[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


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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) * * *

           *       *       *       *       *       *       *

                  (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

           *       *       *       *       *       *       *

          (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

           *       *       *       *       *       *       *

          (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.

           *       *       *       *       *       *       *

  (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.

           *       *       *       *       *       *       *

  (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.

           *       *       *       *       *       *       *

          (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) * * *

           *       *       *       *       *       *       *

                  (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.

           *       *       *       *       *       *       *


                    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.]

           *       *       *       *       *       *       *


          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.

           *       *       *       *       *       *       *

  (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.

           *       *       *       *       *       *       *

  (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.

           *       *       *       *       *       *       *


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.''.

                                  
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