvement, care
                    coordination, and efficiency that the groups
                    believe are effective.
                      (G) The group utilizes patient-centered
                    processes of care, including those that
                    emphasize patient and caregiver involvement in
                    planning and monitoring of ongoing care
                    management plan.
                      (H) The group meets other criteria determined
                    to be appropriate by the Secretary.
      (c) Specific Payment Incentive Models.--The specific payment
    incentive models described in this subsection are the
    following:
              (1) Performance target model.--Under the performance
            target model under this paragraph (in this paragraph
            referred to as the ``performance target model''):
                      (A) In general.--A qualifying ACO qualifies
                    to receive an incentive payment if expenditures
                    for applicable beneficiaries are less than a
                    target spending level or a target rate of
                    growth. The incentive payment shall be made
                    only if savings are greater than would result
                    from normal variation in expenditures for items
                    and services covered under parts A and B.
                      (B) Computation of performance target.--
                              (i) In general.--The Secretary shall
                            establish a performance target for each
                            qualifying ACO comprised of a base
                            amount (described in clause (ii))
                            increased to the current year by an
                            adjustment factor (described in clause
                            (iii)). Such a target may be
                            established on a per capita basis, as
                            the Secretary determines to be
                            appropriate.
                              (ii) Base amount.--For purposes of
                            clause (i), the base amount in this
                            subparagraph is equal to the average
                            total payments (or allowed charges)
                            under parts A and B (and may include
                            part D, if the Secretary determines
                            appropriate) for applicable
                            beneficiaries for whom the qualifying
                            ACO furnishes items and services in a
                            base period determined by the
                            Secretary. Such base amount may be
                            determined on a per capita basis.
                              (iii) Adjustment factor.--For
                            purposes of clause (i), the adjustment
                            factor in this clause may equal an
                            annual per capita amount that reflects
                            changes in expenditures from the period
                            of the base amount to the current year
                            that would represent an appropriate
                            performance target for applicable
                            beneficiaries (as determined by the
                            Secretary). Such adjustment factor may
                            be determined as an amount or rate, may
                            be determined on a national, regional,
                            local, or organization-specific basis,
                            and may be determined on a per capita
                            basis. Such adjustment factor also may
                            be adjusted for risk as determined
                            appropriate by the Secretary.
                              (iv) Rebasing.--Under this model the
                            Secretary shall periodically rebase the
                            base expenditure amount described in
                            clause (ii).
                      (C) Meeting target.--
                              (i) In general.--Subject to clause
                            (ii), a qualifying ACO that meet or
                            exceeds annual quality and performance
                            targets for a year shall receive an
                            incentive payment for such year equal
                            to a portion (as determined appropriate
                            by the Secretary) of the amount by
                            which payments under this title for
                            such year relative are estimated to be
                            below the performance target for such
                            year, as determined by the Secretary.
                            The Secretary may establish a cap on
                            incentive payments for a year for a
                            qualifying ACO.
                              (ii) Limitation.--The Secretary shall
                            limit incentive payments to each
                            qualifying ACO under this paragraph as
                            necessary to ensure that the aggregate
                            expenditures with respect to applicable
                            beneficiaries for such ACOs under this
                            title (inclusive of incentive payments
                            described in this subparagraph) do not
                            exceed the amount that the Secretary
                            estimates would be expended for such
                            ACO for such beneficiaries if the pilot
                            program under this section were not
                            implemented.
                      (D) Reporting and other requirements.--In
                    carrying out such model, the Secretary may (as
                    the Secretary determines to be appropriate)
                    incorporate reporting requirements, incentive
                    payments, and penalties related to the
                    physician quality reporting initiative (PQRI),
                    electronic prescribing, electronic health
                    records, and other similar initiatives under
                    section 1848, and may use alternative criteria
                    than would otherwise apply under such section
                    for determining whether to make such payments.
                    The incentive payments described in this
                    subparagraph shall not be included in the limit
                    described in subparagraph (C)(ii) or in the
                    performance target model described in this
                    paragraph.
              (2) Partial capitation model.--
                      (A) In general.--Subject to subparagraph (B),
                    a partial capitation model described in this
                    paragraph (in this paragraph referred to as a
                    ``partial capitation model'') is a model in
                    which a qualifying ACO would be at financial
                    risk for some, but not all, of the items and
                    services covered under parts A and B, such as
                    at risk for some or all physicians' services or
                    all items and services under part B. The
                    Secretary may limit a partial capitation model
                    to ACOs that are highly integrated systems of
                    care and to ACOs capable of bearing risk, as
                    determined to be appropriate by the Secretary.
                      (B) No additional program expenditures.--
                    Payments to a qualifying ACO for applicable
                    beneficiaries for a year under the partial
                    capitation model shall be established in a
                    manner that does not result in spending more
                    for such ACO for such beneficiaries than would
                    otherwise be expended for such ACO for such
                    beneficiaries for such year if the pilot
                    program were not implemented, as estimated by
                    the Secretary.
              (3) Other payment models.--
                      (A) In general.--Subject to subparagraph (B),
                    the Secretary may develop other payment models
                    that meet the goals of this pilot program to
                    improve quality and efficiency.
                      (B) No additional program expenditures.--
                    Subparagraph (B) of paragraph (2) shall apply
                    to a payment model under subparagraph (A) in a
                    similar manner as such subparagraph (B) applies
                    to the payment model under paragraph (2).
      (d) Applicable Beneficiaries.--
              (1) In general.--In this section, the term
            ``applicable beneficiary'' means, with respect to a
            qualifying ACO, an individual who--
                      (A) is enrolled under part B and entitled to
                    benefits under part A;
                      (B) is not enrolled in a Medicare Advantage
                    plan under part C or a PACE program under
                    section 1894; and
                      (C) meets such other criteria as the
                    Secretary determines appropriate, which may
                    include criteria relating to frequency of
                    contact with physicians in the ACO
              (2) Following applicable beneficiaries.--The
            Secretary may monitor data on expenditures and quality
            of services under this title after an applicable
            beneficiary discontinues receiving services under this
            title through a qualifying ACO.
      (e) Implementation.--
              (1) Starting date.--The pilot program shall begin no
            later than January 1, 2012. An agreement with a
            qualifying ACO under the pilot program may cover a
            multi-year period of between 3 and 5 years.
              (2) Waiver.--The Secretary may waive such provisions
            of this title (including section 1877) and title XI in
            the manner the Secretary determines necessary in order
            implement the pilot program.
              (3) Performance results reports.--The Secretary shall
            report performance results to qualifying ACOs under the
            pilot program at least annually.
              (4) Limitations on review.--There shall be no
            administrative or judicial review under section 1869,
            section 1878, or otherwise of--
                      (A) the elements, parameters, scope, and
                    duration of the pilot program;
                      (B) the selection of qualifying ACOs for the
                    pilot program;
                      (C) the establishment of targets, measurement
                    of performance, determinations with respect to
                    whether savings have been achieved and the
                    amount of savings;
                      (D) determinations regarding whether, to
                    whom, and in what amounts incentive payments
                    are paid; and
                      (E) decisions about the extension of the
                    program under subsection (g), expansion of the
                    program under subsection (h) or extensions
                    under subsection (i).
              (5) Administration.--Chapter 35 of title 44, United
            States Code shall not apply to this section.
      (f) Evaluation; Monitoring.--
              (1) In general.--The Secretary shall evaluate the
            payment incentive model for each qualifying ACO under
            the pilot program to assess impacts on beneficiaries,
            providers of services, suppliers and the program under
            this title. The Secretary shall make such evaluation
            publicly available within 60 days of the date of
            completion of such report.
              (2) Monitoring.--The Inspector General of the
            Department of Health and Human Services shall provide
            for monitoring of the operation of ACOs under the pilot
            program with regard to violations of section 1877
            (popularly known as the ``Stark law'').
      (g) Extension of Pilot Agreement With Successful
    Organizations.--
              (1) Reports to congress.--Not later than 2 years
            after the date the first agreement is entered into
            under this section, and biennially thereafter for six
            years, the Secretary shall submit to Congress and make
            publicly available a report on the use of authorities
            under the pilot program. Each report shall address the
            impact of the use of those authorities on expenditures,
            access, and quality under this title.
              (2) Extension.--Subject to the report provided under
            paragraph (1), with respect to a qualifying ACO, the
            Secretary may extend the duration of the agreement for
            such ACO under the pilot program as the Secretary
            determines appropriate if--
                      (A) the ACO receives incentive payments with
                    respect to any of the first 4 years of the
                    pilot agreement and is consistently meeting
                    quality standards or
                      (B) the ACO is consistently exceeding quality
                    standards and is not increasing spending under
                    the program.
              (3) Termination.--The Secretary may terminate an
            agreement with a qualifying ACO under the pilot program
            if such ACO did not receive incentive payments or
            consistently failed to meet quality standards in any of
            the first 3 years under the program.
      (h) Expansion to Additional ACOs.--
              (1) Testing and refinement of payment incentive
            models.--Subject to the evaluation described in
            subsection (f), the Secretary may enter into agreements
            under the pilot program with additional qualifying ACOs
            to further test and refine payment incentive models
            with respect to qualifying ACOs.
              (2) Expanding use of successful models to program
            implementation.--
                      (A) In general.--Subject to subparagraph (B),
                    the Secretary may issue regulations to
                    implement, on a permanent basis, 1 or more
                    models if, and to the extent that, such models
                    are beneficial to the program under this title,
                    as determined by the Secretary.
                      (B) Certification.--The Chief Actuary of the
                    Centers for Medicare & Medicaid Services shall
                    certify that 1 or more of such models described
                    in subparagraph (A) would result in estimated
                    spending that would be less than what spending
                    would otherwise be estimated to be in the
                    absence of such expansion.
      (i) Treatment of Physician Group Practice Demonstration.--
              (1) Extension.--The Secretary may enter in to an
            agreement with a qualifying ACO under the demonstration
            under section 1866A, subject to rebasing and other
            modifications deemed appropriate by the Secretary,
            until the pilot program under this section is
            operational.
              (2) Transition.--For purposes of extension of an
            agreement with a qualifying ACO under subsection
            (g)(2), the Secretary shall treat receipt of an
            incentive payment for a year by an organization under
            the physician group practice demonstration pursuant to
            section 1866A as a year for which an incentive payment
            is made under such subsection, as long as such practice
            group practice organization meets the criteria under
            subsection (b)(2).
      (j) Additional Provisions.--
              (1) Authority for separate incentive arrangements.--
            The Secretary may create separate incentive
            arrangements (including using multiple years of data,
            varying thresholds, varying shared savings amounts, and
            varying shared savings limits) for different categories
            of qualifying ACOs to reflect natural variations in
            data availability, variation in average annual
            attributable expenditures, program integrity, and other
            matters the Secretary deems appropriate.
              (2) Encouragement of participation of smaller
            organizations.--In order to encourage the participation
            of smaller accountable care organizations under the
            pilot program, the Secretary may limit a qualifying
            ACO's exposure to high cost patients under the program.
              (3) Treatment of high-cost beneficiaries with chronic
            diseases.--Nothing in this section shall be construed
            as preventing a qualifying ACO from entering into an
            arrangement with an Independence at Home Medical
            Practice or from providing home based services for the
            treatment of beneficiaries who are eligible for that
            program.
              (4) Involvement in private payer arrangements.--
            Nothing in this section shall be construed as
            preventing qualifying ACOs participating in the pilot
            program from negotiating similar contracts with private
            payers.
              (5) Antidiscrimination limitation.--The Secretary
            shall not enter into an agreement with an entity to
            provide health care items or services under the pilot
            program, or with an entity to administer the program,
            unless such entity guarantees that it will not deny,
            limit, or condition the coverage or provision of
            benefits under the program, for individuals eligible to
            be enrolled under such program, based on any health
            status-related factor described in section 2702(a)(1)
            of the Public Health Service Act.
              (6) Construction.--Nothing in this section shall be
            construed to compel or require an organization to use
            an organization-specific target growth rate for an
            accountable care organization under this section for
            purposes of section 1848.
              (7) Funding.--For purposes of administering and
            carrying out the pilot program, other than for payments
            for items and services furnished under this title and
            incentive payments under subsection (c)(1), in addition
            to funds otherwise appropriated, there are appropriated
            to the Secretary for the Center for Medicare & Medicaid
            Services Program Management Account $25,000,000 for
            each of fiscal years 2010 through 2014 and $20,000,000
            for fiscal year 2015. Amounts appropriated under this
            paragraph for a fiscal year shall be available until
            expended.

                           MEDICAL HOME PILOT PROGRAM

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

              INDEPENDENCE AT HOME MEDICAL PRACTICE PILOT PROGRAM

      Sec. 1866G.  (a) In General.--The Secretary shall conduct a
    pilot program (in this section referred to as the ``pilot
    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)). The pilot program tests whether
    such a model, 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--
              (1) reducing preventable hospitalizations;
              (2) preventing hospital readmissions;
              (3) reducing emergency room visits;
              (4) improving health outcomes;
              (5) improving the efficiency of care, such as by
            reducing duplicative diagnostic and laboratory tests;
              (6) reducing the cost of health care services covered
            under this title; and
              (7) achieving beneficiary and family caregiver
            satisfaction.
      (b) Qualifying Independence at Home Medical Practice.--
              (1) Definition.--In this section, the term
            ``qualifying independence at home medical practice''
            means a legal entity comprised of an individual
            physician or nurse practitioner or group of physicians
            and nurse practitioners who are certified or have
            experience and training in providing home-based primary
            care services to high cost chronically ill
            beneficiaries as determined appropriate by the
            Secretary and which has entered into an agreement with
            the Secretary. Care is provided by a team, including
            physicians, nurses, physician assistants, pharmacists,
            and other health and social services staff as
            appropriate who are certified or have experience
            providing home-based primary care to applicable
            beneficiaries, make in-home visits and carry out plans
            of care that are tailored to the individual
            beneficiary's chronic conditions and designed to
            achieve the results in subsection (a) and report the
            clinical and quality of care outcomes as determined by
            the Secretary. The pilot program shall be designed to
            include the participation of physician and nurse
            practitioner practices with fewer than 10 full-time
            equivalent physicians, as well as physicians in larger
            practices, particularly in underserved rural areas.
              (2) Participation of nurse practitioners and
            physician assistants.--Nothing in this section shall be
            construed to prevent a nurse practitioner or physician
            assistant from 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; and
                      (B) the nurse practitioner or physician
                    assistant, as the case may be, is acting
                    consistently with State law.
              (3) Inclusion of providers and practitioners.--
            Nothing in this subsection shall be construed as
            preventing a qualifying Independence at Home Medical
            Practice from including a provider or participating
            practitioner that is affiliated with the medical
            practice under an arrangement structured so that such
            provider or practitioner participates in the pilot
            program and shares in any savings under the pilot
            program.
      (c) Payment.--
              (1) Shared savings.--A qualifying Independence at
            Home Medical Practice may receive 80 percent of savings
            in excess of 5 percent if expenditures under this title
            for applicable beneficiaries participating in the pilot
            program are at least 5 percent less than a target
            spending level or a target rate of growth. The shared
            savings payment shall be made only if savings are at a
            minimum 5 percent greater than would result from normal
            variation in expenditures for items and services
            covered under parts A and B (and part D to the extent
            the Secretary decides to include such costs).
              (2) Establishment of levels, thresholds, and
            limits.--The Secretary may establish target spending
            levels, savings thresholds, and limits on shared
            savings amounts for each participating Independence at
            Home Medical Practice based upon the size of the
            practice, characteristics of the enrolled individuals,
            and such other factors as the Secretary determines
            appropriate.
              (3) Interim payments.--A qualifying Independence at
            Home Medical Practice may receive payments for
            geriatric assessments and monthly care coordination
            services as determined by the Secretary but in the
            event that an Independence at Home Medical Practice
            does not achieve the required savings in this
            subsection, those payments or a fraction of them, as
            appropriate, are at risk of being recouped by the
            Secretary to ensure that no Independence at Home
            Medical Practice receives Medicare payments in excess
            of what Medicare otherwise would have paid for the
            services provided to the beneficiaries receiving
            medical care from the Independence at Home Medical
            Practice in the absence of the pilot program.
              (4) Assurance of financial solvency.--In order to
            receive payments under paragraph (3), a qualifying
            Independence at Home Medical Practice shall demonstrate
            to the satisfaction of the Secretary that the
            organization is able to assume financial risk for the 5
            percent savings requirements through available
            reserves, reinsurance, or withholding of funding
            provided under this title, or such other means as the
            Secretary determines appropriate.
              (5) No additional program expenditures.--The
            Secretary shall limit shared savings payments to each
            qualifying Independence at Home Medical Practice under
            this subsection as necessary to ensure that the
            aggregate expenditures with respect to applicable
            beneficiaries for such Independence at Home Medical
            Practice under this title (inclusive of shared savings
            payments described in this paragraph) do not exceed the
            amount that the Secretary estimates would be expended
            for such Independence at Home Medical Practice for such
            beneficiaries if the pilot program under this section
            were not implemented.
      (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--
                      (A) is enrolled under part B and entitled to
                    benefits under part A;
                      (B) is not enrolled in a Medicare Advantage
                    plan under part C or a PACE program under
                    section 1894;
                      (C) is in the top 20 percent of Medicare
                    patient risk scores;
                      (D) has two or more chronic illnesses,
                    including congestive heart failure, diabetes,
                    chronic obstructive pulmonary disease, ischemic
                    heart disease, stroke, Alzheimer's Disease and
                    other dementias designated by the Secretary,
                    pressure ulcers, hypertension,
                    neurodegenerative diseases designated by the
                    Secretary which result in high costs under this
                    title including amyotropic lateral sclerosis
                    (ALS), multiple sclerosis, and Parkinson's
                    disease, and other chronic conditions
                    identified by the Secretary that result in high
                    costs when in combination with one or more of
                    the diseases listed in this subparagraph;
                      (E) had a nonelective hospital admission
                    within the past 12 months;
                      (F) has received acute or subacute
                    rehabilitation services;
                      (G) continues to have two or more functional
                    dependencies requiring the assistance of
                    another person (for example, bathing, dressing,
                    toileting, walking, or feeding); and
                      (H) fulfills such other criteria as the
                    Secretary determines appropriate.
              (2) Publication of requirements.--The Secretary shall
            publish eligibility requirements for beneficiaries that
            are sufficiently clear to be understood by
            beneficiaries and the individuals providing services to
            them as part of the pilot program.
              (3) Patient election to participate.--The Secretary
            shall determine an appropriate method of ensuring that
            applicable beneficiaries have agreed to participate in
            an Independence at Home Medical Practice. Participation
            shall be entirely voluntary.
              (4) Beneficiary access to services.--Except as
            provided in subsection (e)(2), nothing in this section
            shall be construed as encouraging physicians or nurse
            practitioners to limit beneficiary access to services
            covered under title XVIII and 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 pilot program shall begin not
            later than January 1, 2012. An agreement with a
            qualifying Independence at Home Medical Practice under
            the pilot program may cover a 3 year period.
              (2) No duplication in pilot participation.--A
            physician or nurse practitioner who participates in the
            accountable care organization pilot program under
            section 1866D or the medical home pilot program under
            section 1866E shall not be eligible to participate in
            the pilot program under this subsection.
              (3) Preference.--In approving an Independence at Home
            Medical Practice, the Secretary shall give preference
            to medical 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.
              (4) Waiver.--The Secretary may waive such provisions
            of this title (including section 1877) and title XI in
            the manner the Secretary determines necessary in order
            implement the pilot program.
              (5) Administration.--Chapter 35 of title 44, United
            States Code shall not apply to this section.
      (f) Minimum Number of Sites.--To the extent practicable, at
    least two unaffiliated Independence at Home Medical Practices
    will be established in the 13 highest cost States and the
    District of Columbia and in 13 additional States that are
    representative of other regions of the United States and
    include medically underserved rural and urban areas as
    determined by the Secretary.
      (g) Evaluation and Monitoring.--The Secretary shall annually
    evaluate each qualifying Independence at Home Medical Practice
    under the pilot program to assess whether it achieved the
    minimum savings of 5 percent and the results described in
    subsection (a). The Secretary shall have the discretion to
    terminate an agreement with an Independence at Home Medical
    Practice that fails to achieve a preponderance of those
    results. The Secretary shall make evaluations publicly
    available within 60 days of the date of completion of such
    report.
      (h) Reports to Congress.--Not later than 2 years after the
    date the first agreement is entered into under this section,
    and biennially thereafter until the pilot is completed, the
    Secretary shall submit to Congress and make publicly available
    a report on best practices under the pilot program. Each report
    shall address the impact of such best practices on
    expenditures, access, and quality under this title.
      (i) Expansion to Program Implementations.--
              (1) Testing and refinement of payment incentive and
            service delivery models.--Subject to the evaluation
            described in subsection (f), the Secretary may enter
            into agreements under the pilot program with additional
            qualifying Independence at Home Medical Practices to
            further test and refine models with respect to
            qualifying Independence at Home Medical Practices.
              (2) Expanding use of successful models to program
            implementation.--
                      (A) In general.--Subject to subparagraph (B),
                    the Secretary may issue regulations to
                    implement, on a permanent basis, the
                    Independence at Home Medical Practice Model if,
                    and to the extent that, such models are
                    beneficial to the program under this title, as
                    determined by the Secretary.
                      (B) Certification.--The Chief Actuary of the
                    Centers for Medicare and Medicaid Services
                    shall certify that the Independence at Home
                    Medical Model described in subparagraph (A)
                    would result in estimated spending that would
                    be less than what spending would otherwise be
                    estimated to be in the absence of such
                    expansion.
      (j) Funding.--For purposes of administering and carrying out
    the pilot program, other than for payments for items and
    services furnished under this title, shared savings and monthly
    fees, or other payments under subsection (c), in addition to
    funds otherwise appropriated, there are appropriated to the
    Secretary for the Center for Medicare and Medicaid Services
    Program Management Account $5,000,000 for each of fiscal years
    2010 through 2014. Amounts appropriated under this paragraph
    for a fiscal year shall be available until expended.

               *       *       *       *       *       *       *

      PRACTICING PHYSICIANS ADVISORY COUNCIL; COUNCIL FOR TECHNOLOGY AND
                    INNOVATION TELEHEALTH ADVISORY COMMITTEE

      Sec. 1868. [(a) Practicing Physicians Advisory Council.--(1)
    The Secretary shall appoint, based upon nominations submitted
    by medical organizations representing physicians, a Practicing
    Physicians Advisory Council (in this subsection referred to as
    the ``Council'') to be composed of 15 physicians, each of whom
    has submitted at least 250 claims for physicians' services
    under this title in the previous year. At least 11 of the
    members of the Council shall be physicians described in section
    1861(r)(1) and the members of the Council shall include both
    participating and nonparticipating physicians and physicians
    practicing in rural areas and underserved urban areas.
      [(2) The Council shall meet once during each calendar quarter
    to discuss certain proposed changes in regulations and carrier
    manual instructions related to physician services identified by
    the Secretary. To the extent feasible and consistent with
    statutory deadlines, such consultation shall occur before the
    publication of such proposed changes.
      [(3) Members of the Council shall be entitled to receive
    reimbursement of expenses and per diem in lieu of subsistence
    in the same manner as other members of advisory councils
    appointed by the Secretary are provided such reimbursement and
    per diem under this title.]

               *       *       *       *       *       *       *

      (c) Telehealth Advisory Committee.--
              (1) In general.--The Secretary shall appoint a
            Telehealth Advisory Committee (in this subsection
            referred to as the ``Advisory Committee'') to make
            recommendations to the Secretary on policies of the
            Centers for Medicare & Medicaid Services regarding
            telehealth services as established under section
            1834(m), including the appropriate addition or deletion
            of services (and HCPCS codes) to those specified in
            paragraphs (4)(F)(i) and (4)(F)(ii) of such section and
            for authorized payment under paragraph (1) of such
            section.
              (2) Membership; terms.--
                      (A) Membership.--
                              (i) In general.--The Advisory
                            Committee shall be composed of 9
                            members, to be appointed by the
                            Secretary, of whom--
                                      (I) 5 shall be practicing
                                    physicians;
                                      (II) 2 shall be practicing
                                    non-physician health care
                                    practitioners; and
                                      (III) 2 shall be
                                    administrators of telehealth
                                    programs.
                              (ii) Requirements for appointing
                            members.--In appointing members of the
                            Advisory Committee, the Secretary
                            shall--
                                      (I) ensure that each member
                                    has prior experience with the
                                    practice of telemedicine or
                                    telehealth;
                                      (II) give preference to
                                    individuals who are currently
                                    providing telemedicine or
                                    telehealth services or who are
                                    involved in telemedicine or
                                    telehealth programs;
                                      (III) ensure that the
                                    membership of the Advisory
                                    Committee represents a balance
                                    of specialties and geographic
                                    regions; and
                                      (IV) take into account the
                                    recommendations of
                                    stakeholders.
                      (B) Terms.--The members of the Advisory
                    Committee shall serve for such term as the
                    Secretary may specify.
                      (C) Conflicts of interest.--An advisory
                    committee member may not participate with
                    respect to a particular matter considered in an
                    advisory committee meeting if such member (or
                    an immediate family member of such member) has
                    a financial interest that could be affected by
                    the advice given to the Secretary with respect
                    to such matter.
              (3) Meetings.--The Advisory Committee shall meet
            twice each calendar year and at such other times as the
            Secretary may provide.
              (4) Permanent committee.--Section 14 of the Federal
            Advisory Committee Act (5 U.S.C. App.) shall not apply
            to the Advisory Committee.

               *       *       *       *       *       *       *

                                 ADMINISTRATION

      Sec. 1874. (a) * * *

               *       *       *       *       *       *       *

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

               *       *       *       *       *       *       *

     PAYMENTS TO HEALTH MAINTENANCE ORGANIZATIONS AND COMPETITIVE MEDICAL
                                     PLANS

      Sec. 1876. (a) * * *

               *       *       *       *       *       *       *

      (h)(1) * * *

               *       *       *       *       *       *       *

      (5)(A) * * *

               *       *       *       *       *       *       *

      (C)(i) * * *
      (ii) For any period beginning on or after [January 1, 2010]
    January 1, 2012, a reasonable cost reimbursement contract under
    this subsection may not be extended or renewed for a service
    area insofar as such area during the entire previous year was
    within the service area of--
              (I) * * *

               *       *       *       *       *       *       *

      (iii) A plan described in this clause for a year for a
    service area is a plan described in section 1851(a)(2)(A)(i) if
    [the service area for the year] the portion of the plan's
    service area for the year that is within the service area of a
    reasonable cost reimbursement contract meets the following
    minimum enrollment requirements:
              (I) * * *

               *       *       *       *       *       *       *

                   LIMITATION ON CERTAIN PHYSICIAN REFERRALS

      Sec. 1877. (a) * * *

               *       *       *       *       *       *       *

      (d) Additional Exceptions Related Only to Ownership or
    Investment Prohibition.--The following, if not otherwise
    excepted under subsection (b), shall not be considered to be an
    ownership or investment interest described in subsection
    (a)(2)(A):
              (1) * * *
              (2) Rural providers.--In the case of designated
            health services furnished in a rural area (as defined
            in section 1886(d)(2)(D)) by an entity, if--
                      (A) substantially all of the designated
                    health services furnished by the entity are
                    furnished to individuals residing in such a
                    rural area; [and]
                      (B) effective for the 18-month period
                    beginning on the date of the enactment of the
                    Medicare Prescription Drug, Improvement, and
                    Modernization Act of 2003, the entity is not a
                    specialty hospital (as defined in subsection
                    (h)(7))[.]; and
                      (C) in the case where the entity is a
                    hospital, the hospital meets the requirements
                    of paragraph (3)(D).
              (3) Hospital ownership.--In the case of designated
            health services provided by a hospital (other than a
            hospital described in paragraph (1)) if--
                      (A) * * *
                      (B) effective for the 18-month period
                    beginning on the date of the enactment of the
                    Medicare Prescription Drug, Improvement, and
                    Modernization Act of 2003, the hospital is not
                    a specialty hospital (as defined in subsection
                    (h)(7)); [and]
                      (C) the ownership or investment interest is
                    in the hospital itself (and not merely in a
                    subdivision of the hospital)[.]; and
                      (D) the hospital meets the requirements
                    described in subsection (i)(1).

               *       *       *       *       *       *       *

      [(f) Reporting Requirements.--Each entity providing covered
    items or services for which payment may be made under this
    title shall provide the Secretary with the information
    concerning the entity's ownership, investment, and compensation
    arrangements, including--
              [(1) the covered items and services provided by the
            entity, and
              [(2) the names and unique physician identification
            numbers of all physicians with an ownership or
            investment interest (as described in subsection
            (a)(2)(A)), or with a compensation arrangement (as
            described in subsection (a)(2)(B)), in the entity, or
            whose immediate relatives have such an ownership or
            investment interest or who have such a compensation
            relationship with the entity.
    Such information shall be provided in such form, manner, and at
    such times as the Secretary shall specify. The requirement of
    this subsection shall not apply to designated health services
    provided outside the United States or to entities which the
    Secretary determines provides services for which payment may be
    made under this title very infrequently.]
      (f) Reporting and Disclosure Requirements.--
              (1) In general.--Each entity providing covered items
            or services for which payment may be made under this
            title shall provide the Secretary with the information
            concerning the entity's ownership, investment, and
            compensation arrangements, including--
                      (A) the covered items and services provided
                    by the entity, and
                      (B) the names and unique physician
                    identification numbers of all physicians with
                    an ownership or investment interest (as
                    described in subsection (a)(2)(A)), or with a
                    compensation arrangement (as described in
                    subsection (a)(2)(B)), in the entity, or whose
                    immediate relatives have such an ownership or
                    investment interest or who have such a
                    compensation relationship with the entity.
            Such information shall be provided in such form,
            manner, and at such times as the Secretary shall
            specify. The requirement of this subsection shall not
            apply to designated health services provided outside
            the United States or to entities which the Secretary
            determines provide services for which payment may be
            made under this title very infrequently.
              (2) Requirements for hospitals with physician
            ownership or investment.--In the case of a hospital
            that meets the requirements described in subsection
            (i)(1), the hospital shall--
                      (A) submit to the Secretary an initial
                    report, and periodic updates at a frequency
                    determined by the Secretary, containing a
                    detailed description of the identity of each
                    physician owner and physician investor and any
                    other owners or investors of the hospital;
                      (B) require that any referring physician
                    owner or investor discloses to the individual
                    being referred, by a time that permits the
                    individual to make a meaningful decision
                    regarding the receipt of services, as
                    determined by the Secretary, the ownership or
                    investment interest, as applicable, of such
                    referring physician in the hospital; and
                      (C) disclose the fact that the hospital is
                    partially or wholly owned by one or more
                    physicians or has one or more physician
                    investors--
                              (i) on any public website for the
                            hospital; and
                              (ii) in any public advertising for
                            the hospital.
            The information to be reported or disclosed under this
            paragraph shall be provided in such form, manner, and
            at such times as the Secretary shall specify. The
            requirements of this paragraph shall not apply to
            designated health services furnished outside the United
            States or to entities which the Secretary determines
            provide services for which payment may be made under
            this title very infrequently.
              (3) Publication of information.--The Secretary shall
            publish, and periodically update, the information
            submitted by hospitals under paragraph (2)(A) on the
            public Internet website of the Centers for Medicare &
            Medicaid Services.

               *       *       *       *       *       *       *

      (g) Sanctions.--
              (1) * * *

               *       *       *       *       *       *       *

              [(5) Failure to report information.--Any person who
            is required, but fails, to meet a reporting requirement
            of subsection (f) is subject to a civil money penalty
            of not more than $10,000 for each day for which
            reporting is required to have been made. The provisions
            of section 1128A (other than the first sentence of
            subsection (a) and other than subsection (b)) shall
            apply to a civil money penalty under the previous
            sentence in the same manner as such provisions apply to
            a penalty or proceeding under section 1128A(a).]
              (5) Failure to report or disclose information.--
                      (A) Reporting.--Any person who is required,
                    but fails, to meet a reporting requirement of
                    paragraphs (1) and (2)(A) of subsection (f) is
                    subject to a civil money penalty of not more
                    than $10,000 for each day for which reporting
                    is required to have been made.
                      (B) Disclosure.--Any physician who is
                    required, but fails, to meet a disclosure
                    requirement of subsection (f)(2)(B) or a
                    hospital that is required, but fails, to meet a
                    disclosure requirement of subsection (f)(2)(C)
                    is subject to a civil money penalty of not more
                    than $10,000 for each case in which disclosure
                    is required to have been made.
                      (C) Application.--The provisions of section
                    1128A (other than the first sentence of
                    subsection (a) and other than subsection (b))
                    shall apply to a civil money penalty under
                    subparagraphs (A) and (B) in the same manner as
                    such provisions apply to a penalty or
                    proceeding under section 1128A(a).

               *       *       *       *       *       *       *

      (i) Requirements to Qualify for Rural Provider and Hospital
    Ownership Exceptions to Self-Referral Prohibition.--
              (1) Requirements described.--For purposes of
            subsection (d)(3)(D), the requirements described in
            this paragraph are as follows:
                      (A) Provider agreement.--The hospital had--
                              (i) physician ownership or investment
                            on January 1, 2009; and
                              (ii) a provider agreement under
                            section 1866 in effect on such date.
                      (B) Prohibition on physician ownership or
                    investment.--The percentage of the total value
                    of the ownership or investment interests held
                    in the hospital, or in an entity whose assets
                    include the hospital, by physician owners or
                    investors in the aggregate does not exceed such
                    percentage as of the date of enactment of this
                    subsection.
                      (C) Prohibition on expansion of facility
                    capacity.--Except as provided in paragraph (2),
                    the number of operating rooms, procedure rooms,
                    or beds of the hospital at any time on or after
                    the date of the enactment of this subsection
                    are no greater than the number of operating
                    rooms, procedure rooms, or beds, respectively,
                    as of such date.
                      (D) Ensuring bona fide ownership and
                    investment.--
                              (i) Any ownership or investment
                            interests that the hospital offers to a
                            physician are not offered on more
                            favorable terms than the terms offered
                            to a person who is not in a position to
                            refer patients or otherwise generate
                            business for the hospital.
                              (ii) The hospital (or any investors
                            in the hospital) does not directly or
                            indirectly provide loans or financing
                            for any physician owner or investor in
                            the hospital.
                              (iii) The hospital (or any investors
                            in the hospital) does not directly or
                            indirectly guarantee a loan, make a
                            payment toward a loan, or otherwise
                            subsidize a loan, for any physician
                            owner or investor or group of physician
                            owners or investors that is related to
                            acquiring any ownership or investment
                            interest in the hospital.
                              (iv) Ownership or investment returns
                            are distributed to each owner or
                            investor in the hospital in an amount
                            that is directly proportional to the
                            ownership or investment interest of
                            such owner or investor in the hospital.
                              (v) The investment interest of the
                            owner or investor is directly
                            proportional to the owner's or
                            investor's capital contributions made
                            at the time the ownership or investment
                            interest is obtained.
                              (vi) Physician owners and investors
                            do not receive, directly or indirectly,
                            any guaranteed receipt of or right to
                            purchase other business interests
                            related to the hospital, including the
                            purchase or lease of any property under
                            the control of other owners or
                            investors in the hospital or located
                            near the premises of the hospital.
                              (vii) The hospital does not offer a
                            physician owner or investor the
                            opportunity to purchase or lease any
                            property under the control of the
                            hospital or any other owner or investor
                            in the hospital on more favorable terms
                            than the terms offered to a person that
                            is not a physician owner or investor.
                              (viii) The hospital does not
                            condition any physician ownership or
                            investment interests either directly or
                            indirectly on the physician owner or
                            investor making or influencing
                            referrals to the hospital or otherwise
                            generating business for the hospital.
                      (E) Patient safety.--In the case of a
                    hospital that does not offer emergency
                    services, the hospital has the capacity to--
                              (i) provide assessment and initial
                            treatment for medical emergencies; and
                              (ii) if the hospital lacks additional
                            capabilities required to treat the
                            emergency involved, refer and transfer
                            the patient with the medical emergency
                            to a hospital with the required
                            capability.
                      (F) Limitation on application to certain
                    converted facilities.--The hospital was not
                    converted from an ambulatory surgical center to
                    a hospital on or after the date of enactment of
                    this subsection.
              (2) Exception to prohibition on expansion of facility
            capacity.--
                      (A) Process.--
                              (i) Establishment.--The Secretary
                            shall establish and implement a process
                            under which a hospital may apply for an
                            exception from the requirement under
                            paragraph (1)(C).
                              (ii) Opportunity for community
                            input.--The process under clause (i)
                            shall provide persons and entities in
                            the community in which the hospital
                            applying for an exception is located
                            with the opportunity to provide input
                            with respect to the application.
                              (iii) Timing for implementation.--The
                            Secretary shall implement the process
                            under clause (i) on the date that is
                            one month after the promulgation of
                            regulations described in clause (iv).
                              (iv) Regulations.--Not later than the
                            first day of the month beginning 18
                            months after the date of the enactment
                            of this subsection, the Secretary shall
                            promulgate regulations to carry out the
                            process under clause (i). The Secretary
                            may issue such regulations as interim
                            final regulations.
                      (B) Frequency.--The process described in
                    subparagraph (A) shall permit a hospital to
                    apply for an exception up to once every 2
                    years.
                      (C) Permitted increase.--
                              (i) In general.--Subject to clause
                            (ii) and subparagraph (D), a hospital
                            granted an exception under the process
                            described in subparagraph (A) may
                            increase the number of operating rooms,
                            procedure rooms, or beds of the
                            hospital above the baseline number of
                            operating rooms, procedure rooms, or
                            beds, respectively, of the hospital
                            (or, if the hospital has been granted a
                            previous exception under this
                            paragraph, above the number of
                            operating rooms, procedure rooms, or
                            beds, respectively, of the hospital
                            after the application of the most
                            recent increase under such an
                            exception).
                              (ii) 100 percent increase
                            limitation.--The Secretary shall not
                            permit an increase in the number of
                            operating rooms, procedure rooms, or
                            beds of a hospital under clause (i) to
                            the extent such increase would result
                            in the number of operating rooms,
                            procedure rooms, or beds of the
                            hospital exceeding 200 percent of the
                            baseline number of operating rooms,
                            procedure rooms, or beds of the
                            hospital.
                              (iii) Baseline number of operating
                            rooms, procedure rooms, or beds.--In
                            this paragraph, the term ``baseline
                            number of operating rooms, procedure
                            rooms, or beds'' means the number of
                            operating rooms, procedure rooms, or
                            beds of a hospital as of the date of
                            enactment of this subsection.
                      (D) Increase limited to facilities on the
                    main campus of the hospital.--Any increase in
                    the number of operating rooms, procedure rooms,
                    or beds of a hospital pursuant to this
                    paragraph may only occur in facilities on the
                    main campus of the hospital.
                      (E) Conditions for approval of an increase in
                    facility capacity.--The Secretary may grant an
                    exception under the process described in
                    subparagraph (A) only to a hospital--
                              (i) that is located in a county in
                            which the percentage increase in the
                            population during the most recent 5-
                            year period for which data are
                            available is estimated to be at least
                            150 percent of the percentage increase
                            in the population growth of the State
                            in which the hospital is located during
                            that period, as estimated by Bureau of
                            the Census and available to the
                            Secretary;
                              (ii) whose annual percent of total
                            inpatient admissions that represent
                            inpatient admissions under the program
                            under title XIX is estimated to be
                            equal to or greater than the average
                            percent with respect to such admissions
                            for all hospitals located in the county
                            in which the hospital is located;
                              (iii) that does not discriminate
                            against beneficiaries of Federal health
                            care programs and does not permit
                            physicians practicing at the hospital
                            to discriminate against such
                            beneficiaries;
                              (iv) that is located in a State in
                            which the average bed capacity in the
                            State is estimated to be less than the
                            national average bed capacity;
                              (v) that has an average bed occupancy
                            rate that is estimated to be greater
                            than the average bed occupancy rate in
                            the State in which the hospital is
                            located; and
                              (vi) that meets other conditions as
                            determined by the Secretary.
                      (F) Procedure rooms.--In this subsection, the
                    term ``procedure rooms'' includes rooms in
                    which catheterizations, angiographies,
                    angiograms, and endoscopies are furnished, but
                    such term shall not include emergency rooms or
                    departments (except for rooms in which
                    catheterizations, angiographies, angiograms,
                    and endoscopies are furnished).
                      (G) Publication of final decisions.--Not
                    later than 120 days after receiving a complete
                    application under this paragraph, the Secretary
                    shall publish on the public Internet website of
                    the Centers for Medicare & Medicaid Services
                    the final decision with respect to such
                    application.
                      (H) Limitation on review.--There shall be no
                    administrative or judicial review under section
                    1869, section 1878, or otherwise of the
                    exception process under this paragraph,
                    including the establishment of such process,
                    and any determination made under such process.
              (3) Physician owner or investor defined.--For
            purposes of this subsection and subsection (f)(2), the
            term ``physician owner or investor'' means a physician
            (or an immediate family member of such physician) with
            a direct or an indirect ownership or investment
            interest in the hospital.
              (4) Patient safety requirement.--In the case of a
            hospital to which the requirements of paragraph (1)
            apply, insofar as the hospital admits a patient and
            does not have any physician available on the premises
            24 hours per day, 7 days per week, before admitting the
            patient--
                      (A) the hospital shall disclose such fact to
                    the patient; and
                      (B) following such disclosure, the hospital
                    shall receive from the patient a signed
                    acknowledgment that the patient understands
                    such fact.
              (5) Clarification.--Nothing in this subsection shall
            be construed as preventing the Secretary from
            terminating a hospital's provider agreement if the
            hospital is not in compliance with regulations pursuant
            to section 1866.

               *       *       *       *       *       *       *

             MEDICARE COVERAGE FOR END STAGE RENAL DISEASE PATIENTS

      Sec. 1881. (a) * * *
      (b)(1) * * *

               *       *       *       *       *       *       *

      (14)(A) * * *
      (B) For purposes of this paragraph, the term ``renal dialysis
    services'' includes--
                      (i) * * *
                      (iii) other drugs and biologicals, including
                    oral drugs that are not the oral equivalent of
                    an intravenous drug (such as oral phosphate
                    binders and calcimimetics), that are furnished
                    to individuals for the treatment of end stage
                    renal disease and for which payment was (before
                    the application of this paragraph) made
                    separately under this title, and any oral
                    equivalent form of such drug or biological; and

               *       *       *       *       *       *       *

      (E)(i) * * *
      (ii) A provider of services or renal dialysis facility may
    make [a one-time election to be excluded from the phase-in] an
    election, with respect to 2011, 2012, or 2013, to be excluded
    from the phase-in (or the remainder of the phase-in) under
    clause (i) and be paid entirely based on the payment amount
    under the payment system under this paragraph for such year and
    for each subsequent year during the phase-in described in
    clause (i). Such an election shall be made prior to [January 1,
    2011] the first date of such year, in a form and manner and at
    a time specified by the Secretary, and is final and may not be
    rescinded.

               *       *       *       *       *       *       *

      (15) For purposes of evaluating or auditing payments made to
    renal dialysis facilities for items and services under this
    section under paragraph (1), each such renal dialysis facility,
    upon the request of the Secretary, shall provide to the
    Secretary access to information relating to any ownership or
    compensation arrangement between such facility and the medical
    director of such facility or between such facility and any
    physician.

               *       *       *       *       *       *       *

      (h) Quality Incentives in the End-Stage Renal Disease
    Program.--
              (1) * * *
              (2) Measures.--
                      (A) * * *
                      (B) Use of endorsed measures.--
                              (i) * * *
                              (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. The
                            Secretary shall submit such a non-
                            endorsed measure to the entity for
                            consideration for endorsement. If the
                            entity considers but does not endorse
                            such a measure and if the Secretary
                            does not phase-out use of such measure,
                            the Secretary shall include the
                            rationale for continued use of such a
                            measure in rulemaking.

               *       *       *       *       *       *       *

              (4) Performance standards.--
                      (A) * * *

               *       *       *       *       *       *       *

                      (E) Special rule.--The Secretary shall
                    initially use as the performance standard for
                    the measures specified under paragraph
                    (2)(A)(i) for a provider of services or a renal
                    dialysis facility the [lesser] greater of--
                              (i) * * *

               *       *       *       *       *       *       *

              PAYMENT TO HOSPITALS FOR INPATIENT HOSPITAL SERVICES

      Sec. 1886. (a) * * *
      (b)(1) * * *

               *       *       *       *       *       *       *

      (3)(A) * * *
      (B)(i) * * *

               *       *       *       *       *       *       *

      [(iii) For purposes of this subparagraph,] (iii)(I) For
    purposes of this subparagraph, subject to the productivity
    adjustment described in subclause (II), the term ``market
    basket percentage increase'' means, with respect to cost
    reporting periods and discharges occurring in a fiscal year,
    the percentage, estimated by the Secretary before the beginning
    of the period or fiscal year, by which the cost of the mix of
    goods and services (including personnel costs but excluding
    nonoperating costs) comprising routine, ancillary, and special
    care unit inpatient hospital services, based on an index of
    appropriately weighted indicators of changes in wages and
    prices which are representative of the mix of goods and
    services included in such inpatient hospital services, for the
    period or fiscal year will exceed the cost of such mix of goods
    and services for the preceding 12-month cost reporting period
    or fiscal year.
      (II) The productivity adjustment described in this subclause,
    with respect to an increase or change for a fiscal year or year
    or cost reporting period, or other annual period, is a
    productivity offset equal to the percentage change in the 10-
    year moving average of annual economy-wide private nonfarm
    business multi-factor productivity (as recently published
    before the promulgation of such increase for the year or period
    involved). Except as otherwise provided, any reference to the
    increase described in this clause shall be a reference to the
    percentage increase described in subclause (I) minus the
    percentage change under this subclause.

               *       *       *       *       *       *       *

      (viii)(I) For purposes of clause (i) for fiscal year 2007 and
    each subsequent fiscal year, in the case of a subsection (d)
    hospital that does not submit, to the Secretary in accordance
    with this clause, data required to be submitted on measures
    selected under this clause with respect to such a fiscal year,
    the applicable percentage increase under clause (i) for such
    fiscal year shall be reduced (but not below zero) by 2.0
    percentage points (or, beginning with fiscal year 2015, by one-
    quarter). Such reduction shall apply only with respect to the
    fiscal year involved and the Secretary shall not take into
    account such reduction in computing the applicable percentage
    increase under clause (i) for a subsequent fiscal year, and the
    Secretary and the Medicare Payment Advisory Commission shall
    carry out the requirements under section 5001(b) of the Deficit
    Reduction Act of 2005.

               *       *       *       *       *       *       *

      (ix)(I) For purposes of clause (i) for fiscal year 2015 and
    each subsequent fiscal year, in the case of an eligible
    hospital (as defined in subsection (n)(6)(A)) that is not a
    meaningful EHR user (as defined in subsection (n)(3)) for an
    EHR reporting period for such fiscal year, three-quarters of
    the applicable percentage increase otherwise applicable under
    clause (i) (determined without regard to clause (iii)(II) for
    such fiscal year shall be reduced (but not below zero) by 33\1/
    3\ percent for fiscal year 2015, 66\2/3\ percent for fiscal
    year 2016, and 100 percent for fiscal year 2017 and each
    subsequent fiscal year. Such reduction shall apply only with
    respect to the fiscal year involved and the Secretary shall not
    take into account such reduction in computing the applicable
    percentage increase under clause (i) for a subsequent fiscal
    year.

               *       *       *       *       *       *       *

      (x)(I) Subject to subclause (II), for purposes of reporting
    data on quality measures for inpatient hospital services
    furnished during fiscal year 2012 and each subsequent fiscal
    year, the quality measures specified under clause (viii) shall
    be measures selected by the Secretary from measures that have
    been endorsed by the entity with a contract with the Secretary
    under section 1890(a).
      (II) In the case of a specified area or medical topic
    determined appropriate by the Secretary for which a feasible
    and practical quality measure has not been endorsed by the
    entity with a contract under section 1890(a), the Secretary may
    specify a measure that is not so endorsed as long as due
    consideration is given to measures that have been endorsed or
    adopted by a consensus organization identified by the
    Secretary. The Secretary shall submit such a non-endorsed
    measure to the entity for consideration for endorsement. If the
    entity considers but does not endorse such a measure and if the
    Secretary does not phase-out use of such measure, the Secretary
    shall include the rationale for continued use of such a measure
    in rulemaking.

               *       *       *       *       *       *       *

      (d)(1) * * *

               *       *       *       *       *       *       *

      (5)(A) * * *
      (B) The Secretary shall provide for an additional payment
    amount for subsection (d) hospitals with indirect costs of
    medical education, in an amount computed in the same manner as
    the adjustment for such costs under regulations (in effect as
    of January 1, 1983) under subsection (a)(2), except as follows:
              (i) * * *

               *       *       *       *       *       *       *

              [(iv) Effective for discharges occurring on or after
            October 1, 1997] (iv)(I) Effective for discharges
            occurring on or after October 1, 1997, and before July
            1, 2009, all the time spent by an intern or resident in
            patient care activities under an approved medical
            residency training program at an entity in a
            nonhospital setting shall be counted towards the
            determination of full-time equivalency if the hospital
            incurs all, or substantially all, of the costs for the
            training program in that setting.
              (II) Effective for discharges occurring on or after
            July 1, 2009, all the time spent by an intern or
            resident in patient care activities at an entity in a
            nonprovider setting shall be counted towards the
            determination of full-time equivalency if the hospital
            incurs the costs of the stipends and fringe benefits of
            the intern or resident during the time the intern or
            resident spends in that setting.
              (v) In determining the adjustment with respect to a
            hospital for discharges occurring on or after October
            1, 1997, the total number of full-time equivalent
            interns and residents in the fields of allopathic and
            osteopathic medicine in either a hospital or
            nonhospital setting may not exceed the number (or, 130
            percent of such number in the case of a hospital
            located in a rural area) of such full-time equivalent
            interns and residents in the hospital with respect to
            the hospital's most recent cost reporting period ending
            on or before December 31, 1996. Rules similar to the
            rules of subsection (h)(4)(F)(ii) shall apply for
            purposes of this clause. The provisions of [subsection
            (h)(7)] subsections (h)(7) and (h)(8) shall apply with
            respect to the first sentence of this clause in the
            same manner as [it applies] they apply with respect to
            subsection (h)(4)(F)(i).

               *       *       *       *       *       *       *

              (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.
              (xi)(I) The provisions of subparagraph (I) of
            subsection (h)(4) shall apply under this subparagraph
            in the same manner as they apply under such subsection.
              (II) In determining the hospital's number of full-
            time equivalent residents for purposes of this
            subparagraph, all the time spent by an intern or
            resident in an approved medical residency training
            program in nonpatient care activities, such as didactic
            conferences and seminars, as such time and activities
            are defined by the Secretary, that occurs in the
            hospital shall be counted toward the determination of
            full-time equivalency if the hospital--
                      (aa) is recognized as a subsection (d)
                    hospital;
                      (bb) is recognized as a subsection (d) Puerto
                    Rico hospital;
                      (cc) is reimbursed under a reimbursement
                    system authorized under section 1814(b)(3); or
                      (dd) is a provider-based hospital outpatient
                    department.
              (III) In determining the hospital's number of full-
            time equivalent residents for purposes of this
            subparagraph, all the time spent by an intern or
            resident in an approved medical residency training
            program in research activities that are not associated
            with the treatment or diagnosis of a particular
            patient, as such time and activities are defined by the
            Secretary, shall not be counted toward the
            determination of full-time equivalency.

               *       *       *       *       *       *       *

      (h) Payments for Direct Graduate Medical Education Costs.--
              (1) Substitution of special payment rules.--
                      (A) In general.--Notwithstanding section
                    1861(v), instead of any amounts that are
                    otherwise payable under this title with respect
                    to the reasonable costs of hospitals for direct
                    graduate medical education costs, the Secretary
                    shall provide for payments for such costs in
                    accordance with paragraph (3) of this
                    subsection. In providing for such payments, the
                    Secretary shall provide for an allocation of
                    such payments between part A and part B (and
                    the trust funds established under the
                    respective parts) as reasonably reflects the
                    proportion of direct graduate medical education
                    costs of hospitals associated with the
                    provision of services under each respective
                    part.
                      (B) Goals and accountability for approved
                    medical residency training programs.--The goals
                    of medical residency training programs are to
                    foster a physician workforce so that physicians
                    are trained to be able to do the following:
                              (i) Work effectively in various
                            health care delivery settings, such as
                            nonprovider settings.
                              (ii) Coordinate patient care within
                            and across settings relevant to their
                            specialties.
                              (iii) Understand the relevant cost
                            and value of various diagnostic and
                            treatment options.
                              (iv) Work in inter-professional teams
                            and multi-disciplinary team-based
                            models in provider and nonprovider
                            settings to enhance safety and improve
                            quality of patient care.
                              (v) Be knowledgeable in methods of
                            identifying systematic errors in health
                            care delivery and in implementing
                            systematic solutions in case of such
                            errors, including experience and
                            participation in continuous quality
                            improvement projects to improve health
                            outcomes of the population the
                            physicians serve.
                              (vi) Be meaningful EHR users (as
                            determined under section 1848(o)(2)) in
                            the delivery of care and in improving
                            the quality of the health of the
                            community and the individuals that the
                            hospital serves.

               *       *       *       *       *       *       *

              (4) Determination of full-time-equivalent
            residents.--
                      (A) * * *

               *       *       *       *       *       *       *

                      (E) Counting time spent in outpatient
                    settings.--[Such rules]
                              (i) In general.--Subject to clause
                            (ii), such rules shall provide that
                            only time spent in activities relating
                            to patient care [shall be counted and
                            that all the time] shall be counted and
                            that--
                                      (I) effective for cost
                                    reporting periods beginning
                                    before July 1, 2009, all the
                                    time so spent by a resident
                                    under an approved medical
                                    residency training program
                                    shall be counted towards the
                                    determination of full-time
                                    equivalency, without regard to
                                    the setting in which the
                                    activities are performed, if
                                    the hospital incurs all, or
                                    substantially all, of the costs
                                    for the training program in
                                    that setting[.]; and
                                      (II) effective for cost
                                    reporting periods beginning on
                                    or after July 1, 2009, all the
                                    time so spent by a resident
                                    shall be counted towards the
                                    determination of full-time
                                    equivalency, without regard to
                                    the setting in which the
                                    activities are performed, if
                                    the hospital incurs the costs
                                    of the stipends and fringe
                                    benefits of the resident during
                                    the time the resident spends in
                                    that setting.
                            Any hospital claiming under this
                            subparagraph for time spent in a
                            nonprovider setting shall maintain and
                            make available to the Secretary records
                            regarding the amount of such time and
                            such amount in comparison with amounts
                            of such time in such base year as the
                            Secretary shall specify.
                              (ii) Treatment of certain nonprovider
                            and didactic activities.--Such rules
                            shall provide that all time spent by an
                            intern or resident in an approved
                            medical residency training program in a
                            nonprovider setting that is primarily
                            engaged in furnishing patient care (as
                            defined in paragraph (5)(K)) in
                            nonpatient care activities, such as
                            didactic conferences and seminars, but
                            not including research not associated
                            with the treatment or diagnosis of a
                            particular patient, as such time and
                            activities are defined by the
                            Secretary, shall be counted toward the
                            determination of full-time equivalency.
                      (F) Limitation on number of residents in
                    allopathic and osteopathic medicine.--
                              (i) In general.--Such rules shall
                            provide that for purposes of a cost
                            reporting period beginning on or after
                            October 1, 1997, subject to [paragraph
                            (7)] paragraphs (7) and (8), the total
                            number of full-time equivalent
                            residents before application of
                            weighting factors (as determined under
                            this paragraph) with respect to a
                            hospital's approved medical residency
                            training program in the fields of
                            allopathic medicine and osteopathic
                            medicine may not exceed the number (or,
                            130 percent of such number in the case
                            of a hospital located in a rural area)
                            of such full-time equivalent residents
                            for the hospital's most recent cost
                            reporting period ending on or before
                            December 31, 1996.

               *       *       *       *       *       *       *

                      (H) Special rules for application of
                    subparagraphs (f) and (g).--
                              (i) New facilities.--The Secretary
                            shall, consistent with the principles
                            of subparagraphs (F) and (G) and
                            subject to [paragraph (7)] paragraphs
                            (7) and (8), prescribe rules for the
                            application of such subparagraphs in
                            the case of medical residency training
                            programs established on or after
                            January 1, 1995. In promulgating such
                            rules for purposes of subparagraph (F),
                            the Secretary shall give special
                            consideration to facilities that meet
                            the needs of underserved rural areas.

               *       *       *       *       *       *       *

                              (vi) Redistribution of residency
                            slots after a hospital closes.--
                                      (I) In general.--The
                                    Secretary shall, by regulation,
                                    establish a process consistent
                                    with subclauses (II) and (III)
                                    under which, in the case where
                                    a hospital (other than a
                                    hospital described in clause
                                    (v)) with an approved medical
                                    residency program in a State
                                    closes on or after the date
                                    that is 2 years before the date
                                    of the enactment of this
                                    clause, the Secretary shall
                                    increase the otherwise
                                    applicable resident limit under
                                    this paragraph for other
                                    hospitals in the State in
                                    accordance with this clause.
                                      (II) Process for hospitals in
                                    certain areas.--In determining
                                    for which hospitals the
                                    increase in the otherwise
                                    applicable resident limit
                                    described in subclause (I) is
                                    provided, the Secretary shall
                                    establish a process to provide
                                    for such increase to one or
                                    more hospitals located in the
                                    State. Such process shall take
                                    into consideration the
                                    recommendations submitted to
                                    the Secretary by the senior
                                    health official (as designated
                                    by the chief executive officer
                                    of such State) if such
                                    recommendations are submitted
                                    not later than 180 days after
                                    the date of the hospital
                                    closure involved (or, in the
                                    case of a hospital that closed
                                    after the date that is 2 years
                                    before the date of the
                                    enactment of this clause, 180
                                    days after such date of
                                    enactment).
                                      (III) Limitation.--The
                                    estimated aggregate number of
                                    increases in the otherwise
                                    applicable resident limits for
                                    hospitals under this clause
                                    shall be equal to the estimated
                                    number of resident positions in
                                    the approved medical residency
                                    programs that closed on or
                                    after the date described in
                                    subclause (I).
                      (I) Treatment of certain time in aproved
                    medical residency training program.--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.
              (5) Definitions and special rules.--As used in this
            subsection:
                      (A) * * *

               *       *       *       *       *       *       *

                      (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.

               *       *       *       *       *       *       *

              (7) Redistribution of unused resident positions.--
                      (A) * * *

               *       *       *       *       *       *       *

                      (E) Judicial review.--There shall be no
                    administrative or judicial review under section
                    1869, 1878, or otherwise, with respect to
                    determinations made under this paragraph or
                    under paragraph (4)(H)(vi) and paragraph (8).
              (8) Additional redistribution of unused residency
            positions.--
                      (A) Reductions in limit based on unused
                    positions.--
                              (i) Programs subject to reduction.--
                            If a hospital's reference resident
                            level (specified in clause (ii)) is
                            less than the otherwise applicable
                            resident limit (as defined in
                            subparagraph (C)(ii)), effective for
                            portions of cost reporting periods
                            occurring on or after July 1, 2011, the
                            otherwise applicable resident limit
                            shall be reduced by 90 percent of the
                            difference between such otherwise
                            applicable resident limit and such
                            reference resident level.
                              (ii) Reference resident level.--
                                      (I) In general.--Except as
                                    otherwise provided in a
                                    subsequent subclause, the
                                    reference resident level
                                    specified in this clause for a
                                    hospital is the highest
                                    resident level for any of the 3
                                    most recent cost reporting
                                    periods (ending before the date
                                    of the enactment of this
                                    paragraph) of the hospital for
                                    which a cost report has been
                                    settled (or, if not, submitted
                                    (subject to audit)), as
                                    determined by the Secretary.
                                      (II) Use of most recent
                                    accounting period to recognize
                                    expansion of existing
                                    programs.--If a hospital
                                    submits a timely request to
                                    increase its resident level due
                                    to an expansion, or planned
                                    expansion, of an existing
                                    residency training program that
                                    is not reflected on the most
                                    recent settled or submitted
                                    cost report, after audit and
                                    subject to the discretion of
                                    the Secretary, subject to
                                    subclause (IV), the reference
                                    resident level for such
                                    hospital is the resident level
                                    that includes the additional
                                    residents attributable to such
                                    expansion or establishment, as
                                    determined by the Secretary.
                                    The Secretary is authorized to
                                    determine an alternative
                                    reference resident level for a
                                    hospital that submitted to the
                                    Secretary a timely request,
                                    before the start of the 2009-
                                    2010 academic year, for an
                                    increase in its reference
                                    resident level due to a planned
                                    expansion.
                                      (III) Special provider
                                    agreement.--In the case of a
                                    hospital described in paragraph
                                    (4)(H)(v), the reference
                                    resident level specified in
                                    this clause is the limitation
                                    applicable under subclause (I)
                                    of such paragraph.
                                      (IV) Previous
                                    redistribution.--The reference
                                    resident level specified in
                                    this clause for a hospital
                                    shall be increased to the
                                    extent required to take into
                                    account an increase in resident
                                    positions made available to the
                                    hospital under paragraph (7)(B)
                                    that are not otherwise taken
                                    into account under a previous
                                    subclause.
                              (iii) Affiliation.--The provisions of
                            clause (i) shall be applied to
                            hospitals which are members of the same
                            affiliated group (as defined by the
                            Secretary under paragraph (4)(H)(ii))
                            and to the extent the hospitals can
                            demonstrate that they are filling any
                            additional  resident slots allocated to
                            other hospitals through an affiliation
                            agreement, the Secretary shall adjust
                            the determination of available slots
                            accordingly, or which the Secretary
                            otherwise has permitted the resident
                            positions (under section 402 of the
                            Social Security Amendments of 1967) to
                            be aggregated for purposes of applying
                            the resident position limitations under
                            this subsection.
                      (B) Redistribution.--
                              (i) In general.--The Secretary shall
                            increase the otherwise applicable
                            resident limit for each qualifying
                            hospital that submits an application
                            under this subparagraph by such number
                            as the Secretary may approve for
                            portions of cost reporting periods
                            occurring on or after July 1, 2011. The
                            estimated aggregate number of increases
                            in the otherwise applicable resident
                            limit under this subparagraph may not
                            exceed the Secretary's estimate of the
                            aggregate reduction in such limits
                            attributable to subparagraph (A).
                              (ii) Requirements for qualifying
                            hospitals.--A hospital is not a
                            qualifying hospital for purposes of
                            this paragraph unless the following
                            requirements are met:
                                      (I) Maintenance of primary
                                    care resident level.--The
                                    hospital maintains the number
                                    of primary care residents at a
                                    level that is not less than the
                                    base level of primary care
                                    residents increased by the
                                    number of additional primary
                                    care resident positions
                                    provided to the hospital under
                                    this subparagraph. For purposes
                                    of this subparagraph, the
                                    ``base level of primary care
                                    residents'' for a hospital is
                                    the level of such residents as
                                    of a base period (specified by
                                    the Secretary), determined
                                    without regard to whether such
                                    positions were in excess of the
                                    otherwise applicable resident
                                    limit for such period but
                                    taking into account the
                                    application of subclauses (II)
                                    and (III) of subparagraph
                                    (A)(ii).
                                      (II) Dedicated assignment of
                                    additional resident positions
                                    to primary care.--The hospital
                                    assigns all such additional
                                    resident positions for primary
                                    care residents.
                                      (III) Accreditation.--The
                                    hospital's residency programs
                                    in primary care are fully
                                    accredited or, in the case of a
                                    residency training program not
                                    in operation as of the base
                                    year, the hospital is actively
                                    applying for such accreditation
                                    for the program for such
                                    additional resident positions
                                    (as determined by the
                                    Secretary).
                              (iii) Considerations in
                            redistribution.--In determining for
                            which qualifying hospitals the increase
                            in the otherwise applicable resident
                            limit is provided under this
                            subparagraph, the Secretary shall take
                            into account the demonstrated
                            likelihood of the hospital filling the
                            positions within the first 3 cost
                            reporting periods beginning on or after
                            July 1, 2011, made available under this
                            subparagraph, as determined by the
                            Secretary.
                              (iv) Priority for certain
                            hospitals.--In determining for which
                            qualifying hospitals the increase in
                            the otherwise applicable resident limit
                            is provided under this subparagraph,
                            the Secretary shall distribute the
                            increase to qualifying hospitals based
                            on the following criteria:
                                      (I) The Secretary shall give
                                    preference to hospitals that
                                    had a reduction in resident
                                    training positions under
                                    subparagraph (A).
                                      (II) The Secretary shall give
                                    preference to hospitals with 3-
                                    year primary care residency
                                    training programs, such as
                                    family practice and general
                                    internal medicine.
                                      (III) The Secretary shall
                                    give preference to hospitals
                                    insofar as they have in effect
                                    formal arrangements (as
                                    determined by the Secretary)
                                    that place greater emphasis
                                    upon training in Federally
                                    qualified health centers, rural
                                    health clinics, and other
                                    nonprovider settings, and to
                                    hospitals that receive
                                    additional payments under
                                    subsection (d)(5)(F) and
                                    emphasize training in an
                                    outpatient department.
                                      (IV) The Secretary shall give
                                    preference to hospitals with a
                                    number of positions (as of July
                                    1, 2009) in excess of the
                                    otherwise applicable resident
                                    limit for such period.
                                      (V) The Secretary shall give
                                    preference to hospitals that
                                    place greater emphasis upon
                                    training in a health
                                    professional shortage area
                                    (designated under section 332
                                    of the Public Health Service
                                    Act) or a health professional
                                    needs area (designated under
                                    section 2211 of such Act).
                                      (VI) The Secretary shall give
                                    preference to hospitals in
                                    States that have low resident-
                                    to-population ratios (including
                                    a greater preference for those
                                    States with lower resident-to-
                                    population ratios).
                              (v) Limitation.--In no case shall
                            more than 20 full-time equivalent
                            additional residency positions be made
                            available under this subparagraph with
                            respect to any hospital.
                              (vi) Application of per resident
                            amounts for primary care.--With respect
                            to additional residency positions in a
                            hospital attributable to the increase
                            provided under this subparagraph, the
                            approved FTE resident amounts are
                            deemed to be equal to the hospital per
                            resident amounts for primary care and
                            nonprimary care computed under
                            paragraph (2)(D) for that hospital.
                              (vi) Distribution.--The Secretary
                            shall distribute the increase in
                            resident training positions to
                            qualifying hospitals under this
                            subparagraph not later than July 1,
                            2011.
                      (C) Resident level and limit defined.--In
                    this paragraph:
                              (i) The term ``resident level'' has
                            the meaning given such term in
                            paragraph (7)(C)(i).
                              (ii) The term ``otherwise applicable
                            resident limit'' means, with respect to
                            a hospital, the limit otherwise
                            applicable under subparagraphs (F)(i)
                            and (H) of paragraph (4) on the
                            resident level for the hospital
                            determined without regard to this
                            paragraph but taking into account
                            paragraph (7)(A).
                      (D) Maintenance of primary care resident
                    level.--In carrying out this paragraph, the
                    Secretary shall require hospitals that receive
                    additional resident positions under
                    subparagraph (B)--
                              (i) to maintain records, and
                            periodically report to the Secretary,
                            on the number of primary care residents
                            in its residency training programs; and
                              (ii) as a condition of payment for a
                            cost reporting period under this
                            subsection for such positions, to
                            maintain the level of such positions at
                            not less than the sum of--
                                      (I) the base level of primary
                                    care resident positions (as
                                    determined under subparagraph
                                    (B)(ii)(I)) before receiving
                                    such additional positions; and
                                      (II) the number of such
                                    additional positions.

               *       *       *       *       *       *       *

      (j) Prospective Payment for Inpatient Rehabilitation
    Services.--
              (1) * * *

               *       *       *       *       *       *       *

              (3) Payment rate.--
                      (A) * * *

               *       *       *       *       *       *       *

                      (C) Increase factor.--For purposes of this
                    subsection for payment units in each fiscal
                    year (beginning with fiscal year 2001), the
                    Secretary shall establish an increase factor.
                    Such factor shall be based on an appropriate
                    percentage increase (subject to the
                    productivity adjustment described in subsection
                    (b)(3)(B)(iii)(II)) in a market basket of goods
                    and services comprising services for which
                    payment is made under this subsection, which
                    may be the market basket percentage increase
                    described in subsection (b)(3)(B)(iii). The
                    increase factor to be applied under this
                    subparagraph for each of fiscal years 2008 [and
                    2009] through 2010 shall be 0 percent.

               *       *       *       *       *       *       *

      (m) Prospective Payment for Long-Term Care Hospitals.--
              (1) * * *

               *       *       *       *       *       *       *

              (3) Productivity adjustment.--In implementing the
            system described in paragraph (1) for discharges
            occurring during the rate year ending in 2010 or any
            subsequent rate year for a hospital, to the extent that
            an annual percentage increase factor applies to a base
            rate for such discharges for the hospital, such factor
            shall be subject to the productivity adjustment
            described in subsection (b)(3)(B)(iii)(II).

               *       *       *       *       *       *       *

      (o) Prospective Payment for Psychiatric Hospitals.--
              (1) Reference to establishment and implementation of
            system.--For provisions related to the establishment
            and implementation of a prospective payment system for
            payments under this title for inpatient hospital
            services furnished by psychiatric hospitals (as
            described in clause (i) of subsection (d)(1)(B)) and
            psychiatric units (as described in the matter following
            clause (v) of such subsection), see section 124 of the
            Medicare, Medicaid, and SCHIP Balanced Budget
            Refinement Act of 1999.
              (2) Productivity adjustment.--In implementing the
            system described in paragraph (1) for discharges
            occurring during the rate year ending in 2011 or any
            subsequent rate year for a psychiatric hospital or unit
            described in such paragraph, to the extent that an
            annual percentage increase factor applies to a base
            rate for such discharges for the hospital or unit,
            respectively, such factor shall be subject to the
            productivity adjustment described in subsection
            (b)(3)(B)(iii)(II).
      (p) Adjustment to Hospital Payments for Excess
    Readmissions.--
              (1) In general.--With respect to payment for
            discharges from an applicable hospital (as defined in
            paragraph (5)(C)) occurring during a fiscal year
            beginning on or after October 1, 2011, in order to
            account for excess readmissions in the hospital, the
            Secretary shall reduce the payments that would
            otherwise be made to such hospital under subsection (d)
            (or section 1814(b)(3), as the case may be) for such a
            discharge by an amount equal to the product of--
                      (A) the base operating DRG payment amount (as
                    defined in paragraph (2)) for the discharge;
                    and
                      (B) the adjustment factor (described in
                    paragraph (3)(A)) for the hospital for the
                    fiscal year.
              (2) Base operating drg payment amount.--
                      (A) In general.--Except as provided in
                    subparagraph (B), for purposes of this
                    subsection, the term ``base operating DRG
                    payment amount'' means, with respect to a
                    hospital for a fiscal year, the payment amount
                    that would otherwise be made under subsection
                    (d) for a discharge if this subsection did not
                    apply, reduced by any portion of such amount
                    that is attributable to payments under
                    subparagraphs (B) and (F) of paragraph (5).
                      (B) Adjustments.--For purposes of
                    subparagraph (A), in the case of a hospital
                    that is paid under section 1814(b)(3), the term
                    ``base operating DRG payment amount'' means the
                    payment amount under such section.
              (3) Adjustment factor.--
                      (A) In general.--For purposes of paragraph
                    (1), the adjustment factor under this paragraph
                    for an applicable hospital for a fiscal year is
                    equal to the greater of--
                              (i) the ratio described in
                            subparagraph (B) for the hospital for
                            the applicable period (as defined in
                            paragraph (5)(D)) for such fiscal year;
                            or
                              (ii) the floor adjustment factor
                            specified in subparagraph (C).
                      (B) Ratio.--The ratio described in this
                    subparagraph for a hospital for an applicable
                    period is equal to 1 minus the ratio of--
                              (i) the aggregate payments for excess
                            readmissions (as defined in paragraph
                            (4)(A)) with respect to an applicable
                            hospital for the applicable period; and
                              (ii) the aggregate payments for all
                            discharges (as defined in paragraph
                            (4)(B)) with respect to such applicable
                            hospital for such applicable period.
                      (C) Floor adjustment factor.--For purposes of
                    subparagraph (A), the floor adjustment factor
                    specified in this subparagraph for--
                              (i) fiscal year 2012 is 0.99;
                              (ii) fiscal year 2013 is 0.98;
                              (iii) fiscal year 2014 is 0.97; or
                              (iv) a subsequent fiscal year is
                            0.95.
              (4) Aggregate payments, excess readmission ratio
            defined.--For purposes of this subsection:
                      (A) Aggregate payments for excess
                    readmissions.--The term ``aggregate payments
                    for excess readmissions'' means, for a hospital
                    for a fiscal year, the sum, for applicable
                    conditions (as defined in paragraph (5)(A)), of
                    the product, for each applicable condition,
                    of--
                              (i) the base operating DRG payment
                            amount for such hospital for such
                            fiscal year for such condition;
                              (ii) the number of admissions for
                            such condition for such hospital for
                            such fiscal year; and
                              (iii) the excess readmissions ratio
                            (as defined in subparagraph (C)) for
                            such hospital for the applicable period
                            for such fiscal year minus 1.
                      (B) Aggregate payments for all discharges.--
                    The term ``aggregate payments for all
                    discharges'' means, for a hospital for a fiscal
                    year, the sum of the base operating DRG payment
                    amounts for all discharges for all conditions
                    from such hospital for such fiscal year.
                      (C) Excess readmission ratio.--
                              (i) In general.--Subject to clauses
                            (ii) and (iii), the term ``excess
                            readmissions ratio'' means, with
                            respect to an applicable condition for
                            a hospital for an applicable period,
                            the ratio (but not less than 1.0) of--
                                      (I) the risk adjusted
                                    readmissions based on actual
                                    readmissions, as determined
                                    consistent with a readmission
                                    measure methodology that has
                                    been endorsed under paragraph
                                    (5)(A)(ii)(I), for an
                                    applicable hospital for such
                                    condition with respect to the
                                    applicable period; to
                                      (II) the risk adjusted
                                    expected readmissions (as
                                    determined consistent with such
                                    a methodology) for such
                                    hospital for such condition
                                    with respect to such applicable
                                    period.
                              (ii) Exclusion of certain
                            readmissions.--For purposes of clause
                            (i), with respect to a hospital, excess
                            readmissions shall not include
                            readmissions for an applicable
                            condition for which there are fewer
                            than a minimum number (as determined by
                            the Secretary) of discharges for such
                            applicable condition for the applicable
                            period and such hospital.
                              (iii) Adjustment.--In order to
                            promote a reduction over time in the
                            overall rate of readmissions for
                            applicable conditions, the Secretary
                            may provide, beginning with discharges
                            for fiscal year 2014, for the
                            determination of the excess
                            readmissions ratio under subparagraph
                            (C) to be based on a ranking of
                            hospitals by readmission ratios (from
                            lower to higher readmission ratios)
                            normalized to a benchmark that is lower
                            than the 50th percentile.
              (5) Definitions.--For purposes of this subsection:
                      (A) Applicable condition.--The term
                    ``applicable condition'' means, subject to
                    subparagraph (B), a condition or procedure
                    selected by the Secretary among conditions and
                    procedures for which--
                              (i) readmissions (as defined in
                            subparagraph (E)) that represent
                            conditions or procedures that are high
                            volume or high expenditures under this
                            title (or other criteria specified by
                            the Secretary); and
                              (ii) measures of such readmissions--
                                      (I) have been endorsed by the
                                    entity with a contract under
                                    section 1890(a); and
                                      (II) such endorsed measures
                                    have appropriate exclusions for
                                    readmissions that are unrelated
                                    to the prior discharge (such as
                                    a planned readmission or
                                    transfer to another applicable
                                    hospital).
                      (B) Expansion of applicable conditions.--
                    Beginning with fiscal year 2013, the Secretary
                    shall expand the applicable conditions beyond
                    the 3 conditions for which measures have been
                    endorsed as described in subparagraph
                    (A)(ii)(I) as of the date of the enactment of
                    this subsection to the additional 4 conditions
                    that have been so identified by the Medicare
                    Payment Advisory Commission in its report to
                    Congress in June 2007 and to other conditions
                    and procedures which may include an all-
                    condition measure of readmissions, as
                    determined appropriate by the Secretary. In
                    expanding such applicable conditions, the
                    Secretary shall seek the endorsement described
                    in subparagraph (A)(ii)(I) but may apply such
                    measures without such an endorsement.
                      (C) Applicable hospital.--The term
                    ``applicable hospital'' means a subsection (d)
                    hospital or a hospital that is paid under
                    section 1814(b)(3).
                      (D) Applicable period.--The term ``applicable
                    period'' means, with respect to a fiscal year,
                    such period as the Secretary shall specify for
                    purposes of determining excess readmissions.
                      (E) Readmission.--The term ``readmission''
                    means, in the case of an individual who is
                    discharged from an applicable hospital, the
                    admission of the individual to the same or
                    another applicable hospital within a time
                    period specified by the Secretary from the date
                    of such discharge. Insofar as the discharge
                    relates to an applicable condition for which
                    there is an endorsed measure described in
                    subparagraph (A)(ii)(I), such time period (such
                    as 30 days) shall be consistent with the time
                    period specified for such measure.
              (6) Limitations on review.--There shall be no
            administrative or judicial review under section 1869,
            section 1878, or otherwise of--
                      (A) the determination of base operating DRG
                    payment amounts;
                      (B) the methodology for determining the
                    adjustment factor under paragraph (3),
                    including excess readmissions ratio under
                    paragraph (4)(C), aggregate payments for excess
                    readmissions under paragraph (4)(A), and
                    aggregate payments for all discharges under
                    paragraph (4)(B), and applicable periods and
                    applicable conditions under paragraph (5);
                      (C) the measures of readmissions as described
                    in paragraph (5)(A)(ii); and
                      (D) the determination of a targeted hospital
                    under paragraph (8)(B)(i), the increase in
                    payment under paragraph (8)(B)(ii), the
                    aggregate cap under paragraph (8)(C)(i), the
                    hospital-specific limit under paragraph
                    (8)(C)(ii), and the form of payment made by the
                    Secretary under paragraph (8)(D).
              (7) Monitoring inappropriate changes in admissions
            practices.--The Secretary shall monitor the activities
            of applicable hospitals to determine if such hospitals
            have taken steps to avoid patients at risk in order to
            reduce the likelihood of increasing readmissions for
            applicable conditions. If the Secretary determines that
            such a hospital has taken such a step, after notice to
            the hospital and opportunity for the hospital to
            undertake action to alleviate such steps, the Secretary
            may impose an appropriate sanction.
              (8) Assistance to certain hospitals.--
                      (A) In general.--For purposes of providing
                    funds to applicable hospitals to take steps
                    described in subparagraph (E) to address
                    factors that may impact readmissions of
                    individuals who are discharged from such a
                    hospital, for fiscal years beginning on or
                    after October 1, 2011, the Secretary shall make
                    a payment adjustment for a hospital described
                    in subparagraph (B), with respect to each such
                    fiscal year, by a percent estimated by the
                    Secretary to be consistent with subparagraph
                    (C).
                      (B) Targeted hospitals.--Subparagraph (A)
                    shall apply to an applicable hospital that--
                              (i) received (or, in the case of an
                            1814(b)(3) hospital, otherwise would
                            have been eligible to receive)
                            $10,000,000 or more in disproportionate
                            share payments using the latest
                            available data as estimated by the
                            Secretary; and
                              (ii) provides assurances satisfactory
                            to the Secretary that the increase in
                            payment under this paragraph shall be
                            used for purposes described in
                            subparagraph (E).
                      (C) Caps.--
                              (i) Aggregate cap.--The aggregate
                            amount of the payment adjustment under
                            this paragraph for a fiscal year shall
                            not exceed 5 percent of the estimated
                            difference in the spending that would
                            occur for such fiscal year with and
                            without application of the adjustment
                            factor described in paragraph (3) and
                            applied pursuant to paragraph (1).
                              (ii) Hospital-specific limit.--The
                            aggregate amount of the payment
                            adjustment for a hospital under this
                            paragraph shall not exceed the
                            estimated difference in spending that
                            would occur for such fiscal year for
                            such hospital with and without
                            application of the adjustment factor
                            described in paragraph (3) and applied
                            pursuant to paragraph (1).
                      (D) Form of payment.--The Secretary may make
                    the additional payments under this paragraph on
                    a lump sum basis, a periodic basis, a claim by
                    claim basis, or otherwise.
                      (E) Use of additional payment.--Funding under
                    this paragraph shall be used by targeted
                    hospitals for transitional care activities
                    designed to address the patient noncompliance
                    issues that result in higher than normal
                    readmission rates, such as one or more of the
                    following:
                              (i) Providing care coordination
                            services to assist in transitions from
                            the targeted hospital to other
                            settings.
                              (ii) Hiring translators and
                            interpreters.
                              (iii) Increasing services offered by
                            discharge planners.
                              (iv) Ensuring that individuals
                            receive a summary of care and
                            medication orders upon discharge.
                              (v) Developing a quality improvement
                            plan to assess and remedy preventable
                            readmission rates.
                              (vi) Assigning discharged individuals
                            to a medical home.
                              (vii) Doing other activities as
                            determined appropriate by the
                            Secretary.
                      (F) GAO report on use of funds.--Not later
                    than 3 years after the date on which funds are
                    first made available under this paragraph, the
                    Comptroller General of the United States shall
                    submit to Congress a report on the use of such
                    funds.
                      (G) Disproportionate share hospital
                    payment.--In this paragraph, the term
                    ``disproportionate share hospital payment''
                    means an additional payment amount under
                    subsection (d)(5)(F).

               *       *       *       *       *       *       *

        PAYMENT TO SKILLED NURSING FACILITIES FOR ROUTINE SERVICE COSTS

      Sec. 1888. (a) * * *

               *       *       *       *       *       *       *

      (e) Prospective Payment.--
              (1) * * *
              (2) Definitions.--For purposes of this subsection:
                      (A) Covered skilled nursing facility
                    services.--
                              (i) * * *
                              (ii) Services excluded.--Services
                            described in this clause are
                            physicians' services, services
                            described by clauses (i) and (ii) of
                            section 1861(s)(2)(K), certified nurse-
                            midwife services, qualified
                            psychologist services, clinical social
                            worker services, marriage and family
                            therapist services (as defined in
                            subsection (jjj)(1)), mental health
                            counselor services (as defined in
                            section 1861(kkk)(1)), services of a
                            certified registered nurse anesthetist,
                            items and services described in
                            subparagraphs (F) and (O) of section
                            1861(s)(2), telehealth services
                            furnished under section
                            1834(m)(4)(C)(ii)(VII), and, only with
                            respect to services furnished during
                            1998, the transportation costs of
                            electrocardiogram equipment for
                            electrocardiogram test services (HCPCS
                            Code R0076). Services described in this
                            clause do not include any physical,
                            occupational, or speech-language
                            therapy services regardless of whether
                            or not the services are furnished by,
                            or under the supervision of, a
                            physician or other health care
                            professional.

               *       *       *       *       *       *       *

              (4) Federal per diem rate.--
                      (A) * * *

               *       *       *       *       *       *       *

                      (E) Updating.--
                              (i) * * *
                              (ii) Subsequent fiscal years.--The
                            Secretary shall compute an unadjusted
                            Federal per diem rate equal to the
                            Federal per diem rate computed under
                            this subparagraph--
                                      (I) * * *

               *       *       *       *       *       *       *

                                      (III) for each of fiscal
                                    years 2002 and 2003, the rate
                                    computed for the previous
                                    fiscal year increased by the
                                    skilled nursing facility market
                                    basket percentage change for
                                    the fiscal year involved minus
                                    0.5 percentage points; [and]
                                      (IV) for each of fiscal years
                                    2004 through 2009, the rate
                                    computed for the previous
                                    fiscal year increased by the
                                    skilled nursing facility market
                                    basket percentage change for
                                    the fiscal year involved;
                                      (V) for fiscal year 2010, the
                                    rate computed for the previous
                                    fiscal year; and
                                      [(IV)] (VI) for each
                                    subsequent fiscal year, the
                                    rate computed for the previous
                                    fiscal year increased by the
                                    skilled nursing facility market
                                    basket percentage change for
                                    the fiscal year involved.

               *       *       *       *       *       *       *

              (5) Skilled nursing facility market basket index and
            percentage.--For purposes of this subsection:
                      (A) * * *
                      (B) Skilled nursing facility market basket
                    percentage.--The term ``skilled nursing
                    facility market basket percentage'' means, for
                    a fiscal year or other annual period and as
                    calculated by the Secretary subject to the
                    productivity adjustment described in section
                    1886(b)(3)(B)(iii)(II), the percentage change
                    in the skilled nursing facility market basket
                    index (established under subparagraph (A)) from
                    the midpoint of the prior fiscal year (or
                    period) to the midpoint of the fiscal year (or
                    other period) involved.

               *       *       *       *       *       *       *

              (8) Limitation on review.--There shall be no
            administrative or judicial review under section 1869,
            1878, or otherwise of--
                      (A) the establishment of Federal per diem
                    rates under paragraph (4), including the
                    computation of the standardized per diem rates
                    under paragraph (4)(C), adjustments and
                    corrections for case mix under paragraphs
                    (4)(F) and (4)(G)(i), adjustments for
                    variations in labor-related costs under
                    paragraph (4)(G)(ii), [and] adjustments under
                    paragraph (4)(G)(iii), and adjustment under
                    section 1111(b) of the America's Affordable
                    Health Choices Act of 2009;
                      (B) the establishment of facility specific
                    rates before July 1, 1999 (except any
                    determination of costs paid under part A of
                    this title); [and]
                      (C) the establishment of transitional amounts
                    under paragraph (7)[.]; and
                      (D) the establishment of outliers under
                    paragraph (13).

               *       *       *       *       *       *       *

              (13) Outliers for nta and therapy.--
                      (A) In general.--With respect to outliers
                    because of unusual variations in the type or
                    amount of medically necessary care, beginning
                    with October 1, 2010, the Secretary--
                              (i) shall provide for an addition or
                            adjustment to the payment amount
                            otherwise made under this section with
                            respect to non-therapy ancillary
                            services in the case of such outliers;
                            and
                              (ii) may provide for such an addition
                            or adjustment to the payment amount
                            otherwise made under this section with
                            respect to therapy services in the case
                            of such outliers.
                      (B) Outliers based on aggregate costs.--
                    Outlier adjustments or additional payments
                    described in subparagraph (A) shall be based on
                    aggregate costs during a stay in a skilled
                    nursing facility and not on the number of days
                    in such stay.
                      (C) Budget neutrality.--The Secretary shall
                    reduce estimated payments that would otherwise
                    be made under the prospective payment system
                    under this subsection with respect to a fiscal
                    year by 2 percent. The total amount of the
                    additional payments or payment adjustments for
                    outliers made under this paragraph with respect
                    to a fiscal year may not exceed 2 percent of
                    the total payments projected or estimated to be
                    made based on the prospective payment system
                    under this subsection for the fiscal year.

               *       *       *       *       *       *       *

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

               *       *       *       *       *       *       *

         CONTRACT WITH A CONSENSUS-BASED ENTITY REGARDING PERFORMANCE
                                  MEASUREMENT

      Sec. 1890. (a) * * *
      (b) Duties.--The duties described in this subsection are the
    following:
              (1) * * *
              (2) Endorsement of measures.--The entity shall
            provide for the endorsement of standardized health care
            performance measures. The endorsement process under the
            preceding sentence shall consider whether a measure--
                      (A) * * *

               *       *       *       *       *       *       *

            If the entity does not endorse a measure, such entity
            shall explain the reasons and provide suggestions about
            changes to such measure that might make it a
            potentially endorsable measure.

               *       *       *       *       *       *       *

      (d) Funding.--For purposes of carrying out this section, the
    Secretary shall provide for the transfer, from the Federal
    Hospital Insurance Trust Fund under section 1817 and the
    Federal Supplementary Medical Insurance Trust Fund under
    section 1841 (in such proportion as the Secretary determines
    appropriate), of $10,000,000 to the Centers for Medicare &
    Medicaid Services Program Management Account [for each of
    fiscal years 2009 through 2012] for fiscal year 2009, and
    $12,000,000 for each of the fiscal years 2010 through 2012.

               *       *       *       *       *       *       *

                           MEDICARE INTEGRITY PROGRAM

      Sec. 1893. (a) Establishment of Program.--There is hereby
    established the Medicare Integrity Program (in this section
    referred to as the ``Program'') under which the Secretary shall
    promote the integrity of the medicare program by entering into
    contracts in accordance with this section with eligible
    entities, or otherwise, to carry out the activities described
    in subsection (b).

               *       *       *       *       *       *       *

      (c) Eligibility of Entities.--An entity is eligible to enter
    into a contract under the Program to carry out any of the
    activities described in subsection (b) if--
              (1) * * *

               *       *       *       *       *       *       *

              (3) the entity complies with such conflict of
            interest standards as are generally applicable to
            Federal acquisition and procurement; [and]
              (4) for the contract year beginning in 2011 and each
            subsequent contract year, the entity provides
            assurances to the satisfaction of the Secretary that
            the entity will conduct periodic evaluations of the
            effectiveness of the activities carried out by such
            entity under the Program and will submit to the
            Secretary an annual report on such activities; and
              [(4)] (5) the entity meets such other requirements as
            the Secretary may impose.

               *       *       *       *       *       *       *

                  PROSPECTIVE PAYMENT FOR HOME HEALTH SERVICES

      Sec. 1895. (a) * * *
      (b) System of Prospective Payment for Home Health Services.--
              (1) * * *

               *       *       *       *       *       *       *

              (3) Payment basis.--
                      (A) Initial basis.--
                              (i) In general.--Under such system
                            the Secretary shall provide for
                            computation of a standard prospective
                            payment amount (or amounts) as follows:
                                      (I) * * *

               *       *       *       *       *       *       *

                                      (III) For periods beginning
                                    after the period described in
                                    subclause (II) and before 2011,
                                    such amount (or amounts) shall
                                    be equal to the amount (or
                                    amounts) that would have been
                                    determined under subclause (I)
                                    that would have been made for
                                    fiscal year 2001 if the system
                                    had not been in effect and if
                                    section 1861(v)(1)(L)(ix) had
                                    not been enacted but if the
                                    reduction in limits described
                                    in clause (ii) had been in
                                    effect, updated under
                                    subparagraph (B).
                                      (IV) Subject to clause
                                    (iii)(I), for 2011, such amount
                                    (or amounts) shall be adjusted
                                    by a uniform percentage
                                    determined to be appropriate by
                                    the Secretary based on analysis
                                    of factors such as changes in
                                    the average number and types of
                                    visits in an episode, the
                                    change in intensity of visits
                                    in an episode, growth in cost
                                    per episode, and other factors
                                    that the Secretary considers to
                                    be relevant.
                                      (V) Subject to clause
                                    (iii)(II), for a year after
                                    2011, such a amount (or
                                    amounts) shall be equal to the
                                    amount (or amounts) determined
                                    under this clause for the
                                    previous year, updated under
                                    subparagraph (B).

               *       *       *       *       *       *       *

                              (iii) Special rule in case of
                            inability to effect timely rebasing.--
                                      (I) Application of proxy
                                    amount for 2011.--If the
                                    Secretary is not able to
                                    compute the amount (or amounts)
                                    under clause (i)(IV) so as to
                                    permit, on a timely basis, the
                                    application of such clause for
                                    2011, the Secretary shall
                                    substitute for such amount (or
                                    amounts) 95 percent of the
                                    amount (or amounts) that would
                                    otherwise be specified under
                                    clause (i)(III) if it applied
                                    for 2011.
                                      (II) Adjustment for
                                    subsequent years based on
                                    data.--If the Secretary applies
                                    subclause (I), the Secretary
                                    before July 1, 2011, shall
                                    compare the amount (or amounts)
                                    applied under such subclause
                                    with the amount (or amounts)
                                    that should have been applied
                                    under clause (i)(IV). The
                                    Secretary shall decrease or
                                    increase the prospective
                                    payment amount (or amounts)
                                    under clause (i)(V) for 2012
                                    (or, at the Secretary's
                                    discretion, over a period of
                                    several years beginning with
                                    2012) by the amount (if any) by
                                    which the amount (or amounts)
                                    applied under subclause (I) is
                                    greater or less, respectively,
                                    than the amount (or amounts)
                                    that should have been applied
                                    under clause (i)(IV).
                      (B) Annual update.--
                              (i) * * *
                              (ii) Home health applicable increase
                            percentage.--For purposes of this
                            subparagraph, the term ``home health
                            applicable increase percentage'' means,
                            with respect to--
                                      (I) * * *

               *       *       *       *       *       *       *

                                      (IV) 2006, 0 percent; [and]
                                      (V) 2007, 2008, and 2009,
                                    subject to clause (v), the home
                                    health market basket percentage
                                    increase;
                                      (VI) 2010, subject to clause
                                    (v), 0 percent; and
                                      [(V)] (VII) any subsequent
                                    year, subject to clause (v),
                                    the home health market basket
                                    percentage increase.
                              (iii) Home health market basket
                            percentage increase.--For purposes of
                            this subsection, the term ``home health
                            market basket percentage increase''
                            means, with respect to a fiscal year or
                            year, a percentage (estimated by the
                            Secretary before the beginning of the
                            fiscal year or year) determined and
                            applied with respect to the mix of
                            goods and services included in home
                            health services in the same manner
                            (including being subject to the
                            productivity adjustment described in
                            section 1886(b)(3)(B)(iii)(II)) as the
                            market basket percentage increase under
                            section 1886(b)(3)(B)(iii) is
                            determined and applied to the mix of
                            goods and services comprising inpatient
                            hospital services for the fiscal year
                            or year.
                              (iv) Adjustment for case mix
                            changes.--[Insofar as] Subject to
                            clause (vi), insofar as the Secretary
                            determines that the adjustments under
                            paragraph (4)(A)(i) for a previous
                            fiscal year or year (or estimates that
                            such adjustments for a future fiscal
                            year or year) did (or are likely to)
                            result in a change in aggregate
                            payments under this subsection during
                            the fiscal year or year that are a
                            result of changes in the coding or
                            classification of different units of
                            services that do not reflect real
                            changes in case mix, the Secretary may
                            adjust the standard prospective payment
                            amount (or amounts) under paragraph (3)
                            for subsequent fiscal years or years so
                            as to eliminate the effect of such
                            coding or classification changes.
                              (v) Adjustment if quality data not
                            submitted.--
                                      (I) Adjustment.--For purposes
                                    of clause (ii)(V), for 2007 and
                                    each subsequent year, in the
                                    case of a home health agency
                                    that does not submit data to
                                    the Secretary in accordance
                                    with subclause (II) with
                                    respect to such a year, the
                                    home health market basket
                                    percentage increase applicable
                                    under such clause for such year
                                    shall be reduced (but not below
                                    0) by 2 percentage points. Such
                                    reduction shall apply only with
                                    respect to the year involved,
                                    and the Secretary shall not
                                    take into account such
                                    reduction in computing the
                                    prospective payment amount
                                    under this section for a
                                    subsequent year, and the
                                    Medicare Payment Advisory
                                    Commission shall carry out the
                                    requirements under section
                                    5201(d) of the Deficit
                                    Reduction Act of 2005.
                              (vi) Special rule for case mix
                            changes for 2011.--
                                      (I) In general.--With respect
                                    to the case mix adjustments
                                    established in section
                                    484.220(a) of title 42, Code of
                                    Federal Regulations, the
                                    Secretary shall apply, in 2010,
                                    the adjustment established in
                                    paragraph (3) of such section
                                    for 2011, in addition to
                                    applying the adjustment
                                    established in paragraph (2)
                                    for 2010.
                                      (II) Construction.--Nothing
                                    in this clause shall be
                                    construed as limiting the
                                    amount of adjustment for case
                                    mix for 2010 or 2011 if more
                                    recent data indicate an
                                    appropriate adjustment that is
                                    greater than the amount
                                    established in the section
                                    described in subclause (I).

               *       *       *       *       *       *       *

                           MEDICARE IMPROVEMENT FUND

      Sec. 1898. (a) * * *
      (b) Funding.--
              (1) In general.--There shall be available to the
            Fund, for expenditures from the Fund for services
            furnished during--
                      [(A) fiscal year 2014, $22,290,000,000; and]
                      (A) the period beginning with fiscal year
                    2011 and ending with fiscal year 2019,
                    $8,000,000,000; and

               *       *       *       *       *       *       *

                       STATE PLANS FOR MEDICAL ASSISTANCE

      Sec. 1902. (a) A State plan for medical assistance must--
              (1) * * *

               *       *       *       *       *       *       *

              (9) provide--
                      (A) * * *
                      (B) for the establishment or designation of a
                    State authority or authorities which shall be
                    responsible for establishing and maintaining
                    standards, other than those relating to health,
                    for such institutions, [and]
                      (C) that any laboratory services paid for
                    under such plan must be provided by a
                    laboratory which meets the applicable
                    requirements of section 1861(e)(9) or
                    paragraphs (16) and (17) of section 1861(s),
                    or, in the case of a laboratory which is in a
                    rural health clinic, of section
                    1861(aa)(2)(G)[;], and
                      (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;
              (10) provide--
                      (A) subject to section 1903(aa)(2), for
                    making medical assistance available, including
                    at least the care and services listed in
                    paragraphs (1) through (5), (17) [and (21)],
                    (21), and (28) of section 1905(a), to--
                              (i) all individuals--
                                      (I) * * *

               *       *       *       *       *       *       *

                                      (VI) who are described in
                                    subparagraph (C) of subsection
                                    (l)(1) and whose family income
                                    does not exceed the income
                                    level the State is required to
                                    establish under subsection
                                    (l)(2)(B) for such a family,
                                    [or]
                                      (VII) who are described in
                                    subparagraph (D) of subsection
                                    (l)(1) and whose family income
                                    does not exceed the income
                                    level the State is required to
                                    establish under subsection
                                    (l)(2)(C) for such a family;
                                      (VIII) who are under 65 years
                                    of age, who are not described
                                    in a previous subclause of this
                                    clause, and who are in families
                                    whose income (determined using
                                    methodologies and procedures
                                    specified by the Secretary in
                                    consultation with the Health
                                    Choices Commissioner) does not
                                    exceed 133\1/3\ percent of the
                                    income official poverty line
                                    (as defined by the Office of
                                    Management and Budget, and
                                    revised annually in accordance
                                    with section 673(2) of the
                                    Omnibus Budget Reconciliation
                                    Act of 1981) applicable to a
                                    family of the size involved; or
                                      (IX) who are under 65 years
                                    of age, who would be eligible
                                    for medical assistance under
                                    the State plan under one of
                                    subclauses (I) through (VII)
                                    (based on the income standards,
                                    methodologies, and procedures
                                    in effect as of June 16, 2009)
                                    but for income and who are in
                                    families whose income does not
                                    exceed 133\1/3\ percent of the
                                    income official poverty line
                                    (as defined by the Office of
                                    Management and Budget, and
                                    revised annually in accordance
                                    with section 673(2) of the
                                    Omnibus Budget Reconciliation
                                    Act of 1981) applicable to a
                                    family of the size involved;
                              (ii) at the option of the State, to
                            any group or groups of individuals
                            described in section 1905(a) (or, in
                            the case of individuals described in
                            section 1905(a)(i), to any reasonable
                            categories of such individuals) who are
                            not individuals described in clause (i)
                            of this subparagraph but--
                                      (I) * * *

               *       *       *       *       *       *       *

                                      (XVIII) who are described in
                                    subsection (aa) (relating to
                                    certain breast or cervical
                                    cancer patients); [or]
                                      (XIX) who are disabled
                                    children described in
                                    subsection (cc)(1);
                                      (XX) who are described in
                                    subsection (hh) (relating to
                                    individuals who meet certain
                                    income standards); or
                                      (XXI) who are described in
                                    subsection (ii) (relating to
                                    HIV-infected individuals);

               *       *       *       *       *       *       *

                      (C) that if medical assistance is included
                    for any group of individuals described in
                    section 1905(a) who are not described in
                    subparagraph (A) or (E), then--
                              (i) * * *

               *       *       *       *       *       *       *

                              (iv) if such medical assistance
                            includes services in institutions for
                            mental diseases or in an intermediate
                            care facility for the mentally retarded
                            (or both) for any such group, it also
                            must include for all groups covered at
                            least the care and services listed in
                            paragraphs (1) through (5) [and (17)],
                            (17), and (28) of section 1905(a) or
                            the care and services listed in any 7
                            of the paragraphs numbered (1) through
                            (24) of such section;

               *       *       *       *       *       *       *

                      (E)(i) * * *

               *       *       *       *       *       *       *

                      (iv) subject to [sections 1933 and] section
                    1905(p)(4), for making medical assistance
                    available (but only for premiums payable with
                    respect to months during the period beginning
                    with January 1998, and ending with [December
                    2010] December 2012) for medicare cost-sharing
                    described in section 1905(p)(3)(A)(ii) for
                    individuals who would be qualified medicare
                    beneficiaries described in section 1905(p)(1)
                    but for the fact that their income exceeds the
                    income level established by the State under
                    section 1905(p)(2) and is at least 120 percent,
                    but less than 135 percent, of the official
                    poverty line (referred to in such section) for
                    a family of the size involved and who are not
                    otherwise eligible for medical assistance under
                    the State plan;

               *       *       *       *       *       *       *

            except that (I) the making available of the services
            described in paragraph (4), (14), or (16) of section
            1905(a) to individuals meeting the age requirements
            prescribed therein shall not, by reason of this
            paragraph (10), require the making available of any
            such services, or the making available of such services
            of the same amount, duration, and scope, to individuals
            of any other ages, (II) the making available of
            supplementary medical insurance benefits under part B
            of title XVIII to individuals eligible therefor (either
            pursuant to an agreement entered into under section
            1843 or by reason of the payment of premiums under such
            title by the State agency on behalf of such
            individuals), or provision for meeting part or all of
            the cost of deductibles, cost sharing, or similar
            charges under part B of title XVIII for individuals
            eligible for benefits under such part, shall not, by
            reason of this paragraph (10), require the making
            available of any such benefits, or the making available
            of services of the same amount, duration, and scope, to
            any other individuals, (III) the making available of
            medical assistance equal in amount, duration, and scope
            to the medical assistance made available to individuals
            described in clause (A) to any classification of
            individuals approved by the Secretary with respect to
            whom there is being paid, or who are eligible, or would
            be eligible if they were not in a medical institution,
            to have paid with respect to them, a State
            supplementary payment shall not, by reason of this
            paragraph (10), require the making available of any
            such assistance, or the making available of such
            assistance of the same amount, duration, and scope, to
            any other individuals not described in clause (A), (IV)
            the imposition of a deductible, cost sharing, or
            similar charge for any item or service furnished to an
            individual not eligible for the exemption under section
            1916(a)(2) or (b)(2) shall not require the imposition
            of a deductible, cost sharing, or similar charge for
            the same item or service furnished to an individual who
            is eligible for such exemption, (V) the making
            available to pregnant women covered under the plan of
            services relating to pregnancy (including prenatal,
            delivery, and postpartum services) or to any other
            condition which may complicate pregnancy shall not, by
            reason of this paragraph (10), require the making
            available of such services, or the making available of
            such services of the same amount, duration, and scope,
            to any other individuals, provided such services are
            made available (in the same amount, duration, and
            scope) to all pregnant women covered under the State
            plan, (VI) with respect to the making available of
            medical assistance for hospice care to terminally ill
            individuals who have made a voluntary election
            described in section 1905(o) to receive hospice care
            instead of medical assistance for certain other
            services, such assistance may not be made available in
            an amount, duration, or scope less than that provided
            under title XVIII, and the making available of such
            assistance shall not, by reason of this paragraph (10),
            require the making available of medical assistance for
            hospice care to other individuals or the making
            available of medical assistance for services waived by
            such terminally ill individuals, (VII) the medical
            assistance made available to an individual described in
            subsection (l)(1)(A) who is eligible for medical
            assistance only because of subparagraph (A)(i)(IV) or
            (A)(ii)(IX) shall be limited to medical assistance for
            services related to pregnancy (including prenatal,
            delivery, postpartum, and family planning services) and
            to other conditions which may complicate pregnancy,
            (VIII) the medical assistance made available to a
            qualified medicare beneficiary described in section
            1905(p)(1) who is only entitled to medical assistance
            because the individual is such a beneficiary shall be
            limited to medical assistance for medicare cost-sharing
            (described in section 1905(p)(3)), subject to the
            provisions of subsection (n) and section 1916(b), (IX)
            the making available of respiratory care services in
            accordance with subsection (e)(9) shall not, by reason
            of this paragraph (10), require the making available of
            such services, or the making available of such services
            of the same amount, duration, and scope, to any
            individuals not included under subsection (e)(9)(A),
            provided such services are made available (in the same
            amount, duration, and scope) to all individuals
            described in such subsection, (X) if the plan provides
            for any fixed durational limit on medical assistance
            for inpatient hospital services (whether or not such a
            limit varies by medical condition or diagnosis), the
            plan must establish exceptions to such a limit for
            medically necessary inpatient hospital services
            furnished with respect to individuals under one year of
            age in a hospital defined under the State plan,
            pursuant to section 1923(a)(1)(A), as a
            disproportionate share hospital and subparagraph (B)
            (relating to comparability) shall not be construed as
            requiring such an exception for other individuals,
            services, or hospitals, (XI) the making available of
            medical assistance to cover the costs of premiums,
            deductibles, coinsurance, and other cost-sharing
            obligations for certain individuals for private health
            coverage as described in section 1906 shall not, by
            reason of paragraph (10), require the making available
            of any such benefits or the making available of
            services of the same amount, duration, and scope of
            such private coverage to any other individuals, (XII)
            the medical assistance made available to an individual
            described in subsection (u)(1) who is eligible for
            medical assistance only because of subparagraph (F)
            shall be limited to medical assistance for COBRA
            continuation premiums (as defined in subsection
            (u)(2)), (XIII) the medical assistance made available
            to an individual described in subsection (z)(1) who is
            eligible for medical assistance only because of
            subparagraph (A)(ii)(XII) shall be limited to medical
            assistance for TB-related services (described in
            subsection (z)(2)), [and (XIV)] (XIV) the medical
            assistance made available to an individual described in
            subsection (aa) who is eligible for medical assistance
            only because of subparagraph (A)(10)(ii)(XVIII) shall
            be limited to medical assistance provided during the
            period in which such an individual requires treatment
            for breast or cervical cancer, and (XV) the medical
            assistance made available to an individual described in
            subsection (hh) shall be limited to family planning
            services and supplies described in section
            1905(a)(4)(C) including medical diagnosis and treatment
            services that are provided pursuant to a family
            planning service in a family planning setting;

               *       *       *       *       *       *       *

              (13) provide--
                      (A) for a public process for determination of
                    rates of payment under the plan for hospital
                    services, nursing facility services, and
                    services of intermediate care facilities for
                    the mentally retarded under which--
                              (i) * * *
                              (iii) final rates, the methodologies
                            underlying the establishment of such
                            rates, and justifications for such
                            final rates are published, [and]
                              (iv) in the case of hospitals, such
                            rates take into account (in a manner
                            consistent with section 1923) the
                            situation of hospitals which serve a
                            disproportionate number of low-income
                            patients with special needs[; and], and
                              (v) in the case of hospitals and at
                            the option of a State, such rates may
                            include, to the extent consistent with
                            section 1905(bb), payment for graduate
                            medical education; and
                      (B) for payment for hospice care in amounts
                    no lower than the amounts, using the same
                    methodology, used under part A of title XVIII
                    and for payment of amounts under section
                    1905(o)(3); except that in the case of hospice
                    care which is furnished to an individual who is
                    a resident of a nursing facility or
                    intermediate care facility for the mentally
                    retarded, and who would be eligible under the
                    plan for nursing facility services or services
                    in an intermediate care facility for the
                    mentally retarded if he had not elected to
                    receive hospice care, there shall be paid an
                    additional amount, to take into account the
                    room and board furnished by the facility, equal
                    to at least 95 percent of the rate that would
                    have been paid by the State under the plan for
                    facility services in that facility for that
                    individual; and
                      (C) payment for primary care services (as
                    defined in section 1848(j)(5)(A), but applied
                    without regard to clause (ii) thereof)
                    furnished by physicians (or for services
                    furnished by other health care professionals
                    that would be primary care services under such
                    section if furnished by a physician) at a rate
                    not less than 80 percent of the payment rate
                    applicable to such services and physicians or
                    professionals (as the case may be) under part B
                    of title XVIII for services furnished in 2010,
                    90 percent of such rate for services and
                    physicians (or professionals) furnished in
                    2011, and 100 percent of such payment rate for
                    services and physicians (or professionals)
                    furnished in 2012 or a subsequent year;

               *       *       *       *       *       *       *

              (23) provide that (A) any individual eligible for
            medical assistance (including drugs) may obtain such
            assistance from any institution, agency, community
            pharmacy, or person, qualified to perform the service
            or services required (including an organization which
            provides such services, or arranges for their
            availability, on a prepayment basis), who undertakes to
            provide him such services, and (B) an enrollment of an
            individual eligible for medical assistance in a primary
            care case-management system (described in section
            1915(b)(1)), a medicaid managed care organization, or a
            similar entity shall not restrict the choice of the
            qualified person from whom the individual may receive
            services under section 1905(a)(4)(C), except as
            provided in subsection (g) and in section 1915, except
            that this paragraph shall not apply in the case of
            Puerto Rico, the Virgin Islands, and Guam, and except
            that nothing in this paragraph shall be construed as
            requiring a State to provide medical assistance for
            such services furnished by a person or entity convicted
            of a felony under Federal or State law for an offense
            which the State agency determines is inconsistent with
            the best interests of beneficiaries under the State
            plan or by a person to whom or entity to which a
            moratorium under section 1128G(a)(4) is applied during
            the period of such moratorium;

               *       *       *       *       *       *       *

              (39) provide that the State agency shall exclude any
            specified individual or entity from participation in
            the program under the State plan for the period
            specified by the Secretary, when required by him to do
            so pursuant to section 1128 or section 1128A, terminate
            the participation of any individual or entity in such
            program if (subject to such exceptions are are
            permitted with respect to exclusion under sections
            1128(b)(3)(C) and 1128(d)(3)(B)) participation of such
            individual or entity is terminated under title XVIII,
            any other State plan under this title, or any child
            health plan under title XXI, and provide that no
            payment may be made under the plan with respect to any
            item or service furnished by such individual or entity
            during such period;

               *       *       *       *       *       *       *

              (47) at the option of the State, provide for making
            ambulatory prenatal care available to pregnant women
            during a presumptive eligibility period in accordance
            with section 1920 and provide for making medical
            assistance for items and services described in
            subsection (a) of section 1920A available to children
            during a presumptive eligibility period in accordance
            with such section and provide for making medical
            assistance available to individuals described in
            subsection (a) of section 1920B during a presumptive
            eligibility period in accordance with such section 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;

               *       *       *       *       *       *       *

              (55) provide for receipt and initial processing of
            applications of individuals for medical assistance
            [under subsection (a)(10)(A)(i)(IV), (a)(10)(A)(i)(VI),
            (a)(10)(A)(i)(VII), or (a)(10)(A)(ii)(IX)] (including
            receipt and processing of applications of individuals
            for affordability credits under subtitle C of title II
            of division A of the America's Affordable Health
            Choices Act of 2009 pursuant to a Medicaid memorandum
            of understanding under section 1943(a)(1))--
                      (A) * * *

               *       *       *       *       *       *       *

              (72) provide that the State will not prevent a
            Federally-qualified health center from entering into
            contractual relationships with private practice dental
            providers in the provision of Federally-qualified
            health center services; [and]
              (73) in the case of any State in which 1 or more
            Indian Health Programs or Urban Indian Organizations
            furnishes health care services, provide for a process
            under which the State seeks advice on a regular,
            ongoing basis from designees of such Indian Health
            Programs and Urban Indian Organizations on matters
            relating to the application of this title that are
            likely to have a direct effect on such Indian Health
            Programs and Urban Indian Organizations and that--
                      (A) * * *
                      (B) may include appointment of an advisory
                    committee and of a designee of such Indian
                    Health Programs and Urban Indian Organizations
                    to the medical care advisory committee advising
                    the State on its State plan under this
                    title[.];
              (74) provide that the State will enforce any
            determination made by the Secretary under subsection
            (a) of section 1128G (relating to a significant risk of
            fraudulent activity with respect to a category of
            provider or supplier described in such subsection (a)
            through use of the appropriate procedures described in
            such subsection (a)) or subsection (b) of such section
            (relating to disclosure requirements), and that the
            State will carry out any activities as required by the
            Secretary for purposes of such subsection (a) and apply
            any enhanced safeguards, with respect to a provider or
            supplier described in such subsection (b), as the
            Secretary determines necessary under such subsection
            (b);
              (75) provide for maintenance of effort under the
            State child health plan under title XXI in accordance
            with subsection (gg);
              (76) provide that in the case of any youth who is 18
            years of age or younger, was enrolled for medical
            assistance under the State plan immediately before
            becoming an inmate of a public institution, is 18 years
            of age or younger upon release from such institution,
            and is eligible for such medical assistance under the
            State plan at the time of release from such
            institution--
                      (A) during the period such youth is
                    incarcerated in a public institution, the State
                    shall not terminate eligibility for medical
                    assistance under the State plan for such youth;
                      (B) during the period such youth is
                    incarcerated in a public institution, the State
                    shall establish a process that ensures--
                              (i) that the State does not claim
                            federal financial participation for
                            services that are provided to such
                            youth and that are excluded under
                            subsection 1905(a)(28)(A); and
                              (ii) that the youth receives medical
                            assistance for which federal
                            participation is available under this
                            title;
                      (C) on or before the date such youth is
                    released from such institution, the State
                    ensure that such youth is enrolled for medical
                    assistance under this title, unless and until
                    there is a determination that the individual is
                    no longer eligible to be so enrolled; and
                      (D) the State shall ensure that enrollment
                    under subparagraph (C) will be completed before
                    such date so that the youth can access medical
                    assistance under this title immediately upon
                    leaving the institution;
              (77) provide that any provider or supplier (other
            than a physician or nursing facility) providing
            services under such plan shall, subject to paragraph
            (5) of section 1874(d), establish a compliance program
            described in paragraph (1) of such section in
            accordance with such section;
              (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 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;
              (79) provide that any agent, clearinghouse, or other
            alternate payee that submits claims on behalf of a
            health care provider must register with the State and
            the Secretary in a form and manner specified by the
            Secretary under section 1866(j)(1)(D); and
              (80) 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.

               *       *       *       *       *       *       *

      (e)(1)(A) * * *
      (B) Subparagraph (A) shall not apply with respect to families
    that cease to be eligible for aid under part A of title IV
    during the period beginning on April 1, 1990, and ending on
    [December 31, 2010] December 31, 2012. During such period, for
    provisions relating to extension of eligibility for medical
    assistance for certain families who have received aid pursuant
    to a State plan approved under part A of title IV and have
    earned income, see section 1925.

               *       *       *       *       *       *       *

      (14)(A) At the option of the State, in the case of an
    individual with extremely high prescription drug costs
    described in subparagraph (B) who has been determined (without
    the application of this paragraph) to be eligible for medical
    assistance under this title, the State may, in redetermining
    the individual's eligibility for medical assistance under this
    title, disregard any family income of the individual to the
    extent such income is less than an amount that is specified by
    the State and does not exceed the amount specified in
    subparagraph (C), or, if greater, income equal to the cost of
    the orphan drugs described in subparagraph (B)(iii).
      (B) An individual with extremely high prescription drug costs
    described in this subparagraph for a 12-month period is an
    individual--
              (i) who is covered under health insurance or a health
            benefits plan that has a maximum lifetime limit of not
            less than $1,000,000 which includes all prescription
            drug coverage;
              (ii) who has exhausted all available prescription
            drug coverage under the plan as of the beginning of
            such period;
              (iii) who incurs (or is reasonably expected to incur)
            on an annual basis during the period costs for orphan
            drugs in excess of the amount specified in subparagraph
            (C) for the period; and
              (iv) whose annual family income (determined without
            regard to this paragraph) as of the beginning of the
            period does not exceed 75 percent of the amount
            incurred for such drugs (as described in clause (iii)).
      (C) The amount specified in this subparagraph for a 12-month
    period beginning in--
              (i) 2009 or 2010, is $200,000; or
              (ii) a subsequent year, is the amount specified in
            clause (i) (or this subparagraph) for the previous year
            increased by the annual rate of increase in the medical
            care component of the consumer price index (U.S. city
            average) for the 12-month period ending in August of
            the previous year.
    Any amount computed under clause (ii) that is not a multiple of
    $1,000 shall be rounded to the nearest multiple of $1,000.
      (D) In applying this paragraph, amounts incurred for
    prescription drugs for cosmetic purposes shall not be taken
    into account.
      (E) With respect to an individual described in subparagraph
    (A), notwithstanding section 1916, the State plan--
              (i) shall provide for the application of cost-sharing
            that is at least nominal as determined under section
            1916; and
              (ii) may provide, consistent with section 1916A, for
            such additional cost-sharing as does not exceed a
            maximum level of cost-sharing that is specified by the
            Secretary and is adjusted by the Secretary on an annual
            basis.
      (F) A State electing the option under this paragraph shall
    provide for a determination on an individual's application for
    continued medical assistance under this title within 30 days of
    the date the application if filed with the State.
      (G) In this paragraph:
              (i) The term ``orphan drugs'' means prescription
            drugs designated under section 526 of the Federal Food,
            Drug, and Cosmetic Act (21 U.S.C. 360bb) as a drug for
            a rare disease or condition.
              (ii) The term ``health benefits plan'' includes
            coverage under a plan offered under a State high risk
            pool.

               *       *       *       *       *       *       *

      (j) Notwithstanding any other requirement of this title, the
    Secretary may waive or modify any requirement of this title
    with respect to the medical assistance program in [American
    Samoa and the Northern Mariana Islands] Puerto Rico, the Virgin
    Islands, Guam, the Northern Mariana Islands, and American
    Samoa, other than a waiver of the Federal medical assistance
    percentage, the limitation in section 1108(f), or the
    requirement that payment may be made for medical assistance
    only with respect to amounts expended by [American Samoa or the
    Northern Mariana Islands] Puerto Rico, the Virgin Islands,
    Guam, the Northern Mariana Islands, or American Samoa for care
    and services described in a numbered paragraph of section
    1905(a).

               *       *       *       *       *       *       *

      (gg) CHIP Maintenance of Eligibility Requirement.--
              (1) In general.--Subject to paragraph (2), as a
            condition of its State plan under this title under
            subsection (a)(75) and receipt of any Federal financial
            assistance under section 1903(a) for calendar quarters
            beginning after the date of the enactment of this
            subsection and before CHIP MOE termination date
            specified in paragraph (3), a State shall not have in
            effect eligibility standards, methodologies, or
            procedures under its State child health plan under
            title XXI (including any waiver under such title or
            under section 1115 that is permitted to continue
            effect) that are more restrictive than the eligibility
            standards, methodologies, or procedures, respectively,
            under such plan (or waiver) as in effect on June 16,
            2009.
              (2) Limitation.--Paragraph (1) shall not be construed
            as preventing a State from imposing a limitation
            described in section 2110(b)(5)(C)(i)(II) for a fiscal
            year in order to limit expenditures under its State
            child health plan under title XXI to those for which
            Federal financial participation is available under
            section 2105 for the fiscal year.
              (3) CHIP moe termination date.--In paragraph (1), the
            ``CHIP MOE termination date'' for a State is the date
            that is the first day of Y1 (as defined in section
            100(c) of the America's Affordable Health Choices Act
            of 2009) or, if later, the first day after such date
            that both of the following determinations have been
            made:
                      (A) The Health Choices Commissioner has
                    determined that the Health Insurance Exchange
                    has the capacity to support the participation
                    of CHIP enrollees who are Exchange-eligible
                    individuals (as defined in section 202(b) of
                    the America's Affordable Health Choices Act of
                    2009),
                      (B) The Secretary has determined that--
                              (i) comparable coverage, as specified
                            in section 202(g) of the America's
                            Affordable Health Choices Act of 2009,
                            is available through such Exchange; and
                              (ii) procedures have been established
                            for transferring CHIP enrollees into
                            acceptable coverage (as defined for
                            purposes of such Act) without
                            interruption of coverage or a written
                            plan of treatment.
            The Secretary shall recommend to Congress any
            legislative changes needed to effectuate this
            paragraph. In this paragraph, the term ``CHIP
            enrollee'' means a targeted low-income child or (if the
            State has elected the option under section 2112, a
            targeted low-income pregnant woman) who is or otherwise
            would be (but for acceptable coverage) eligible for
            child health assistance or pregnancy-related
            assistance, respectively, under the State child health
            plan referred to in paragraph (1).
      (hh)(1) Individuals described in this subsection are
    individuals--
              (A) whose income does not exceed an income
            eligibility level established by the State that does
            not exceed the highest income eligibility level
            established under the State plan under this title (or
            under its State child health plan under title XXI) for
            pregnant women; and
              (B) who are not pregnant.
      (2) At the option of a State, individuals described in this
    subsection may include individuals who, had individuals applied
    on or before January 1, 2007, would have been made eligible
    pursuant to the standards and processes imposed by that State
    for benefits described in clause (XV) of the matter following
    subparagraph (G) of section subsection (a)(10) pursuant to a
    waiver granted under section 1115.
      (3) At the option of a State, for purposes of subsection
    (a)(17)(B), in determining eligibility for services under this
    subsection, the State may consider only the income of the
    applicant or recipient.
      (ii) Individuals described in this subsection are individuals
    not described in subsection (a)(10)(A)(i)--
              (1) who have HIV infection;
              (2) whose income (as determined under the State plan
            under this title with respect to disabled individuals)
            does not exceed the maximum amount of income a disabled
            individual described in subsection (a)(10)(A)(i) may
            have and obtain medical assistance under the plan; and
              (3) whose resources (as determined under the State
            plan under this title with respect to disabled
            individuals) do not exceed the maximum amount of
            resources a disabled individual described in subsection
            (a)(10)(A)(i) may have and obtain medical assistance
            under the plan.
      (jj) Report on Medicaid Payments.--Each year, on or before a
    date determined by the Secretary, a State participating in the
    Medicaid program under this title shall submit to the
    Administrator of the Centers for Medicare & Medicaid Services--
              (1) information on the determination of rates of
            payment to providers for covered services under the
            State plan, including--
                      (A) the final rates;
                      (B) the methodologies used to determine such
                    rates; and
                      (C) justifications for the rates; and
              (2) an explanation of the process used by the State
            to allow providers, beneficiaries and their
            representatives, and other concerned State residents a
            reasonable opportunity to review and comment on such
            rates, methodologies, and justifications before the
            State made such rates final.

               *       *       *       *       *       *       *

                               PAYMENT TO STATES

      Sec. 1903. (a) From the sums appropriated therefor, the
    Secretary (except as otherwise provided in this section) shall
    pay to each State which has a plan approved under this title,
    for each quarter, beginning with the quarter commencing January
    1, 1966--
              (1) * * *
              (2)(A) * * *

               *       *       *       *       *       *       *

              (E) an amount equal to 75 percent of so much of the
            sums expended during such quarter (as found necessary
            by the Secretary for the proper and efficient
            administration of the State plan) as are attributable
            to translation or interpretation services in connection
            with the enrollment of, retention of, and use of
            services under this title by, children of families and
            other individuals for whom English is not the primary
            language; plus

               *       *       *       *       *       *       *

      (d)(1) * * *
      (2)(A) * * *

               *       *       *       *       *       *       *

      (C) For purposes of this subsection, when an overpayment is
    discovered, which was made by a State to a person or other
    entity, the State shall have a period of 60 days (or of 1 year
    in the case of overpayments due to fraud) in which to recover
    or attempt to recover such overpayment before adjustment is
    made in the Federal payment to such State on account of such
    overpayment. Except as otherwise provided in subparagraph (D),
    the adjustment in the Federal payment shall be made at the end
    of [the 60 days] such period, whether or not recovery was made.

               *       *       *       *       *       *       *

      (f)(1) * * *

               *       *       *       *       *       *       *

      (4) The limitations on payment imposed by the preceding
    provisions of this subsection shall not apply with respect to
    any amount expended by a State as medical assistance for any
    individual described in section 1902(a)(10)(A)(i)(III),
    1902(a)(10)(A)(i)(IV), 1902(a)(10)(A)(i)(V),
    1902(a)(10)(A)(i)(VI), 1902(a)(10)(A)(i)(VII),
    1902(a)(10)(A)(i)(VIII), 1902(a)(10)(A)(i)(IX),
    1902(a)(10)(A)(ii)(IX), 1902(a)(10)(A)(ii)(X),
    1902(a)(10)(A)(ii)(XIII), 1902(a)(10)(A)(ii)(XIV), or
    1902(a)(10)(A)(ii)(XV), 1902(a)(10)(A)(ii)(XVI),
    1902(a)(10)(A)(ii)(XVII), 1902(a)(10)(A)(ii)(XVIII),
    1902(a)(10)(A)(ii)(XIX), 1905(p)(1) or for any individual--
              (A) * * *

               *       *       *       *       *       *       *

      (i) Payment under the preceding provisions of this section
    shall not be made--
              (1) * * *

               *       *       *       *       *       *       *

              (23) with respect to amounts expended for medical
            assistance for covered outpatient drugs (as defined in
            section 1927(k)(2)) for which the prescription was
            executed in written (and non-electronic) form unless
            the prescription was executed on a tamper-resistant
            pad; [or]
              (24) if a State is required to implement an asset
            verification program under section 1940 and fails to
            implement such program in accordance with such section,
            with respect to amounts expended by such State for
            medical assistance for individuals subject to asset
            verification under such section, unless--
                      (A) * * *

               *       *       *       *       *       *       *

                      (C) not later than 12 months after the date
                    of such submission (and approval), the State
                    fulfills the terms of such corrective action
                    plan[.];
              (25) with respect to amounts expended for services
            related to the presence of a condition that could be
            identified by a secondary diagnostic code described in
            section 1886(d)(4)(D)(iv) and for any health care
            acquired condition determined as a non-covered service
            under title XVIII;
              (26) with respect to any amount paid to a billing
            agent, clearinghouse, or other alternate payee that is
            not registered with the State and the Secretary as
            required under section 1902(a)(79); or
              (27) with respect to any amount expended--
                      (A) on litigation in which a court imposes
                    sanctions on the State, its employees, or its
                    counsel for litigation-related misconduct; or
                      (B) to reimburse (or otherwise compensate) a
                    managed care entity for payment of legal
                    expenses associated with any action in which a
                    court imposes sanctions on the managed care
                    entity for litigation-related misconduct.

               *       *       *       *       *       *       *

      (m)(1) * * *
      (2)(A) Except as provided in subparagraphs (B), (C), and (G),
    no payment shall be made under this title to a State with
    respect to expenditures incurred by it for payment (determined
    under a prepaid capitation basis or under any other risk basis)
    for services provided by any entity (including a health
    insuring organization) which is responsible for the provision
    (directly or through arrangements with providers of services)
    of inpatient hospital services and any other service described
    in paragraph (2), (3), (4), (5), or (7) of section 1905(a) or
    for the provision of any three or more of the services
    described in such paragraphs unless--
              (i) * * *

               *       *       *       *       *       *       *

              (xi) such contract provides for maintenance of
            sufficient patient encounter data to identify the
            physician who delivers services to patients and for the
            provision of such data to the State at a frequency and
            level of detail to be specified by the Secretary; [and]
              (xii) such contract, and the entity complies with the
            applicable requirements of section 1932[.];
              (xiii) such contract provides that the entity shall
            report to the State such information, on such timely
            and periodic basis as specified by the Secretary, as
            the State may require in order to include, in the
            information submitted by the State to a manufacturer
            under section 1927(b)(2)(A), information on covered
            outpatient drugs dispensed to individuals eligible for
            medical assistance who are enrolled with the entity and
            for which the entity is responsible for coverage of
            such drugs under this subsection; and
              (xiv) such contract has a medical loss ratio, as
            determined in accordance with a methodology specified
            by the Secretary that is a percentage (not less than 85
            percent) as specified by the Secretary.

               *       *       *       *       *       *       *

      (r)(1) In order to receive payments under subsection (a) for
    use of automated data systems in administration of the State
    plan under this title, a State must have in operation
    mechanized claims processing and information retrieval systems
    that meet the requirements of this subsection and that the
    Secretary has found--
              (A) * * *
              (B) are compatible with the claims processing and
            information retrieval systems used in the
            administration of title XVIII, and for this purpose--
                              (i) * * *
                              (ii) provide liaison between States
                            and carriers and intermediaries with
                            agreements under title XVIII to
                            facilitate timely exchange of
                            appropriate data; [and]
                              (iii) provide for exchange of data
                            between the States and the Secretary
                            with respect to persons sanctioned
                            under this title or title XVIII; and
                              (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 (3);

               *       *       *       *       *       *       *

              (F) effective for claims filed on or after January 1,
            1999, provide for electronic transmission of claims
            data in the format specified by the Secretary and
            consistent with the Medicaid Statistical Information
            System (MSIS) (including detailed individual enrollee
            encounter data and other information that the Secretary
            may find necessary and including, for data submitted to
            the Secretary on or after July 1, 2010, data elements
            from the automated data system that the Secretary
            determines to be necessary for detection of waste,
            fraud, and abuse).

               *       *       *       *       *       *       *

      (3) Not later than September 1, 2010, the Secretary shall do
    the following:
              (A) 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.
              (B) 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.
              (C) 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.
              (D) Submit a report to Congress that includes the
            notice to States under subparagraph (C) and an analysis
            supporting the identification of the methodologies made
            under subparagraphs (A) and (B).

               *       *       *       *       *       *       *

      (u)(1)(A) * * *

               *       *       *       *       *       *       *

      (D)(i) * * *

               *       *       *       *       *       *       *

      (v) In determining the amount of erroneous excess payments,
    there shall not be included any erroneous payments made for
    ambulatory prenatal care provided during a presumptive
    eligibility period (as defined in section 1920(b)(1)), for
    items and services described in subsection (a) of section 1920A
    provided to a child during a presumptive eligibility period
    under such section, [or] for medical assistance provided to an
    individual described in subsection (a) of section 1920B during
    a presumptive eligibility period under such section, or for
    medical assistance provided to an individual described in
    subsection (a) of section 1920C during a presumptive
    eligibility period under such section.
      (vi) In determining the amount of erroneous excess payments,
    there shall not be included any erroneous payments made that
    are attributable to an error in an eligibility determination
    under subtitle C of title II of division A of the America's
    Affordable Health Choices Act of 2009.

               *       *       *       *       *       *       *

      (aa) Maintenance of Medicaid Effort; Simplifying and
    Coordinating Eligibility Rules Between Health Insurance
    Exchange and Medicaid.--
              (1) Maintenance of effort.--
                      (A) In general.--Subject to subparagraph (B),
                    a State is not eligible for payment under
                    subsection (a) for a calendar quarter beginning
                    after the date of the enactment of this
                    subsection if eligibility standards,
                    methodologies, or procedures under its plan
                    under this title (including any waiver under
                    this title or under section 1115 that is
                    permitted to continue effect) that are more
                    restrictive than the eligibility standards,
                    methodologies, or procedures, respectively,
                    under such plan (or waiver) as in effect on
                    June 16, 2009. The Secretary shall extend such
                    a waiver (including the availability of Federal
                    financial participation under such waiver) for
                    such period as may be required for a State to
                    meet the requirement of the previous sentence.
                      (B) Exception for certain waivers.--In the
                    case of a State waiver under section 1115 in
                    effect on June 16, 2009, that permits childless
                    individuals to be eligible solely to receive a
                    premium or cost-sharing subsidy for individual
                    health insurance coverage, effective for
                    coverage provided in Y1--
                              (i) the Secretary shall permit the
                            State to amend such waiver to apply
                            more restrictive eligibility standards,
                            methodologies, or procedures with
                            respect to such individuals under such
                            waiver; and
                              (ii) the application of such more
                            restrictive, standards, methodologies,
                            or procedures under such an amendment
                            shall not be considered in violation of
                            the requirement of subparagraph (A).
              (2) Removal of asset test for certain eligibility
            categories.--
                      (A) In general.--A State is not eligible for
                    payment under subsection (a) for a calendar
                    quarter beginning on or after the first day of
                    Y1 (as defined in section 100(c) of the
                    America's Affordable Health Choices Act of
                    2009), if the State applies any asset or
                    resource test in determining (or redetermining)
                    eligibility of any individual on or after such
                    first day under any of the following:
                              (i) Subclause (I), (III), (IV), or
                            (VI) of section 1902(a)(10)(A)(i).
                              (ii) Subclause (II), (IX), (XIV) or
                            (XVII) of section 1902(a)(10)(A)(ii).
                              (iii) Section 1931(b).
                      (B) Overriding contrary provisions;
                    references.--The provisions of this title that
                    prevent the waiver of an asset or resource test
                    described in subparagraph (A) are hereby
                    waived.
                      (C) References.--Any reference to a provision
                    described in a provision in subparagraph (A)
                    shall be deemed to be a reference to such
                    provision as modified through the application
                    of subparagraphs (A) and (B).

               *       *       *       *       *       *       *

                                  DEFINITIONS

      Sec. 1905. For purposes of this title--
      (a) The term ``medical assistance'' means payment of part or
    all of the cost of the following care and services or the care
    and services themselves, or both (if provided in or after the
    third month before the month in which the recipient makes
    application for assistance or, in the case of medicare cost-
    sharing with respect to a qualified medicare beneficiary
    described in subsection (p)(1), if provided after the month in
    which the individual becomes such a beneficiary) for
    individuals, and, with respect to physicians' or dentists'
    services, at the option of the State, to individuals (other
    than individuals with respect to whom there is being paid, or
    who are eligible, or would be eligible if they were not in a
    medical institution, to have paid with respect to them a State
    supplementary payment and are eligible for medical assistance
    equal in amount, duration, and scope to the medical assistance
    made available to individuals described in section
    1902(a)(10)(A)) not receiving aid or assistance under any plan
    of the State approved under title I, X, XIV, or XVI, or part A
    of title IV, and with respect to whom supplemental security
    income benefits are not being paid under title XVI, who are--
              (i) * * *

               *       *       *       *       *       *       *

              (xii) employed individuals with a medically improved
            disability (as defined in subsection (v)), [or]
              (xiii) individuals described in section 1902(aa),
              (xiv) individuals described in section 1902(ii),
              (xv) individuals described in section 1902(hh), or
              (xvi) individuals described in section
            1902(a)(10)(A)(i)(VIII),
    but whose income and resources are insufficient to meet all of
    such cost--
              (1) * * *

               *       *       *       *       *       *       *

               *       *       *       *       *       *       *

              (4)(A) nursing facility services (other than services
            in an institution for mental diseases) for individuals
            21 years of age or older; (B) early and periodic
            screening, diagnostic, and treatment services (as
            defined in subsection (r)) for individuals who are
            eligible under the plan and are under the age of 21;
            [and] (C) family planning services and supplies
            furnished (directly or under arrangements with others)
            to individuals of child-bearing age (including minors
            who can be considered to be sexually active) who are
            eligible under the State plan and who desire such
            services and supplies ; and (D) preventive services
            described in subsection (z);
              (5)(A) physicians' services furnished by a physician
            (as defined in [section 1861(r)(1)] paragraphs (1) and
            (3) of section 1861(r)), whether furnished in the
            office, the patient's home, a hospital, or a nursing
            facility, or elsewhere, [and] (B) medical and surgical
            services furnished by a dentist (described in section
            1861(r)(2)) to the extent such services may be
            performed under State law either by a doctor of
            medicine or by a doctor of dental surgery or dental
            medicine and would be described in clause (A) if
            furnished by a physician (as defined in section
            1861(r)(1)), and (C) medical and other health services
            (as defined in section 1861(s)) as authorized by State
            law, furnished by an optometrist (described in section
            1861(r)(4)) to the extent such services may be
            performed under State law;

               *       *       *       *       *       *       *

              (27) subject to subsection (x), primary and secondary
            medical strategies and treatment and services for
            individuals who have Sickle Cell Disease; [and]
              (28) nurse home visitation services (as defined in
            subsection (aa));
              (29) freestanding birth center services (as defined
            in subsection (l)(3)(A)) and other ambulatory services
            that are offered by a freestanding birth center (as
            defined in subsection (l)(3)(B)) and that are otherwise
            included in the plan;
              (30) nonemergency transportation to medically
            necessary services, consistent with the requirement of
            section 431.53 of title 42, Code of Federal
            Regulations, as in effect as of June 1, 2008; and
              [(28)] (31) any other medical care, and any other
            type of remedial care recognized under State law,
            specified by the Secretary[,[;

               *       *       *       *       *       *       *

      (b) Subject to section [1933(d)] 1933(b), the term ``Federal
    medical assistance percentage'' for any State shall be 100 per
    centum less the State percentage; and the State percentage
    shall be that percentage which bears the same ratio to 45 per
    centum as the square of the per capita income of such State
    bears to the square of the per capita income of the continental
    United States (including Alaska) and Hawaii; except that (1)
    the Federal medical assistance percentage shall in no case be
    less than 50 per centum or more than 83 per centum, (2) the
    Federal medical assistance percentage for Puerto Rico, the
    Virgin Islands, Guam, the Northern Mariana Islands, and
    American Samoa shall be 50 per centum, (3) for purposes of this
    title and title XXI, the Federal medical assistance percentage
    for the District of Columbia shall be 70 percent, [and] (4) the
    Federal medical assistance percentage shall be equal to the
    enhanced FMAP described in section 2105(b) with respect to
    medical assistance provided to individuals who are eligible for
    such assistance only on the basis of [section
    1902(a)(10)(A)(ii)(XVIII)] subclause (XVIII) or (XXI) of
    section 1902(a)(10)(A)(ii), and (5) 100 percent (or 90 percent
    for periods beginning with 2015) with respect to amounts
    described in subsection (y). The Federal medical assistance
    percentage for any State shall be determined and promulgated in
    accordance with the provisions of section 1101(a)(8)(B).
    Notwithstanding the first sentence of this section, the Federal
    medical assistance percentage shall be 100 per centum with
    respect to amounts expended as medical assistance for services
    which are received through an Indian Health Service facility
    whether operated by the Indian Health Service or by an Indian
    tribe or tribal organization (as defined in section 4 of the
    Indian Health Care Improvement Act). Notwithstanding the first
    sentence of this subsection, in the case of a State plan that
    meets the condition described in subsection (u)(1), with
    respect to expenditures (other than expenditures under section
    1923) described in subsection (u)(2)(A) or subsection (u)(3)
    for the State for a fiscal year, and that do not exceed the
    amount of the State's available allotment under section 2104,
    the Federal medical assistance percentage is equal to the
    enhanced FMAP described in section 2105(b). Notwithstanding the
    first sentence of this subsection and any other provision of
    law, for fiscal years 2011 through 2019, the Federal medical
    assistance percentage for Puerto Rico, the Virgin Islands,
    Guam, the Northern Mariana Islands, and American Samoa shall be
    the highest Federal medical assistance percentage applicable to
    any of the 50 States or the District of Columbia for the fiscal
    year involved, taking into account the application of
    subsections (a) and (b)(1) of section 5001 of division B of the
    American Recovery and Reinvestment Act of 2009 (Public Law 111-
    5) to such States and the District for calendar quarters during
    such fiscal years for which such subsections apply.

               *       *       *       *       *       *       *

      (l)(1) * * *

               *       *       *       *       *       *       *

      (3)(A) The term ``freestanding birth center services'' means
    services furnished to an individual at a freestanding birth
    center (as defined in subparagraph (B)), including by a
    licensed birth attendant (as defined in subparagraph (C)) at
    such center.
      (B) The term ``freestanding birth center'' means a health
    facility--
              (i) that is not a hospital; and
              (ii) where childbirth is planned to occur away from
            the pregnant woman's residence.
      (C) The term ``licensed birth attendant'' means an individual
    who is licensed or registered by the State involved to provide
    health care at childbirth and who provides such care within the
    scope of practice under which the individual is legally
    authorized to perform such care under State law (or the State
    regulatory mechanism provided by State law), regardless of
    whether the individual is under the supervision of, or
    associated with, a physician or other health care provider.
    Nothing in this subparagraph shall be construed as changing
    State law requirements applicable to a licensed birth
    attendant.

               *       *       *       *       *       *       *

      (o)(1) * * *

               *       *       *       *       *       *       *

      (4) The provisions of section 1819A shall apply to a hospice
    program providing hospice care under this title in the same
    manner as such provisions apply to a hospice program providing
    hospice care under title XVIII.
      (p)(1) The term ``qualified medicare beneficiary'' means an
    individual--
              (A) * * *

               *       *       *       *       *       *       *

              (C) whose resources (as determined under section 1613
            for purposes of the supplemental security income
            program) do not exceed twice the maximum amount of
            resources that an individual may have and obtain
            benefits under that program or, [effective beginning
            with January 1, 2010] effective for the period
            beginning with January 1, 2010, and ending with
            December 31, 2011, whose resources (as so determined)
            do not exceed the maximum resource level applied for
            the year under subparagraph (D) of section 1860D-
            14(a)(3) (determined without regard to the life
            insurance policy exclusion provided under subparagraph
            (G) of such section) applicable to an individual or to
            the individual and the individual's spouse (as the case
            may be) or, effective beginning with January 1, 2012,
            whose resources (as so determined) do not exceed the
            maximum resource level applied for the year under
            subparagraph (E) of section 1860D-14(a)(3) (determined
            without regard to the life insurance policy exclusion
            provided under subparagraph (G) of such section)
            applicable to an individual or to the individual and
            the individual's spouse (as the case may be).

               *       *       *       *       *       *       *

      (y) Additional Expenditures Subject to Increased FMAP.--For
    purposes of section 1905(b)(5), the amounts described in this
    subsection are the following:
              (1) Amounts expended for medical assistance for
            individuals described in subclause (VIII) or (IX) of
            section 1902(a)(10)(A)(i), and who is not provided
            medical assistance under section 1943(b)(2) of this
            title or section 205(d)(1)(B) of the America's
            Affordable Health Choices Act of 2009.
              (2) Amounts expended for medical assistance for
            children described in section 203(d)(1)(A) of the
            America's Affordable Health Choices Act of 2009 during
            the time period specified in such section.
              (3)(A) The portion of the amounts expended for
            medical assistance for services described in section
            1902(a)(13)(C) furnished on or after January 1, 2010,
            that is attributable to the amount by which the minimum
            payment rate required under such section (or, by
            application, section 1932(f)) exceeds the payment rate
            applicable to such services under the State plan as of
            June 16, 2009.
              (B) Subparagraphs (A) shall not be construed as
            preventing the payment of Federal financial
            participation based on the Federal medical assistance
            percentage for amounts in excess of those specified
            under such subparagraphs.
      (z) Preventive Services.--The preventive services described
    in this subsection are services not otherwise described in
    subsection (a) or (r) that the Secretary determines are--
              (1)(A) recommended with a grade of A or B by the Task
            Force for Clinical Preventive Services; or
              (B) vaccines recommended for use as appropriate by
            the Director of the Centers for Disease Control and
            Prevention; and
              (2) appropriate for individuals entitled to medical
            assistance under this title.
      (aa) The term ``nurse home visitation services'' means home
    visits by trained nurses to families with a first-time pregnant
    woman, or a child (under 2 years of age), who is eligible for
    medical assistance under this title, but only, to the extent
    determined by the Secretary based upon evidence, that such
    services are effective in one or more of the following:
              (1) Improving maternal or child health and pregnancy
            outcomes or increasing birth intervals between
            pregnancies.
              (2) Reducing the incidence of child abuse, neglect,
            and injury, improving family stability (including
            reduction in the incidence of intimate partner
            violence), or reducing maternal and child involvement
            in the criminal justice system.
              (3) Increasing economic self-sufficiency, employment
            advancement, school-readiness, and educational
            achievement, or reducing dependence on public
            assistance.
      (bb) Payment for Graduate Medical Education.--
              (1) In general.--The term ``medical assistance''
            includes payment for costs of graduate medical
            education consistent with this subsection, whether
            provided in or outside of a hospital.
              (2) Submission of information.--For purposes of
            paragraph (1) and section 1902(a)(13)(A)(v), payment
            for such costs is not consistent with this subsection
            unless--
                      (A) the State submits to the Secretary, in a
                    timely manner and on an annual basis specified
                    by the Secretary, information on total payments
                    for graduate medical education and how such
                    payments are being used for graduate medical
                    education, including--
                              (i) the institutions and programs
                            eligible for receiving the funding;
                              (ii) the manner in which such
                            payments are calculated;
                              (iii) the types and fields of
                            education being supported;
                              (iv) the workforce or other goals to
                            which the funding is being applied;
                              (v) State progress in meeting such
                            goals; and
                              (vi) such other information as the
                            Secretary determines will assist in
                            carrying out paragraphs (3) and (4);
                            and
                      (B) such expenditures are made consistent
                    with such goals and requirements as are
                    established under paragraph (4).
              (3) Review of information.--The Secretary shall make
            the information submitted under paragraph (2) available
            to the Advisory Committee on Health Workforce
            Evaluation and Assessment (established under section
            2261 of the Public Health Service Act). The Secretary
            and the Advisory Committee shall independently review
            the information submitted under paragraph (2), taking
            into account State and local workforce needs.
              (4) Specification of goals and requirements.--The
            Secretary shall specify by rule, initially published by
            not later than December 31, 2011--
                      (A) program goals for the use of funds
                    described in paragraph (1), taking into account
                    recommendations of the such Advisory Committee
                    and the goals for approved medical residency
                    training programs described in section
                    1886(h)(1)(B); and
                      (B) requirements for use of such funds
                    consistent with such goals.
            Such rule may be effective on an interim basis pending
            revision after an opportunity for public comment.

               *       *       *       *       *       *       *

    USE OF ENROLLMENT FEES, PREMIUMS, DEDUCTIONS, COST SHARING, AND SIMILAR
                                    CHARGES

      Sec. 1916. (a) Subject to subsections (g) and (i), the State
    plan shall provide that in the case of individuals described in
    subparagraph (A) or (E)(i) of section 1902(a)(10) who are
    eligible under the plan--
              (1) * * *
              (2) no deduction, cost sharing or similar charge will
            be imposed under the plan with respect to--
                      (A) * * *

               *       *       *       *       *       *       *

                      (D) emergency services (as defined by the
                    Secretary), preventive services described in
                    section 1905(z), family planning services and
                    supplies described in section 1905(a)(4)(C), or

               *       *       *       *       *       *       *

      (b) The State plan shall provide that in the case of
    individuals other than those described in subparagraph (A) or
    (E) of section 1902(a)(10) who are eligible under the plan--
              (1) * * *
              (2) no deduction, cost sharing, or similar charge
            will be imposed under the plan with respect to--
                      (A) * * *

               *       *       *       *       *       *       *

                      (D) emergency services (as defined by the
                    Secretary), preventive services described in
                    section 1905(z), family planning services and
                    supplies described in section 1905(a)(4)(C), or

               *       *       *       *       *       *       *

             STATE OPTION FOR ALTERNATIVE PREMIUMS AND COST SHARING

      Sec. 1916A. (a) State Flexibility.--
              (1) In general.--Notwithstanding sections 1916 and
            1902(a)(10)(B), but subject to paragraph (2), a State,
            at its option and through a State plan amendment, may
            impose premiums and cost sharing for any group of
            individuals (as specified by the State) and for any
            type of services (other than drugs for which cost
            sharing may be imposed under subsection (c), preventive
            services described in section 1905(z), and non-
            emergency services furnished in a hospital emergency
            department for which cost sharing may be imposed under
            subsection (e)), and may vary such premiums and cost
            sharing among such groups or types, consistent with the
            limitations established under this section. Nothing in
            this section shall be construed as superseding (or
            preventing the application of) subsection (g) or (i) of
            section 1916.

               *       *       *       *       *       *       *

                      REQUIREMENTS FOR NURSING FACILITIES

      Sec. 1919. (a) * * *
      (b) Requirements Relating to Provision of Services.--
              (1) Quality of life.--
                      (A) * * *
                      (B) Quality assessment and assurance and
                    quality assurance and performance improvement
                    program.--
                              (i) In general.--A nursing facility
                            must maintain a quality assessment and
                            assurance committee, consisting of the
                            director of nursing services, a
                            physician designated by the facility,
                            and at least 3 other members of the
                            facility's staff, which (i) meets at
                            least quarterly to identify issues with
                            respect to which quality assessment and
                            assurance activities are necessary and
                            (ii) develops and implements
                            appropriate plans of action to correct
                            identified quality deficiencies. A
                            State or the Secretary may not require
                            disclosure of the records of such
                            committee except insofar as such
                            disclosure is related to the compliance
                            of such committee with the requirements
                            of this subparagraph.
                              (ii) Quality assurance and
                            performance improvement program.--
                                      (I) In general.--Not later
                                    than December 31, 2011, the
                                    Secretary shall establish and
                                    implement a quality assurance
                                    and performance improvement
                                    program (in this clause
                                    referred to as the ``QAPI
                                    program'') for nursing
                                    facilities, including multi-
                                    unit chains of such facilities.
                                    Under the QAPI program, the
                                    Secretary shall establish
                                    standards relating to such
                                    facilities and provide
                                    technical assistance to such
                                    facilities on the development
                                    of best practices in order to
                                    meet such standards. Not later
                                    than 1 year after the date on
                                    which the regulations are
                                    promulgated under subclause
                                    (II), a nursing facility must
                                    submit to the Secretary a plan
                                    for the facility to meet such
                                    standards and implement such
                                    best practices, including how
                                    to coordinate the
                                    implementation of such plan
                                    with quality assessment and
                                    assurance activities conducted
                                    under clause (i).
                                      (II) Regulations.--The
                                    Secretary shall promulgate
                                    regulations to carry out this
                                    clause.

               *       *       *       *       *       *       *

              (4) Provision of services and activities.--
                      (A) In general.--To the extent needed to
                    fulfill all plans of care described in
                    paragraph (2), a nursing facility must provide
                    (or arrange for the provision of)--
                              (i) * * *

               *       *       *       *       *       *       *

                    The services provided or arranged by the
                    facility must meet professional standards of
                    quality. With respect to meeting the staffing
                    requirement imposed by the Secretary to carry
                    out clause (iv), the full-time director of food
                    services of the facility, if not a qualified
                    dietitian (as defined in section 483.35(a)(2)
                    of title 42, Code of Federal Regulations, as in
                    effect as of the date of the enactment of this
                    section), shall be a Certified Dietary Manager
                    meeting the requirements of the Certifying
                    Board for Dietary Managers, or a Dietetic
                    Technician, Registered meeting the requirements
                    of the Commission on Dietetic Registration or
                    have equivalent military or academic
                    qualifications (as specified by the Secretary).

               *       *       *       *       *       *       *

              (8) Information on nurse staffing.--
                      (A) * * *

               *       *       *       *       *       *       *

                      (C) Submission of staffing information based
                    on payroll data in a uniform format.--Beginning
                    not later than 2 years after the date of the
                    enactment of this subparagraph, and after
                    consulting with State long-term care ombudsman
                    programs, consumer advocacy groups, provider
                    stakeholder groups, employees and their
                    representatives, and other parties the
                    Secretary deems appropriate, the Secretary
                    shall require a skilled nursing facility to
                    electronically submit to the Secretary direct
                    care staffing information (including
                    information with respect to agency and contract
                    staff) based on payroll and other verifiable
                    and auditable data in a uniform format
                    (according to specifications established by the
                    Secretary in consultation with such programs,
                    groups, and parties). Such specifications shall
                    require that the information submitted under
                    the preceding sentence--
                              (i) specify the category of work a
                            certified employee performs (such as
                            whether the employee is a registered
                            nurse, licensed practical nurse,
                            licensed vocational nurse, certified
                            nursing assistant, therapist, or other
                            medical personnel);
                              (ii) include resident census data and
                            information on resident case mix;
                              (iii) include a regular reporting
                            schedule; and
                              (iv) include information on employee
                            turnover and tenure and on the hours of
                            care provided by each category of
                            certified employees referenced in
                            clause (i) per resident per day.
                    Nothing in this subparagraph shall be construed
                    as preventing the Secretary from requiring
                    submission of such information with respect to
                    specific categories, such as nursing staff,
                    before other categories of certified employees.
                    Information under this subparagraph with
                    respect to agency and contract staff shall be
                    kept separate from information on employee
                    staffing.
      (c) Requirements Relating to Residents' Rights.--
              (1) * * *

               *       *       *       *       *       *       *

              (9) Notification of facility closure.--
                      (A) In general.--Any individual who is an
                    administrator of a nursing facility must--
                              (i) submit to the Secretary, the
                            State long-term care ombudsman,
                            residents of the facility, and the
                            legal representatives of such residents
                            or other responsible parties, written
                            notification of an impending closure--
                                      (I) subject to subclause
                                    (II), not later than the date
                                    that is 60 days prior to the
                                    date of such closure; and
                                      (II) in the case of a
                                    facility where the Secretary
                                    terminates the facility's
                                    participation under this title,
                                    not later than the date that
                                    the Secretary determines
                                    appropriate;
                              (ii) ensure that the facility does
                            not admit any new residents on or after
                            the date on which such written
                            notification is submitted; and
                              (iii) include in the notice a plan
                            for the transfer and adequate
                            relocation of the residents of the
                            facility by a specified date prior to
                            closure that has been approved by the
                            State, including assurances that the
                            residents will be transferred to the
                            most appropriate facility or other
                            setting in terms of quality, services,
                            and location, taking into consideration
                            the needs and best interests of each
                            resident.
                      (B) Relocation.--
                              (i) In general.--The State shall
                            ensure that, before a facility closes,
                            all residents of the facility have been
                            successfully relocated to another
                            facility or an alternative home and
                            community-based setting.
                              (ii) Continuation of payments until
                            residents relocated.--The Secretary
                            may, as the Secretary determines
                            appropriate, continue to make payments
                            under this title with respect to
                            residents of a facility that has
                            submitted a notification under
                            subparagraph (A) during the period
                            beginning on the date such notification
                            is submitted and ending on the date on
                            which the resident is successfully
                            relocated.
      (d) Requirements Relating to Administration and Other
    Matters.--
              (1) Administration.--
                      (A) * * *
                      [(B) Required notices.--If a change occurs
                    in--
                              [(i) the persons with an ownership or
                            control interest (as defined in section
                            1124(a)(3)) in the facility,
                              [(ii) the persons who are officers,
                            directors, agents, or managing
                            employees (as defined in section
                            1126(b)) of the facility,
                              [(iii) the corporation, association,
                            or other company responsible for the
                            management of the facility, or
                              [(iv) the individual who is the
                            administrator or director of nursing of
                            the facility,
                    nursing facility must provide notice to the
                    State agency responsible for the licensing of
                    the facility, at the time of the change, of the
                    change and of the identity of each new person,
                    company, or individual described in the
                    respective clause.]
                      [(C)] (B) Nursing facility administrator.--
                    The administrator of a nursing facility must
                    meet standards established by the Secretary
                    under subsection (f)(4).
                      (C) Compliance and ethics program.--
                              (i) Requirement.--On or after the
                            date that is 36 months after the date
                            of the enactment of this subparagraph,
                            a nursing facility shall, with respect
                            to the entity that operates the
                            facility (in this subparagraph referred
                            to as the ``operating organization'' or
                            ``organization''), have in operation a
                            compliance and ethics program that is
                            effective in preventing and detecting
                            criminal, civil, and administrative
                            violations under this Act and in
                            promoting quality of care consistent
                            with regulations developed under clause
                            (ii).
                              (ii) Development of regulations.--
                                      (I) In general.--Not later
                                    than the date that is 2 years
                                    after such date of the
                                    enactment, the Secretary, in
                                    consultation with the Inspector
                                    General of the Department of
                                    Health and Human Services,
                                    shall develop regulations for
                                    an effective compliance and
                                    ethics program for operating
                                    organizations, which may
                                    include a model compliance
                                    program.
                                      (II) Design of regulations.--
                                    Such regulations with respect
                                    to specific elements or
                                    formality of a program may vary
                                    with the size of the
                                    organization, such that larger
                                    organizations should have a
                                    more formal and rigorous
                                    program and include established
                                    written policies defining the
                                    standards and procedures to be
                                    followed by its employees. Such
                                    requirements may specifically
                                    apply to the corporate level
                                    management of multi-unit
                                    nursing home chains.
                                      (III) Evaluation.--Not later
                                    than 3 years after the date of
                                    promulgation of regulations
                                    under this clause the Secretary
                                    shall complete an evaluation of
                                    the compliance and ethics
                                    programs required to be
                                    established under this
                                    subparagraph. Such evaluation
                                    shall determine if such
                                    programs led to changes in
                                    deficiency citations, changes
                                    in quality performance, or
                                    changes in other metrics of
                                    resident quality of care. The
                                    Secretary shall submit to
                                    Congress a report on such
                                    evaluation and shall include in
                                    such report such
                                    recommendations regarding
                                    changes in the requirements for
                                    such programs as the Secretary
                                    determines appropriate.
                              (iii) Requirements for compliance and
                            ethics programs.--In this subparagraph,
                            the term ``compliance and ethics
                            program'' means, with respect to a
                            nursing facility, a program of the
                            operating organization that--
                                      (I) has been reasonably
                                    designed, implemented, and
                                    enforced so that it generally
                                    will be effective in preventing
                                    and detecting criminal, civil,
                                    and administrative violations
                                    under this Act and in promoting
                                    quality of care; and
                                      (II) includes at least the
                                    required components specified
                                    in clause (iv).
                              (iv) Required components of
                            program.--The required components of a
                            compliance and ethics program of an
                            organization are the following:
                                      (I) The organization must
                                    have established compliance
                                    standards and procedures to be
                                    followed by its employees and
                                    other agents that are
                                    reasonably capable of reducing
                                    the prospect of criminal,
                                    civil, and administrative
                                    violations under this Act.
                                      (II) Specific individuals
                                    within high-level personnel of
                                    the organization must have been
                                    assigned overall responsibility
                                    to oversee compliance with such
                                    standards and procedures and
                                    has sufficient resources and
                                    authority to assure such
                                    compliance.
                                      (III) The organization must
                                    have used due care not to
                                    delegate substantial
                                    discretionary authority to
                                    individuals whom the
                                    organization knew, or should
                                    have known through the exercise
                                    of due diligence, had a
                                    propensity to engage in
                                    criminal, civil, and
                                    administrative violations under
                                    this Act.
                                      (IV) The organization must
                                    have taken steps to communicate
                                    effectively its standards and
                                    procedures to all employees and
                                    other agents, such as by
                                    requiring participation in
                                    training programs or by
                                    disseminating publications that
                                    explain in a practical manner
                                    what is required.
                                      (V) The organization must
                                    have taken reasonable steps to
                                    achieve compliance with its
                                    standards, such as by utilizing
                                    monitoring and auditing systems
                                    reasonably designed to detect
                                    criminal, civil, and
                                    administrative violations under
                                    this Act by its employees and
                                    other agents and by having in
                                    place and publicizing a
                                    reporting system whereby
                                    employees and other agents
                                    could report violations by
                                    others within the organization
                                    without fear of retribution.
                                      (VI) The standards must have
                                    been consistently enforced
                                    through appropriate
                                    disciplinary mechanisms,
                                    including, as appropriate,
                                    discipline of individuals
                                    responsible for the failure to
                                    detect an offense.
                                      (VII) After an offense has
                                    been detected, the organization
                                    must have taken all reasonable
                                    steps to respond appropriately
                                    to the offense and to prevent
                                    further similar offenses,
                                    including repayment of any
                                    funds to which it was not
                                    entitled and any necessary
                                    modification to its program to
                                    prevent and detect criminal,
                                    civil, and administrative
                                    violations under this Act.
                                      (VIII) The organization must
                                    periodically undertake
                                    reassessment of its compliance
                                    program to identify changes
                                    necessary to reflect changes
                                    within the organization and its
                                    facilities.
                              (v) Coordination.--The provisions of
                            this subparagraph shall apply with
                            respect to a nursing facility in lieu
                            of section 1902(a)(77).
                      (D) Availability of survey, certification,
                    and complaint investigation reports.--A nursing
                    facility must--
                              (i) have reports with respect to any
                            surveys, certifications, and complaint
                            investigations made respecting the
                            facility during the 3 preceding years
                            available for any individual to review
                            upon request; and
                              (ii) post notice of the availability
                            of such reports in areas of the
                            facility that are prominent and
                            accessible to the public.
                    The facility shall not make available under
                    clause (i) identifying information about
                    complainants or residents.

               *       *       *       *       *       *       *

      (e) State Requirements Relating to Nursing Facility
    Requirements.--As a condition of approval of its plan under
    this title, a State must provide for the following:
              (1) * * *

               *       *       *       *       *       *       *

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

               *       *       *       *       *       *       *

      (f) Responsibilities of Secretary Relating to Nursing
    Facility Requirements.--
              (1) * * *
              (2) Requirements for nurse aide training and
            competency evaluation programs and for nurse aide
            competency evaluation programs.--
                      (A) In general.--For purposes of subsections
                    (b)(5) and (e)(1)(A), the Secretary shall
                    establish, by not later than September 1,
                    1988--
                              (i) requirements for the approval of
                            nurse aide training and competency
                            evaluation programs, including
                            requirements relating to (I) the areas
                            to be covered in such a program
                            (including at least basic nursing
                            skills, personal care skills,
                            recognition of mental health and social
                            service needs, care of cognitively
                            impaired residents, basic restorative
                            services, and residents' rights) and
                            content of the curriculum (including,
                            in the case of initial training and, if
                            the Secretary determines appropriate,
                            in the case of ongoing training,
                            dementia management training and
                            resident abuse prevention training),
                            (II) minimum hours of initial and
                            ongoing training and retraining
                            (including not less than 75 hours in
                            the case of initial training), (III)
                            qualifications of instructors, and (IV)
                            procedures for determination of
                            competency;

               *       *       *       *       *       *       *

              (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.
              (11) Standardized complaint form.--The Secretary
            shall develop a standardized complaint form for use by
            a resident (or a person acting on the resident's
            behalf) in filing a complaint with a State survey and
            certification agency and a State long-term care
            ombudsman program with respect to a nursing facility.
      (g) Survey and Certification Process.--
              (1) * * *

               *       *       *       *       *       *       *

              (5) Disclosure of results of inspections and
            activities.--
                      (A) * * *

               *       *       *       *       *       *       *

                      (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.
      (h) Enforcement Process.--
              (1) * * *
              (2) Specified remedies.--
                      (A) Listing.--Except as provided in
                    subparagraph (B)(ii), each State shall
                    establish by law (whether statute or
                    regulation) at least the following remedies:
                              (i) * * *
                              (ii) [A civil money penalty assessed
                            and collected, with interest, for each
                            day in which the facility is or was out
                            of compliance with a requirement of
                            subsection (b), (c), or (d).] A civil
                            money penalty in accordance with
                            subparagraph (G). Funds collected by a
                            State as a result of imposition of such
                            a penalty (or as a result of the
                            imposition by the State of a civil
                            money penalty for activities described
                            in subsections (b)(3)(B)(ii)(I),
                            (b)(3)(B)(ii)(II), or (g)(2)(A)(i))
                            shall be applied to the protection of
                            the health or property of residents of
                            nursing facilities that the State or
                            the Secretary finds deficient,
                            including payment for the costs of
                            relocation of residents to other
                            facilities, maintenance of operation of
                            a facility pending correction of
                            deficiencies or closure, and
                            reimbursement of residents for personal
                            funds lost, and some portion of such
                            funds may be used to support activities
                            that benefit residents, including
                            assistance to support and protect
                            residents of a facility that closes
                            (voluntarily or involuntarily) or is
                            decertified (including offsetting costs
                            of relocating residents to home and
                            community-based settings or another
                            facility), projects that support
                            resident and family councils and other
                            consumer involvement in assuring
                            quality care in facilities, and
                            facility improvement initiatives
                            approved by the Secretary (including
                            joint training of facility staff and
                            surveyors, providing technical
                            assistance to facilities under quality
                            assurance programs, the appointment of
                            temporary management, and other
                            activities approved by the Secretary).

               *       *       *       *       *       *       *

                      (G) Civil money penalties.--
                              (i) In general.--The State may impose
                            a civil money penalty under
                            subparagraph (A)(ii) in the applicable
                            per instance or per day amount (as
                            defined in subclause (II) and (III))
                            for each day or instance, respectively,
                            of noncompliance (as determined
                            appropriate by the Secretary).
                              (ii) Applicable per instance
                            amount.--In this subparagraph, the term
                            ``applicable per instance amount''
                            means--
                                      (I) in the case where the
                                    deficiency is found to be a
                                    direct proximate cause of death
                                    of a resident of the facility,
                                    an amount not to exceed
                                    $100,000.
                                      (II) in each case of a
                                    deficiency where the facility
                                    is cited for actual harm or
                                    immediate jeopardy, an amount
                                    not less than $3,050 and not
                                    more than $25,000; and
                                      (III) in each case of any
                                    other deficiency, an amount not
                                    less than $250 and not to
                                    exceed $3050.
                              (iii) Applicable per day amount.--In
                            this subparagraph, the term
                            ``applicable per day amount'' means--
                                      (I) in each case of a
                                    deficiency where the facility
                                    is cited for actual harm or
                                    immediate jeopardy, an amount
                                    not less than $3,050 and not
                                    more than $25,000 and
                                      (II) in each case of any
                                    other deficiency, an amount not
                                    less than $250 and not to
                                    exceed $3,050.
                              (iv) Reduction of civil money
                            penalties in certain circumstances.--
                            Subject to clauses (v) and (vi), in the
                            case where a facility self-reports and
                            promptly corrects a deficiency for
                            which a penalty was imposed under
                            subparagraph (A)(ii) not later than 10
                            calendar days after the date of such
                            imposition, the State may reduce the
                            amount of the penalty imposed by not
                            more than 50 percent.
                              (v) Prohibition on reduction for
                            certain deficiencies.--
                                      (I) Repeat deficiencies.--The
                                    State may not reduce under
                                    clause (iv) the amount of a
                                    penalty if the State had
                                    reduced a penalty imposed on
                                    the facility in the preceding
                                    year under such clause with
                                    respect to a repeat deficiency.
                                      (II) Certain other
                                    deficiencies.--The State may
                                    not reduce under clause (iv)
                                    the amount of a penalty if the
                                    penalty is imposed for a
                                    deficiency described in clause
                                    (ii)(II) or (iii)(I) and the
                                    actual harm or widespread harm
                                    that immediately jeopardizes
                                    the health or safety of a
                                    resident or residents of the
                                    facility, or if the penalty is
                                    imposed for a deficiency
                                    described in clause (ii)(I).
                                      (III) Limitation on aggregate
                                    reductions.--The aggregate
                                    reduction in a penalty under
                                    clause (iv) may not exceed 35
                                    percent on the basis of self-
                                    reporting, on the basis of a
                                    waiver or an appeal (as
                                    provided for under regulations
                                    under section 488.436 of title
                                    42, Code of Federal
                                    Regulations), or on the basis
                                    of both.
                              (vi) Collection of civil money
                            penalties.--In the case of a civil
                            money penalty imposed under
                            subparagraph (A)(ii), the State--
                                      (I) subject to subclause
                                    (III), shall, not later than 30
                                    days after the date of
                                    imposition of the penalty,
                                    provide the opportunity for the
                                    facility to participate in an
                                    independent informal dispute
                                    resolution process which
                                    generates a written record
                                    prior to the collection of such
                                    penalty, but such opportunity
                                    shall not affect the
                                    responsibility of the State
                                    survey agency for making final
                                    recommendations for such
                                    penalties;
                                      (II) in the case where the
                                    penalty is imposed for each day
                                    of noncompliance, shall not
                                    impose a penalty for any day
                                    during the period beginning on
                                    the initial day of the
                                    imposition of the penalty and
                                    ending on the day on which the
                                    informal dispute resolution
                                    process under subclause (I) is
                                    completed;
                                      (III) may provide for the
                                    collection of such civil money
                                    penalty and the placement of
                                    such amounts collected in an
                                    escrow account under the
                                    direction of the State on the
                                    earlier of the date on which
                                    the informal dispute resolution
                                    process under subclause (I) is
                                    completed or the date that is
                                    90 days after the date of the
                                    imposition of the penalty;
                                      (IV) may provide that such
                                    amounts collected are kept in
                                    such account pending the
                                    resolution of any subsequent
                                    appeals;
                                      (V) in the case where the
                                    facility successfully appeals
                                    the penalty, may provide for
                                    the return of such amounts
                                    collected (plus interest) to
                                    the facility; and
                                      (VI) in the case where all
                                    such appeals are unsuccessful,
                                    may provide that such funds
                                    collected shall be used for the
                                    purposes described in the
                                    second sentence of subparagraph
                                    (A)(ii).
              (3) Secretarial authority.--
                      (A) * * *

               *       *       *       *       *       *       *

                      (C) Specified remedies.--The Secretary may
                    take the following actions with respect to a
                    finding that a facility has not met an
                    applicable requirement:
                              (i) * * *
                              [(ii) Authority with respect to civil
                            money penalties.--The Secretary may
                            impose a civil money penalty in an
                            amount not to exceed $10,000 for each
                            day of noncompliance. The provisions of
                            section 1128A (other than subsections
                            (a) and (b)) shall apply to a civil
                            money penalty under the previous
                            sentence in the same manner as such
                            provisions apply to a penalty or
                            proceeding under section 1128A(a).]
                              (ii) Authority with respect to civil
                            money penalties.--
                                      (I) Amount.--Subject to
                                    subclause (II), the Secretary
                                    may impose a civil money
                                    penalty in an amount not to
                                    exceed $10,000 for each day or
                                    each instance of noncompliance
                                    (as determined appropriate by
                                    the Secretary).
                                      (II) Reduction of civil money
                                    penalties in certain
                                    circumstances.--Subject to
                                    subclause (III), in the case
                                    where a facility self-reports
                                    and promptly corrects a
                                    deficiency for which a penalty
                                    was imposed under this clause
                                    not later than 10 calendar days
                                    after the date of such
                                    imposition, the Secretary may
                                    reduce the amount of the
                                    penalty imposed by not more
                                    than 50 percent.
                                      (III) Prohibition on
                                    reduction for repeat
                                    deficiencies.--The Secretary
                                    may not reduce the amount of a
                                    penalty under subclause (II) if
                                    the Secretary had reduced a
                                    penalty imposed on the facility
                                    in the preceding year under
                                    such subclause with respect to
                                    a repeat deficiency.
                                      (IV) Collection of civil
                                    money penalties.--In the case
                                    of a civil money penalty
                                    imposed under this clause, the
                                    Secretary--
                                              (aa) subject to item
                                            (bb), shall, not later
                                            than 30 days after the
                                            date of imposition of
                                            the penalty, provide
                                            the opportunity for the
                                            facility to participate
                                            in an independent
                                            informal dispute
                                            resolution process
                                            which generates a
                                            written record prior to
                                            the collection of such
                                            penalty;
                                              (bb) in the case
                                            where the penalty is
                                            imposed for each day of
                                            noncompliance, shall
                                            not impose a penalty
                                            for any day during the
                                            period beginning on the
                                            initial day of the
                                            imposition of the
                                            penalty and ending on
                                            the day on which the
                                            informal dispute
                                            resolution process
                                            under item (aa) is
                                            completed;
                                              (cc) may provide for
                                            the collection of such
                                            civil money penalty and
                                            the placement of such
                                            amounts collected in an
                                            escrow account under
                                            the direction of the
                                            Secretary on the
                                            earlier of the date on
                                            which the informal
                                            dispute resolution
                                            process under item (aa)
                                            is completed or the
                                            date that is 90 days
                                            after the date of the
                                            imposition of the
                                            penalty;
                                              (dd) may provide that
                                            such amounts collected
                                            are kept in such
                                            account pending the
                                            resolution of any
                                            subsequent appeals;
                                              (ee) in the case
                                            where the facility
                                            successfully appeals
                                            the penalty, may
                                            provide for the return
                                            of such amounts
                                            collected (plus
                                            interest) to the
                                            facility; and
                                              (ff) in the case
                                            where all such appeals
                                            are unsuccessful, may
                                            provide that some
                                            portion of such amounts
                                            collected may be used
                                            to support activities
                                            that benefit residents,
                                            including assistance to
                                            support and protect
                                            residents of a facility
                                            that closes
                                            (voluntarily or
                                            involuntarily) or is
                                            decertified (including
                                            offsetting costs of
                                            relocating residents to
                                            home and community-
                                            based settings or
                                            another facility),
                                            projects that support
                                            resident and family
                                            councils and other
                                            consumer involvement in
                                            assuring quality care
                                            in facilities, and
                                            facility improvement
                                            initiatives approved by
                                            the Secretary
                                            (including joint
                                            training of facility
                                            staff and surveyors,
                                            technical assistance
                                            for facilities under
                                            quality assurance
                                            programs, the
                                            appointment of
                                            temporary management,
                                            and other activities
                                            approved by the
                                            Secretary).
                                      (V) Procedure.--The
                                    provisions of section 1128A
                                    (other than subsections (a) and
                                    (b) and except to the extent
                                    that such provisions require a
                                    hearing prior to the imposition
                                    of a civil money penalty) shall
                                    apply to a civil money penalty
                                    under this clause in the same
                                    manner as such provisions apply
                                    to a penalty or proceeding
                                    under section 1128A(a).

               *       *       *       *       *       *       *

              (8) Construction.--The remedies provided under this
            subsection are in addition to those otherwise available
            under State or Federal law and shall not be construed
            as limiting such other remedies, including any remedy
            available to an individual at common law. The remedies
            described in clauses (i), (iii), and (iv) of paragraph
            (2)(A) and in paragraph (3)(C)(ii) may be imposed
            during the pendency of any hearing. The provisions of
            this subsection shall apply to a nursing facility (or
            portion thereof) notwithstanding that the facility (or
            portion thereof) also is a skilled nursing facility for
            purposes of title XVIII.

               *       *       *       *       *       *       *

      (i) Nursing Home Compare Website.--
              (1) Inclusion of additional information.--
                      (A) In general.--The Secretary shall ensure
                    that the Department of Health and Human
                    Services includes, as part of the information
                    provided for comparison of nursing homes on the
                    official Internet website of the Federal
                    Government for Medicare beneficiaries (commonly
                    referred to as the ``Nursing Home Compare''
                    Medicare website) (or a successor website), the
                    following information in a manner that is
                    prominent, easily accessible, readily
                    understandable to consumers of long-term care
                    services, and searchable:
                              (i) Staffing data for each facility
                            (including resident census data and
                            data on the hours of care provided per
                            resident per day) based on data
                            submitted under subsection
                            (b)(8)(C)(ii), including information on
                            staffing turnover and tenure, in a
                            format that is clearly understandable
                            to consumers of long-term care services
                            and allows such consumers to compare
                            differences in staffing between
                            facilities and State and national
                            averages for the facilities. Such
                            format shall include--
                                      (I) concise explanations of
                                    how to interpret the data (such
                                    as plain English explanation of
                                    data reflecting ``nursing home
                                    staff hours per resident
                                    day'');
                                      (II) differences in types of
                                    staff (such as training
                                    associated with different
                                    categories of staff);
                                      (III) the relationship
                                    between nurse staffing levels
                                    and quality of care; and
                                      (IV) an explanation that
                                    appropriate staffing levels
                                    vary based on patient case mix.
                              (ii) Links to State Internet websites
                            with information regarding State survey
                            and certification programs, links to
                            Form 2567 State inspection reports (or
                            a successor form) on such websites,
                            information to guide consumers in how
                            to interpret and understand such
                            reports, and the facility plan of
                            correction or other response to such
                            report.
                              (iii) The standardized complaint form
                            developed under subsection (f)(10),
                            including explanatory material on what
                            complaint forms are, how they are used,
                            and how to file a complaint with the
                            State survey and certification program
                            and the State long-term care ombudsman
                            program.
                              (iv) Summary information on the
                            number, type, severity, and outcome of
                            substantiated complaints.
                              (v) The number of adjudicated
                            instances of criminal violations by
                            employees of a nursing facility--
                                      (I) that were committed
                                    inside of the facility; and
                                      (II) with respect to such
                                    instances of violations or
                                    crimes committed outside of the
                                    facility, that were the
                                    violations or crimes that
                                    resulted in the serious bodily
                                    injury of an elder.
                      (B) Deadline for provision of information.--
                              (i) In general.--Except as provided
                            in clause (ii), the Secretary shall
                            ensure that the information described
                            in subparagraph (A) is included on such
                            website (or a successor website) not
                            later than 1 year after the date of the
                            enactment of this subsection.
                              (ii) Exception.--The Secretary shall
                            ensure that the information described
                            in subparagraph (A)(i) and (A)(iii) is
                            included on such website (or a
                            successor website) not later than the
                            date on which the requirements under
                            section 1124(c)(4) and subsection
                            (b)(8)(C)(ii) are implemented.
              (2) Review and modification of website.--
                      (A) In general.--The Secretary shall
                    establish a process--
                              (i) to review the accuracy, clarity
                            of presentation, timeliness, and
                            comprehensiveness of information
                            reported on such website as of the day
                            before the date of the enactment of
                            this subsection; and
                              (ii) not later than 1 year after the
                            date of the enactment of this
                            subsection, to modify or revamp such
                            website in accordance with the review
                            conducted under clause (i).
                      (B) Consultation.--In conducting the review
                    under subparagraph (A)(i), the Secretary shall
                    consult with--
                              (i) State long-term care ombudsman
                            programs;
                              (ii) consumer advocacy groups;
                              (iii) provider stakeholder groups;
                              (iv) skilled nursing facility
                            employees and their representatives;
                            and
                              (v) any other representatives of
                            programs or groups the Secretary
                            determines appropriate.
      [(i)] (j) Construction.--Where requirements or obligations
    under this section are identical to those provided under
    section 1819 of this Act, the fulfillment of those requirements
    or obligations under section 1819 shall be considered to be the
    fulfillment of the corresponding requirements or obligations
    under this section.

               *       *       *       *       *       *       *

              PRESUMPTIVE ELIGIBILITY FOR FAMILY PLANNING SERVICES

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

               *       *       *       *       *       *       *

      ADJUSTMENT IN PAYMENT FOR INPATIENT HOSPITAL SERVICES FURNISHED BY
                        DISPROPORTIONATE SHARE HOSPITALS

      Sec. 1923. (a) * * *
      (b) Hospitals Deemed Disproportionate Share.--
              (1) * * *

               *       *       *       *       *       *       *

              (4) The Secretary may not restrict a State's
            authority to designate hospitals as disproportionate
            share hospitals under this section. The previous
            sentence shall not be construed to affect the authority
            of the Secretary to reduce payments pursuant to section
            1903(w)(1)(A)(iii) if the Secretary determines that, as
            a result of such designations, there is in effect a
            hold harmless provision described in section 1903(w)(4)
            or to affect the authority of the Secretary to issue
            and implement the DSH Health Reform methodology under
            section 1704(b)(2) of the America's Health Choices Act
            of 2009.

               *       *       *       *       *       *       *

      (d) Requirements To Qualify as Disproportionate Share
    Hospital.--
              (1) * * *

               *       *       *       *       *       *       *

              (4) No hospital may be defined or deemed as a
            disproportionate share hospital, or as an essential
            access hospital (for purposes of subsection
            (f)(6)(A)(iv)), under a State plan under this title or
            subsection (b) of this section (including any waiver
            under section 1115) unless the hospital--
                      (A) provides services to beneficiaries under
                    this title without discrimination on the ground
                    of race, color, national origin, creed, source
                    of payment, status as a beneficiary under this
                    title, or any other ground unrelated to such
                    beneficiary's need for the services or the
                    availability of the needed services in the
                    hospital; and
                      (B) makes arrangements for, and accepts,
                    reimbursement under this title for services
                    provided to eligible beneficiaries under this
                    title.

               *       *       *       *       *       *       *

      (f) Limitation on Federal Financial Participation.--
              (1) * * *

               *       *       *       *       *       *       *

              (7) Special rule for fiscal years 2017, 2018, and
            2019.--
                      (A) Fiscal year 2017.--Notwithstanding
                    paragraph (2), the total DSH allotments for all
                    States for--
                              (i) fiscal year 2017, shall be the
                            total DSH allotments that would
                            otherwise be determined under this
                            subsection for such fiscal year
                            decreased by $1,500,000,000;
                              (ii) fiscal year 2018, shall be the
                            total DSH allotments that would
                            otherwise be determined under this
                            subsection for such fiscal year
                            decreased by $2,500,000,000; and
                              (iii) fiscal year 2019, shall be the
                            total DSH allotments that would
                            otherwise be determined under this
                            subsection for such fiscal year
                            decreased by $6,000,000,000.
              [(7)] (8) Definition of state.-- In this subsection,
            the term ``State'' means the 50 States and the District
            of Columbia.

               *       *       *       *       *       *       *

                EXTENSION OF ELIGIBILITY FOR MEDICAL ASSISTANCE

      Sec. 1925. (a) * * *

               *       *       *       *       *       *       *

      (f) Sunset.--This section shall not apply with respect to
    families that cease to be eligible for aid under part A of
    title IV after [December 31, 2010] December 31, 2012.

               *       *       *       *       *       *       *

                 ASSURING ADEQUATE PAYMENT LEVELS FOR SERVICES

      Sec. 1926.  (a) In General.--A State plan under this title
    shall not be considered to meet the requirement of section
    1902(a)(30)(A) for a year (beginning with 2011) unless, by not
    later than April 1 before the beginning of such year, the State
    submits to the Secretary an amendment to the plan that
    specifies the payment rates to be used for such services under
    the plan in such year and includes in such submission such
    additional data as will assist the Secretary in evaluating the
    State's compliance with such requirement, including data
    relating to how rates established for payments to medicaid
    managed care organizations under sections 1903(m) and 1932 take
    into account such payment rates.
      (b) Secretarial Review.--The Secretary, by not later than 90
    days after the date of submission of a plan amendment under
    subsection (a), shall--
              (1) review each such amendment for compliance with
            the requirement of section 1902(a)(30)(A); and
              (2) approve or disapprove each such amendment.
    If the Secretary disapproves such an amendment, the State shall
    immediately submit a revised amendment that meets such
    requirement.

                      PAYMENT FOR COVERED OUTPATIENT DRUGS

      Sec. 1927. (a) Requirement for Rebate Agreement.--
              (1) * * *

               *       *       *       *       *       *       *

              (5) Limitation on prices of drugs purchased by
            covered entities.--
                      (A) Agreement with secretary.--A manufacturer
                    meets the requirements of this paragraph if the
                    manufacturer has entered into an agreement with
                    the Secretary that meets the requirements of
                    section 340B of the Public Health Service Act
                    with respect to [covered outpatient drugs]
                    covered drugs (as defined in section 340B(b)(2)
                    of the Public Health Service Act) purchased by
                    a covered entity on or after the first day of
                    the first month that begins after the date of
                    the enactment of this paragraph.

               *       *       *       *       *       *       *

                      [(D) Effect of subsequent amendments.--In
                    determining whether an agreement under
                    subparagraph (A) meets the requirements of
                    section 340B of the Public Health Service Act,
                    the Secretary shall not take into account any
                    amendments to such section that are enacted
                    after the enactment of title VI of the Veterans
                    Health Care Act of 1992.]
                      (D) State responsibility for calculating
                    hospital credits.--The State shall calculate
                    the credits owed by the hospital under
                    paragraph (1) of section 340B(c) of the Public
                    Health Service Act and provide the hospital
                    with both the amounts and an explanation of how
                    it calculated the credits. In performing the
                    calculations specified in paragraphs (2)(A)(ii)
                    and (2)(B)(ii) of such section, the State shall
                    use the average manufacturer price applicable
                    to the calendar quarter in which the drug was
                    purchased by the hospital.
      (b) Terms of Rebate Agreement.--
              (1) Periodic rebates.--
                      (A) In general.--A rebate agreement under
                    this subsection shall require the manufacturer
                    to provide, to each State plan approved under
                    this title, a rebate for a rebate period in an
                    amount specified in subsection (c) for covered
                    outpatient drugs of the manufacturer dispensed
                    after December 31, 1990, for which payment was
                    made under the State plan for such period,
                    including such drugs dispensed to individuals
                    enrolled with a medicaid managed care
                    organization if the organization is responsible
                    for coverage of such drugs. Such rebate shall
                    be paid by the manufacturer not later than 30
                    days after the date of receipt of the
                    information described in paragraph (2) for the
                    period involved.

               *       *       *       *       *       *       *

              (2) State provision of information.--
                      (A) * * *

               *       *       *       *       *       *       *

                      (C) Reporting on mmco drugs.--On a quarterly
                    basis, each State shall report to the Secretary
                    the total amount of rebates in dollars received
                    from pharmacy manufacturers for drugs provided
                    to individuals enrolled with Medicaid managed
                    care organizations that contract under section
                    1903(m).
              (3) Manufacturer provision of price information.--
                      (A) In general.--Each manufacturer with an
                    agreement in effect under this section shall
                    report to the Secretary--
                              (i) not later than 30 days after the
                            last day of each month of a rebate
                            period under the agreement--
                              (I) * * *

               *       *       *       *       *       *       *

                              (iii) for calendar quarters beginning
                            on or after January 1, 2004, in
                            conjunction with reporting required
                            under clause (i) and by National Drug
                            Code (including package size)--
                                      (I) * * *

               *       *       *       *       *       *       *

                            for a drug or biological described in
                            subparagraph (A)(iv) (including
                            influenza vaccines furnished on or
                            after January 1, 2011), (C), (D), (E),
                            or (G) of section 1842(o)(1) or section
                            1881(b)(13)(A)(ii), and, for calendar
                            quarters beginning on or after January
                            1, 2007 and only with respect to the
                            information described in subclause
                            (III), for covered outpatient drugs.
                              (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.
                    Information reported under this subparagraph is
                    subject to audit by the Inspector General of
                    the Department of Health and Human Services.
                    Beginning July 1, 2006, the Secretary shall
                    provide on a monthly basis to States under
                    subparagraph (D)(iv) the most recently reported
                    average manufacturer prices for single source
                    drugs and for multiple source drugs [and shall,
                    on at least a quarterly basis, update the
                    information posted on the website under
                    subparagraph (D)(v)].

               *       *       *       *       *       *       *

                      (D) Confidentiality of information.--
                    Notwithstanding any other provision of law,
                    information disclosed by manufacturers or
                    wholesalers under this paragraph or under an
                    agreement with the Secretary of Veterans
                    Affairs described in subsection (a)(6)(A)(ii)
                    (other than the wholesale acquisition cost for
                    purposes of carrying out section 1847A) is
                    confidential and shall not be disclosed by the
                    Secretary or the Secretary of Veterans Affairs
                    or a State agency (or contractor therewith) in
                    a form which discloses the identity of a
                    specific manufacturer or wholesaler, prices
                    charged for drugs by such manufacturer or
                    wholesaler, except--
                              (i) * * *

               *       *       *       *       *       *       *

                              (v) to the Secretary to disclose
                            (through a website accessible to the
                            public) weighted average manufacturer
                            prices.

               *       *       *       *       *       *       *

      (c) Determination of Amount of Rebate.--
              (1) Basic rebate for single source drugs and
            innovator multiple source drugs.--
                      (A) * * *
                      (B) Range of rebates required.--
                              (i) Minimum rebate percentage.--For
                            purposes of subparagraph (A)(ii)(II),
                            the ``minimum rebate percentage'' for
                            rebate periods beginning--
                                      (I) * * *

               *       *       *       *       *       *       *

                                      (IV) after December 31, 1994,
                                    and before January 1, 1996, is
                                    15.2 percent; [and]
                                      (V) after December 31, 1995,
                                    and before January 1, 2010 is
                                    15.1 percent[.]; and
                                      (VI) after December 31, 2009,
                                    is 22.1 percent.

               *       *       *       *       *       *       *

              (2) Additional rebate for single source and innovator
            multiple source drugs.--
                      (A) * * *

               *       *       *       *       *       *       *

                      (C) Treatment of new formulations.--In the
                    case of a drug that is a line extension of a
                    single source drug or an innovator multiple
                    source drug that is an oral solid dosage form,
                    the rebate obligation with respect to such drug
                    under this section shall be the amount computed
                    under this section for such new drug or, if
                    greater, the product of--
                              (i) the average manufacturer price of
                            the line extension of a single source
                            drug or an innovator multiple source
                            drug that is an oral solid dosage form;
                              (ii) the highest additional rebate
                            (calculated as a percentage of average
                            manufacturer price) under this section
                            for any strength of the original single
                            source drug or innovator multiple
                            source drug; and
                              (iii) the total number of units of
                            each dosage form and strength of the
                            line extension product paid for under
                            the State plan in the rebate period (as
                            reported by the State).
                    In this subparagraph, the term ``line
                    extension'' means, with respect to a drug, an
                    extended release formulation of the drug.

               *       *       *       *       *       *       *

      (d) Limitations on Coverage of Drugs.--
              (1) * * *
              (2) List of drugs subject to restriction.--The
            following drugs or classes of drugs, or their medical
            uses, may be excluded from coverage or otherwise
            restricted:
                      (A) * * *

               *       *       *       *       *       *       *

                      [(E) Agents when used to promote smoking
                    cessation.]
                      [(F)] (E) Prescription vitamins and mineral
                    products, except prenatal vitamins and fluoride
                    preparations.
                      [(G)] (F) Nonprescription drugs, except
                    agents approved by the Food and Drug
                    Administration for purposes of promoting, and
                    when used to promote, tobacco cessation.
                      [(H)] (G) Covered outpatient drugs which the
                    manufacturer seeks to require as a condition of
                    sale that associated tests or monitoring
                    services be purchased exclusively from the
                    manufacturer or its designee.
                      [(I)] (H) Barbiturates.
                      [(J)] (I) Benzodiazepines.
                      [(K)] (J) Agents when used for the treatment
                    of sexual or erectile dysfunction, unless such
                    agents are used to treat a condition, other
                    than sexual or erectile dysfunction, for which
                    the agents have been approved by the Food and
                    Drug Administration.

               *       *       *       *       *       *       *

      (e) Treatment of Pharmacy Reimbursement Limits.--
              (1) * * *

               *       *       *       *       *       *       *

              [(5) Use of amp in upper payment limits.--Effective
            January 1, 2007, in applying the Federal upper
            reimbursement limit under paragraph (4) and section
            447.332(b) of title 42 of the Code of Federal
            Regulations, the Secretary shall substitute 250 percent
            of the average manufacturer price (as computed without
            regard to customary prompt pay discounts extended to
            wholesalers) for 150 percent of the published price.]
              (5) Use of amp in upper payment limits.--The
            Secretary shall calculate the Federal upper
            reimbursement limit established under paragraph (4) as
            130 percent of the weighted average (determined on the
            basis of manufacturer utilization) of monthly average
            manufacturer prices.

               *       *       *       *       *       *       *

      (j) [Exemption] Special Rules of Organized Health Care
    Settings.--(1) Covered outpatient drugs dispensed by health
    maintenance organizations, including medicaid managed care
    organizations that contract under section 1903(m), are [not]
    subject to the requirements of this section.

               *       *       *       *       *       *       *

      (k) Definitions.--In the section--
              (1) Average manufacturer price.--
                      (A) In general.--Subject to [subparagraph
                    (B)] subparagraphs (B) and (D), the term
                    ``average manufacturer price'' means, with
                    respect to a covered outpatient drug of a
                    manufacturer for a rebate period, the average
                    price paid to the manufacturer for the drug in
                    the United States by wholesalers for drugs
                    distributed to the retail pharmacy class of
                    trade.
                      (B) Exclusion of customary prompt pay
                    discounts [extended to wholesalers] and other
                    payments.--The average manufacturer price for a
                    covered outpatient drug shall be determined
                    without [regard to customary prompt pay
                    discounts extended to wholesalers.] regard to--
                              (i) customary prompt pay discounts
                            extended to wholesalers;
                              (ii) bona fide service fees paid by
                            manufacturers;
                              (iii) reimbursement by manufacturers
                            for recalled, damaged, expired, or
                            otherwise unsalable returned goods,
                            including reimbursement for the cost of
                            the goods and any reimbursement of
                            costs associated with return goods
                            handling and processing, reverse
                            logistics, and drug destruction;
                              (iv) sales directly to, or rebates,
                            discounts, or other price concessions
                            provided to, pharmacy benefit managers,
                            managed care organizations, health
                            maintenance organizations, insurers,
                            mail order pharmacies that are not open
                            to all members of the public, or long
                            term care providers, provided that
                            these rebates, discounts, or price
                            concessions are not passed through to
                            retail pharmacies;
                              (v) sales directly to, or rebates,
                            discounts, or other price concessions
                            provided to, hospitals, clinics, and
                            physicians, unless the drug is an
                            inhalation, infusion, or injectable
                            drug, or unless the Secretary
                            determines, as allowed for in Agency
                            administrative procedures, that it is
                            necessary to include such sales,
                            rebates, discounts, and price
                            concessions in order to obtain an
                            accurate AMP for the drug. Such a
                            determination shall not be subject to
                            judicial review; or
                              (vi) rebates, discounts, and other
                            price concessions required to be
                            provided under agreements under
                            subsections (f) and (g) of section
                            1860D-2(f).

               *       *       *       *       *       *       *

                      (D) Calculation for covered drugs.--With
                    respect to a covered drug (as defined in
                    section 340B(b)(2) of the Public Health Service
                    Act), the average manufacturer price shall be
                    determined in accordance with subparagraph (A)
                    except that, in the event a covered drug is not
                    distributed to the retail pharmacy class of
                    trade, it shall mean the average price paid to
                    the manufacturer for the drug in the United
                    States by wholesalers for drugs distributed to
                    the acute care class of trade, after deducting
                    customary prompt pay discounts.

               *       *       *       *       *       *       *

                 PROGRAM FOR DISTRIBUTION OF PEDIATRIC VACCINES

      Sec. 1928. (a) * * *
      (b) Vaccine-Eligible Children.--For purposes of this section:
              (1) * * *
              (2) Federally vaccine-eligible child.--
                      (A) In general.--The term ``federally
                    vaccine-eligible child'' means any of the
                    following children:
                              (i) * * *

               *       *       *       *       *       *       *

                              (iii) A child who (I) is administered
                            a qualified pediatric vaccine by a
                            federally-qualified health center (as
                            defined in section 1905(l)(2)(B)) [or a
                            rural health clinic], a rural health
                            clinic (as defined in section
                            1905(l)(1)), or a public health clinic,
                            and (II) is not insured with respect to
                            the vaccine.

               *       *       *       *       *       *       *

      (c) Program-Registered Providers.--
              (1) * * *
              (2) Provider agreement.--A provider agreement for a
            provider under this paragraph is an agreement (in such
            form and manner as the Secretary may require) that the
            provider agrees as follows:
                      (A) * * *
                      (B)(i) Subject to clause (ii), the provider
                    will comply with the schedule, regarding the
                    appropriate periodicity, dosage, and
                    contraindications applicable to pediatric
                    vaccines, that is established and periodically
                    reviewed and, as appropriate, revised by [the
                    advisory committee referred to in subsection
                    (e)] the Director of the Centers for Disease
                    Control and Prevention, except in such cases
                    as, in the provider's medical judgment subject
                    to accepted medical practice, such compliance
                    is medically inappropriate.

               *       *       *       *       *       *       *

      (e) Use of Pediatric Vaccines List.--The Secretary shall use,
    for the purpose of the purchase, delivery, and administration
    of pediatric vaccines under this section, the list established
    (and periodically reviewed and as appropriate revised) 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).]
    Director of the Centers for Disease Control and Prevention.

               *       *       *       *       *       *       *

      [(g) Termination.--This section, and the requirement of
    section 1902(a)(62), shall cease to be in effect beginning on
    such date as may be prescribed in Federal law providing for
    immunization services for all children as part of a broad-based
    reform of the national health care system.]

               *       *       *       *       *       *       *

               ASSURING COVERAGE FOR CERTAIN LOW-INCOME FAMILIES

      Sec. 1931. (a) * * *
      (b) Application of Pre-Welfare-Reform Eligibility Criteria.--
              (1) In general.--For purposes of this title, subject
            to paragraphs (2) and (3) and section 1903(aa)(2), in
            determining eligibility for medical assistance--
                      (A) * * *

               *       *       *       *       *       *       *

                      PROVISIONS RELATING TO MANAGED CARE

      Sec. 1932. (a) State Option To Use Managed Care.--
              (1)

               *       *       *       *       *       *       *

              (2) Special rules.--
                      (A) * * *

               *       *       *       *       *       *       *

                      (D) Enrollment of non-traditional medicaid
                    eligibles.--A State may not require under
                    paragraph (1) the enrollment in a managed care
                    entity of an individual described in section
                    1902(a)(10)(A)(i)(VIII) unless the State
                    demonstrates, to the satisfaction of the
                    Secretary, that the entity, through its
                    provider network and other arrangements, has
                    the capacity to meet the health, mental health,
                    and substance abuse needs of such individuals.

               *       *       *       *       *       *       *

      (f) Timeliness of Payment; Adequacy of Payment for Primary
    Care Services.--A contract under section 1903(m) with a
    medicaid managed care organization shall provide that the
    organization shall make payment to health care providers for
    items and services which are subject to the contract and that
    are furnished to individuals eligible for medical assistance
    under the State plan under this title who are enrolled with the
    organization on a timely basis consistent with the claims
    payment procedures described in section 1902(a)(37)(A), unless
    the health care provider and the organization agree to an
    alternate payment schedule and, in the case of primary care
    services described in section 1902(a)(13)(C), consistent with
    the minimum payment rates specified in such section (regardless
    of the manner in which such payments are made, including in the
    form of capitation or partial capitation).

               *       *       *       *       *       *       *

       STATE COVERAGE OF MEDICARE COST-SHARING FOR ADDITIONAL LOW-INCOME
                             MEDICARE BENEFICIARIES

      Sec. 1933. (a) In General.--A State plan under this title
    shall provide, under section 1902(a)(10)(E)(iv) and subject to
    the succeeding provisions of this section and through a plan
    amendment, for medical assistance for payment of the cost of
    medicare cost-sharing described in such section on behalf of
    all individuals described in such section (in this section
    referred to as ``qualifying individuals'') [who are selected to
    receive such assistance under subsection (b)].
      [(b) Selection of Qualifying Individuals.--A State shall
    select qualifying individuals, and provide such individuals
    with assistance, under this section consistent with the
    following:
              [(1) All qualifying individuals may apply.--The State
            shall permit all qualifying individuals to apply for
            assistance during a calendar year.
              [(2) Selection on first-come, first-served basis.--
                      [(A) In general.--For each calendar year
                    (beginning with 1998), from (and to the extent
                    of) the amount of the allocation under
                    subsection (c) for the State for the fiscal
                    year ending in such calendar year, the State
                    shall select qualifying individuals who apply
                    for the assistance in the order in which they
                    apply.
                      [(B) Carryover.--For calendar years after
                    1998, the State shall give preference to
                    individuals who were provided such assistance
                    (or other assistance described in section
                    1902(a)(10)(E)) in the last month of the
                    previous year and who continue to be (or
                    become) qualifying individuals.
              [(3) Limit on number of individuals based on
            allocation.--The State shall limit the number of
            qualifying individuals selected with respect to
            assistance in a calendar year so that the aggregate
            amount of such assistance provided to such individuals
            in such year is estimated to be equal to (but not
            exceed) the State's allocation under subsection (c) for
            the fiscal year ending in such calendar year.
              [(4) Receipt of assistance during duration of year.--
            If a qualifying individual is selected to receive
            assistance under this section for a month in a year,
            the individual is entitled to receive such assistance
            for the remainder of the year if the individual
            continues to be a qualifying individual. The fact that
            an individual is selected to receive assistance under
            this section at any time during a year does not entitle
            the individual to continued assistance for any
            succeeding year.
      [(c) Allocation.--
              [(1) Total allocation.--The total amount available
            for allocation under this section for--
                      [(A) fiscal year 1998 is $200,000,000;
                      [(B) fiscal year 1999 is $250,000,000;
                      [(C) fiscal year 2000 is $300,000,000;
                      [(D) fiscal year 2001 is $350,000,000; and
                      [(E) each of fiscal years 2002 and 2003 is
                    $400,000,000.
              [(2) Allocation to states.--The Secretary shall
            provide for the allocation of the total amount
            described in paragraph (1) for a fiscal year, among the
            States that executed a plan amendment in accordance
            with subsection (a), based upon the Secretary's
            estimate of the ratio of--
                      [(A) an amount equal to the the total number
                    of individuals described in section
                    1902(a)(10)(E)(iv) in the State; to
                      [(B) the sum of the amounts computed under
                    subparagraph (A) for all eligible States.]
      [(d)] (b) Applicable FMAP.--With respect to assistance
    described in section 1902(a)(10)(E)(iv) [furnished in a State
    for calendar quarters in a calendar year --
              [(1) to the extent that such assistance does not
            exceed the State's allocation under subsection (c) for
            the fiscal year ending in the calendar year, the
            Federal medical assistance percentage shall be equal to
            100 percent; and
              [(2) to the extent that such assistance exceeds such
            allocation, the Federal medical assistance percentage
            is 0 percent.] the Federal medical assistance
            percentage shall be equal to 100 percent.
      [(e) Limitation on Entitlement.--Except as specifically
    provided under this section, nothing in this title shall be
    construed as establishing any entitlement of individuals
    described in section 1902(a)(10)(E)(iv) to assistance described
    in such section.]
      [(f)] (c) Coverage of Costs Through Part B of the Medicare
    Program.--For each fiscal year, the Secretary shall provide for
    the transfer from the Federal Supplementary Medical Insurance
    Trust Fund under section 1841 to the appropriate account in the
    Treasury that provides for payments under section 1903(a) with
    respect to medical assistance provided under this section, of
    an amount equivalent to the total of the amount of payments
    made under such section that is attributable to this section
    and such transfer shall be treated as an expenditure from such
    Trust Fund for purposes of section 1839.
      [(g) Special Rules.--
              [(1) In general.--With respect to each period
            described in paragraph (2), a State shall select
            qualifying individuals, subject to paragraph (3), and
            provide such individuals with assistance, in accordance
            with the provisions of this section as in effect with
            respect to calendar year 2003, except that for such
            purpose--
                      [(A) references in the preceding subsections
                    of this section to a year, whether fiscal or
                    calendar, shall be deemed to be references to
                    such period; and
                      [(B) the total allocation amount under
                    subsection (c) for such period shall be the
                    amount described in paragraph (2) for that
                    period.
              [(2) Periods and total allocation amounts
            described.--For purposes of this subsection--
                      [(A) for the period that begins on January 1,
                    2004, and ends on September 30, 2004, the total
                    allocation amount is $300,000,000;
                      [(B) for the period that begins on October 1,
                    2004, and ends on December 31, 2004, the total
                    allocation amount is $100,000,000;
                      [(C) for the period that begins on January 1,
                    2005, and ends on September 30, 2005, the total
                    allocation amount is $300,000,000;
                      [(D) for the period that begins on October 1,
                    2005, and ends on December 31, 2005, the total
                    allocation amount is $100,000,000;
                      [(E) for the period that begins on January 1,
                    2006, and ends on September 30, 2006, the total
                    allocation amount is $300,000,000;
                      [(F) for the period that begins on October 1,
                    2006, and ends on December 31, 2006, the total
                    allocation amount is $100,000,000;
                      [(G) for the period that begins on January 1,
                    2007, and ends on September 30, 2007, the total
                    allocation amount is $300,000,000;
                      [(H) for the period that begins on October 1,
                    2007, and ends on December 31, 2007, the total
                    allocation amount is $100,000,000;
                      [(I) for the period that begins on January 1,
                    2008, and ends on September 30, 2008, the total
                    allocation amount is $315,000,000;
                      [(J) for the period that begins on October 1,
                    2008, and ends on December 31, 2008, the total
                    allocation amount is $130,000,000;
                      [(K) for the period that begins on January 1,
                    2009, and ends on September 30, 2009, the total
                    allocation amount is $350,000,000;
                      [(L) for the period that begins on October 1,
                    2009, and ends on December 31, 2009, the total
                    allocation amount is $150,000,000;
                      [(M) for the period that begins on January 1,
                    2010, and ends on September 30, 2010, the total
                    allocation amount is $412,500,000; and
                      [(N) for the period that begins on October 1,
                    2010, and ends on December 31, 2010, the total
                    allocation amount is $150,000,000.]

               *       *       *       *       *       *       *

       SPECIAL PROVISIONS RELATING TO MEDICARE PRESCRIPTION DRUG BENEFIT

      Sec. 1935. (a) Requirements Relating to Medicare Prescription
    Drug Low-Income Subsidies and Medicare Transitional
    Prescription Drug Assistance.--As a condition of its State plan
    under this title under section 1902(a)(66) and receipt of any
    Federal financial assistance under section 1903(a) subject to
    subsection (e), a State shall do the following:
              (1) * * *

               *       *       *       *       *       *       *

              (4) Consideration of data transmitted by the social
            security administration for purposes of medicare
            savings program.--
                      (A) In general.--The State shall accept data
                    transmitted under section 1144(c)(3) and act on
                    such data in the same manner and in accordance
                    with the same deadlines as if the data
                    constituted an initiation of an application for
                    benefits under the Medicare Savings Program (as
                    defined for purposes of such section) that had
                    been submitted directly by the applicant. [The
                    date of the individual's application for the
                    low income subsidy program from which the data
                    have been derived shall constitute the date of
                    filing of such application for benefits under
                    the Medicare Savings Program.]
                      (B) Furnishing medical assistance with
                    reasonable promptness.--For the purpose of a
                    State's obligation under section 1902(a)(8) to
                    furnish medical assistance with reasonable
                    promptness, the date of the electronic
                    transmission of low-income subsidy program
                    data, as described in section 1144(c), from the
                    Commissioner of Social Security to the State
                    Medicaid Agency, shall constitute the date of
                    filing of such application for benefits under
                    the Medicare Savings Program.
                      (C) Determining availability of medical
                    assistance.--For the purpose of determining
                    when medical assistance will be made available,
                    the State shall consider the date of the
                    individual's application for the low income
                    subsidy program to constitute the date of
                    filing for benefits under the Medicare Savings
                    Program.

               *       *       *       *       *       *       *

                           MEDICAID INTEGRITY PROGRAM

      Sec. 1936. (a) * * *

               *       *       *       *       *       *       *

      (c) Eligible Entity and Contracting Requirements.--
              (1) * * *
              (2) Eligibility requirements.--The requirements of
            this paragraph are the following:
                      (A) * * *

               *       *       *       *       *       *       *

                      (D) For the contract year beginning in 2011
                    and each subsequent contract year, the entity
                    provides assurances to the satisfaction of the
                    Secretary that the entity will conduct periodic
                    evaluations of the effectiveness of the
                    activities carried out by such entity under the
                    Program and will submit to the Secretary an
                    annual report on such activities.
                      [(D)] (E) The entity meets such other
                    requirements as the Secretary may impose.

               *       *       *       *       *       *       *

                     STATE FLEXIBILITY IN BENEFIT PACKAGES

      Sec. 1937. (a) * * *
      (b) Benchmark Benefit Packages.--
              (1) In general.--For purposes of subsection (a)(1),
            subject to paragraph (5), each of the following
            coverages shall be considered to be benchmark coverage:
                      (A) * * *

               *       *       *       *       *       *       *

              (2) Benchmark-equivalent coverage.--For purposes of
            subsection (a)(1),subject to paragraph (5), coverage
            that meets the following requirement shall be
            considered to be benchmark-equivalent coverage:
                      (A) * * *

               *       *       *       *       *       *       *

              (5) Minimum standards.--Effective January 1, 2013,
            any benchmark benefit package (or benchmark equivalent
            coverage under paragraph (2)) must meet the minimum
            benefits and cost-sharing standards of a basic plan
            offered through the Health Insurance Exchange.
              (6) 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.

               *       *       *       *       *       *       *

          REQUIREMENTS AND SPECIAL RULES FOR CERTAIN MEDICAID ELIGIBLE
                                  INDIVIDUALS

      Sec. 1943.  (a) Coordination With NHI Exchange Through
    Memorandum of Understanding.--
              (1) In general.--The State shall enter into a
            Medicaid memorandum of understanding described in
            section 204(e)(4) of the America's Affordable Health
            Choices Act of 2009 with the Health Choices
            Commissioner, acting in consultation with the
            Secretary, with respect to coordinating the
            implementation of the provisions of division A of such
            Act with the State plan under this title in order to
            ensure the enrollment of Medicaid eligible individuals
            in acceptable coverage. Nothing in this section shall
            be construed as permitting such memorandum to modify or
            vitiate any requirement of a State plan under this
            title.
              (2) Enrollment of exchange-referred individuals.--
                      (A) Non-traditional individuals.--Pursuant to
                    such memorandum the State shall accept without
                    further determination the enrollment under this
                    title of an individual determined by the
                    Commissioner to be a non-traditional Medicaid
                    eligible individual. The State shall not do any
                    redeterminations of eligibility for such
                    individuals unless the periodicity of such
                    redeterminations is consistent with the
                    periodicity for redeterminations by the
                    Commissioner of eligibility for affordability
                    credits under subtitle C of title II of
                    division A of the America's Affordable Health
                    Choices Act of 2009, as specified under such
                    memorandum.
                      (B) Traditional individuals.--Pursuant to
                    such memorandum, the State shall accept without
                    further determination the enrollment under this
                    title of an individual determined by the
                    Commissioner to be a traditional Medicaid
                    eligible individual. The State may do
                    redeterminations of eligibility of such
                    individual consistent with such section and the
                    memorandum.
              (3) Determinations of eligibility for affordability
            credits.--If the Commissioner determines that a State
            Medicaid agency has the capacity to make determinations
            of eligibility for affordability credits under subtitle
            C of title II of division A of the America's Affordable
            Health Choices Act of 2009, under such memorandum--
                      (A) the State Medicaid agency shall conduct
                    such determinations for any Exchange-eligible
                    individual who requests such a determination;
                      (B) in the case that a State Medicaid agency
                    determines that an Exchange-eligible individual
                    is not eligible for affordability credits, the
                    agency shall forward the information on the
                    basis of which such determination was made to
                    the Commissioner; and
                      (C) the Commissioner shall reimburse the
                    State Medicaid agency for the costs of
                    conducting such determinations.
      (b) Treatment of Certain Newborns.--
              (1) In general.--In the case of a child who is deemed
            under section 205(d)(1) of the America's Affordable
            Health Choices Act of 2009 to be a non-traditional
            Medicaid eligible individual and enrolled under this
            title pursuant to such section, the State shall provide
            for a determination, by not later than the end of the
            period referred to in subparagraph (A) of such section,
            of the child's eligibility for medical assistance under
            this title.
              (2) Extended treatment as traditional medicaid
            eligible individual.--In accordance with subparagraph
            (B) of section 205(d)(1) of the America's Affordable
            Health Choices Act of 2009, in the case of a child
            described in subparagraph (A) of such section who at
            the end of the period referred to in such subparagraph
            is not otherwise covered under acceptable coverage, the
            child shall be deemed (until such time as the child
            obtains such coverage or the State otherwise makes a
            determination of the child's eligibility for medical
            assistance under its plan under this title pursuant to
            paragraph (1)) to be a traditional Medicaid eligible
            individual described in section 1902(l)(1)(B).
      (c) Definitions.--In this section:
              (1) Medicaid eligible individuals.--In this section,
            the terms ``Medicaid eligible individual'',
            ``traditional Medicaid eligible individual'', and
            ``non-traditional Medicaid eligible individual'' have
            the meanings given such terms in section 205(e)(5) of
            the America's Affordable Health Choices Act of 2009.
              (2) Memorandum.--The term ``memorandum'' means a
            Medicaid memorandum of understanding under section
            205(e)(4) of the America's Affordable Health Choices
            Act of 2009.
              (3) Y1.--The term ``Y1'' has the meaning given such
            term in section 100(c) of the America's Affordable
            Health Choices Act of 2009.

               *       *       *       *       *       *       *

    TITLE XXI--STATE CHILDREN'S HEALTH INSURANCE PROGRAM

               *       *       *       *       *       *       *

    SEC. 2102. GENERAL CONTENTS OF STATE CHILD HEALTH PLAN; ELIGIBILITY;
                        OUTREACH.

      (a) * * *
      (b) General Description of Eligibility Standards and
    Methodology.--
              (1) Eligibility standards.--
                      (A) * * *
                      (B) Limitations on eligibility standards.--
                    Such eligibility standards--
                              (i) * * *

               *       *       *       *       *       *       *

                              (iii) may not apply a waiting period
                            (including a waiting period to carry
                            out paragraph (3)(C)) in the case of a
                            targeted low-income pregnant woman
                            provided pregnancy-related assistance
                            under section 2112; [and]
                              (iv) at State option, may not apply a
                            waiting period in the case of a child
                            provided dental-only supplemental
                            coverage under section 2110(b)(5)[.];
                            and
                              (v) may not apply a waiting period
                            (including a waiting period to carry
                            out paragraph (3)(C)) in the case of a
                            child described in subparagraph (C).
                      (C) Description of children not subject to
                    waiting period.--For purposes of this
                    paragraph, a child described in this
                    subparagraph is a child who, on the date an
                    application is submitted for such child for
                    child health assistance under this title, meets
                    any of the following requirements:
                              (i) Infants and toddlers.--The child
                            is under two years of age.
                              (ii) Loss of group health plan
                            coverage.--The child previously had
                            private health insurance coverage
                            through a group health plan or health
                            insurance coverage offered through an
                            employer and lost such coverage due
                            to--
                                      (I) termination of an
                                    individual's employment;
                                      (II) a reduction in hours
                                    that an individual works for an
                                    employer;
                                      (III) elimination of an
                                    individual's retiree health
                                    benefits; or
                                      (IV) termination of an
                                    individual's group health plan
                                    or health insurance coverage
                                    offered through an employer.
                              (iii) Unaffordable private
                            coverage.--
                                      (I) In general.--The family
                                    of the child demonstrates that
                                    the cost of health insurance
                                    coverage (including the cost of
                                    premiums, co-payments,
                                    deductibles, and other cost
                                    sharing) for such family
                                    exceeds 10 percent of the
                                    income of such family.
                                      (II) Determination of family
                                    income.--For purposes of
                                    subclause (I), family income
                                    shall be determined in the same
                                    manner specified by the State
                                    for purposes of determining a
                                    child's eligibility for child
                                    health assistance under this
                                    title.

               *       *       *       *       *       *       *

              (6) Requirement for 12-month continuous
            eligibility.--In the case of a State child health plan
            that provides child health assistance under this title
            through a means other than described in section
            2101(a)(2), the plan shall provide for implementation
            under this title of the 12-month continuous eligibility
            option described in section 1902(e)(12) for targeted
            low-income children whose family income is below 200
            percent of the poverty line.

               *       *       *       *       *       *       *

      (d) Program Integrity.--A State child health plan shall
    include a description of the procedures to be used by the
    State--
              (1) to enforce any determination made by the
            Secretary under subsection (a) of section 1128G
            (relating to a significant risk of fraudulent activity
            with respect to a category of provider or supplier
            described in such subsection through use of the
            appropriate procedures described in such subsection);
              (2) to carry out any activities as required by the
            Secretary for purposes of such subsection; and
              (3) to enforce any determination made by the
            Secretary under subsection (b) of section 1128G
            (relating to disclosure requirements) and to apply any
            enhanced safeguards, with respect to a provider or
            supplier described in such subsection, as the Secretary
            determines necessary under such subsection.

               *       *       *       *       *       *       *

    SEC. 2105. PAYMENTS TO STATES.

      (a) * * *

               *       *       *       *       *       *       *

      (c) Limitation on Certain Payments for Certain
    Expenditures.--
              (1) * * *

               *       *       *       *       *       *       *

              (11) Enhanced payments.--Notwithstanding subsection
            (b), the enhanced FMAP with respect to payments under
            subsection (a) for expenditures related to the
            administration of the payment error rate measurement
            (PERM) requirements applicable to the State child
            health plan in accordance with the Improper Payments
            Information Act of 2002 and parts 431 and 457 of title
            42, Code of Federal Regulations (or any related or
            successor guidance or regulations) shall in no event be
            less than 90 percent. Clause (vi) of section
            1903(u)(1)(D) shall apply with respect to the
            application of such requirements under this title and
            title XIX.

               *       *       *       *       *       *       *

    SEC. 2107. STRATEGIC OBJECTIVES AND PERFORMANCE GOALS; PLAN
                        ADMINISTRATION.

      (a) * * *

               *       *       *       *       *       *       *

      (e) Application of Certain General Provisions.--The following
    sections of this Act shall apply to States under this title in
    the same manner as they apply to a State under title XIX:
              (1) Title xix provisions.--
                      (A) Section 1902(a)(4)(C) (relating to
                    conflict of interest standards) and sections
                    1902(a)(39) and 1902(a)(78) (relating to
                    exclusion and termination of participation).

               *       *       *       *       *       *       *

                      (G) Paragraphs (2), (16), [and (17)] (17),
                    and (25) of section 1903(i) (relating to
                    limitations on payment).
                      (H) Section 1903(m)(2)(A)(xiv) (relating to
                    application of minimum loss ratios), with
                    respect to comparable contracts under this
                    title.
                      [(H)] (I) Paragraph (4) of section 1903(v)
                    (relating to optional coverage of categories of
                    lawfully residing immigrant children or
                    pregnant women), but only if the State has
                    elected to apply such paragraph with respect to
                    such category of children or pregnant women
                    under title XIX.
                      [(I)] (J) Section 1903(w) (relating to
                    limitations on provider taxes and donations).
                      [(J)] (K) Section 1920A (relating to
                    presumptive eligibility for children).
                      [(K)] (L) Subsections (a)(2)(C) and (h) of
                    section 1932.
                      [(L)] (M) Section 1942 (relating to
                    authorization to receive data directly relevant
                    to eligibility determinations).

               *       *       *       *       *       *       *

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

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

               *       *       *       *       *       *       *

                                  ----------

                          BALANCED BUDGET ACT OF 1997

    SEC. 4505. IMPLEMENTATION OF RESOURCE-BASED METHODOLOGIES.

      (a) * * *

               *       *       *       *       *       *       *

      [(d) Requirements for Developing New Resource-Based Practice
    Expense Relative Value Units.--
              [(1) Development.--For purposes of section
            1848(c)(2)(C)(ii) of the Social Security Act, the
            Secretary of Health and Human Services shall develop
            new resource-based relative value units. In developing
            such units the Secretary shall--
                      [(A) utilize, to the maximum extent
                    practicable, generally accepted cost accounting
                    principles which (i) recognize all staff,
                    equipment, supplies, and expenses, not just
                    those which can be tied to specific procedures,
                    and (ii) use actual data on equipment
                    utilization and other key assumptions;
                      [(B) consult with organizations representing
                    physicians regarding methodology and data to be
                    used; and
                      [(C) develop a refinement process to be used
                    during each of the 4 years of the transition
                    period.
              [(2) Report.--The Secretary shall transmit a report
            by March 1, 1998, on the development of resource-based
            relative value units under paragraph (1) to the
            Committee on Ways and Means and the Committee on
            Commerce of the House of Representatives and the
            Committee on Finance of the Senate. The report shall
            include a presentation of data to be used in developing
            the value units and an explanation of the methodology.
              [(3) Notice of proposed rulemaking.--The Secretary
            shall publish a notice of proposed rulemaking with the
            new resource-based relative value units on or before
            May 1, 1998, and shall allow for a 90-day public
            comment period.
              [(4) Items included.--The new proposed rule shall
            consider the following:
                      [(A) Impact projections which compare new
                    proposed payment amounts on data on actual
                    physician practice expenses.
                      [(B) Impact projections for hospital-based
                    and other specialties, geographic payment
                    localities, and urban versus rural localities.]

               *       *       *       *       *       *       *

                                  ----------

    TAX RELIEF AND HEALTH CARE ACT OF 2006

               *       *       *       *       *       *       *

    DIVISION B--MEDICARE AND OTHER HEALTH PROVISIONS

               *       *       *       *       *       *       *

    TITLE I--MEDICARE IMPROVED QUALITY AND PROVIDER PAYMENTS

               *       *       *       *       *       *       *

    SEC. 106. HOSPITAL MEDICARE REPORTS AND CLARIFICATIONS.

      (a) Correction of Mid-Year Reclassification Expiration.--
    Notwithstanding any other provision of law, in the case of a
    subsection (d) hospital (as defined for purposes of section
    1886 of the Social Security Act (42 U.S.C. 1395ww)) with
    respect to which a reclassification of its wage index for
    purposes of such section would (but for this subsection) expire
    on March 31, 2007, such reclassification of such hospital shall
    be extended through [September 30, 2009] September 30, 2011.
    The previous sentence shall not be effected in a budget-neutral
    manner.

               *       *       *       *       *       *       *

    TITLE II--MEDICARE BENEFICIARY PROTECTIONS

               *       *       *       *       *       *       *

    [SEC. 204. MEDICARE MEDICAL HOME DEMONSTRATION PROJECT.

      [(a) In General.--The Secretary of Health and Human Services
    (in this section referred to as the ``Secretary'') shall
    establish under title XVIII of the Social Security Act a
    medical home demonstration project (in this section referred to
    as the ``project'') to redesign the health care delivery system
    to provide targeted, accessible, continuous and coordinated,
    family-centered care to high-need populations and under which--
              [(1) care management fees are paid to persons
            performing services as personal physicians; and
              [(2) incentive payments are paid to physicians
            participating in practices that provide services as a
            medical home under subsection (d).
    For purposes of this subsection, the term ``high-need
    population'' means individuals with multiple chronic illnesses
    that require regular medical monitoring, advising, or
    treatment.
      [(b) Details.--
              [(1) Duration; scope.--Subject to paragraph (3), the
            project shall operate during a period of three years
            and shall include urban, rural, and underserved areas
            in a total of no more than 8 States.
              [(2) Encouraging participation of small physician
            practices.--The project shall be designed to include
            the participation of physicians in practices with fewer
            than three full-time equivalent physicians, as well as
            physicians in larger practices particularly in rural
            and underserved areas.
              [(3) Expansion.--The Secretary may expand the
            duration and the scope of the project under paragraph
            (1), to an extent determined appropriate by the
            Secretary, if the Secretary determines that such
            expansion will result in any of the following
            conditions being met:
                      [(A) The expansion of the project is expected
                    to improve the quality of patient care without
                    increasing spending under the Medicare program
                    (not taking into account amounts available
                    under subsection (g)).
                      [(B) The expansion of the project is expected
                    to reduce spending under the Medicare program
                    (not taking into account amounts available
                    under subsection (g)) without reducing the
                    quality of patient care.
      [(c) Personal Physician Defined.--
              [(1) In general.--For purposes of this section, the
            term ``personal physician'' means a physician (as
            defined in section 1861(r)(1) of the Social Security
            Act (42 U.S.C. 1395x(r)(1)) who--
                      [(A) meets the requirements described in
                    paragraph (2); and
                      [(B) performs the services described in
                    paragraph (3).
            Nothing in this paragraph shall be construed as
            preventing such a physician from being a specialist or
            subspecialist for an individual requiring ongoing care
            for a specific chronic condition or multiple chronic
            conditions (such as severe asthma, complex diabetes,
            cardiovascular disease, rheumatologic disorder) or for
            an individual with a prolonged illness.
              [(2) Requirements.--The requirements described in
            this paragraph for a personal physician are as follows:
                      [(A) The physician is a board certified
                    physician who provides first contact and
                    continuous care for individuals under the
                    physician's care.
                      [(B) The physician has the staff and
                    resources to manage the comprehensive and
                    coordinated health care of each such
                    individual.
              [(3) Services performed.--A personal physician shall
            perform or provide for the performance of at least the
            following services:
                      [(A) Advocates for and provides ongoing
                    support, oversight, and guidance to implement a
                    plan of care that provides an integrated,
                    coherent, cross-discipline plan for ongoing
                    medical care developed in partnership with
                    patients and including all other physicians
                    furnishing care to the patient involved and
                    other appropriate medical personnel or agencies
                    (such as home health agencies).
                      [(B) Uses evidence-based medicine and
                    clinical decision support tools to guide
                    decision-making at the point-of-care based on
                    patient-specific factors.
                      [(C) Uses health information technology, that
                    may include remote monitoring and patient
                    registries, to monitor and track the health
                    status of patients and to provide patients with
                    enhanced and convenient access to health care
                    services.
                      [(D) Encourages patients to engage in the
                    management of their own health through
                    education and support systems.
      [(d) Medical Home Defined.--For purposes of this section, the
    term ``medical home'' means a physician practice that--
              [(1) is in charge of targeting beneficiaries for
            participation in the project; and
              [(2) is responsible for--
                      [(A) providing safe and secure technology to
                    promote patient access to personal health
                    information;
                      [(B) developing a health assessment tool for
                    the individuals targeted; and
                      [(C) providing training programs for
                    personnel involved in the coordination of care.
      [(e) Payment Mechanisms.--
              [(1) Personal physician care management fee.--Under
            the project, the Secretary shall provide for payment
            under section 1848 of the Social Security Act (42
            U.S.C. 1395w-4) of a care management fee to personal
            physicians providing care management under the project.
            Under such section and using the relative value scale
            update committee (RUC) process under such section, the
            Secretary shall develop a care management fee code for
            such payments and a value for such code.
              [(2) Medical home sharing in savings.--The Secretary
            shall provide for payment under the project of a
            medical home based on the payment methodology applied
            to physician group practices under section 1866A of the
            Social Security Act (42 U.S.C. 1395cc-1). Under such
            methodology, 80 percent of the reductions in
            expenditures under title XVIII of the Social Security
            Act resulting from participation of individuals that
            are attributable to the medical home (as reduced by the
            total care managements fees paid to the medical home
            under the project) shall be paid to the medical home.
            The amount of such reductions in expenditures shall be
            determined by using assumptions with respect to
            reductions in the occurrence of health complications,
            hospitalization rates, medical errors, and adverse drug
            reactions.
              [(3) Source.--Payments paid under the project shall
            be made from the Federal Supplementary Medical
            Insurance Trust Fund under section 1841 of the Social
            Security Act (42 U.S.C. 1395t).
      [(f) Evaluations and Reports.--
              [(1) Annual interim evaluations and reports.--For
            each year of the project, the Secretary shall provide
            for an evaluation of the project and shall submit to
            Congress, by a date specified by the Secretary, a
            report on the project and on the evaluation of the
            project for each such year.
              [(2) Final evaluation and report.--The Secretary
            shall provide for an evaluation of the project and
            shall submit to Congress, not later than one year after
            completion of the project, a report on the project and
            on the evaluation of the project.
      [(g) Funding From SMI Trust Fund.--There shall be available,
    from the Federal Supplementary Medical Insurance Trust Fund
    (under section 1841 of the Social Security Act (42 U.S.C.
    1395t)), the amount of $100,000,000 to carry out the project.
      [(h) Application.--Chapter 35 of title 44, United States
    Code, shall not apply to the conduct of the project.]

               *       *       *       *       *       *       *

                                  ----------

     SECTION 542 OF THE MEDICARE, MEDICAID, AND SCHIP BENEFITS IMPROVEMENT
                           AND PROTECTION ACT OF 2000

    SEC. 542. TREATMENT OF CERTAIN PHYSICIAN PATHOLOGY SERVICES UNDER
                        MEDICARE.

      (a) * * *

               *       *       *       *       *       *       *

      (c) Effective Date.--This section shall apply to services
    furnished during the 2-year period beginning on January 1,
    2001, and for services furnished during 2005, 2006, 2007, 2008,
    [and 2009] 2009, 2010, and 2011.
                                  ----------

    MEDICARE IMPROVEMENTS FOR PATIENTS AND PROVIDERS ACT OF 2008

               *       *       *       *       *       *       *

    TITLE I--MEDICARE

               *       *       *       *       *       *       *

                   Subtitle C--Provisions Relating to Part B

    PART I--PHYSICIANS' SERVICES

               *       *       *       *       *       *       *

    SEC. 138. ADJUSTMENT FOR MEDICARE MENTAL HEALTH SERVICES.

      (a) Payment Adjustment.--
              (1) In general.--For purposes of payment for services
            furnished under the physician fee schedule under
            section 1848 of the Social Security Act (42 U.S.C.
            1395w-4) during the period beginning on July 1, 2008,
            and ending on [December 31, 2009] December 31, 2011,
            the Secretary of Health and Human Services shall
            increase the fee schedule otherwise applicable for
            specified services by 5 percent.

               *       *       *       *       *       *       *

    PART II--OTHER PAYMENT AND COVERAGE IMPROVEMENTS

               *       *       *       *       *       *       *

    SEC. 146. IMPROVED ACCESS TO AMBULANCE SERVICES.

      (a) * * *

               *       *       *       *       *       *       *

      (b) Air Ambulance Payment Improvements.--
              (1) Treatment of certain areas for payment for air
            ambulance services under the ambulance fee schedule.--
            Notwithstanding any other provision of law, for
            purposes of making payments under section 1834(l) of
            the Social Security Act (42 U.S.C. 1395m(l)) for air
            ambulance services furnished during the period
            beginning on July 1, 2008, and [ending on December 31,
            2009] ending on December 31, 2011, any area that was
            designated as a rural area for purposes of making
            payments under such section for air ambulance services
            furnished on December 31, 2006, shall be treated as a
            rural area for purposes of making payments under such
            section for air ambulance services furnished during
            such period.

               *       *       *       *       *       *       *

                                  ----------

    MEDICARE PRESCRIPTION DRUG, IMPROVEMENT, AND MODERNIZATION ACT OF 2003

               *       *       *       *       *       *       *

    TITLE IV--RURAL PROVISIONS

               *       *       *       *       *       *       *

    Subtitle C--Provisions Relating to Parts A and B

               *       *       *       *       *       *       *

    SEC. 422. REDISTRIBUTION OF UNUSED RESIDENT POSITIONS.

      (a) * * *
      (b) Conforming Provisions.--(1) * * *
      (2) Chapter 35 of title 44, United States Code, shall not
    apply with respect to applications under [section 1886(h)(7) of
    the Social Security Act, as added by subsection (a)(3).]
    paragraphs (4)(H)(vi), (7), and (8) of subsection (h) of
    section 1886 of the Social Security Act.

               *       *       *       *       *       *       *

                          TITLE VIII--COST CONTAINMENT

                         [Subtitle A--Cost Containment

    [SEC. 801. INCLUSION IN ANNUAL REPORT OF MEDICARE TRUSTEES OF
                        INFORMATION ON STATUS OF MEDICARE TRUST FUNDS.

      [(a) Determinations of Excess General Revenue Medicare
    Funding.--
              [(1) In general.--The Board of Trustees of each
            medicare trust fund shall include in the annual reports
            submitted under subsection (b)(2) of sections 1817 and
            1841 of the Social Security Act (42 U.S.C. 1395i and
            1395t)--
                      [(A) the information described in subsection
                    (b); and
                      [(B) a determination as to whether there is
                    projected to be excess general revenue medicare
                    funding (as defined in subsection (c)) for the
                    fiscal year in which the report is submitted or
                    for any of the succeeding 6 fiscal years.
              [(2) Medicare funding warning.--For purposes of
            section 1105(h) of title 31, United States Code, and
            this subtitle, an affirmative determination under
            paragraph (1)(B) in 2 consecutive annual reports shall
            be treated as a medicare funding warning in the year in
            which the second such report is made.
              [(3) 7-fiscal-year reporting period.--For purposes of
            this subtitle, the term ``7-fiscal-year reporting
            period'' means, with respect to a year in which an
            annual report described in paragraph (1) is made, the
            period of 7 consecutive fiscal years beginning with the
            fiscal year in which the report is submitted.
      [(b) Information.--The information described in this
    subsection for an annual report in a year is as follows:
              [(1) Projections of growth of general revenue
            spending.--A statement of the general revenue medicare
            funding as a percentage of the total medicare outlays
            for each of the following:
                      [(A) Each fiscal year within the 7-fiscal-
                    year reporting period.
                      [(B) Previous fiscal years and as of 10, 50,
                    and 75 years after such year.
              [(2) Comparison with other growth trends.--A
            comparison of the trend of such percentages with the
            annual growth rate in the following:
                      [(A) The gross domestic product.
                      [(B) Private health costs.
                      [(C) National health expenditures.
                      [(D) Other appropriate measures.
              [(3) Part d spending.--Expenditures, including trends
            in expenditures, under part D of title XVIII of the
            Social Security Act, as added by section 101.
              [(4) Combined medicare trust fund analysis.--A
            financial analysis of the combined medicare trust funds
            if general revenue medicare funding were limited to the
            percentage specified in subsection (c)(1)(B) of total
            medicare outlays.
      [(c) Definitions.--For purposes of this section:
              [(1) Excess general revenue medicare funding.--The
            term ``excess general revenue medicare funding'' means,
            with respect to a fiscal year, that--
                      [(A) general revenue medicare funding (as
                    defined in paragraph (2)), expressed as a
                    percentage of total medicare outlays (as
                    defined in paragraph (4)) for the fiscal year;
                    exceeds
                      [(B) 45 percent.
              [(2) General revenue medicare funding.--The term
            ``general revenue medicare funding'' means for a year--
                      [(A) the total medicare outlays (as defined
                    in paragraph (4)) for the year; minus
                      [(B) the dedicated medicare financing sources
                    (as defined in paragraph (3)) for the year.
              [(3) Dedicated medicare financing sources.--The term
            ``dedicated medicare financing sources'' means the
            following:
                      [(A) Hospital insurance tax.--Amounts
                    appropriated to the Hospital Insurance Trust
                    Fund under the third sentence of section
                    1817(a) of the Social Security Act (42 U.S.C.
                    1395i(a)) and amounts transferred to such Trust
                    Fund under section 7(c)(2) of the Railroad
                    Retirement Act of 1974 (45 U.S.C. 231f(c)(2)).
                      [(B) Taxation of certain oasdi benefits.--
                    Amounts appropriated to the Hospital Insurance
                    Trust Fund under section 121(e)(1)(B) of the
                    Social Security Amendments of 1983 (Public Law
                    98-21), as inserted by section 13215(c) of the
                    Omnibus Budget Reconciliation Act of 1993
                    (Public Law 103-66).
                      [(C) State transfers.--The State share of
                    amounts paid to the Federal Government by a
                    State under section 1843 of the Social Security
                    Act (42 U.S.C. 1395v) or pursuant to section
                    1935(c) of such Act.
                      [(D) Premiums.--The following premiums:
                              [(i) Part a.--Premiums paid by non-
                            Federal sources under sections 1818 and
                            section 1818A (42 U.S.C. 1395i-2 and
                            1395i-2a) of such Act.
                              [(ii) Part b.--Premiums paid by non-
                            Federal sources under section 1839 of
                            such Act (42 U.S.C. 1395r), including
                            any adjustments in premiums under such
                            section.
                              [(iii) Part d.--Monthly beneficiary
                            premiums paid under part D of title
                            XVIII of such Act, as added by section
                            101, and MA monthly prescription drug
                            beneficiary premiums paid under part C
                            of such title insofar as they are
                            attributable to basic prescription drug
                            coverage.
            Premiums under clauses (ii) and (iii) shall be
            determined without regard to any reduction in such
            premiums attributable to a beneficiary rebate under
            section 1854(b)(1)(C) of such title, as amended by
            section 222(b)(1), and premiums under clause (iii) are
            deemed to include any amounts paid under section 1860D-
            13(b) of such title, as added by section 101.
                      [(E) Gifts.--Amounts received by the medicare
                    trust funds under section 201(i) of the Social
                    Security Act (42 U.S.C. 401(i)).
              [(4) Total medicare outlays.--The term ``total
            medicare outlays'' means total outlays from the
            medicare trust funds and shall--
                      [(A) include payments made to plans under
                    part C of title XVIII of the Social Security
                    Act that are attributable to any rebates under
                    section 1854(b)(1)(C) of such Act (42 U.S.C.
                    1395w-24(b)(1)(C)), as amended by section
                    222(b)(1);
                      [(B) include administrative expenditures made
                    in carrying out title XVIII of such Act and
                    Federal outlays under section 1935(b) of such
                    Act, as added by section 103(a)(2); and
                      [(C) offset outlays by the amount of fraud
                    and abuse collections insofar as they are
                    applied or deposited into a medicare trust
                    fund.
              [(5) Medicare trust fund.--The term ``medicare trust
            fund'' means--
                      [(A) the Federal Hospital Insurance Trust
                    Fund established under section 1817 of the
                    Social Security Act (42 U.S.C. 1395i); and
                      [(B) the Federal Supplementary Medical
                    Insurance Trust Fund established under section
                    1841 of such Act (42 U.S.C. 1395t), including
                    the Medicare Prescription Drug Account under
                    such Trust Fund.
      [(d) Conforming Amendments.--
              [(1) Federal hospital insurance trust fund.--Section
            1817(b)(2) (42 U.S.C. 1395i(b)(2)) is amended by adding
            at the end the following: ``Each report provided under
            paragraph (2) beginning with the report in 2005 shall
            include the information specified in section 801(a) of
            the Medicare Prescription Drug, Improvement, and
            Modernization Act of 2003.''.
              [(2) Federal supplementary medical insurance trust
            fund.--Section 1841(b)(2) (42 U.S.C. 1395t(b)(2)) is
            amended by adding at the end the following: ``Each
            report provided under paragraph (2) beginning with the
            report in 2005 shall include the information specified
            in section 801(a) of the Medicare Prescription Drug,
            Improvement, and Modernization Act of 2003.''.
      [(e) Notice of Medicare Funding Warning.--Whenever any report
    described in subsection (a) contains a determination that for
    any fiscal year within the 7-fiscal-year reporting period there
    will be excess general revenue medicare funding, Congress and
    the President should address the matter under existing rules
    and procedures.

    [SEC. 802. PRESIDENTIAL SUBMISSION OF LEGISLATION.

      [(a) In General.--Section 1105 of title 31, United States
    Code, is amended by adding at the end the following new
    subsection:
      [``(h)(1) If there is a medicare funding warning under
    section 801(a)(2) of the Medicare Prescription Drug,
    Improvement, and Modernization Act of 2003 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 subsection (a) for the succeeding year, proposed
    legislation to respond to such warning.
      [``(2) Paragraph (1) does not apply if, during the year in
    which the warning is made, legislation is enacted which
    eliminates excess general revenue medicare funding (as defined
    in section 801(c) of the Medicare Prescription Drug,
    Improvement, and Modernization Act of 2003) for the 7-fiscal-
    year reporting period, as certified by the Board of Trustees of
    each medicare trust fund (as defined in section 801(c)(5) of
    such Act) not later than 30 days after the date of the
    enactment of such legislation.''.
      [(b) Sense of Congress.--It is the sense of Congress that
    legislation submitted pursuant to section 1105(h) of title 31,
    United States Code, in a year should be designed to eliminate
    excess general revenue medicare funding (as defined in section
    801(c)) for the 7-fiscal-year period that begins in such year.

    [SEC. 803. PROCEDURES IN THE HOUSE OF REPRESENTATIVES.

      [(a) Introduction and Referral of President's Legislative
    Proposal.--
              [(1) Introduction.--In the case of a legislative
            proposal submitted by the President pursuant to section
            1105(h) of title 31, United States Code, within the 15-
            day period specified in paragraph (1) of such section,
            the Majority Leader of the House of Representatives (or
            his designee) and the Minority Leader of the House of
            Representatives (or his designee) shall introduce such
            proposal (by request), the title of which is as
            follows: ``A bill to respond to a medicare funding
            warning.'' Such bill shall be introduced within 3
            legislative days after Congress receives such proposal.
              [(2) Referral.--Any legislation introduced pursuant
            to paragraph (1) shall be referred to the appropriate
            committees of the House of Representatives.
      [(b) Direction to the Appropriate House Committees.--
              [(1) In general.--In the House, in any year during
            which the President is required to submit proposed
            legislation to Congress under section 1105(h) of title
            31, United States Code, the appropriate committees
            shall report medicare funding legislation by not later
            than June 30 of such year.
              [(2) Medicare funding legislation.--For purposes of
            this section, the term ``medicare funding legislation''
            means--
                      [(A) legislation introduced pursuant to
                    subsection (a)(1), but only if the legislative
                    proposal upon which the legislation is based
                    was submitted within the 15-day period referred
                    to in such subsection; or
                      [(B) any bill the title of which is as
                    follows: ``A bill to respond to a medicare
                    funding warning.''.
              [(3) Certification.--With respect to any medicare
            funding legislation or any amendment to such
            legislation to respond to a medicare funding warning,
            the chairman of the Committee on the Budget of the
            House shall certify--
                      [(A) whether or not such legislation
                    eliminates excess general revenue medicare
                    funding (as defined in section 801(c)) for each
                    fiscal year in the 7-fiscal-year reporting
                    period; and
                      [(B) with respect to such an amendment,
                    whether the legislation, as amended, would
                    eliminate excess general revenue medicare
                    funding (as defined in section 801(c)) for each
                    fiscal year in such 7-fiscal-year reporting
                    period.
      [(c) Fallback Procedure for Floor Consideration if the House
    Fails to Vote on Final Passage by July 30.--
              [(1) After July 30 of any year during which the
            President is required to submit proposed legislation to
            Congress under section 1105(h) of title 31, United
            States Code, unless the House of Representatives has
            voted on final passage of any medicare funding
            legislation for which there is an affirmative
            certification under subsection (b)(3)(A), then, after
            the expiration of not less than 30 calendar days (and
            concurrently 5 legislative days), it is in order to
            move to discharge any committee to which medicare
            funding legislation which has such a certification and
            which has been referred to such committee for 30
            calendar days from further consideration of the
            legislation.
              [(2) A motion to discharge may be made only by an
            individual favoring the legislation, may be made only
            if supported by one-fifth of the total membership of
            the House (a quorum being present), and is highly
            privileged in the House. Debate thereon shall be
            limited to not more than one hour, the time to be
            divided in the House equally between those favoring and
            those opposing the motion. An amendment to the motion
            is not in order, and it is not in order to move to
            reconsider the vote by which the motion is agreed to or
            disagreed to.
              [(3) Only one motion to discharge a particular
            committee may be adopted under this subsection in any
            session of a Congress.
              [(4) Notwithstanding paragraph (1), it shall not be
            in order to move to discharge a committee from further
            consideration of medicare funding legislation pursuant
            to this subsection during a session of a Congress if,
            during the previous session of the Congress, the House
            passed medicare funding legislation for which there is
            an affirmative certification under subsection
            (b)(3)(A).
      [(d) Floor Consideration in the House of Discharged
    Legislation.--
              [(1) In the House, not later than 3 legislative days
            after any committee has been discharged from further
            consideration of legislation under subsection (c), the
            Speaker shall resolve the House into the Committee of
            the Whole for consideration of the legislation.
              [(2) The first reading of the legislation shall be
            dispensed with. All points of order against
            consideration of the legislation are waived. General
            debate shall be confined to the legislation and shall
            not exceed five hours, which shall be divided equally
            between those favoring and those opposing the
            legislation. After general debate the legislation shall
            be considered for amendment under the five-minute rule.
            During consideration of the legislation, no amendments
            shall be in order in the House or in the Committee of
            the Whole except those for which there has been an
            affirmative certification under subsection (b)(3)(B).
            All points of order against consideration of any such
            amendment in the Committee of the Whole are waived. The
            legislation, together with any amendments which shall
            be in order, shall be considered as read. During the
            consideration of the bill for amendment, the Chairman
            of the Committee of the Whole may accord priority in
            recognition on the basis of whether the Member offering
            an amendment has caused it to be printed in the portion
            of the Congressional Record designated for that purpose
            in clause 8 of Rule XVIII of the Rules of the House of
            Representatives. Debate on any amendment shall not
            exceed one hour, which shall be divided equally between
            those favoring and those opposing the amendment, and no
            pro forma amendments shall be offered during the
            debate. The total time for debate on all amendments
            shall not exceed 10 hours. At the conclusion of
            consideration of the legislation for amendment, the
            Committee shall rise and report the legislation to the
            House with such amendments as may have been adopted.
            The previous question shall be considered as ordered on
            the legislation and amendments thereto to final passage
            without intervening motion except one motion to
            recommit with or without instructions. If the Committee
            of the Whole rises and reports that it has come to no
            resolution on the bill, then on the next legislative
            day the House shall, immediately after the third daily
            order of business under clause 1 of Rule XIV of the
            Rules of the House of Representatives, resolve into the
            Committee of the Whole for further consideration of the
            bill.
              [(3) All appeals from the decisions of the Chair
            relating to the application of the Rules of the House
            of Representatives to the procedure relating to any
            such legislation shall be decided without debate.
              [(4) Except to the extent specifically provided in
            the preceding provisions of this subsection,
            consideration of any such legislation and amendments
            thereto (or any conference report thereon) shall be
            governed by the Rules of the House of Representatives
            applicable to other bills and resolutions, amendments,
            and conference reports in similar circumstances.
      [(e) Legislative Day Defined.--As used in this section, the
    term ``legislative day'' means a day on which the House of
    Representatives is in session.
      [(f) Restriction on Waiver.--In the House, the provisions of
    this section may be waived only by a rule or order proposing
    only to waive such provisions.
      [(g) Rulemaking Power.--The provisions of this section are
    enacted by the Congress--
              [(1) as an exercise of the rulemaking power of the
            House of Representatives and, as such, shall be
            considered as part of the rules of that House and shall
            supersede other rules only to the extent that they are
            inconsistent therewith; and
              [(2) with full recognition of the constitutional
            right of that House to change the rules (so far as they
            relate to the procedures 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.

    [SEC. 804. PROCEDURES IN THE SENATE.

      [(a) Introduction and Referral of President's Legislative
    Proposal.--
              [(1) Introduction.--In the case of a legislative
            proposal submitted by the President pursuant to section
            1105(h) of title 31, United States Code, within the 15-
            day period specified in paragraph (1) of such section,
            the Majority Leader and Minority Leader of the Senate
            (or their designees) shall introduce such proposal (by
            request), the title of which is as follows: ``A bill to
            respond to a medicare funding warning.'' Such bill
            shall be introduced within 3 days of session after
            Congress receives such proposal.
              [(2) Referral.--Any legislation introduced pursuant
            to paragraph (1) shall be referred to the Committee on
            Finance.
      [(b) Medicare Funding Legislation.--For purposes of this
    section, the term ``medicare funding legislation'' means--
              [(1) legislation introduced pursuant to subsection
            (a)(1), but only if the legislative proposal upon which
            the legislation is based was submitted within the 15-
            day period referred to in such subsection; or
              [(2) any bill the title of which is as follows: ``A
            bill to respond to a medicare funding warning.''.
      [(c) Qualification for Special Procedures.--
              [(1) In general.--The special procedures set forth in
            subsections (d) and (e) shall apply to medicare funding
            legislation, as described in subsection (b), only if
            the legislation--
                      [(A) is medicare funding legislation that is
                    passed by the House of Representatives; or
                      [(B) contains matter within the jurisdiction
                    of the Committee on Finance in the Senate.
              [(2) Failure to qualify for special procedures.--If
            the medicare funding legislation does not satisfy
            paragraph (1), then the legislation shall be considered
            under the ordinary procedures of the Standing Rules of
            the Senate.
      [(d) Discharge.--
              [(1) In general.--If the Committee on Finance has not
            reported medicare funding legislation described in
            subsection (c)(1) by June 30 of a year in which the
            President is required to submit medicare funding
            legislation to Congress under section 1105(h) of title
            31, United States Code, then any Senator may move to
            discharge the Committee of any single medicare funding
            legislation measure. Only one such motion shall be in
            order in any session of Congress.
              [(2) Debate limits.--Debate in the Senate on any such
            motion to discharge, and all appeals in connection
            therewith, shall be limited to not more than 2 hours.
            The time shall be equally divided between, and
            controlled by, the maker of the motion and the Majority
            Leader, or their designees, except that in the event
            the Majority Leader is in favor of such motion, the
            time in opposition thereto shall be controlled by the
            Minority Leader or the Minority Leader's designee. A
            point of order under this subsection may be made at any
            time. It is not in order to move to proceed to another
            measure or matter while such motion (or the motion to
            reconsider such motion) is pending.
              [(3) Amendments.--No amendment to the motion to
            discharge shall be in order.
              [(4) Exception if certified legislation enacted.--
            Notwithstanding paragraph (1), it shall not be in order
            to discharge the Committee from further consideration
            of medicare funding legislation pursuant to this
            subsection during a session of a Congress if the
            chairman of the Committee on the Budget of the Senate
            certifies that medicare funding legislation has been
            enacted that eliminates excess general revenue medicare
            funding (as defined in section 801(c)) for each fiscal
            year in the 7-fiscal-year reporting period.
      [(e) Consideration.--After the date on which the Committee on
    Finance has reported medicare funding legislation described in
    subsection (c)(1), or has been discharged (under subsection
    (d)) from further consideration of, such legislation, it is in
    order (even though a previous motion to the same effect has
    been disagreed to) for any Member of the Senate to move to
    proceed to the consideration of such legislation.
      [(f) Rules of the Senate.--This section is enacted by the
    Senate--
              [(1) as an exercise of the rulemaking power of the
            Senate and as such it is deemed a part of the rules of
            the Senate, but applicable only with respect to the
            procedure to be followed in the Senate in the case of a
            bill described in this paragraph, and it supersedes
            other rules only to the extent that it is inconsistent
            with such rules; and
              [(2) with full recognition of the constitutional
            right of the Senate to change the rules (so far as
            relating to the procedure of the Senate) at any time,
            in the same manner, and to the same extent as in the
            case of any other rule of the Senate.]

               *       *       *       *       *       *       *

    TITLE XI--ACCESS TO AFFORDABLE PHARMACEUTICALS

               *       *       *       *       *       *       *

    Subtitle B--Federal Trade Commission Review

               *       *       *       *       *       *       *

    SEC. 1112. NOTIFICATION OF AGREEMENTS.

      (a) * * *

               *       *       *       *       *       *       *

      (c) Filing.--
              (1) * * *
              (2) Other agreements.--The parties that are required
            in subsection (a) or (b) to file an agreement in
            accordance with this subsection shall file with the
            Assistant Attorney General and [the Commission the] the
            Commission--
                      (A) the text of any agreements between the
                    parties that are not described in such
                    subsections and are contingent upon, provide a
                    contingent condition for, or are otherwise
                    related to an agreement that is required in
                    subsection (a) or (b) to be filed in accordance
                    with this subsection[.]; and
                      (B) any other agreement the parties enter
                    into within 30 days of entering into an
                    agreement covered by subsection (a) or (b).

               *       *       *       *       *       *       *

      (d) Certification.--The chief executive officer or the
    company official responsible for negotiating any agreement
    required to be filed under subsection (a), (b), or (c) shall
    execute and file with the Assistant Attorney General and the
    Commission a certification as follows: ``I declare under
    penalty of perjury that the following is true and correct: The
    materials filed with the Federal Trade Commission and the
    Department of Justice under section 1112 of subtitle B of title
    XI of the Medicare Prescription Drug, Improvement, and
    Modernization Act of 2003, with respect to the agreement
    referenced in this certification: (1) represent the complete,
    final, and exclusive agreement between the parties; (2) include
    any ancillary agreements that are contingent upon, provide a
    contingent condition for, or are otherwise related to, the
    referenced agreement; and (3) include written descriptions of
    any oral agreements, representations, commitments, or promises
    between the parties that are responsive to subsection (a) or
    (b) of such section 1112 and have not been reduced to
    writing.''.

               *       *       *       *       *       *       *

                                  ----------

    PERSONAL RESPONSIBILITY AND WORK OPPORTUNITY RECONCILIATION ACT OF 1996

               *       *       *       *       *       *       *

    TITLE IV--RESTRICTING WELFARE AND PUBLIC BENEFITS FOR ALIENS

               *       *       *       *       *       *       *

    Subtitle A--Eligibility for Federal Benefits

               *       *       *       *       *       *       *

    SEC. 402. LIMITED ELIGIBILITY OF QUALIFIED ALIENS FOR CERTAIN FEDERAL
                        PROGRAMS.

      (a) * * *
      (b) Limited Eligibility for Designated Federal Programs.--
              (1) * * *
              (2) Exceptions.--Qualified aliens under this
            paragraph shall be eligible for any designated Federal
            program.
                      (A) * * *

               *       *       *       *       *       *       *

                      (G) Medicaid exception for citizens of freely
                    associated states.--With respect to eligibility
                    for benefits for the designated Federal program
                    defined in paragraph (3)(C) (relating to the
                    Medicaid program), section 401(a) and paragraph
                    (1) shall not apply to any individual who
                    lawfully resides in the United States
                    (including territories and possessions of the
                    United States) in accordance with the Compacts
                    of Free Association between the Government of
                    the United States and the Governments of the
                    Federated States of Micronesia, the Republic of
                    the Marshall Islands, and the Republic of
                    Palau.

               *       *       *       *       *       *       *

    SEC. 403. FIVE-YEAR LIMITED ELIGIBILITY OF QUALIFIED ALIENS FOR FEDERAL
                        MEANS-TESTED PUBLIC BENEFIT.

      (a) * * *

               *       *       *       *       *       *       *

      (d) Benefits for Certain Groups.--Notwithstanding any other
    provision of law, the limitations under section 401(a) and
    subsection (a) shall not apply to--
              (1) an individual described in section 402(a)(2)(G),
            but only with respect to the programs specified in
            subsections (a)(3) and (b)(3)(C) of section 402; [or]
              (2) an individual, spouse, or dependent described in
            section 402(a)(2)(K), but only with respect to the
            specified Federal program described in section
            402(a)(3)(B)[.]; or
              (3) an individual described in section 402(b)(2)(G),
            but only with respect to the designated Federal program
            defined in section 402(b)(3)(C).

               *       *       *       *       *       *       *

                         Subtitle D--General Provisions

    SEC. 431. DEFINITIONS.

      (a) * * *
      (b) Qualified Alien.--For purposes of this title, the term
    ``qualified alien'' means an alien who, at the time the alien
    applies for, receives, or attempts to receive a Federal public
    benefit, is--
              (1) * * *

               *       *       *       *       *       *       *

              (6) an alien who is granted conditional entry
            pursuant to section 203(a)(7) of such Act as in effect
            prior to April 1, 1980[; or],
              (7) an alien who is a Cuban and Haitian entrant (as
            defined in section 501(e) of the Refugee Education
            Assistance Act of 1980)[.], or
              (8) an individual who lawfully resides in the United
            States (including territories and possessions of the
            United States) in accordance with a Compact of Free
            Association referred to in section 402(b)(2)(G), but
            only with respect to the designated Federal program
            defined in section 402(b)(3)(C) (relating to the
            Medicaid program).

               *       *       *       *       *       *       *

                                  ----------

    DEFICIT REDUCTION ACT OF 2005

               *       *       *       *       *       *       *

                               TITLE V--MEDICARE

    Subtitle A--Provisions Relating to Part A

               *       *       *       *       *       *       *

    SEC. 5007. MEDICARE DEMONSTRATION PROJECTS TO PERMIT GAINSHARING
                        ARRANGEMENTS.

      (a) * * *

               *       *       *       *       *       *       *

      (d) Program Administration.--
              (1) * * *

               *       *       *       *       *       *       *

              (3) Duration.--The qualified gainsharing
            demonstration program under this section shall be
            conducted for the period beginning on January 1, 2007,
            and ending on December 31, 2009 (or September 30, 2011,
            in the case of a demonstration project in operation as
            of October 1, 2008).
      (e) Reports.--
              (1) * * *

               *       *       *       *       *       *       *

              (3) Quality improvement and savings.--By not later
            than [December 1, 2008] March 31, 2011, the Secretary
            shall submit to Congress a report on quality
            improvement and savings achieved as a result of the
            qualified gainsharing demonstration program established
            under subsection (a).
              (4) Final report.--By not later than [May 1, 2010]
            March 31, 2013, the Secretary shall submit to Congress
            a final report on the information described in
            paragraph (3).
      (f) Funding.--
              (1) In general.--Out of any funds in the Treasury not
            otherwise appropriated, there are appropriated to the
            Secretary for fiscal year 2006 $6,000,000, and for
            fiscal year 2010, $1,600,000, to carry out this
            section.
              (2) Availability.--Funds appropriated under paragraph
            (1) shall remain available for expenditure through
            fiscal year [2010] 2014 or until expended.

               *       *       *       *       *       *       *

                   CHAPTER 5--STATE FINANCING UNDER MEDICAID

                          TITLE VI--MEDICAID AND SCHIP

    Subtitle A--Medicaid

               *       *       *       *       *       *       *

                   CHAPTER 5--STATE FINANCING UNDER MEDICAID

    SEC. 6051. MANAGED CARE ORGANIZATION PROVIDER TAX REFORM.

      (a) * * *
      (b) Effective Date.--
              (1) * * *
              (2) Delay in effective date.--
                      (A) In general.--Subject to subparagraph (B),
                    in the case of a State specified in
                    subparagraph (B), the amendment made by
                    subsection (a) shall be effective as of
                    [October 1, 2009] October 1, 2010.

               *       *       *       *       *       *       *

                                  ----------

    SECTION 605 OF THE CHILDREN'S HEALTH INSURANCE PROGRAM REAUTHORIZATION
                                  ACT OF 2009

    SEC. 605. NO FEDERAL FUNDING FOR ILLEGAL ALIENS; DISALLOWANCE FOR
                        UNAUTHORIZED EXPENDITURES.

      Nothing in this Act allows Federal payment for individuals
    who are not [legal residents] lawfully residing in the United
    States. Titles XI, XIX, and XXI of the Social Security Act
    provide for the disallowance of Federal financial participation
    for erroneous expenditures under Medicaid and under CHIP,
    respectively.
                                  ----------

                                  ----------

    INDIAN HEALTH CARE IMPROVEMENT ACT

               *       *       *       *       *       *       *

                        DECLARATION OF HEALTH OBJECTIVES

      Sec. 3. (a) * * *
      (b) It is the intent of the Congress that the Nation meet the
    following health status objectives with respect to Indians and
    urban Indians by the year 2000:
              (1) * * *

               *       *       *       *       *       *       *

              (61) Increase to at least 70 percent the proportion
            of individuals who have received, as a minimum within
            the appropriate interval, all of the screening and
            immunization services and at least one of the
            counseling services appropriate for their age and
            gender as recommended by the [United States Preventive
            Services Task Force] Task Force on Clinical Preventive
            Services.

               *       *       *       *       *       *       *

                                  ----------

     SECTION 126 OF THE MEDICARE, MEDICAID, AND SCHIP BENEFITS IMPROVEMENT
                           AND PROTECTION ACT OF 2000

    SEC. 126. STUDIES ON PREVENTIVE INTERVENTIONS IN PRIMARY CARE FOR OLDER
                        AMERICANS.

      (a) Studies.--The Secretary of Health and Human Services,
    acting through the [United States Preventive Services Task
    Force] Task Force on Clinical Preventive Services, shall
    conduct a series of studies designed to identify preventive
    interventions that can be delivered in the primary care setting
    and that are most valuable to older Americans.
      (b) Mission Statement.--The mission statement of the [United
    States Preventive Services Task Force] Task Force on Clinical
    Preventive Services is amended to include the evaluation of
    services that are of particular relevance to older Americans.

               *       *       *       *       *       *       *

                                  ----------

                              SOCIAL SECURITY ACT

    TITLE XVIII--HEALTH INSURANCE FOR THE AGED AND DISABLED

               *       *       *       *       *       *       *

                        Part E--Miscellaneous Provisions

                  DEFINITIONS OF SERVICES, INSTITUTIONS, ETC.

      Sec. 1861. For purposes of this title--
      (a) * * *

               *       *       *       *       *       *       *

      (s) Medical and Other Health Services.--The term ``medical
    and other health services'' means any of the following items or
    services:
              (1) * * *
              (2)(A) * * *

               *       *       *       *       *       *       *

              (AA) ultrasound screening for abdominal aortic
            aneurysm (as defined in subsection (bbb)) for an
            individual--
                      (i) * * *

               *       *       *       *       *       *       *

                      (iii) who--
                              (I) * * *
                              (II) manifests risk factors included
                            in a beneficiary category recommended
                            for screening by the [United States
                            Preventive Services Task Force] Task
                            Force on Clinical Preventive Services
                            regarding abdominal aortic aneurysms;

               *       *       *       *       *       *       *

      (xx)(1) The term ``cardiovascular screening blood test''
    means a blood test for the early detection of cardiovascular
    disease (or abnormalities associated with an elevated risk of
    cardiovascular disease) that tests for the following:
              (A)  * * *

               *       *       *       *       *       *       *

    The Secretary may not approve an indication under subparagraph
    (B) for any individual unless a blood test for such is
    recommended by the [United States Preventive Services Task
    Force] Task Force on Clinical Preventive Services.

               *       *       *       *       *       *       *

      (ddd)(1) The term ``additional preventive services'' means
    services not otherwise described in this title that identify
    medical conditions or risk factors and that the Secretary
    determines are--
              (A)  * * *
              (B) recommended with a grade of A or B by the [United
            States Preventive Services Task Force] Task Force on
            Clinical Preventive Services ; and

               *       *       *       *       *       *       *

    TITLE XIX--GRANTS TO STATES FOR MEDICAL ASSISTANCE PROGRAMS

               *       *       *       *       *       *       *

                      PAYMENT FOR COVERED OUTPATIENT DRUGS

      Sec. 1927. (a) Requirement for Rebate Agreement.--
              (1) * * *

               *       *       *       *       *       *       *

              (5) Limitation on prices of drugs purchased by
            covered entities.--
                      (A) Agreement with secretary.--A manufacturer
                    meets the requirements of this paragraph if the
                    manufacturer has entered into an agreement with
                    the Secretary that meets the requirements of
                    section 340B of the Public Health Service Act
                    with respect to [covered outpatient drugs]
                    covered drugs (as defined in section 340B(b)(2)
                    of the Public Health Service Act) purchased by
                    a covered entity on or after the first day of
                    the first month that begins after the date of
                    the enactment of this paragraph.

               *       *       *       *       *       *       *

                      [(D) Effect of subsequent amendments.--In
                    determining whether an agreement under
                    subparagraph (A) meets the requirements of
                    section 340B of the Public Health Service Act,
                    the Secretary shall not take into account any
                    amendments to such section that are enacted
                    after the enactment of title VI of the Veterans
                    Health Care Act of 1992.]
                      (D) State responsibility for calculating
                    hospital credits.--The State shall calculate
                    the credits owed by the hospital under
                    paragraph (1) of section 340B(c) of the Public
                    Health Service Act and provide the hospital
                    with both the amounts and an explanation of how
                    it calculated the credits. In performing the
                    calculations specified in paragraphs (2)(A)(ii)
                    and (2)(B)(ii) of such section, the State shall
                    use the average manufacturer price applicable
                    to the calendar quarter in which the drug was
                    purchased by the hospital.

               *       *       *       *       *       *       *

      (k) Definitions.--In the section--
              (1) Average manufacturer price.--
                      (A) In general.--Subject to [subparagraph
                    (B)] subparagraphs (B) and (D), the term
                    ``average manufacturer price'' means, with
                    respect to a covered outpatient drug of a
                    manufacturer for a rebate period, the average
                    price paid to the manufacturer for the drug in
                    the United States by wholesalers for drugs
                    distributed to the retail pharmacy class of
                    trade.

               *       *       *       *       *       *       *

                      (D) Calculation for covered drugs.--With
                    respect to a covered drug (as defined in
                    section 340B(b)(2) of the Public Health Service
                    Act), the average manufacturer price shall be
                    determined in accordance with subparagraph (A)
                    except that, in the event a covered drug is not
                    distributed to the retail pharmacy class of
                    trade, it shall mean the average price paid to
                    the manufacturer for the drug in the United
                    States by wholesalers for drugs distributed to
                    the acute care class of trade, after deducting
                    customary prompt pay discounts.

               *       *       *       *       *       *       *

                                  ----------

    HOMELAND SECURITY ACT OF 2002

               *       *       *       *       *       *       *

    SEC. 2. DEFINITIONS.

      In this Act, the following definitions apply:
              (1) * * *

               *       *       *       *       *       *       *

              (6) The term ``emergency response providers''
            includes Federal, State, and local governmental and
            nongovernmental emergency public safety, fire, law
            enforcement, emergency response, emergency medical and
            dental (including hospital emergency facilities), and
            related personnel, agencies, and authorities.

               *       *       *       *       *       *       *

    TITLE V--NATIONAL EMERGENCY MANAGEMENT

               *       *       *       *       *       *       *

    SEC. 516. CHIEF MEDICAL OFFICER.

      (a) * * *

               *       *       *       *       *       *       *

      (c) Responsibilities.--The Chief Medical Officer shall have
    the primary responsibility within the Department for medical
    issues related to natural disasters, acts of terrorism, and
    other man-made disasters, including--
              (1) * * *

               *       *       *       *       *       *       *

              (5) serving as the Department's primary point of
            contact for State, local, and tribal governments, the
            [medical community] medical and dental communities, and
            others within and outside the Department, with respect
            to medical and public health matters;

               *       *       *       *       *       *       *

                                  ----------

    SECTION 653 OF THE POST-KATRINA EMERGENCY MANAGEMENT REFORM ACT OF 2006

    SEC. 653. FEDERAL PREPAREDNESS.

      (a) * * *
      (b) Operational Plans.--An operations plan developed under
    subsection (a)(4) shall meet the following requirements:
              (1) * * *

               *       *       *       *       *       *       *

              (4) The operations plan shall address, as
            appropriate, the following matters:
                      (A) * * *
                      (B) The preparedness and deployment of
                    [public health and medical] public health,
                    medical, and dental resources, including
                    resources to address the needs of evacuees and
                    populations with special needs.

               *       *       *       *       *       *       *

                                  ----------

    FEDERAL FOOD, DRUG, AND COSMETIC ACT

               *       *       *       *       *       *       *

    CHAPTER III--PROHIBITED ACTS AND PENALTIES

               *       *       *       *       *       *       *

                                   PENALTIES

      Sec. 303. (a) * * *

               *       *       *       *       *       *       *

      (f)(1)(A) * * *
      (B) Subparagraph (A) shall not apply--
              (i) * * *
              (ii) to any person who commits minor violations of
            section 519(e) or [519(g)] 519(h) (only with respect to
            correction reports) if such person demonstrates
            substantial compliance with such section, or

               *       *       *       *       *       *       *

    CHAPTER IV--FOOD

               *       *       *       *       *       *       *

                                MISBRANDED FOOD

      Sec. 403. A food shall be deemed to be misbranded--
      (a) * * *

               *       *       *       *       *       *       *

      (q)(1) * * *

               *       *       *       *       *       *       *

      (5)(A) Subparagraphs (1), (2), (3), and (4) shall not apply
    to food--
              (i) except as provided in clause (H)(ii)(III), which
            is served in restaurants or other establishments in
            which food is served for immediate human consumption or
            which is sold for sale or use in such establishments,
              (ii) except as provided in clause (H)(ii)(III), which
            is processed and prepared primarily in a retail
            establishment, which is ready for human consumption,
            which is of the type described in subclause (i), and
            which is offered for sale to consumers but not for
            immediate human consumption in such establishment and
            which is not offered for sale outside such
            establishment,

               *       *       *       *       *       *       *

      (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.--Clause (C) shall apply
                    to any regulations promulgated under subclauses
                    (ii)(III) and (vi).
              (viii) Vending machines.--In the case of an article
            of food sold from a vending machine that--
                      (I) 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
                      (II) 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 the
                    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 the 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.

               *       *       *       *       *       *       *

      Sec. 403A. (a) Except as provided in subsection (b), no State
    or political subdivision of a State may directly or indirectly
    establish under any authority or continue in effect as to any
    food in interstate commerce--
              (1) * * *

               *       *       *       *       *       *       *

              (4) any requirement for nutrition labeling of food
            that is not identical to the requirement of section
            403(q), [except a requirement for nutrition labeling of
            food which is exempt under subclause (i) or (ii) of
            section 403(q)(5)(A)] 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), or

               *       *       *       *       *       *       *

                          CHAPTER V--DRUGS AND DEVICES

    Subchapter A--Drugs and Devices

               *       *       *       *       *       *       *

                                   NEW DRUGS

      Sec. 505. (a) * * *

               *       *       *       *       *       *       *

      (w) Protecting Consumer Access to Generic Drugs.--
              (1) Unfair and deceptive acts and practices related
            to new drug applications.--
                      (A) Conduct prohibited.--It shall be unlawful
                    for any person to directly or indirectly be a
                    party to any agreement resolving or settling a
                    patent infringement claim in which--
                              (i) an ANDA filer receives anything
                            of value; and
                              (ii) the ANDA filer agrees to limit
                            or forego research, development,
                            manufacturing, marketing, or sales, for
                            any period of time, of the drug that is
                            to be manufactured under the ANDA
                            involved and is the subject of the
                            patent infringement claim.
                      (B) Exceptions.--Notwithstanding subparagraph
                    (A)(i), subparagraph (A) does not prohibit a
                    resolution or settlement of a patent
                    infringement claim in which the value received
                    by the ANDA filer includes no more than--
                              (i) the right to market the drug that
                            is to be manufactured under the ANDA
                            involved and is the subject of the
                            patent infringement claim, before the
                            expiration of--
                                      (I) the patent that is the
                                    basis for the patent
                                    infringement claim; or
                                      (II) any other statutory
                                    exclusivity that would prevent
                                    the marketing of such drug; and
                              (ii) the waiver of a patent
                            infringement claim for damages based on
                            prior marketing of such drug.
                      (C) Enforcement.--
                              (i) In general.--A violation of
                            subparagraph (A) shall be treated as an
                            unfair and deceptive act or practice
                            and an unfair method of competition in
                            or affecting interstate commerce
                            prohibited under section 5 of the
                            Federal Trade Commission Act and shall
                            be enforced by the Federal Trade
                            Commission in the same manner, by the
                            same means, and with the same
                            jurisdiction as though all applicable
                            terms and provisions of the Federal
                            Trade Commission Act were incorporated
                            into and made a part of this
                            subsection.
                              (ii) Inapplicability.--Subchapter A
                            of chapter VII shall not apply with
                            respect to this subsection.
                      (D) Definitions.--In this subsection:
                              (i) Agreement.--The term
                            ``agreement'' means anything that would
                            constitute an agreement under section 5
                            of the Federal Trade Commission Act.
                              (ii) Agreement resolving or
                            settling.--The term ``agreement
                            resolving or settling'', in reference
                            to a patent infringement claim,
                            includes any agreement that is
                            contingent upon, provides a contingent
                            condition for, or is otherwise related
                            to the resolution or settlement of the
                            claim.
                              (iii) Anda.--The term ``ANDA'' means
                            an abbreviated new drug application for
                            the approval of a new drug under
                            section (j).
                              (iv) Anda filer.--The term ``ANDA
                            filer'' means a party that has filed an
                            ANDA with the Food and Drug
                            Administration.
                              (v) Patent infringement.--The term
                            ``patent infringement'' means
                            infringement of any patent or of any
                            filed patent application, extension,
                            reissuance, renewal, division,
                            continuation, continuation in part,
                            reexamination, patent term restoration,
                            patent of addition, or extension
                            thereof.
                              (vi) Patent infringement claim.--The
                            term ``patent infringement claim''
                            means any allegation made to an ANDA
                            filer, whether or not included in a
                            complaint filed with a court of law,
                            that its ANDA or drug to be
                            manufactured under such ANDA may
                            infringe any patent.
              (2) FTC rulemaking.--The Federal Trade Commission
            may, by rule promulgated under section 553 of title 5,
            United States Code, exempt certain agreements described
            in paragraph (1) from the requirements of this
            subsection if the Commission finds such agreements to
            be in furtherance of market competition and for the
            benefit of consumers. Consistent with the authority of
            the Commission, such rules may include interpretive
            rules and general statements of policy with respect to
            the practices prohibited under paragraph (1).

               *       *       *       *       *       *       *

                         RECORDS AND REPORTS ON DEVICES

      Sec. 519. (a) * * *

               *       *       *       *       *       *       *

                        National Medical Device Registry

      (g)(1) The Secretary shall establish a national medical
    device registry (in this subsection referred to as the
    ``registry'') to facilitate analysis of postmarket safety and
    outcomes data on each device that--
              (A) is or has been used in or on a patient; and
              (B) is--
                      (i) a class III device; or
                      (ii) a class II device that is implantable,
                    life-supporting, or life-sustaining.
      (2) In developing the registry, the Secretary shall, in
    consultation with the Commissioner of Food and Drugs, the
    Administrator of the Centers for Medicare & Medicaid Services,
    the head of the Office of the National Coordinator for Health
    Information Technology, and the Secretary of Veterans Affairs,
    determine the best methods for--
              (A) including in the registry, in a manner consistent
            with subsection (f), appropriate information to
            identify each device described in paragraph (1) by
            type, model, and serial number or other unique
            identifier;
              (B) validating methods for analyzing patient safety
            and outcomes data from multiple sources and for linking
            such data with the information included in the registry
            as described in subparagraph (A), including, to the
            extent feasible, use of--
                      (i) data provided to the Secretary under
                    other provisions of this chapter; and
                      (ii) information from public and private
                    sources identified under paragraph (3);
              (C) integrating the activities described in this
            subsection with--
                      (i) activities under paragraph (3) of section
                    505(k) (relating to active postmarket risk
                    identification);
                      (ii) activities under paragraph (4) of
                    section 505(k) (relating to advanced analysis
                    of drug safety data); and
                      (iii) other postmarket device surveillance
                    activities of the Secretary authorized by this
                    chapter; and
              (D) providing public access to the data and analysis
            collected or developed through the registry in a manner
            and form that protects patient privacy and proprietary
            information and is comprehensive, useful, and not
            misleading to patients, physicians, and scientists.
      (3)(A) To facilitate analyses of postmarket safety and
    patient outcomes for devices described in paragraph (1), the
    Secretary shall, in collaboration with public, academic, and
    private entities, develop methods to--
              (i) obtain access to disparate sources of patient
            safety and outcomes data, including--
                      (I) Federal health-related electronic data
                    (such as data from the Medicare program under
                    title XVIII of the Social Security Act or from
                    the health systems of the Department of
                    Veterans Affairs);
                      (II) private sector health-related electronic
                    data (such as pharmaceutical purchase data and
                    health insurance claims data); and
                      (III) other data as the Secretary deems
                    necessary to permit postmarket assessment of
                    device safety and effectiveness; and
              (ii) link data obtained under clause (i) with
            information in the registry.
      (B) In this paragraph, the term ``data'' refers to
    information respecting a device described in paragraph (1),
    including claims data, patient survey data, standardized
    analytic files that allow for the pooling and analysis of data
    from disparate data environments, electronic health records,
    and any other data deemed appropriate by the Secretary.
      (4) Not later than 36 months after the date of the enactment
    of this subsection, the Secretary shall promulgate regulations
    for establishment and operation of the registry under paragraph
    (1). Such regulations--
              (A)(i) in the case of devices that are described in
            paragraph (1) and sold on or after the date of the
            enactment of this subsection, shall require
            manufacturers of such devices to submit information to
            the registry, including, for each such device, the
            type, model, and serial number or, if required under
            subsection (f), other unique device identifier; and
              (ii) in the case of devices that are described in
            paragraph (1) and sold before such date, may require
            manufacturers of such devices to submit such
            information to the registry, if deemed necessary by the
            Secretary to protect the public health;
              (B) shall establish procedures--
                      (i) to permit linkage of information
                    submitted pursuant to subparagraph (A) with
                    patient safety and outcomes data obtained under
                    paragraph (3); and
                      (ii) to permit analyses of linked data;
              (C) may require device manufacturers to submit such
            other information as is necessary to facilitate
            postmarket assessments of device safety and
            effectiveness and notification of device risks;
              (D) shall establish requirements for regular and
            timely reports to the Secretary, which shall be
            included in the registry, concerning adverse event
            trends, adverse event patterns, incidence and
            prevalence of adverse events, and other information the
            Secretary determines appropriate, which may include
            data on comparative safety and outcomes trends; and
              (E) shall establish procedures to permit public
            access to the information in the registry in a manner
            and form that protects patient privacy and proprietary
            information and is comprehensive, useful, and not
            misleading to patients, physicians, and scientists.
      (5) To carry out this subsection, there are authorized to be
    appropriated such sums as may be necessary for fiscal years
    2010 and 2011.

                      Reports of Removals and Corrections

      [(g)] (h)(1) * * *

               *       *       *       *       *       *       *

    CHAPTER VII--GENERAL AUTHORITY

               *       *       *       *       *       *       *

    Subchapter C--Fees

               *       *       *       *       *       *       *

                         PART 2--FEES RELATING TO DRUGS

    SEC. 735. DEFINITIONS.

      For purposes of this part:
              (1) The term ``human drug application'' means an
            application for--
                      (A) * * *
                      (B) licensure of a biological product under
                    section 351 of the Public Health Service Act,
                    including licensure of a biological product
                    under section 351(k) of such Act.

               *       *       *       *       *       *       *

                                DISSENTING VIEWS

        Republicans believe that the American health care system is
    the most effective in the world, but that it increasingly
    delivers services in ways that are uneven and too expensive for
    people to afford. We believe those problems are serious and
    that they require an equally serious remedy. As Congress and
    the President go about the business of devising new health care
    policies to cure the problems our people face, our own
    priorities are to ensure that Americans who like their health
    insurance are able to keep it, and that no system built by
    politicians in Washington will insert politics, radical social
    theory or bureaucrats between patients and their doctors.
    Unfortunately, those flaws are the hallmarks of the current
    proposal to restructure American health care, H.R. 3200.
        We are further concerned over the related matter of a
    currently popular style of governing in which every problem
    seems to require a trillion-dollar solution. The deficit for
    the just completed fiscal year was $1.6 trillion, the greatest
    annual accumulation of government debt in the history of the
    United States. The curious response of those in charge of the
    House is to amass more debt while simultaneously cutting back
    on the programs that people need, choose and like. Thus H.R.
    3200 manages to achieve both more debt and less health care by
    cutting Medicare by almost $500 billion in order to fund an
    array of unaffordable new entitlements that will supplant the
    health coverage that people have already picked for themselves.
    We believe that policymakers must find ways to make insurance
    more affordable and health care more accessible without
    creating an expensive new entitlement and without imposing on
    innocent Americans a vast new federal bureaucracy that will
    take away their choices and make their health care decisions
    for them.
        The President has stated he will not sign a bill ``that
    adds one dime to our deficits--either now or in the future.''
    According to the Congressional Budget Office and Joint
    Committee on Tax, enacting H.R. 3200 would result in a net
    increase in the federal budget deficit of $239 billion over the
    2010-2019 period.
        Additionally, H.R. 3200 uses gimmicks that hide the cost to
    the American taxpayer. Under H.R. 3200, the tax increases and
    Medicare cuts come first and quickly, but the big spending does
    not begin for four years. As a result, annual federal deficits
    associated with H.R. 3200 will grow progressively larger toward
    the end of the decade and explode in the following decades.
    H.R. 3200 will increase the deficit by $65 billion in 2019
    alone. A new report issued on September 9, 2009, by the
    Peterson Foundation found that H.R. 3200 would create an
    additional $1 trillion in deficit spending between 2020 and
    2029.
        We believe there are other options to fixing our health
    care system rather than burdening future generations with
    trillions of dollars in debt and dismantling the health care
    systems that the vast majority of Americans like.
        Division A of the Act would enact sweeping changes to the
    laws governing health insurance; create a new federal agency
    called the Health Choices Administration to regulate and sell
    health insurance through a new process called an Exchange;
    create a new government health care program for individuals
    under 65; and require individuals and employers to either pay
    new taxes or purchase insurance. The heavy regulation of
    insurance would increase costs and the government-run plan
    would exacerbate an ongoing cycle of cost shifting from the
    public sector to the private sector--driving up costs and
    encouraging private plans to exit the market.

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

        Title I transforms the current legal framework for the
    regulation of health insurance with new federal rules governing
    the sale of health insurance. These rules mandate the benefits
    that insurers must cover and the prices they may charge. At a
    minimum, policies would need to cover ``essential benefits,''
    defined as services for hospitalization; outpatient care;
    physician care; medical equipment and supplies; prescription
    drugs; rehabilitative needs; mental health and substance abuse
    disorders; preventive care; maternity care; and care for
    children under 21 years of age. In addition, the Act grants a
    newly created board of federal bureaucrats (the Health Benefits
    Advisory Committee) and the Secretary of Health and Human
    Services (HHS) broad authority to mandate that every health
    plan in the country cover additional benefits not listed in the
    legislation. These additional benefits could include
    objectionable services such as abortion or elective procedures
    that raise the cost of care.
        Benefit mandates are a key reason why the current cost of
    health plans is inflated. According to some estimates, the
    States have mandated 2,133 benefits and providers that have
    increased the cost of basic health coverage from a little less
    than 20% to perhaps 50%, depending on the number of mandates,
    the benefit design and the cost of the initial premium. The new
    authority for the Secretary of Health and Human Services to
    mandate limitless benefits will drive up the cost of coverage.
        If the goal of the legislation is to reduce health care
    costs, then creation of a multitude of new boards, bureaucrats,
    commissions, and programs is counterproductive to that goal.
    One of these new bureaucrats will be a new Health Choices
    Commissioner who will be endowed with unprecedented powers. The
    Commissioner will have the power to dictate levels of network
    adequacy and the types of benefits that must be included in
    every health plan. The Commissioner will have the ability to
    disenroll any individual from his or her health plan or it can
    impose draconian civil monetary penalties on health plans. The
    Commissioner can also decide that a health plan is not
    qualified and thus anyone enrolled would be subject to a 2.5%
    tax and any employer offering the plan would be subject to an
    8% tax.
        The Act provides essentially meaningless ``grandfathering''
    exceptions for existing health plans. These provisions do not
    implement the Majority's claim that the bill allows Americans
    who like the health insurance they have today to choose to keep
    it. Individual health policies could remain in effect only so
    long as the carrier does not change any of its terms and
    conditions or offer new treatments (e.g., new generic drugs) as
    covered benefits. As a result, this provision effectively will
    prohibit individuals from keeping their current health
    coverage. Instead, individuals will have to buy insurance
    through the new federal bureaucrat-run Exchange (described
    below). Existing employer-sponsored coverage would be exempt
    from the Act's new requirements for five years. At that point,
    it is probable that employers will begin dropping existing
    coverage instead of complying with the new costly federal
    mandates and regulations imposed by the Act.
        The Minority offered several amendments to protect
    Americans' ability to choose to keep their existing insurance
    plan if they like it. Congressman Stearns offered an amendment,
    which failed 32-26, to strike the requirement that all
    employer-sponsored health plans comply with the new mandates
    within five years. Instead, the amendment would have ensured
    that ``nothing in this Act shall be construed to prevent or
    limit individuals from keeping their current health coverage.''
    In addition, Congressmen Rogers and Gingrey offered an
    amendment, which failed 33-26, to ensure that Americans with a
    Health Savings Account or a Flexible Savings Account could
    continue to keep them if they chose to do so. Currently more
    than 8 million Americans own a Health Savings Account--which is
    more than the 7.7 million Americans enrolled in SCHIP and more
    than the populations of any one of 39 states.
        Congressman Buyer offered several amendments to protect
    veterans and service members from the adverse effects of H.R.
    3200. Two amendments were accepted by voice vote during the
    Committee's markup: one will allow veterans and service members
    to enroll in the health insurance Exchange created under the
    bill and another will protect and preserve the authorities of
    the Departments of Veterans Affairs (VA) and Defense to ensure
    they retain their authority over their respective health care
    systems. When the Energy and Commerce Committee reconvened its
    markup in September, Chairman Waxman included a third amendment
    offered by Congressman Buyer in his substitute amendment which
    passed by voice vote. This amendment requires the public plan
    created under H.R. 3200 to reimburse the VA in the same manner
    as other private health insurance plans reimburse the VA for
    treatment of non-service connected conditions.
        In a letter to Congressman Buyer and Chairman Bob Filner,
    the chairmen of the three committees with jurisdiction over
    H.R. 3200 committed to addressing the concerns covered in
    another amendment offered by Congressman Buyer. This amendment
    would ensure that veterans enrolled in the VA health care
    system are deemed to have acceptable health coverage for the
    purposes of the individual coverage mandate created by H.R.
    3200 and cannot be subjected to the 2.5% individual mandate
    tax. Finally, in a colloquy with Congressman Buyer, Chairman
    Waxman issued his commitment to ensuring that guard and
    reservists called to active duty and returning from active duty
    are considered by the Secretary of Treasury when the Secretary
    develops de minimus rules. This will help to protect guard and
    reservists from the individual mandate tax should they, for
    reasons beyond their control, be temporarily without health
    insurance due to the process of enrolling them into, and out
    of, Tricare.

     TITLE II--HEALTH INSURANCE EXCHANGE AND A NEW GOVERNMENT HEALTH CARE
                                      PLAN

        Title II creates a new government bureaucracy called a
    Health Choices Administration, which will regulate all private
    insurance and sell insurance plans through a new process called
    the ``Exchange.'' The Health Choices Administration, run by the
    Commissioner, will have the power to: govern the Exchange;
    transfer money from a government trust fund to finance the
    Exchange; prevent citizens from participating in the Exchange;
    permit (or not permit) employers to join the Exchange;
    establish benefit standards for Exchange plans (e.g., standards
    governing permissible amounts of cost-sharing); set standards
    governing provider networks (i.e., allow the Commissioner to
    regulate access to doctors); set enrollment periods; reduce co-
    payments for out-of-network providers; develop an auto-
    enrollment process for those who do not choose a plan (nothing
    prevents the Commissioner from auto-enrolling those individuals
    into the government plan); establish a mechanism for pooling
    risk; and suspend payments to health plans.
        As this lengthy but not exhaustive list shows, the Act
    gives tremendous power to the Commissioner. This power will
    allow the Commissioner to impose significant economic costs,
    displace unnecessary functions provided by the private market,
    and restrict the health choices of Americans.
        Title II also creates a new government health care plan run
    by the Department of Health and Human Services, which will
    ``compete'' with private insurance and be made available for
    enrollment through the Exchange. The plan would be administered
    by government bureaucrats who will determine benefits,
    premiums, and payments to health care providers. Providers who
    participate in Medicare would have to participate in the
    government plan unless they asked to opt out.
        The Minority does not accept the Majority's premise that a
    government health care plan is needed to ensure access to care
    or to drive down costs. To the contrary, estimates suggest that
    the creation of a government health plan will be enormously
    disruptive. Under some scenarios, payment levels under the
    public plan would be 32% less than what private insurers pay
    for the same services and would be 14% less for physician
    services.\1\ These lower reimbursement rates will come on top
    of existing government reimbursement rates that are lower than
    private plans. According to CBO Director Elmendorf, in 2006
    Medicare physician reimbursement rates averaged 20% less than
    private insurance levels; the disparity was 30% for hospitals.
    In Medicaid, the variation was greater: a 40% gap in physician
    payment levels; 35% for hospitals.\2\ Lower government rates
    force hospitals and doctors to shift costs to privately insured
    individuals; a Milliman study found that these cost shifts add
    nearly $1,800 annually to the cost of coverage for a family of
    four.\3\ By triggering these cost shifts, the creation of a
    government plan would cause 88 million people to lose their
    existing employer-sponsored private insurance and 103.4 million
    people to join the government plan.
    ---------------------------------------------------------------------------
        \1\The Lewin Group, Cost and Coverage Impacts of the American
    Affordable Health Choices Act of 2009: The July 15th draft, July 27,
    2009, http://www.lewin.com/content/publications/
    LewinAnalysisHouseBill2009.pdf.
        \2\Testimony of Doug Elmendorf, Congressional Budget Office
    Director, before the Senate Finance Committee on ``Options for
    Expanding Health Insurance Coverage and Controlling Costs,'' February
    25, 2009.
        \2\Milliman, ``Hospital and Physician Cost Shift Payment Level
    Comparison of Medicare, Medicaid, and Commercial Payers,'' December
    2008.
    ---------------------------------------------------------------------------
        Despite Majority claims that the government-run plan will
    compete on a level playing field with other health plans,
    nothing in this bill suggests that there will be a level
    playing field. That is because--as Congressional Budget Office
    Director Elmendorf testified before the Committee this spring--
    it would be ``extremely difficult'' to create ``a system where
    a public plan could compete on a level playing field'' against
    private coverage.
        Under this bill, the government plan will not be subject to
    a whole host of costs and liabilities that other plans must
    face. The government plan does not have to finance its start-up
    costs or pay state premium taxes; state and local property
    taxes; corporate taxes; and market rates for buildings,
    equipment, and services. The government plan would have
    exclusive access to government agency data, special protections
    from lawsuits, exemption from financial stability requirements,
    and the implicit financial backing of the entire U.S. Treasury.
    Finally, the government plan could undercut healthcare
    providers by only paying for a portion of services, forcing
    providers to shift costs onto Americans with private health
    care plans. These provisions are not--as the Majority claims--
    in the Act to keep private plans honest; they exist to drive
    them out of business.
        To address this situation, Mr. Burgess offered an
    amendment, which failed 35-24, to strike the public health
    plan. Mr. Radanovich offered an amendment to mitigate the
    damage expected from a government plan by requiring it to be
    subject to the same standards and business environment as
    private plans. This amendment, which failed 32-23, would have
    eliminated the exhaustive list of exclusive benefits afforded
    to the government plan in order to level the playing field with
    private insurers and ensure that Americans could keep their
    health insurance plans if they liked them.
        The Minority believes that the creation of the government
    plan likely will lead to a single payer system after private
    plans gradually are run out of business. Other countries with
    single-payer systems provide troubling examples of worse health
    care outcomes relative to those achieved in the United States.
    For example, the five-year survival rate for breast cancer
    patients in America is over 90%, more than twelve points higher
    than the rate in England, which has a centralized, government-
    run health care system. Congressman Shadegg offered an
    amendment, which failed 36-22, that would have required the
    Government Accountability Office (GAO) to regularly gather data
    on the five-year survival rates for breast cancer patients. If
    GAO determined that survival rates decreased after the
    implementation of the government plan, then it would have been
    discontinued in order to restore the higher survival rate.
        The Minority also offered amendments to ensure that the
    creation of a government-run health plan does not result in
    federal bureaucrats rationing access to care. Congressman
    Burgess offered an amendment, which passed by voice vote, to
    ensure that all qualified health plans (including the
    government plan) will have a reasonable and accessible
    utilization review and appeals process. This change will ensure
    that plans are not allowed to deny needed care and instead will
    keep medical decisions between a patient and his or her doctor.
        The Minority also offered several amendments to offer
    alternative solutions to reform the Nation's health care system
    and increase Americans' access to affordable health care,
    without unnecessarily expanding the scope of government in the
    system. Congressman Barton offered an amendment to ensure that
    very sick individuals with pre-existing health conditions have
    access to care. This amendment, which failed 35-22, would have
    struck the government plan and instead directed federal help to
    those who most needed it by providing health coverage to
    Americans who are ``uninsurable'' because of pre-existing
    health conditions. Every State would have been required to put
    in place either a high risk pool or a reinsurance program; the
    federal government would have provided sufficient funding to
    ensure enrollees' access to care.
        Congressmen Terry, Gingrey, and Blunt offered an amendment
    to allow all Americans access to the same health insurance as
    Members of Congress. Individuals could enroll in the Federal
    Employee Health Benefits Program, which offers premium coverage
    and allows enrollees to choose from many private insurance
    plans. Passage of this amendment would have met President
    Obama's guarantee that ``every uninsured American could get the
    same kind of health care that Members of Congress give
    themselves''--without imposing new burdensome insurance
    regulations and creating the new Exchange and the new
    government plan. However, this amendment was voted down 31 to
    28.
        Finally, the Minority believes Americans should have access
    to the price and quality information they need to make good
    health care decisions. Currently, Americans lack adequate cost
    and quality information to inform their health care decision-
    making. Insurance companies, government-run health programs and
    health care providers generally do not provide per-service
    prices or make this information available to patients prior to
    providing care. A search of existing State and federal
    government websites suggest that most provide insufficient
    information; by, for example, only posting proxies for this
    information in the form of average prices, median prices or
    price ranges.
        Consequently, consumers rarely know the amount of money
    they must pay for a specific service when they visit a medical
    provider. The lack of specific information especially hurts the
    uninsured and individuals whose insurance leaves them with
    significant out-of-pocket expenses. By cloaking a wide range of
    price variation, imprecise information hinders consumers'
    efforts to understand health care costs and decide how to spend
    money. It also impacts the entire market because consumers and
    analysts lack a critical aspect of a functioning market that
    they use in other purchasing decisions to drive down cost,
    determine value, reward effective organizations and penalize
    ineffective ones.
        To address this situation, Congressmen Barton and Stupak
    offered an amendment to create a new independent office within
    HHS tasked with the sole mission of working with public and
    private entities to collect, analyze, and publicly disclose all
    the price and risk-adjusted quality information necessary for
    consumers to make informed decisions about their health care
    services. This added transparency would have not only brought
    to light a greater understanding of the problems in the health
    care system, but also would have empowered American patients to
    make fully informed choices and so bring greater competition to
    the marketplace. In turn, this competition would bring lower
    prices, greater efficiency, and higher quality. This amendment
    was voted down by a show of hands, 28 to 18.
        The Committee has subsequently approved a second amendment
    to improve transparency offered by Congressman Barton,
    Congressman Green, and Congressman Burgess. The amendment
    permits all insured individuals to be able to learn in advance
    the amount of cost-sharing they would pay for a specific item
    or service by a participating provider. In addition, hospitals
    will need to make publicly available their charges. This added
    transparency will improve Americans' access to the information
    they need to make health care decisions.

                                   TITLE III

        Title III requires individuals to obtain insurance and
    employers to pay for 72% percent of the cost of insurance or
    face new taxes (2.5% for individuals or 8% of payroll for
    employers). This approach forces employers to choose between
    creating (or saving) jobs and providing health insurance,
    especially since the cost of the insurance likely will rise due
    to all the new benefit mandates imposed by the bill. The
    Congressional Research Service has concluded that individuals
    will pay $29 billion in new taxes due to the individual
    mandate. H.R. 3200 presents a Catch-22 to American workers
    because the underlying bill will increase the cost of their
    health insurance and for those people that cannot afford health
    insurance they will be subject to the 2.5% surtax on their
    income.
        The individual mandate and the employer mandate not only
    impose an economic hardship to families and an impediment to
    job growth but they are also designed to empower bureaucrats to
    control decisions about Americans' health care. Under these
    provisions, a person could purchase a health policy that they
    are happy with and fits their needs but still be subject to the
    new tax because that policy does not meet the specifications
    that the Health Care Choices Commissioner dictates. An employer
    who has offered its employees the same policy for years could
    be required to pay the 8% tax if the Commissioner says the
    policy does not qualify. We do not believe any bureaucrat
    should have that type of unlimited power.
        An individual mandate also is troubling because it would
    force Americans to pay for abortion services if the federal
    government exercises its authority under this Act and mandates
    that insurance plans cover abortion services. This means that
    Americans who do not want to finance abortion due to conscience
    objections would have to forego heath insurance coverage in
    order to uphold the claims of their conscience. In addition, it
    means that their tax dollars would finance these services
    through the government plan and through the new subsidies for
    low-income individuals established under the Act.
        The Minority offered several bipartisan amendments to
    address this problem. Congressman Pitts's amendment passed 31
    to 27, prohibiting the federal government from mandating the
    coverage of abortion (except in cases involving danger to the
    mother's life, rape or incest). However, at the request of
    Chairman Waxman, this amendment was reconsidered and
    subsequently defeated on a second vote 30-29. Another amendment
    offered by Congressmen Pitts and Stupak would have prevented
    the Act from allowing taxpayer dollars to subsidize abortions,
    but failed 31-27.
        The pay-to-play employment tax will discourage job growth
    and low-income workers will be especially hurt in the form of
    lower wages. Additionally, several studies have concluded that
    the new pay-to-play tax could put millions of Americans in
    jeopardy of losing their jobs. The CBO estimates this
    employment tax will cost employers $163 billion in new taxes
    over ten years. According to a methodology developed by the
    chair of the White House Council of Economic Advisors,
    Christina Romer, the mandates under this legislation could cost
    4.7 million jobs during the next ten years.
        The pay-to-play employment tax is designed to work in
    concert with the government health care plan and the new
    burdensome health care rules set forth by the Health Choices
    Commissioner to effectuate the ultimate desire of many in the
    Majority who support the federal government's takeover of
    health care. With the new costly rules that the Health Choices
    Commissioner could force on employers, as well the fear of
    excessive civil monetary penalties that the Commissioner can
    impose on an employer, many companies will reluctantly pay an
    8% tax and put their employees in the government plan rather
    than deal with the new heavy handed government bureaucracy by
    continuing to offer employees health insurance.
        The devastating impact of the pay-to-play employment tax is
    exacerbated by the legislation's surtax on income. The new
    income taxes will cost individuals and small businesses over
    $500 billion by imposing a surcharge on individuals making over
    $280,000 a year and households making over $350,000 a year. For
    those making over a million dollars, the surcharge would be
    5.4%. The effective federal tax rate for the highest income tax
    bracket would be over 45% once the tax rates established in
    2001 expire. When State income taxes are factored in with the
    federal income tax rates, some Americans will see effective tax
    rates that are among the highest in the world. Mr. Barton
    offered an amendment that would have prevented the surtax from
    affecting those individuals and small business that make less
    than $1 million in 2013, but the amendment was defeated on a
    party line vote.
        H.R. 3200 fails to recognize that most small businesses
    file individual tax returns. We agree with the July 16, 2009,
    letter sent by several Democrats to Speaker Pelosi, which
    pointed out that the surcharge will have a direct negative
    impact on manufacturers and small businesses. We share these
    Members' concern that this tax ``will discourage
    entrepreneurial activity and job growth.'' Like some in the
    Majority, we believe the anti-economic growth policies in the
    bill should be rejected and that it is counterproductive to
    efforts to get this Nation's economy back on track.
        Instead of finding new ways to increase costs on employers
    we should examine ways to bend the curve on health care costs.
    One way to do that is to allow employers to incentive workers
    to take more responsibility for their health and promote
    prevention. On June 15, before the American Medical
    Association, President Obama stated the following: ``building a
    health care system that promotes prevention rather than just
    managing diseases will require all of us to do our part. It
    will take doctors telling us what risk factors we should avoid
    and what preventive measures we should pursue. And it will take
    employers following the example of places like Safeway that is
    rewarding workers for taking better care of their health while
    reducing health care costs in the process. If you're one of the
    three quarters of Safeway workers enrolled in their Healthy
    Measures' program, you can get screened for problems like high
    cholesterol or high blood pressure. And if you score well, you
    can pay lower premiums. It's a program that has helped Safeway
    cut health care spending by over 13 percent and workers save
    over 20 percent on their premiums. And we are open to doing
    more to help employers adopt and expand programs like this
    one.''
        Congressman Buyer offered an amendment that would have
    granted greater flexibility to employers to provide individuals
    with incentives to take control of their health. These types of
    programs can improve individuals' health while significantly
    reducing health insurance costs for employers and employees
    alike. Such an approach can have far reaching positive impacts
    for the whole health system without costing federal taxpayers a
    dime. Mr. Buyer's amendment gained the full support of
    Republican members of the Committee but was rejected by the
    Majority. Instead, at taxpayers' expense, the Majority adopted
    an amendment that would create a new federal grant program to
    employers and an outreach campaign to let employers know about
    the grants. Like the President, we understand that employers
    already know about wellness programs and know they work.
    Employers do not need federal handouts to initiate these
    programs; instead they need greater flexibility in our laws and
    regulations which allow them to offer the incentives needed to
    attract employees to wellness programs and give individuals
    greater responsibility over their health.
        At the American Medical Association conference earlier this
    year, President Obama acknowledged that defensive medicine
    leads to more tests and needless costs because doctors must
    protect themselves from frivolous lawsuits. However, H.R. 3200
    fails to even touch on the issue of liability reform.
        Congressman Burgess offered an amendment that would
    institute common-sense liability protections to reduce the
    costs of ``defensive medicine'' to the health care system.
    Defensive medicine procedures are estimated to cost roughly $70
    billion a year. Furthermore, studies also show that the system
    fails injured patients, with claims taking on average five
    years to resolve and roughly 60 cents out of every dollar spent
    in the malpractice system going to lawyers or administrative
    costs. Modeled after reforms in Texas, which have reduced
    liability waste every year since 2003, this amendment would
    place a $750,000 cap on punitive damages, allow for periodic
    payments of damages, require expert physician witnesses to be
    practicing doctors, and afford special protections to
    volunteering good Samaritans. Reforming the flawed liability
    system will both lower costs by reducing the prevalence of
    defensive medicine and frivolous lawsuits, and increase the
    number of health care providers by curtailing one of the key
    barriers to entry in the industry. Unfortunately, the amendment
    was defeated largely along party lines.

                                   DIVISION B

        Rather than strengthen our health care system, the
    Majority's bill jeopardizes access to care that Americans,
    including seniors, currently enjoy. The Majority's bill raids
    the Medicare Trust Fund to pay for comparative effectiveness
    research that may never produce any savings, thereby stealing
    from Medicare's ever-shrinking funds.
        Additionally, the Majority's bill makes drastic cuts across
    Medicare providers. These cuts include: (1) hospitals and
    facilities receiving Medicare market basket payment updates
    will be cut $160.5 billion; (2) home health agencies are cut
    $56.8 billion; and (3) medical equipment such as oxygen tanks,
    wheelchairs and imaging services are cut $1.2 billion. Such
    cuts will not enhance access to health care--they may only
    serve to hinder the ability of providers to continue to offer
    quality health care and will eliminate the ability of providers
    to offset the increased costs of serving those who find
    themselves enrolled in health care by way of a mandate.
        Moreover, H.R. 3200 will directly impact seniors' ability
    to keep their current health insurance. The bill will limit the
    ability of millions of seniors to continue to have access to
    the care they have chosen. The Majority's bill cuts the
    Medicare Advantage benefit by $172 billion. This is money that
    is used in the program to buy down premiums and eliminate co-
    pays, provide enhanced benefits such as vision and dental
    benefits, and provide access to affordable prescription drugs.
        Furthermore, the Majority's bill will actually cost seniors
    money. The CBO found that the Majority's bill will raise
    Medicare prescription drug premiums for seniors by about 5% in
    2011, rising to about 20% in 2019. H.R. 3200 includes a
    provision that fills in the Medicare Part D prescription drug
    program ``doughnut hole.'' This is the coverage gap where
    seniors are responsible for paying out of pocket for 100% of
    the costs of their Part D drugs, until they hit a catastrophic
    level of spending (at which time the plan then picks up most of
    the cost of the drugs). There are two problems with this
    provision--first, the doughnut hole is largely filled in
    outside of the 10-year budget window with completion not until
    15 years from now. More importantly, seniors will bear the cost
    of doing so. The CBO estimated that this provision will raise
    Part D premiums.
        In sum, the Majority's bill hinders access to health care
    by stealing money from the Medicare Trust Fund, which is
    estimated to be bankrupt in a few years; cutting payments to
    Medicare providers and plans; and setting forth policies that
    increase our seniors' Medicare premiums. It does so with the
    purpose of creating new entitlements and empowering and
    enlarging the federal bureaucracy designed to control the
    health care choices of Americans. Congressman Gingrey offered
    an amendment that was unfortunately defeated that would have
    ensured that any cuts to the Medicare program be directed
    towards beneficiaries and ensuring the future viability of the
    program. That amendment was defeated largely along party lines.
        We believe that rather than exacerbate problems regarding
    access to care in our current health care system and spending
    inordinate sums of taxpayer dollars and Medicare funds on a
    government-run plan, Congress should be focusing on the need to
    reform our current health care programs. The National Health
    Care Anti-Fraud Association (NHCAA) estimates conservatively
    that 3% of all health care spending--or $68 billion--is lost to
    health care fraud. Other estimates by government and law
    enforcement agencies place the loss due to health care fraud as
    high as 10% of our Nation's annual health care expenditure--or
    a staggering $226 billion--each year. Even though everyone
    acknowledges the staggering amount of fraud in our current
    entitlement programs, H.R. 3200 does little to address this
    abuse of taxpayer funds.
        Furthermore, the Majority asserts their bill overhauls the
    Medicare physician payment system. This bill does not fix the
    broken Medicare physician payment system. While it is true the
    bill does replace the scheduled cut for next year, it does not
    replace the target system that has proved flawed. Rather, it
    takes the national target system Congress has almost never
    allowed to operate and breaks it into two national targets.
        If the argument for the past decade has been that a
    national target does not curb physician spending, then we are
    unsure why two national targets would be better than one. The
    Medicare system for paying physicians is broken, and the
    Majority's bill does not change that. Specifically, it does not
    adjust for how some providers in this country are getting paid
    under Medicare at rates well below their cost of services. This
    causes even more concern for us when you consider that the
    Majority's bill would tie payments for physicians who take
    patients in the government-run plan to Medicare rates and make
    taking these patients as a condition of participation in
    Medicare. Doing so will only jeopardize access to care as
    providers are forced to lay off health care workers and close
    clinics.
        The Minority is also concerned about the impact of the
    Medicaid policies in H.R. 3200. During the numerous health-
    reform hearings that were held by the Committee in the months
    leading up to the introduction of H.R. 3200, the Committee
    repeatedly heard testimony from expert witnesses about the
    numerous problems that plague the Medicaid program. Repeatedly,
    the Committee heard testimony as to how the low provider
    reimbursement rates and burdensome administrative requirements
    have led to significant access problems for Medicaid
    beneficiaries. The Committee also heard testimony as to how the
    fee-for-service model that is incorporated by many State
    Medicaid programs is an inherently flawed model for the
    delivery of health care that results in lower-quality health
    outcomes and higher costs when compared to more-modern health
    care delivery models. As a result of these numerous flaws in
    the Medicaid program, almost every witness, both Majority and
    Minority, before the Committee stated they would not exchange
    their current health insurance plan for Medicaid coverage if
    given the option.
        However, despite these numerous, inherent flaws and the
    undeniable need for significant, fundamental reform of the
    Medicaid program, the authors of H.R. 3200 decided to
    imprudently utilize a massive, mandated expansion of Medicaid
    eligibility, enrollment, and spending as a central component of
    their strategy to increase the number of Americans with health
    care coverage. This is primarily accomplished by mandating that
    all States expand their Medicaid eligibility levels to 133.33%
    of the federal poverty level ($14,440 for an individual and
    $29,400 for a family of four) for all individuals under the age
    of 65. Under current law, non-disabled childless adults between
    the ages of 19 and 64 are not eligible for Medicaid coverage,
    so the Majority's draft legislation has to create and mandate
    coverage for a massive new entitlement category to cover these
    populations. Combining this massive, mandated coverage
    expansion with provisions requiring an unprecedented automatic
    enrollment into Medicaid for low-income individuals, analysts
    project that this legislation could add between 15 and 20
    million people to the Medicaid rolls over the next ten years,
    increasing total Medicaid enrollment to approximately 90
    million Americans.
        The Minority is concerned about the negative impact that
    this policy will have on existing Medicaid beneficiaries,
    individuals who would become enrolled in Medicaid under this
    legislation, Medicaid participating health care providers, the
    States, and the American taxpayers. The Minority is concerned
    that the additional 15 to 20 million Medicaid beneficiaries who
    would become enrolled under H.R. 3200 would result in State
    Medicaid programs losing their focus on providing needed
    medical services to low-income children and the disabled that
    are already enrolled in the program. The Committee has
    repeatedly heard testimony regarding the difficulty that States
    are currently having in providing the required services to
    their existing Medicaid populations. In fact, it was this
    difficulty in meeting the demands of the current Medicaid
    populations that was given as the primary justification of the
    $90 billion in temporary federal funding increases that were
    given to the State Medicaid programs in Title V of P.L. 111-5.
    However, the current financial and caseload strains on State
    Medicaid programs, was clearly ignored in the drafting H.R.
    3200, which is projected to increase federal Medicaid spending
    by over $400 billion and State Medicaid spending by over $40
    billion.
        The Minority offered several amendments to improve the
    Medicaid-related provisions of H.R. 3200, but unfortunately,
    these amendments were all defeated by the Majority. One of the
    most important amendments offered by the Minority would have
    provided all Medicaid and SCHIP beneficiaries with the right to
    choose the health care coverage that best fits their needs by
    requiring all State Medicaid and SCHIP programs to give
    beneficiaries the option of receiving premium assistance for
    employer-sponsored health insurance coverage or any other
    participating health insurance plan that has met the coverage
    requirements that already exist in current law. The Minority
    was disappointed that this premium-assistance amendment was
    defeated, especially after the Majority voted in favor of an
    amendment offered by Congressman Welch to give a special
    exemption for the State of Vermont to allow just this one State
    to continue their current premium-assistance program for
    Medicaid beneficiaries.
        The Minority was also disappointed that an anti-fraud
    amendment offered by Congressman Deal was defeated by a 28-29
    vote. This amendment would have prevented American taxpayers
    from being forced to finance welfare benefits for illegal
    aliens by clarifying that all potential Medicaid enrollees must
    first go through the existing citizenship and identity
    verification requirements that are in Sections 1903(x) and
    1137(d) of the Social Security Act. H.R. 3200 would require
    States to automatically enroll potentially millions of Medicaid
    beneficiaries without any guarantees that these new enrollees
    will be United States citizens or certain legal permanent
    residents as required in current law. Specifically, Section
    1702 of H.R. 3200 requires that ``the State shall accept
    without further determination the enrollment under [the
    Medicaid program] of an individual determined by the
    Commissioner to be a non-traditional Medicaid eligible
    individual.'' However, nowhere in this bill is the Health
    Choices Commissioner required to apply the existing citizenship
    and identity verification requirements that exist in current
    Medicaid statute. The Minority hopes that this loophole is
    addressed before this legislation is passed into law.

                                   DIVISION C

        The state of our Nation's health depends greatly on the
    health status of its people. Prevention and wellness programs
    are worthwhile endeavors; however, the CBO recently stated that
    ``different types of preventative care [has] different effects
    on spending, the evidence suggests that for most preventative
    services, expanded utilization leads to higher, now lower,
    medical spending overall.''\4\ CBO outlined that because
    doctors do not know which patients would benefit from the
    preventative services, mass screenings will lead to higher
    costs. In order for preventative services to truly lower costs,
    the services need to be targeted to specific populations. This
    bill does nothing to target prevention efforts. Instead, it
    spends billions of dollars on mass prevention measures which
    may have little to no effect.
    ---------------------------------------------------------------------------
        \4\Congressional Budget Office, Letter to Congressman Nathan Deal,
    August 7, 2009.
    ---------------------------------------------------------------------------
        We are concerned by the authorization of over $88 billion
    to create a public health investment fund. This fund is
    authorized to be used for increasing the public health
    workforce, increasing allied health professional workforces,
    increasing physician workforce, and the creation of a new
    Prevention and Wellness trust fund. While these are worthy
    goals, we believe that before any money is appropriated,
    Congress should take a serious look at what funds are already
    being used for these purposes. An amendment offered by
    Congressman Sullivan which was adopted by a majority vote
    stated that any duplicative programs be eliminated. The new
    Democratic health care proposal creates massive new federal
    spending programs, many of which are charged with
    responsibilities already assigned to pre-existing programs.
    This amendment does not eliminate services, but ensures that
    services offered under the new system are administered in a
    more efficient manner. According to the current language, the
    vast new roster of programs only add to the existing
    bureaucracy instead of replacing the appropriate portion. This
    amendment will lower administrative costs and help streamline
    the greatly expanded government health care system.
        The massive size of the bill and the short time period that
    the Committee had to consider the bill is concerning given the
    number of new programs the legislation creates. The legislation
    creates a loan repayment program financed by the federal
    taxpayers to repay people's loans who get degrees in health
    policy. We agree that it is important to find ways to train the
    next generation of individuals who will be on the front line of
    treating Americans, but it is irresponsible in this time of
    budget deficits to have loan repayment programs for people who
    will never see a patient. We are also concerned with the open
    ended nature of grants that could be funneled to localities to
    build sidewalks, parks and bike trails. A health reform bill
    should be about health care, not bike trails.
        As the legislative process moves forward, Congress should
    consider the following amendments offered at the Committee
    which were not adopted. An amendment offered by Congressman
    Gingrey would prevent government bureaucrats at the new Center
    for Quality Improvement from dictating to physicians what
    treatments they can or can't offer. In the legislation, the
    Center is tasked with determining what treatments and
    procedures are most cost effective. This manner of government-
    sponsored research, in conjunction with the new federal crowd-
    out health plan, would represent the first step towards
    implementing a policy of bureaucrat health care rationing. This
    amendment would have helped prevent this eventuality by
    ensuring that this new agency cannot take the next dangerous
    step and put a federal bureaucrat between the American people
    and their doctors.
        An amendment offered by Congressman Rogers, would prevent
    the federal government's comparative effectiveness research
    from being used for care rationing or limiting reimbursement
    levels by any government or private entity. The current
    legislation creates an Agency for Healthcare Research and
    Quality (AHRQ) to conduct said research. Under the current
    legislation, the AHRQ, the Center for Medicare and Medicaid
    Services, or any other agency could use comparative
    effectiveness research, including cost-effectiveness research,
    to make payment and coverage decisions to deny patient care.
    This amendment would prevent government agencies from rationing
    availability of life-saving drugs, therapies, and treatments
    based on government research, or limiting reimbursement for
    these services.
        An amendment offered by Congressman Terry would reauthorize
    funding for abstinence education in our Nation's schools.
    Abstinence education programs teach students far more than just
    how to ``say no''. Students learn the value of building healthy
    relationships, they build critical skills in decision-making
    and self-efficacy, and they gain medically accurate information
    on contraceptives and sexually transmitted diseases (STDs).
    Additionally, while achieving these objectives, these programs
    have not decreased condom use in sexually active teens. This
    amendment would not cut funding for Comprehensive Sex Education
    programs, which receive four times as much funding as
    abstinence education programs; it will only ensure that teens
    retain access to an invaluable perspective on their personal
    and sexual development.
        An amendment offered by Congressman Terry would prohibit
    the creation of a $35.3 billion Community Wellness Fund unless
    the projected budget deficit for the next fiscal year is less
    than $1 trillion. Under the current legislation, this money
    could be given out to any program that is tangentially related
    to community wellness. This could include building jungle gyms,
    bike trails, or parks; or even paying people to drink diet soda
    instead of regular soda. This amendment would require that
    Congress have the budget in order before it can obligate
    billions more in new government grant programs.
        The Minority is very concerned that the Committee rejected
    an amendment offered by Congressman Deal that would prohibit
    the federal government from taxing or withholding benefits from
    States whose health plans do not comply with the new arbitrary
    essential benefits mandates that the HHS Secretary is
    authorized to make under this legislation. These could include
    mandated coverage of abortion or Botox injections, and if
    States don't comply they would face an 8% tax on their employee
    payroll or drastic cuts in federal grants. States are already
    struggling to balance their budgets. New federal taxes on State
    governments or restrictions on critical grants could mean the
    breaking point for stretched-thin State budgets. Due to the
    rejection of this amendment, State taxpayers could see thier
    money taken by the federal government because their State
    government did not want to cover objectionable services.
        The Minority would also note that the Committee has never
    held a hearing to examine the details of H.R. 3200. The
    Majority claims in the report that three days of legislative
    hearings were held on the bill. However, when witnesses were
    asked to comment on specifics of the legislation, Members were
    told that the witnesses could not comment on specifics because
    there had not been enough time to review it. We believe that,
    given the enormity of this issue, it would be important for the
    Committee to hold a hearing to discuss the implications of the
    legislation.

                                       Joe Barton
                                               (Ranking Member).
                                       Nathan Deal.
                                       Fred Upton.
                                       Cliff Stearns.
                                       Ralph Hall.
                                       John Shimkus.
                                       George Radanovich.
                                       Lee Terry.
                                       Ed Whitfield.
                                       Greg Walden.
                                       Phil Gingrey.
                                       Marsha Blackburn.
                                       Mike Rogers.
                                       Michael Burgess.
                                       Mary Bono Mack.
                                       Sue Myrick.
                                       John Sullivan.
                                       John Shadegg.
                                       Steve Scalise.
                                       Joseph R. Pitts.
                                       Steve Buyer.
                                       Roy Blunt.
                                       Tim Murphy.

        Appendix A--Text of Motion to Instruct the Chairman on H.R. 3200

    Motion to Instruct the Chairman to
    Transmit to the Committee on Rules
                 Additional Recommended Amendments

    (As Approved by the Committee on Energy and Commerce on September
       23, 2009; references are to H.R. 3200, as ordered reported by the
                        Committee on Energy and Commerce)

      The Committee on Energy and Commerce approved, by a vote of
    28-22 on September 23, 2009, the following motion:
      Mr. Dingell moves to instruct the Chairman of the Committee
    on Energy and Commerce to transmit to the Committee on Rules
    the following additional recommended amendments for
    consideration, by the Committee on Rules and the House of
    Representatives, in connection with H.R. 3200, as previously
    ordered reported by the Committee on Energy and Commerce:
      [Baldwin 15:]
      In section 1150A(c) of the Social Security Act, as added by
    section 1905--
              (1) redesignate paragraphs (7) and (8) as paragraphs
            (9) and (10), respectively; and
              (2) insert after paragraph (6) the following new
            paragraphs:
              ``(7) Support for coordination of State and Federal
            contracting and oversight for dual coordination
            programs supportive of the goals described in
            subsection (b);
              ``(8) Support for State Medicaid agencies through the
            provision of technical assistance for Medicare and
            Medicaid coordination initiatives designed to improve
            acute and long-term care for dual eligibles;
      In section 1150A of the Social Security Act, as added by
    section 1905--
              (1) redesignate subsections (d) and (e) as subsection
            (f) and (g), respectively;
              (2) in subsection (a), strike ``as defined in
            subsection (e)'' and insert ``as defined in subsection
            (g)''; and
              (3) insert after subsection (c) the following new
            subsections:
      ``(d) Integrated Reporting; Benchmarks.--
              ``(1) In general.--The Office or program shall work
            with relevant State agencies to establish a common set
            of risk adjusted quality measures and reporting
            procedures for Medicare and Medicaid reporting that
            include integration and consolidation of current
            reporting requirements for--
                      ``(A) annual risk assessment and model of
                    care requirements;
                      ``(B) the Healthcare Effectiveness Data and
                    Information Set (HEDIS), Consumer Assessment of
                    Healthcare Providers and Systems (CAHPS),
                    Health Outcomes Study (HOS), Quality
                    Improvement Projects (QIP), Chronic Care
                    Improvement Program (CCIP), and any plan
                    organizational structure and quality
                    improvement processes; and
                      ``(C) a common set of risk adjusted
                    benchmarks for Medicare and Medicaid to
                    evaluate performance of for integrated
                    Medicare-Medicaid programs for dual eligibles
                    in serving a comparable group of beneficiaries
                    under the original Medicare fee-for-service
                    program, under the Medicare Advantage program,
                    and under Medicaid managed care, including, to
                    the extent possible, the following outcomes
                    measures: emergency room use, avoidable
                    hospitalizations and inpatient readmissions for
                    ambulatory care sensitive conditions;
                    medication management to prevent adverse drug
                    events and promote adherence; long-term nursing
                    home stays; beneficiary satisfaction; and such
                    other measures as the Secretary deems
                    appropriate.
      ``(e) Consultation With Stakeholders.--The Office or program
    shall consult with relevant stakeholders, including
    representatives for dual eligible beneficiaries, health plans,
    providers, and State Medicaid agencies, in the development of
    policies related to integrated Medicare-Medicaid programs for
    dual eligibles.
      In section 1177, strike subsection (b) and insert the
    following:
      (b) Extension of Certain Plans.--
              (1) Plans described.--For purposes of Section
            1859(f)(1) of the Social Security Act (42 U.S.C. 1395w-
            28(f)(1)), a plan described in this paragraph is a
            Medicare Advantage dual eligible special needs plan--
                      (A) whose sponsoring Medicare Advantage
                    organization, as of the date enactment of
                    America's Affordable Health Choices Act of
                    2009, has a contract with a State Medicaid
                    Agency that participated in the
                    ``Demonstrations Serving Those Dually-Eligible
                    for Medicare and Medicaid'' under the Medicare
                    program; and
                      (B) that has been approved by the Centers for
                    Medicare & Medicaid Services as a dual eligible
                    special needs plan and that offers integrated
                    Medicare and Medicaid services under a contract
                    with the State Medicaid agency.
              (2) Analysis; report.--
                      (A) Analysis.--The Secretary of Health and
                    Human Services shall provide, through a
                    contract with an independent health services
                    evaluation organization, for an analysis of the
                    plans described in paragraph (1) with regard to
                    the impact of such plans on cost, quality of
                    care, patient satisfaction, and other subjects
                    specified by the Secretary. Such report also
                    will identify statutory changes needed to
                    simplify access to needed services, improve
                    coordination of benefits and services and
                    ensure protection for dual eligibles as
                    appropriate.
                      (B) Report.--Not later than December 31,
                    2011, the Secretary shall submit to the
                    Congress a report on the analysis under
                    subparagraph (A) and shall include in such
                    report such recommendations with regard to the
                    treatment of such plans as the Secretary deems
                    appropriate.
      [Barton, Green, Burgess 1:]
      Amend section 133 to read as follows:

    SEC. 133. REQUIRING INFORMATION TRANSPARENCY AND PLAN DISCLOSURE.

      (a) In General.--A qualified health benefits plan shall
    comply with standards established by the Commissioner for the
    accurate and timely disclosure of plan documents, plan terms
    and conditions, claims payment policies, practices, and
    amounts, periodic financial disclosure, and other information
    as determined appropriate by the Commissioner. The Commissioner
    shall require that such disclosure be provided in plain
    language.
      (b) Cost Sharing Transparency.--A qualified health benefits
    plan shall allow individuals to learn the amount of cost-
    sharing (including deductibles, copayments, and coinsurance)
    under the individual's plan or coverage that the individual
    would be responsible for paying with respect to the furnishing
    of a specific item or service by a participating provider in a
    timely manner upon request. At a minimum, this information
    shall be made available to such individual via an Internet
    website.
      (c) Contracting Reimbursement.--A qualified health benefits
    plan shall comply with standards established by the
    Commissioner to ensure transparency to each health care
    provider relating to reimbursement arrangements between such
    plan and such provider.
      (d) Advance Notice of Plan Changes.--A change in a qualified
    health benefits plan shall not be made without reasonable and
    timely advance notice to enrollees of such change.
      Add at the end of subtitle C of title VII of division B the
    following:

    SEC. 1730B. HOSPITAL PRICE AND QUALITY TRANSPARENCY.

      (a) In General.--Section 1902(a) of the Social Security Act
    (42 U.S.C. 1396a(a)), as amended by sections 1631(b), 1703(a),
    1729, 1753, 1757(a), 1759(a), and 1910(b), is amended--
              (1) by striking ``and'' at the end of paragraph (79);
              (2) by striking the period at the end of paragraph
            (80) and inserting ``; and''; and
              (3) by inserting after paragraph (80) the following
            new paragraph:
              ``(81) provide that the State will establish and
            maintain laws, in accordance with the requirements of
            section 1921A, to require disclosure of information on
            hospital charges and quality and to make such
            information available to the public and the
            Secretary.''; and
              (4) by inserting after section 1921 the following new
            section:

                         ``HOSPITAL PRICE TRANSPARENCY

      ``Sec. 1921A.  (a) In General.--The requirements referred to
    in section 1902(a)(81) are that the laws of a State must--
              ``(1) require reporting to the State (or its agent)
            by each hospital located therein, of information on--
                      ``(A) the charges for the most common
                    inpatient and outpatient hospital services;
                      ``(B) the Medicare and Medicaid reimbursement
                    amount for such services; and
                      ``(C) if the hospital allows for or provides
                    reduced charges for individuals based on
                    financial need, the factors considered in
                    making determinations for reductions in
                    charges, including any formula for such
                    determination and the contact information for
                    the specific department of a hospital that
                    responds to such inquiries;
              ``(2) provide for notice to individuals seeking or
            requiring such services of the availability of
            information on charges described in paragraph (1);
              ``(3) provide for timely access to such information,
            including at least through an Internet website, by
            individuals seeking or requiring such services; and
              ``(4) provide for timely access to information
            regarding the quality of care at each hospital made
            publicly available in accordance with section 501 of
            the Medicare Prescription Drug, Improvement, and
            Modernization Act of 2003 (Public Law 108-173), section
            1139A, or section 1139B.
    The Secretary shall consult with stakeholders (including those
    entities in section 1808(d)(6) and the National Governors
    Association) through a formal process to obtain guidance prior
    to issuing implementing policies under this section.
      ``(b) Hospital Defined.--For purposes of this section, the
    term `hospital' means an institution that meets the
    requirements of paragraphs (1) and (7) of section 1861(e) and
    includes those to which section 1820(c) applies.''.
      (b) Effective Date; Administration.--
              (1) In general.--Except as provided in paragraphs (2)
            and (3)(B), the amendments made by subsection (a) shall
            take effect on October 1, 2010.
              (2) Exception.--In the case of a State plan for
            medical assistance under title XIX of the Social
            Security Act which the Secretary of Health and Human
            Services determines requires State legislation (other
            than legislation appropriating funds) in order for the
            plan to meet the additional requirements imposed by the
            amendments made by subsection (a), the State plan shall
            not be regarded as failing to comply with the
            requirements of such title solely on the basis of its
            failure to meet these additional requirements before
            the first day of the first calendar quarter beginning
            after the close of the first regular session of the
            State legislature that begins after the date of the
            enactment of this Act. For purposes of the previous
            sentence, in the case of a State that has a 2-year
            legislative session, each year of such session shall be
            deemed to be a separate regular session of the State
            legislature.
              (3) Existing programs.--
                      (A) In general.--The Secretary of Health and
                    Human Services shall establish a process by
                    which a State with an existing program may
                    certify to the Secretary that its program
                    satisfies the requirements of section 1921A of
                    the Social Security Act, as inserted by
                    subsection (a).
                      (B) 2-year period to become in compliance.--
                    States that, as of the date of the enactment of
                    this Act, administer hospital price
                    transparency policies that do not meet such
                    requiremens shall have 2 years from such date
                    to make necessary modifications to come into
                    compliance and shall not be regarded as failing
                    to comply with such requirements during such 2-
                    year period.
      [Butterfield 2:]
      At the end of section 122, add the following new subsection:
      (f) Report Regarding Inclusion of Oral Health Care in
    Essential Benefits Package.--Not later than one year after the
    date of the enactment of this Act, the Secretary of Health and
    Human Services shall submit to Congress a report containing the
    results of a study determining the need and cost of providing
    accessible and affordable oral health care to adults as part of
    the essential benefits package.
      [Buyer Health09\005:]
      In subtitle A of title II of division A, add at the end the
    following new section:

    SEC. 209. REIMBURSEMENT OF SECRETARY OF VETERANS AFFAIRS.

      The Secretary of Health and Human Services shall seek to
    enter into a memorandum of understanding with the Secretary of
    Veterans Affairs regarding the recovery of costs related to
    non-service-connected care or services provided by the
    Secretary of Veterans Affairs to an individual covered under
    the public health insurance option in a manner consistent with
    recovery of costs related to non-service-connected care from
    private health insurance plans.
      [Castor 7_001:]
      In title XXXI of the Public Health Service Act, added by
    section 2301(a), redesignate subtitle G (and section 3171) as
    subtitle H (and section 3181, respectively), and insert after
    subtitle F the following new subtitle (and conform cross-
    references accordingly): [review if this should go into part 2
    of subtitle B of title V of division C]:

                     ``Subtitle G--Wellness Program Grants

    ``SEC. 3171. WELLNESS PROGRAM GRANTS.

      ``(a) Allowance of Grant.--
              ``(1) In general.--For purposes of this section, the
            Secretary shall award wellness grants as determined
            under this section. Wellness program grants shall be
            awarded to qualified employers for any plan year in an
            amount equal to 50 percent of the costs paid or
            incurred by the employer in connection with a qualified
            wellness program during the plan year. For purposes of
            the preceding sentence, in the case of any qualified
            wellness program offered as part of an employment-based
            health plan, only costs attributable to the qualified
            wellness program and not to the health plan, or health
            insurance coverage offered in connection with such a
            plan, may be taken into account.
              ``(2) Limitation.--The amount of the grant allowed
            under paragraph (1) for any plan year shall not exceed
            the sum of--
                      ``(A) the product of $200 and the number of
                    employees of the employer not in excess of 200
                    employees; plus
                      ``(B) the product of $100 and the number of
                    employees of the employer in excess of 200
                    employees.
            The wellness grants awarded to an employer under this
            section shall be for up to 3 years and shall not exceed
            $50,000.
      ``(b) Qualified Wellness Program.--For purposes of this
    section:
              ``(1) Qualified wellness program.--The term
            `qualified wellness program' means a program that --
                      ``(A) includes any 3 wellness components
                    described in subsection (c); and
                      ``(B) is certified by the Secretary, in
                    coordination with the Health Choices
                    Commissioner and the Director of the Center for
                    Disease Control and Prevention, as a qualified
                    wellness program under this section.
              ``(2) Programs must be consistent with research and
            best practices.--
                      ``(A) In general.--The Secretary shall not
                    certify a program as a qualified wellness
                    program unless the program--
                              ``(i) is newly established or in
                            existence on the date of enactment of
                            this Act but not yet meeting the
                            requirements of this section;
                              ``(ii) is consistent with evidenced-
                            based researched and best practices, as
                            identified by persons with expertise in
                            employer health promotion and wellness
                            programs;
                              ``(iii) includes multiple, evidenced-
                            based strategies which are based on the
                            existing and emerging research and
                            careful scientific reviews, including
                            the Guide to Community Preventative
                            Services, the Guide to Clinical
                            Preventative Services, and the National
                            Registry for Effective Programs, and
                              ``(iv) includes strategies which
                            focus on prevention and support for
                            employee populations at risk of poor
                            health outcomes.
                      ``(B) Periodic updating and review.--The
                    Secretary, in consultation with other
                    appropriate agencies shall establish procedures
                    for periodic review, evaluation, and update of
                    the programs under this subsection.
              ``(3) Health literacy/accessibility.--The Secretary
            shall, as part of the certification process--
                      ``(A) ensure that employers make the programs
                    culturally competent. physically and
                    programmatically accessible (including for
                    individuals with disabilities), and appropriate
                    to the health literacy needs of the employees
                    covered by the programs;
                      ``(B) require a health literacy component to
                    provide special assistance and materials to
                    employees with low literacy skills, limited
                    English and from under-served populations; and
                      ``(C) require the Secretary , in consultation
                    with Secretary of Labor, to compile and
                    disseminate to employer health plans info on
                    model health literacy curricula, instructional
                    programs, and effective intervention
                    strategies.
      ``(c) Wellness Program Components.--For purposes of this
    section, the wellness program components described in this
    subsection are the following:
              ``(1) Health awareness component.--A health awareness
            component which provides for the following:
                      ``(A) Health education.--The dissemination of
                    health information which addresses the specific
                    needs and health risks of employees.
                      ``(B) Health screenings.--The opportunity for
                    periodic screenings for health problems and
                    referrals for appropriate follow up measures.
              ``(2) Employee engagement component.--An employee
            engagement component which provides for the active
            engagement of employees in worksite wellness programs
            through worksite assessments and program planning,
            onsite delivery, evaluation, and improvement efforts.
              ``(3) Behavioral change component.--A behavioral
            change component which provides for altering employee
            lifestyles to encourage healthy living through
            counseling, seminars, on-line programs, or self-help
            materials which provide technical assistance and
            problem solving skills. such component may include
            programs relating to--
                      ``(A) tobacco use;
                      ``(B) obesity;
                      ``(C) stress management;
                      ``(D) physical fitness;
                      ``(E) nutrition;
                      ``(F) substance abuse;
                      ``(G) depression; and
                      ``(H) mental health promotion (including
                    anxiety).
              ``(4) Supportive environment component.--A supportive
            environment component which includes the following:
                      ``(A) On-site policies.--Policies and
                    services at the worksite which promote a
                    healthy lifestyle, including policies relating
                    to--
                              ``(i) tobacco use at the worksite;
                              ``(ii) the nutrition of food
                            available at the worksite through
                            cafeterias and vending options;
                              ``(iii) minimizing stress and
                            promoting positive mental health in the
                            workplace; and
                              ``(iv) the encouragement of physical
                            activity before, during, and after work
                            hours.
      ``(d) Participation Requirement.--No grant shall be allowed
    under subsection (a) unless the Secretary in consultation with
    other appropriate agencies, certifies, as a part of any
    certification described in subsection (b), that each wellness
    program component of the qualified wellness program--
              ``(1) shall be available to all employees of the
            employer;
              ``(2) shall not mandate participation by employees;
            and
              ``(3) shall not require participation by individual
            employees as a condition to obtain a premium discount,
            rebate, deductible reduction, or other financial
            reward.
      ``(e) Privacy Protections.--Any employee health information
    collected through participation in an employer wellness program
    shall be confidential and available only to appropriately
    trained health professions as defined by the Secretary.
    Employers or employees of the employer sponsoring a wellness
    program shall have no access to employee health data. All
    entities offering employer-sponsored wellness programs shall be
    considered `business associates' pursuant to the American
    Reinvestment and Recovery Act and must comply with privacy
    protections restricting the release of personal medical
    information.
      ``(f) Definitions and Special Rules.--For purposes of this
    section:
              ``(1) Qualified employer.--The term `qualified
            employer' means an employer that offers a qualified
            health benefits plan to every employee (including each
            employee required to be offered coverage under a
            qualified health benefits plan under subtitle B of
            title III of division A of the America's Affordable
            Health Choices Act of 2009), and meets the health
            coverage participation requirements as defined in
            section 312 of such Act.
              ``(2) Certain costs not included.--Costs paid or
            incurred by an employer for food or health insurance
            shall not be taken into account under subsection (a).
      ``(g) Outreach.--
              ``(1) In general.--The Secretary, in conjunction with
            other appropriate agencies and members of the business
            community, shall institute an outreach program to
            inform businesses about the availability of the
            wellness program grant as well as to educate businesses
            on how to develop programs according to recognized and
            promising practices and on how to measure the success
            of implemented programs.
      ``(h) Effective Date.--This section shall take effect on
    January 1, 2013.
      ``(i) Authorization of Appropriations.--There are authorized
    to be appropriated such sums as are necessary to carry out this
    section.''.
      [Christensen 23_001:]
      In section 123(a)(5), strike ``an expert on children's
    health'' and insert ``an expert in child and adolescent
    health''.
      [Degette/SarbanesMcNerney 3_001:]
      In section 123(a)(5), after ``experts in heath care financing
    and delivery,'' insert ``experts in oral health care,''.
      [GreenTX 6_002:]
      In the subparagraph (C) added by section 1176, insert before
    the period at the end the following: ``or, in the case of an
    individual described in such subsection who is eligible for
    benefits under part A on the basis of section 226A, during the
    1-year period beginning on the first day of such individual's
    eligibility for such benefits''.
      [GreenTX 7_001:]
      Add at the end of part 2 of subtitle B of title V of division
    C the following:

    SEC. 2532. GRANTS TO STRENGTHEN THE EFFECTIVENESS, EFFICIENCY, AND
                        COORDINATION OF SERVICES.

      (a) In General.--The Secretary shall award grants to assist
    in the development of integrated health care delivery systems
    to serve defined communities of individuals--
              (1) to improve the efficiency of and coordination
            among the providers providing services through such
            systems;
              (2) to assist local communities in developing
            programs targeted toward preventing and managing
            chronic diseases; and
              (3) to expand and enhance the services provided
            through such systems.
      (b) Eligible Entities.--To be eligible to receive a grant
    under this section, an entity shall be an entity that--
              (1) represents a balanced consortium--
                      (A) whose principal purpose is to ensure the
                    sustainable capacity for the provision of a
                    broad range of coordinated services for all
                    residents within a community defined in the
                    entity's grant application as described in
                    paragraph (2); and
                      (B) that includes at least one of each of the
                    following providers that serve the community
                    (unless such provider does not exist within the
                    community, declines or refuses to participate,
                    or places unreasonable conditions on their
                    participation)--
                              (i) a Federally qualified health
                            center (as defined in section 1861(aa)
                            of the Social Security Act (42 U.S.C.
                            1395x(aa)));
                              (ii) rural health clinics and rural
                            health networks (as defined in sections
                            1861(aa) and 1820(d) of the Social
                            Security Act, respectively (42 U.S.C.
                            1395x(aa), 1395i-4(d)));
                              (iii) a hospital with a low-income
                            utilization rate that is greater than
                            25 percent (as defined in section
                            1923(b)(3) of the Social Security Act
                            (42 U.S.C. 1396r-4(b)(3))) or a
                            critical access hospital (as defined in
                            section 1820(c)(2) of the Social
                            Security Act (42 U.S.C. 1395i-
                            4(c)(2)));
                              (iv) a public health department; and
                              (v) an interested public or private
                            sector health care provider or an
                            organization that has traditionally
                            served the medically uninsured and low-
                            income individuals; and
              (2) submits to the Secretary an application, in such
            form and manner as the Secretary shall prescribe,
            that--
                      (A) clearly defines the community to be
                    served;
                      (B) identifies the providers who will
                    participate in the community coalition under
                    the grant and specifies each provider's
                    contribution to the care of individuals in the
                    community;
                      (C) describes the activities that the
                    applicant and the community coalition propose
                    to perform under the grant to further the
                    objectives of this section;
                      (D) demonstrates that it is an established
                    coalition with ability to build on the current
                    system for serving the community by involving
                    providers who have traditionally provided a
                    significant volume of care for uninsured and
                    low-income individuals for that community;
                      (E) demonstrates the coalition's ability to
                    develop coordinated systems of care that either
                    directly provide or ensure the prompt provision
                    of a broad range of high-quality, accessible
                    services, including, as appropriate, primary,
                    secondary, and tertiary services as well as
                    pharmacy, substance abuse, behavioral health
                    and oral health services, in a manner that
                    ensures continuity of care in the community;
                      (F) provides evidence of community
                    involvement, including the business community,
                    in the development, implementation, and
                    direction of the system of care that the
                    coalition proposes to ensure;
                      (G) demonstrates the coalition's ability to
                    ensure that participating individuals are
                    enrolled in health care coverage programs, both
                    public and private, for which the individuals
                    are eligible;
                      (H) presents a plan for leveraging other
                    sources of revenue, which may include State and
                    local sources and private grant funds, and
                    integrating current and proposed new funding
                    sources in a manner to ensure long-term
                    sustainability of the system of care;
                      (I) describes a plan for evaluation of the
                    activities carried out under the grant,
                    including measurement of progress toward the
                    goals and objectives of the program and the use
                    of evaluation findings to improve system
                    performance;
                      (J) demonstrates fiscal responsibility
                    through the use of appropriate accounting
                    procedures and management systems;
                      (K) demonstrates commitment to serve the
                    community without regard to the ability of an
                    individual or family to pay by arranging for or
                    providing free or reduced charge care for the
                    poor; and
                      (L) includes such other information as the
                    Secretary may prescribe.
      (c) Limitations.--
              (1) In general.--An eligible entity may receive a
            grant under this section for 3 consecutive fiscal years
            and may receive such a grant award for 2 additional
            years if--
                      (A) the eligible entity submits to the
                    Secretary a request for a grant for such
                    additional years;
                      (B) the Secretary determines that current
                    performance justifies the granting of such a
                    request; and
                      (C) the Secretary determines that granting
                    such request is necessary to further the
                    objectives described in subsection (a).
      (d) Priorities.--In awarding grants under this section, the
    Secretary--
              (1) may accord priority to applicants that
            demonstrate the greatest extent of unmet need in the
            community for a more coordinated system of care; and
              (2) shall accord priority to applicants that best
            promote the objectives of this section, taking into
            consideration the extent to which the applicant--
                      (A) identifies a community whose geographical
                    area has a high or increasing percentage of
                    individuals who are uninsured or low-income;
                      (B) demonstrates that the applicant has
                    included in its community coalition providers,
                    support systems, and programs that have a
                    tradition of serving individuals and families
                    in the community who are uninsured or earn
                    below 200 percent of the Federal poverty level;
                      (C) shows evidence that the proposed
                    coalition activities would expand utilization
                    of preventive and primary care services for
                    uninsured and underinsured individuals and
                    families in the community, including
                    pharmaceuticals, behavioral and mental health
                    services, oral health services, or substance
                    abuse services;
                      (D) proposes approaches that would improve
                    coordination between health care providers and
                    appropriate social service providers;
                      (E) demonstrates collaboration with State and
                    local governments;
                      (F) demonstrates that the applicant makes use
                    of non-Federal contributions to the greatest
                    extent possible; or
                      (G) demonstrates likelihood that the proposed
                    activities will lead to sustainable integrated
                    delivery system as additional efforts of health
                    systems development evolve.
      (e) Use of Funds.--
              (1) Use by grantees.--
                      (A) In general.--Except as provided in
                    paragraphs (2) and (3), a grantee may use
                    amounts provided under this section only for--
                              (i) direct expenses associated with
                            achieving the greater integration of a
                            health care delivery system so that the
                            system either directly provides or
                            ensures the provision of a broad range
                            of culturally competent services,
                            including as appropriate primary,
                            secondary, and tertiary care and oral
                            health, substance abuse, behavioral and
                            mental health, and pharmaceutical
                            services; and
                              (ii) direct patient care and service
                            expansions to fill identified or
                            documented gaps within an integrated
                            delivery system.
                      (B) Specific uses.--The following are
                    examples of purposes for which a grantee may
                    use grant funds under this section, when such
                    use meets the conditions stated in subparagraph
                    (A):
                              (i) Increases in outreach activities
                            and closing gaps in health care
                            service, including referral to
                            specialty services and prescription
                            drugs and conducting ongoing outreach
                            to health disparity populations.
                              (ii) Improvements to care management
                            and delivery of patient-centered care,
                            including patient navigation services.
                              (iii) Improvements to coordination of
                            transportation to health care
                            facilities.
                              (iv) Development of provider networks
                            and other innovative models to engage
                            physicians in voluntary efforts to
                            serve the medically underserved within
                            a community.
                              (v) Recruitment, training, and
                            compensation of necessary personnel.
                              (vi) Coordinate the acquisition or
                            interconnected use of technology within
                            a community for the purpose of
                            coordinating care and improving
                            provider communication, including
                            implementation of shared information
                            systems or shared clinical systems to
                            improve the quality of health care.
                              (vii) Development of common processes
                            such as mechanisms for determining
                            eligibility for the programs provided
                            through the system, common
                            identification cards, sliding scale
                            discounts, and monitoring and tracking
                            of outcomes.
                              (viii) Development of specific
                            prevention and disease management tools
                            and processes.
                              (ix) Language access services.
                              (x) Facilitating the involvement of
                            community organizations to provide
                            better access to high-quality health
                            care services to individuals at risk
                            for or who have chronic diseases or
                            cancer.
                              (xi) Helping patients overcome
                            barriers within the health care system
                            to ensure prompt diagnostic and
                            treatment resolution of an abnormal
                            finding of cancer or chronic disease.
              (2) Direct patient care limitation.--Not more than 20
            percent of the funds provided under a grant awarded
            under this section may be used for providing direct
            patient care and services.
              (3) Reservation of funds for national program
            purposes.--The Secretary may use not more than 7
            percent of funds appropriated to carry out this section
            for providing technical assistance to grantees,
            obtaining assistance of experts and consultants,
            holding meetings, developing of tools, disseminating of
            information, and evaluation.
      (f) Reporting by Grantee.--A grantee under this section shall
    report to the Secretary annually regarding--
              (1) progress in meeting the goals and measurable
            objectives set forth in the grant application submitted
            by the grantee under subsection (b); and
              (2) the extent to which activities conducted by such
            grantee have--
                      (A) improved the effectiveness, efficiency,
                    and coordination of services for uninsured and
                    low-income individuals in the community served
                    by such grantee, using commonly accepted
                    outcome measures;
                      (B) resulted in the provision of better
                    quality health care for individuals and
                    families in the community served; and
                      (C) resulted in the provision of health care
                    to such individuals at lower cost than would
                    have been possible in the absence of the
                    activities conducted by such grantee.
      (g) Maintenance of Effort.--With respect to activities for
    which a grant under this section is authorized, the Secretary
    may award such a grant only if the applicant and each of the
    participating providers agree that the grantee and each such
    provider will maintain its expenditures of non-Federal funds
    for such activities at a level that is not less then the level
    of such expenditures during the fiscal year immediately
    preceding the fiscal year for which the applicant is applying
    to receive such grant.
      (h) Technical Assistance.--The Secretary may provide any
    entity that receives a grant under this section with technical
    and other nonfinancial assistance necessary to meet the
    requirements of this section. The Secretary may choose to
    provide such assistance by awarding a grant to, or entering
    into a contract with, a State or national not-for-profit
    organization with expertise in building successful community
    coalitions.
      (i) Evaluation of Program.--Not later than September 30,
    2014, the Secretary shall prepare and submit to the appropriate
    committees of Congress a report that describes the extent to
    which projects funded under this section have been successful
    in improving the effectiveness, efficiency, and coordination of
    services in the communities served by such projects, including
    whether the projects resulted in the provision of better
    quality health care for such individuals, and whether such care
    was provided at lower costs than would have been provided in
    the absence of such projects.
      (j) Authorization of Appropriations.--There are authorized to
    be appropriated to carry out this section such sums as may be
    necessary for fiscal years 2010 through 2014.
      [Hill 7_003:]
      In the heading of subsection (b) of section 1128H of the
    Social Security Act, inserted by section 1451(a), strike ``in
    Hospitals and Other Entities That Bill Medicare''.
      In section 1128H(b) of the Social Security Act, inserted by
    section 1451(a), strike ``Not later than'' and insert the
    following:
              ``(1) Ownership in hospitals and other entities that
            bill medicare.--Not later than''.
      In section 1128H(b) of the Social Security Act, inserted by
    section 1451(a), add at the end the following:
              ``(2) Additional physician ownership.--In addition to
            the requirement under paragraph (a)(1), not later than
            March 31 of each year (beginning with 2011) any
            applicable manufacturer, applicable group purchasing
            organization, or applicable distributor 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,
            applicable group purchasing organization or applicable
            distributor 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 (iii) of paragraph (a)(1)(B), and
                    information described in subsection (f)(9)(A)
                    and (f)(9)(B).
                      ``(D) Any other information regarding the
                    ownership or investment interest the Secretary
                    determines appropriate.''.
      In paragraphs (1)(A), (1)(B), (2)(A), and (2)(B) of section
    1128H(d) of the Social Security Act, inserted by section
    1451(a), after ``applicable manufacturer'' insert ``,
    applicable group purchasing organization, or applicable''.
      In the heading of section 1128H(f)(1) of the Social Security
    Act, inserted by section 1451(a), strike ``; applicable
    distributor''.
      In section 1128H(f)(1) of the Social Security Act, inserted
    by section 1451(a), strike ``, and'' and all that follows and
    insert a period.
      In section 1128H(f) of the Social Security Act, inserted by
    section 1451(a), amend paragraph (5) to read as follows:
              ``(5) Applicable distributor.--The term `applicable
            distributor' means an entity, other than an applicable
            group purchasing organization, that buys and resells,
            or receives a commission or other similar form of
            payment, from another seller, for selling or arranging
            for the sale of a covered drug, device, biological, or
            medical supply.''.
       In section 1128H(f) of the Social Security Act, inserted by
    section 1451(a), add at the end the following:
              ``(10) 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.''.
      In section 1128H(f)(9)(C) of the Social Security Act,
    inserted by section 1451(a), add at the end the following:
                              ``(ix) Payments made to a covered
                            recipient by an applicable manufacturer
                            or by a health plan affiliated with an
                            applicable manufacturer for medical
                            care provided to employees of such
                            manufacturer and their dependents.''.
      In section 1128H(f)(5) of the Social Security Act, inserted
    by section 1451(a), strike ``(or any subsidiary of or entity
    affiliated with such entity)'' and insert ``or any entity under
    common ownership with such entity and which provides assistance
    or support to such entity with respect to the production,
    preparation, propagation, compounding, conversion, processing,
    marketing, or distribution of a covered drug, device,
    biological, or medical supply''.
      In section 1128H(f)(8) of the Social Security Act, inserted
    by section 1451(a), strike ``(or any subsidiary of or entity
    affiliated with such entity)'' and insert ``or any entity under
    common ownership with such entity and which provides assistance
    or support to such entity with respect to the production,
    preparation, propagation, compounding, conversion, processing,
    marketing, or distribution of a covered drug, device,
    biological, or medical supply''.
      [Markey 4_002:]
      Add at the end of section 206(b) the following: ``For
    purposes of the previous sentence, the Commissioner may utilize
    data regarding enrollee demographics, inpatient and outpatient
    diagnoses (in a similar manner as such data are used under
    parts C and D of title XVIII of the Social Security Act), and
    such other information as the Secretary determines may be
    necessary, such as the actual medical costs of enrollees during
    the previous year.''.
      [Murphy 7_001:]
      In section 1866D of the Social Security Act, as being added
    by section 1152(f)(1) of the bill, strike subsection (b) and
    insert the following new subsection:
      ``(b) Scope.--
              ``(1) Number and purpose of test sites.--The
            Secretary shall attempt to attract ten percent of all
            eligible providers to act as acute and post-acute
            bundling test sites under the pilot program to ensure
            that the pilot program is of sufficient size and scope
            to--
                      ``(A) test the approaches under the pilot
                    program in a variety of settings, including
                    urban, rural, and underserved areas;
                      ``(B) include geographic areas and additional
                    conditions that account for significant program
                    spending, as defined by the Secretary; and
                      ``(C) subject to subsection (d), disseminate
                    the pilot program rapidly on a national basis.
              ``(2) Expansion.--To the extent that the Secretary
            finds inpatient and post-acute care bundling to be
            successful in improving quality and reducing costs, the
            Secretary shall implement such mechanisms and reforms
            under the pilot program on as large a geographic scale
            as practical and economical, consistent with subsection
            (e).''.
      [Murphy 2_001:]
      At the end of title V of division C, insert the following new
    subtitle::

                           Subtitle F--Women's Health

    SEC. 2591. OFFICE OF 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.''.
              (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.''.
      (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;
              (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 927 and 928 as sections
            928 and 929, respectively;
              (2) by inserting after section 926 the following:

    ``SEC. 927. 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)).''; and
              (3) by adding at the end of section 928 (as
            redesignated by paragraph (1)) the following:
      ``(e) Women's Health.--For the purpose of carrying out
    section 927 regarding women's health, 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 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.''.
      (g) Food and Drug Administration Office of Women's Health.--
    Chapter IX 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. 911. 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).''.
      (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.
      [Pallone Inf-Mortality_001:]
      Add at the end of part 2 of subtitle B of title V of division
    C the following:

    SEC. 2533. INFANT MORTALITY PILOT PROGRAMS.

      (a) In General.--The Secretary, acting through the Director,
    shall award grants to eligible entities to create, implement,
    and oversee infant mortality pilot programs.
      (b) Period of a Grant.--The period of a grant under this
    section shall be 5 consecutive fiscal years.
      (c) Preference.--In awarding grants under this section, the
    Secretary shall give preference to eligible entities proposing
    to serve any of the 15 counties or groups of counties with the
    highest rates of infant mortality in the United States in the
    past 3 years.
      (d) Use of Funds.--Any infant mortality pilot program funded
    under this section may--
              (1) include the development of a plan that identifies
            the individual needs of each community to be served and
            strategies to address those needs;
              (2) provide outreach to at-risk mothers through
            programs deemed appropriate by the Director;
              (3) develop and implement standardized systems for
            improved access, utilization, and quality of social,
            educational, and clinical services to promote healthy
            pregnancies, full term births, and healthy infancies
            delivered to women and their infants, such as--
                      (A) counseling on infant care, feeding, and
                    parenting;
                      (B) postpartum care;
                      (C) prevention of premature delivery; and
                      (D) additional counseling for at-risk
                    mothers, including smoking cessation programs,
                    drug treatment programs, alcohol treatment
                    programs, nutrition and physical activity
                    programs, postpartum depression and domestic
                    violence programs, social and psychological
                    services, dental care, and parenting programs;
              (4) establish a rural outreach program to provide
            care to at-risk mothers in rural areas;
              (5) establish a regional public education campaign,
            including a campaign to--
                      (A) prevent preterm births; and
                      (B) educate the public about infant
                    mortality; and
              (6) provide for any other activities, programs, or
            strategies as identified by the community plan.
      (e) Limitation.--Of the funds received through a grant under
    this section for a fiscal year, an eligible entity shall not
    use more than 10 percent for program evaluation.
      (f) Reports on Pilot Programs.--
              (1) In general.--Not later than 1 year after
            receiving a grant, and annually thereafter for the
            duration of the grant period, each entity that receives
            a grant under subsection (a) shall submit a report to
            the Secretary detailing its infant mortality pilot
            program.
              (2) Contents of report.--The reports required under
            paragraph (1) shall include information such as the
            methodology of, and outcomes and statistics from, the
            grantee's infant mortality pilot program.
              (3) Evaluation.--The Secretary shall use the reports
            required under paragraph (1) to evaluate, and conduct
            statistical research on, infant mortality pilot
            programs funded through this section.
      (g) Definitions.--For the purposes of this section:
              (1) Director.--The term ``Director'' means the
            Director of the Centers for Disease Control and
            Prevention.
              (2) Eligible entity.--The term ``eligible entity''
            means a State, county, city, territorial, or tribal
            health department that has submitted a proposal to the
            Secretary that the Secretary deems likely to reduce
            infant mortality rates within the standard metropolitan
            statistical area involved.
              (3) Tribal.--The term ``tribal'' refers to an Indian
            tribe, a Tribal organization, or an Urban Indian
            organization, as such terms are defined in section 4 of
            the Indian Health Care Improvement Act.
      (h) Authorization of Appropriations.--To carry out this
    section, there are authorized to be appropriated $10,000,000
    for each of fiscal years 2010 through 2014.
      [Pallone ECD1_005:]
      In section 100(c) (relating to general definitions)
    redesignate paragraphs (14) through (25) as paragraphs (16)
    through (27), respectively.
      In section 100(c), after paragraph 13, insert the following
    new paragraphs:
              (14) Indian.--The term ``Indian'' has the meaning
            given such term in section 4 of the Indian Health Care
            Improvement Act (24 U.S.C. 1603).
              (15) Indian health care provider.--The term ``Indian
            health care provider'' means a health care program
            operated by the Indian Health Service, an Indian tribe,
            tribal organization, or urban Indian organization as
            such terms are defined in section 4 of the Indian
            Health Care Improvement Act (25 U.S.C. 1603).
      In section 204(b) (relating to standards for QHBP offering
    entities) redesignate paragraph (8) as paragraph (9).
      In section 204(b), after paragraph (7), insert the following
    new paragraph:
              (8) Special rules with respect to indian enrollees
            and indian health care providers.--
                      (A) Choice of providers.--The entity shall--
                              (i) demonstrate to the satisfaction
                            of the Commissioner that it has
                            contracted with a sufficient number of
                            Indian health care providers to ensure
                            timely access to covered services
                            furnished by such providers to
                            individual Indians through the entity's
                            Exchange-participating health benefits
                            plan; and
                              (ii) agree to pay Indian health care
                            providers, whether such providers are
                            participating or nonparticipating
                            providers with respect to the entity,
                            for covered services provided to those
                            enrollees who are eligible to receive
                            services from such providers at a rate
                            that is not less than the level and
                            amount of payment which the entity
                            would make for the services of a
                            participating provider which is not an
                            Indian health care provider.
                      (B) Special rule relating to
                    discrimination.--Provision of services by an
                    Indian health care provider exclusively to
                    Indians and their dependents shall not
                    constitute discrimination under this Act.
      In section 204(c), add at the end the following new
    paragraph:
              (5) Special rule related to cost-sharing and indian
            health care providers.--The contract under this section
            with a QHBP offering entity for a health benefits plan
            shall provide that if an individual who is an Indian is
            enrolled in such a plan and such individual receives a
            covered item or service from an Indian health care
            provider (regardless of whether such provider is in the
            plan's provider network), the cost sharing for such
            item or service shall be equal to the amount of cost-
            sharing that would be imposed if such item or service--
                      (A) had been furnished by another provider in
                    the plan's provider network; or
                      (B) in the case that the plan has no such
                    network, was furnished by a non-Indian
                    provider.
      In section 225 (relating to provider participation) strike
    subsection (b) and insert the following subsection:
      (b) Licensure or Certification.--
              (1) In general.--Except as provided in paragraph (2),
            the Secretary shall not allow a health care provider to
            participate in the public health insurance option
            unless such provider is appropriately licensed or
            certified under State law.
              (2) Special rule for ihs facilities and providers .--
            The requirements under paragraph (1) shall not apply
            to--
                      (A) a facility that is operated by the Indian
                    Health Service;
                      (B) a facility operated by an Indian Tribe or
                    tribal organization under the Indian Self
                    Determination Act (Public Law 93-638);
                      (C) a health care professional employed by
                    the Indian Health Service; or
                      (D) A health care professional--
                              (i) who is employed to provide health
                            care services in a facility operated by
                            an Indian Tribe or tribal organization
                            under the Indian Self Determination
                            Act; and
                              (ii) who is licensed or certified in
                            any State.
      [Ross16_001:]
      Add at the end of subtitle F of title I of division A the
    following new section:

    SEC. 158. STATE PROHIBITIONS ON DISCRIMINATION AGAINST HEALTH CARE
                        PROVIDERS.

       Notwithstanding any other provision of this Act (or any
    amendment made by this Act), this Act (and any amendment made
    by this Act) shall not supersede laws, as they now or
    hereinafter exist, of any State or jurisdiction designed to
    prohibit a health plan or insurer from discriminating with
    respect to participation, reimbursement, covered services,
    indemnification, or related requirements under a health plan or
    other health insurance coverage against a health care provider
    who is acting within the scope of that provider's license or
    certification under applicable State law.
      [Rush_003:]
      At the end of part 2 of subtitle B of title V of division C,
    add the following new section:

    SEC. 2534. SECONDARY SCHOOL HEALTH SCIENCES TRAINING PROGRAM.

       (a) Program.--The Secretary of Health and Human Services,
    acting through the Administrator of the Health Resources and
    Services Administration, and in consultation with the Secretary
    of Education, may establish a health sciences training program
    consisting of awarding grants and contracts under subsection
    (b) to prepare secondary school students for careers in health
    professions.
      (b) Development and Implementation of Health Sciences
    Curricula.--The Secretary may make grants to, or enter into
    contracts with, eligible entities--
              (1) to plan, develop, or implement secondary school
            health sciences curricula, including curricula in
            biology, chemistry, physiology, mathematics, nutrition,
            and other courses deemed appropriate by the Secretary
            to prepare students for associate's or bachelor's
            degree programs in health professions or bachelor's
            degree programs in health professions-related majors;
            and
              (2) to increase the interest of secondary school
            students in applying to, and enrolling in, accredited
            associate's or bachelor's degree programs in health
            professions or bachelor's degree programs in health
            professions-related majors, including through--
                      (A) work-study programs;
                      (B) programs to increase awareness of careers
                    in health professions; and
                      (C) other activities to increase such
                    interest.
      (c) Eligibility.--To be eligible for a grant or contract
    under subsection (b), an entity shall--
              (1) be a local educational agency; and
              (2) provide assurances that activities under the
            grant or contract will be carried out in partnership
            with an accredited health professions school or
            program, public or nonprofit private hospital, or
            public or private nonprofit entity.
      (d) Preference.--In awarding grants and contracts under
    subsection (b), the Secretary shall give preference to entities
    that have a demonstrated record of the following:
              (1) Graduating the greatest percentage, or
            significantly improving the percentage, of students who
            have exhibited mastery in secondary school State
            science standards.
              (2) Graduating students of minority or disadvantaged
            backgrounds who are underrepresented in--
                      (A) associate's or bachelor's degree programs
                    in health professions or bachelor's degree
                    programs in health professions-related majors;
                    or
                      (B) health professions.
      (e) Report.--The Secretary shall submit to the Congress an
    annual report on the program carried out under this section.
      (f) Definitions.--In this section:
              (1) The term ``health profession'' means the
            profession of any member of the health workforce, as
            defined in section 764(i) of the Public Health Service
            Act, as added by section 2261.
              (2) The term ``local educational agency'' has the
            meaning given to the term in section 9101 of the
            Elementary and Secondary Education Act of 1965 (20
            U.S.C. 7801).
              (3) The term ``secondary school''--
                      (A) means a secondary school, as defined in
                    section 9101 of the Elementary and Secondary
                    Education Act of 1965 (20 U.S.C. 7801); and
                      (B) includes any such school that is a middle
                    school.
      (g) Authorization of Appropriations.--To carry out this
    section, there are authorized to be appropriated such sums as
    may be necessary for each of fiscal years 2010 through 2014.
      [Rush 11_001:]
      Add at the end of part 2 of subtitle B of title V of division
    C the following:

    SEC. 2535. COLLABORATIVE CARE NETWORKS.

      (a) Purpose.--The purpose of this section is to establish and
    provide assistance to collaborative care networks--
              (1) to reduce the use of emergency departments,
            inpatient and other expensive resources of hospitals
            and other providers; and
              (2) to provide more comprehensive and coordinated
            care to low-income vulnerable individuals without
            health insurance coverage.
      (b) Creation of the Collaborative Care Network Program.--
    Part D of title III of the Public Health Service Act (42 U.S.C.
    254b et seq.), as amended by sections 2211 and 2231, is amended
    by inserting after subpart XII the following new subpart:

               ``Subpart XIII--Collaborative Care Network Program

    ``SEC. 340O. COLLABORATIVE CARE NETWORK PROGRAM.

      ``(a) In General.--The Secretary may award grants to eligible
    entities for the purpose of establishing model projects to
    accomplish the following goals:
              ``(1) To reduce unnecessary use of items and services
            furnished in emergency departments of hospitals
            (especially to ensure that individuals without health
            insurance coverage or with inadequate health insurance
            coverage do not use the services of such department
            instead of the services of a primary care physician)
            through methods such as--
                      ``(A) screening individuals who seek
                    emergency department services for possible
                    eligibility under relevant governmental health
                    programs or for subsidies under such programs;
                    and
                      ``(B) providing such individuals with
                    referrals for follow-up care and chronic
                    condition care.
              ``(2) To manage chronic conditions to reduce their
            severity, negative health outcomes, and expense.
              ``(3) To encourage health care providers to
            coordinate their efforts so that the most vulnerable
            patient populations seek and obtain primary care.
              ``(4) To provide more comprehensive and coordinated
            care to vulnerable low income individuals and
            individuals without health insurance coverage or with
            inadequate coverage.
              ``(5) To provide mechanisms for improving both
            quality and efficiency of care for low-in come
            individuals and families, with an emphasis on those
            most likely to remain uninsured despite the existence
            of government programs to make health insurance more
            affordable.
              ``(6) To increase preventive services, including
            screening and counseling, to those who would otherwise
            not receive such screening, in order to improve health
            status and reduce long term complications and costs.
              ``(7) To ensure the availability of community-wide
            safety net services, including emergency and trauma
            care.
      ``(b) Eligibility and Participant Selection.--
              ``(1) Eligible program participant.--For purposes of
            this section, the term `eligible program participant'
            means a safety net hospital that provides services to a
            high volume of low-income patients, as determined by
            the Secretary, and that is to be a member of a
            collaborative care network described in subsection (d)
            and selected by the Secretary under paragraph (3) of
            this subsection.
              ``(2) Application.--An eligible program participant
            representing a collaborative care network described in
            subsection (d) shall submit to the Secretary an
            application in such form and manner and containing such
            information as specified by the Secretary. Such
            information shall at least--
                      ``(A) identify the health care providers
                    participating in the collaborative care network
                    proposed by the applicant and in the case a
                    Federally qualified health center is not
                    included as such a participant, the reason such
                    a center is not so included;
                      ``(B) include a description of how the
                    providers plan to collaborate to provide
                    comprehensive and integrated care for low-
                    income individuals, including uninsured and
                    underinsured individuals;
                      ``(C) include a description of the
                    organizational and joint governance structure
                    of the collaborative care network in a manner
                    so that it is clear how decisions will be made;
                      ``(D) define the geographic areas and
                    populations that the network intends to serve;
                      ``(E) define the scope of services that the
                    network intends to provide and identify any
                    reasons why such services would not include a
                    suggested core service identified by the
                    Secretary under paragraph (4);
                      ``(F) demonstrate the network's ability to
                    meet the requirements of this section; and
                      ``(G) provide assurances that (and include a
                    plan demonstrating how) grant funds received by
                    an eligible program participant shall be
                    appropriately distributed among all health care
                    providers participating in the collaborative
                    care network.
              ``(3) Selection of participants.--
                      ``(A) In general.--The Secretary shall select
                    eligible program participants to receive grants
                    from applications submitted under paragraph (2)
                    on the basis of quality of the proposal
                    involved, geographic diversity (including
                    different States and regions served and urban
                    and rural diversity), and the number of low-
                    income and uninsured individuals that the
                    proposal intends to serve.
                      ``(B) Priority.--The Secretary shall give
                    priority to proposals from eligible program
                    participants that serve a high volume of low-
                    income individuals.
                      ``(C) Renewal.--In subsequent years, the
                    Secretary may provide renewal grants to prior
                    year grant recipients.
              ``(4) Suggested core services.--For purposes of
            paragraph (2)(E), the Secretary shall develop a list of
            suggested core services to be provided by a
            collaborative care network. The Secretary may select an
            eligible program participant under paragraph (3), the
            application of which does not include all such
            services, if such application provides a reasonable
            explanation why such services are not proposed to be
            included, and the Secretary determines that the
            application is otherwise high quality.
              ``(5) Termination authority.--The Secretary may
            terminate selection of a collaborative care network
            under this section for good cause. Such good cause
            shall include a determination that the network has
            failed--
                      ``(A) has failed to provide a comprehensive
                    range of coordinated and integrated health care
                    services as required under subsection (d)(3);
                      ``(B) had failed to meet reasonable quality
                    standards;
                      ``(C) has misappropriated funds provided
                    under this section; or
                      ``(D) has failed to make progress toward
                    accomplishing goals set out in subsection (a).
      ``(c) Use of Grant Funds.--Grant funds provided under the
    collaborative care network program shall be available to an
    eligible program participant (or consortium of participants) to
    create and support collaborative care networks (described in
    subsection (d)) that would carry out the following activities:
              ``(1) Assist low-income individuals without adequate
            health care coverage to--
                      ``(A) access and appropriately use health
                    services;
                      ``(B) enroll in applicable public or private
                    health insurance programs;
                      ``(C) obtain referrals to and see a primary
                    care provider in case such an individual does
                    not have a primary care provider; and
                      ``(D) obtain appropriate care for chronic
                    conditions.
              ``(2) Improve heath care by providing case
            management, application assistance, and appropriate
            referrals such as through methods to--
                      ``(A) create and meaningfully use a health
                    information network to track patients across
                    collaborative providers;
                      ``(B) perform health outreach, such as by
                    using neighborhood health workers who may
                    inform individuals about the availability of
                    safety net and primary care available through
                    the collaborative care network;
                      ``(C) provide for follow-up outreach to
                    remind patients of appointments or follow-up
                    care instructions;
                      ``(D) provide transportation to individuals
                    to and from the site of care;
                      ``(E) expand the capacity to provide care at
                    any provider participating in the collaborative
                    care network, including through hiring new
                    staff, opening new clinics or other provider
                    sites after-hours, on weekends, or otherwise
                    providing an urgent care alternative to an
                    emergency department; and
                      ``(F) provide a primary care provider or
                    medical home for each network patient.
      ``(d) Collaborative Care Networks.--
              ``(1) In general.--
                      ``(A) Description.--A collaborative care
                    network described in this subsection is a
                    consortium of health care providers with a
                    joint governance structure that provides a
                    comprehensive range of coordinated and
                    integrated health care services for low-income
                    patient populations or medically underserved
                    communities (whether or not such individuals
                    receive benefits under title XVIII, XIX, or XXI
                    of the Social Security Act, private or other
                    health insurance or are uninsured or
                    underinsured) that complies with any applicable
                    minimum eligibility requirements that the
                    Secretary may determine appropriate.
                      ``(B) Required inclusion.--Each such network
                    shall include
                              ``(i) at least one eligible program
                            participant; and
                              ``(ii) at least one Federally
                            qualified health center (as defined in
                            section 1905(l)(2)(B) of such Act),
                            unless no such a center serves the
                            geographic area proposed to be served
                            by the network, a center exists but
                            refuses to participate, or a center
                            places unreasonable conditions on such
                            participation.
                      ``(C) Additional inclusions.--Each such
                    network may include any of the following
                    additional providers:
                              ``(i) A hospital.
                              ``(ii) A county or municipal
                            department of health.
                              ``(iii) A rural health clinic.
                              ``(iv) A community clinic, including
                            a mental health clinic, substance abuse
                            clinic, or a reproductive health
                            clinic.
                              ``(v) A private practice physician or
                            group practice.
                              ``(vi) A nurse or physician assistant
                            or group practice.
                              ``(vii) An adult day care center.
                              ``(viii) A home health provider.
                              ``(ix) Any other type of provider
                            specified by the Secretary, which has a
                            desire to serve low-income and
                            uninsured patients.
                      ``(D) Construction.--Nothing in this section
                    shall prohibit a single entity from qualifying
                    as collaborative care network so long as such
                    single entity meets the criteria of a
                    collaborative care network. If the network does
                    not include at least one Federally qualified
                    health center (as defined in section
                    1905(l)(2)(B) of the Social Security Act), the
                    application must explain the reason pursuant to
                    subsection (b)(2)(A).
              ``(2) Comprehensive range of coordinated and
            integrated health care services.--The Secretary may
            define criteria for evaluating the services offered by
            a collaborative care network. Such criteria may include
            the following:
                      ``(A) Requiring collaborative care networks
                    to include at least the suggested core services
                    identified under subsection (b)(4), or
                    whichever subset of the suggested core services
                    is applicable to a particular network.
                      ``(B) Requiring such networks to assign each
                    patient of the network to a primary care
                    provider responsible for managing that
                    patient's care.
                      ``(C) Requiring the services provided by a
                    collaborative care network to include support
                    services appropriate to meet the health needs
                    of low-income populations in the network's
                    community, which may include chronic care
                    management, nutritional counseling,
                    transportation, language services, enrollment
                    counselors, social services and other services
                    as proposed by the network.
                      ``(D) Providing that the services provided by
                    a collaborative care network may also include
                    long term care services and other services not
                    specified in this subsection.
                      ``(E) Providing for the approval by the
                    Secretary of a scope of collaborative care
                    network services for each network that
                    addresses an appropriate minimum scope of work
                    consistent with the setting of the network and
                    the health professionals available in the
                    community the network serves.
              ``(3) Clarification.--Participation in a
            collaborative care network shall not disqualify a
            health care provider from reimbursement under title
            XVIII, XIX, or XXI of the Social Security Act with
            respect to services otherwise reimbursable under such
            title. Nothing in this section shall prevent a
            collaborative care network that is otherwise eligible
            to contract with Medicare, a private health insurer, or
            any other appropriate entity to provide care under
            Medicare, under health insurance coverage offered by
            the insurer, or otherwise.
      ``(e) Evaluations.--
              ``(1) Participant reports.--Beginning in the third
            year following an initial grant, each eligible program
            participant shall submit to the Secretary, with respect
            to each year the participant has received a grant, an
            evaluation on the activities carried out by the
            collaborative care network of such participant under
            the collaborative care network program and shall
            include--
                      ``(A) the number of people served;
                      ``(B) the most common health problems
                    treated;
                      ``(C) any reductions in emergency department
                    use;
                      ``(D) an accounting of how amounts received
                    were used; and
                      ``(E) to the extent requested by the
                    Secretary, any quality measures or any other
                    measures specified by the Secretary.
              ``(2) Program reports.--The Secretary shall submit to
            Congress an annual evaluation (beginning not later than
            6 months after the first reports under paragraph (1)
            are submitted) on the extent to which emergency
            department use was reduced as a result of the
            activities carried out by the participant under the
            program. Each such evaluation shall also include
            information on--
                      ``(A) the prevalence of certain chronic
                    conditions in various populations, including a
                    comparison of such prevalence in the general
                    population versus in the population of
                    individuals with inadequate health insurance
                    coverage;
                      ``(B) demographic characteristics of the
                    population of uninsured and underinsured
                    individuals served by the collaborative care
                    network involved; and
                      ``(C) the conditions of such individuals for
                    whom services were requested at such emergency
                    departments of participating hospitals.
              ``(3) Audit authority.--The Secretary may conduct
            periodic audits and request periodic spending reports
            of participants under the collaborative care network
            program.
      ``(f) Clarification.--Nothing in this section requires a
    provider to report individually identifiable information of an
    individual to government agencies unless the individual
    consents, consistent with HIPAA privacy and security law, as
    defined in section 3009(a)(2).
      ``(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 2015.''.
      [Sarbanes/Dingell Medicaid-FQHC_001:]
      Add at the end of subtitle C of title VII of division B the
    following:

    SEC. 1730C. FQHC COVERAGE.

      Section 1905(l)(2)(B) of the Social Security Act (42 U.S.C.
    1396d(l)(2)(B)) is amended--
              (1) by striking ``or'' at the end of clause (iii);
              (2) by striking the semicolon at the end of clause
            (iv) and inserting ``, and''; and
              (3) by inserting after clause (iv) the following new
            clause:
              ``(v) is receiving a grant under section 399Z-1 of
            the Public Health Service Act;''.
      [Sarbanes1_001:]
      In part 1 of subtitle D of title I of division B, add at the
    end the following new section:

    SEC. 1169A. MEDICARE SENIOR HOUSING PLANS.

      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.--Notwithstanding any other
            provision of this part, in the case of a Medicare
            Advantage senior housing facility plan described in
            paragraph (2), 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)(i) 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));
                      ``(ii) provides primary care services onsite
                    and has a ratio of accessible providers to
                    beneficiaries that the Secretary determines is
                    adequate, taking into consideration the number
                    of residents onsite, the health needs of those
                    residents, and the accessibility of providers
                    offsite;
                      ``(iii) provides transportation services for
                    beneficiaries to providers outside of the
                    facility; and
                      ``(iv) makes meaningful use of health
                    information technology (as defined in section
                    3000(5) of the Public Health Service Act (42
                    U.S.C. 300jj(5)); and
                      ``(B) is offered by a Medicare Advantage
                    organization that has offered at least 1 plan
                    described in subparagraph (A) for at least 1
                    year prior to January 1, 2010, under a
                    demonstration project established by the
                    Secretary.
              ``(3) Budget neutrality.--The Secretary of Health and
            Human Services shall ensure that payments made to
            qualified health plans described in this Section are no
            greater than the payments that would have been made
            before the date of the enactment of this subsection, or
            that would have been made had these beneficiaries been
            enrolled in the traditional fee for service Medicare
            program.''
      [Stupak_009:]
      In section 1743(b)(3), strike subparagraph (B) and insert the
    following:
                      (B) in paragraph (1), by striking ``are not
                    subject to the requirements of this section''
                    and inserting ``are subject to the requirements
                    of this section unless such drugs are subject
                    to discounts under section 340B of the Public
                    Health Service Act''.
      [Sutton 22_001:]
      In section 144(b)(1), after ``by individuals'' insert the
    following: ``through means such as the mail, by telephone,
    electronically, and in person''.
      [Waxman 340B-Integrity_001:]
      Amend the heading of subtitle A of title V of division C to
    read:

     Subtitle A--Drug Discount for Rural and Other Hospitals; 340B Program
                                   Integrity

      After the heading of subtitle A of title V of division C,
    insert the following:

              PART 1--DRUG DISCOUNT FOR RURAL AND OTHER HOSPITALS

      At the end of subtitle A of title V of division C, add the
    following:

                         PART 2--340B PROGRAM INTEGRITY

    SEC. 2505. IMPROVEMENTS TO 340B PROGRAM INTEGRITY.

      (a) Integrity Improvements.--Subsection (d) of section 340B
    (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 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 establishment of a process
                            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, 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) Conducting periodic
                                    monitoring of sales
                                    transactions to covered
                                    entities.
                                      ``(IV) Inquiring into any
                                    discrepancies between ceiling
                                    prices and manufacturer pricing
                                    data that may be identified and
                                    taking, or requiring
                                    manufacturers to take,
                                    corrective action in response
                                    to such discrepancies.
                              ``(ii) The establishment of
                            procedures for the issuance of refunds
                            to covered entities by manufacturers in
                            the event that the Secretary finds
                            there has been an overcharge, including
                            the following:
                                      ``(I) Submission to the
                                    Secretary by manufacturers of
                                    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.
                              ``(iii) Notwithstanding any other
                            provision of law prohibiting the
                            disclosure of ceiling prices or data
                            used to calculate the ceiling price,
                            the provision of access to covered
                            entities through an Internet website of
                            the Department of Health and Human
                            Services or contractor to the
                            applicable ceiling prices for covered
                            drugs as calculated and verified by the
                            Secretary in a manner that ensures
                            protection of privileged pricing data
                            from unauthorized disclosure.
                              ``(iv) The development of a mechanism
                            by which--
                                      ``(I) rebates, discounts, or
                                    other price concessions
                                    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
                                    rebates, discounts, or other
                                    price concessions have the
                                    effect of lowering the
                                    applicable ceiling price for
                                    the relevant quarter for the
                                    drugs involved.
                              ``(v) The selective auditing of
                            manufacturers and wholesalers by the
                            Secretary or the Secretary's contractor
                            to ensure the integrity of the drug
                            discount program under this section.
                              ``(vi) The establishment of a
                            requirement that manufacturers and
                            wholesalers use the identification
                            system developed by 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.
                              ``(vii) The imposition of sanctions
                            in the form of civil monetary
                            penalties, which--
                                      ``(I) shall be assessed
                                    according to standards and
                                    procedures established in
                                    regulations to be promulgated
                                    by the Secretary within one
                                    year of the date of the
                                    enactment of the America's
                                    Affordable Health Choices Act
                                    of 2009;
                                      ``(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 charges a covered
                                    entity a price for purchase of
                                    a drug that exceeds the maximum
                                    applicable price under
                                    subsection (a)(1) or that
                                    knowingly violates any other
                                    provision of this section.
              ``(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 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 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 procedures
                            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
                            the form of civil monetary penalties,
                            which--
                                      ``(I) shall be assessed
                                    according to standards and
                                    procedures established in
                                    regulations promulgated by the
                                    Secretary;
                                      ``(II) shall not exceed
                                    $5,000 for each violation; and
                                      ``(III) shall apply to any
                                    covered entity that knowingly
                                    violates subparagraph (a)(5)(B)
                                    or knowingly and violates any
                                    other provision of this
                                    section.
                              ``(vi) The exclusion of a covered
                            entity from participation in the
                            program under this section, for a
                            period of time to be determined by the
                            Secretary, in cases in which the
                            Secretary determines, in accordance
                            with standards and procedures
                            established in regulations, that--
                                      ``(I) a violation of a
                                    requirement of this section was
                                    repeated and knowing; and
                                      ``(II) imposition of a
                                    monetary penalty would be
                                    insufficient to reasonably
                                    ensure compliance.
                              ``(vii) The referral of matters as
                            appropriate to the Food and Drug
                            Administration, the Office of Inspector
                            General of Department of Health and
                            Human Services, or other Federal
                            agencies.
              ``(3) Administrative dispute resolution process.--
            From amounts appropriated under paragraph (4), the
            Secretary may establish and implement an administrative
            process for the resolution of the following:
                      ``(A) Claims by covered entities that
                    manufacturers have violated the terms of their
                    agreement with the Secretary under subsection
                    (a)(1).
                      ``(B) Claims by manufacturers that covered
                    entities have violated subsection (a)(5)(A) or
                    (a)(5)(B).
              ``(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) (42 U.S.C.
    256b(a)) is amended--
              (1) by adding at the end of paragraph (1) the
            following: ``Such agreement shall require that the
            manufacturer offer each 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. Notwithstanding any other provision of
            law, if the Secretary requests a manufacturer to enter
            into a new agreement that complies with current law,
            the manufacturer will have the option of signing a new
            agreement or being determined to not have entered into
            an agreement with the Secretary that meets the
            requirements of this section.''; and
              (2) by adding at the end the following paragraph:
              ``(11) Quarterly reports.--An agreement described in
            paragraph (1) shall require that the manufacturer
            furnish the Secretary with reports on a quarterly basis
            that include the following information:
                      ``(A) 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').
                      ``(B) The component information used to
                    calculate the ceiling price as determined
                    necessary to administer the requirements of the
                    program under this section.
                      ``(C) Rebates, discounts, and other price
                    concessions provided by manufacturers to other
                    purchasers subsequent to the sale of covered
                    drugs to covered entities.''.
      [Welch 9_001:]
      Amend paragraph (2) of section 1128H(h) of the Social
    Security Act, added by section 1451(a), to read as follows:
              ``(2) No preemption of additional requirements.--
            Paragraph (1) shall not preempt any statute or
            regulation of a State or political subdivision of a
            State that requires any of the following:
                      ``(A) The disclosure or reporting of
                    information not of the type required to be
                    disclosed or reported under this section.
                      ``(B) The disclosure or reporting , in any
                    format, of information described in subsection
                    (f)(9)(C), except in the case of information
                    described in clause (i) of subsection
                    (f)(9)(C).
                      ``(C) The disclosure or reporting by any
                    person or entity other than an applicable
                    manufacturer (as so defined) or a covered
                    recipient (as defined in subsection (f)).
                      ``(D) The disclosure or reporting, in any
                    format, of the type of information required to
                    be disclosed or reported under this section to
                    a Federal, State, or local governmental agency
                    for public health surveillance, investigation,
                    or other public health purposes or health
                    oversight purposes.
            Nothing in paragraph (1) shall be construed to limit
            the discovery or admissibility of information described
            in this paragraph in a criminal, civil, or
            administrative proceeding.''.