[House Report 111-330]
[From the U.S. Government Publishing Office]


111th Congress                                                   Report
                        HOUSE OF REPRESENTATIVES
 1st Session                                                    111-330

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


 
    PROVIDING FOR CONSIDERATION OF THE BILL (H.R. 3962) TO PROVIDE 
AFFORDABLE, QUALITY HEALTH CARE FOR ALL AMERICANS AND REDUCE THE GROWTH 
  IN HEALTH CARE SPENDING, AND FOR OTHER PURPOSES, AND PROVIDING FOR 
   CONSIDERATION OF THE BILL (H.R. 3961) TO AMEND TITLE XVIII OF THE 
   SOCIAL SECURITY ACT TO REFORM THE MEDICARE SGR PAYMENT SYSTEM FOR 
                               PHYSICIANS

                                _______
                                

 November 7, 2009 (legislative day of November 6, 2009).--Referred to 
              the House Calendar and ordered to be printed

                                _______
                                

  Ms. Slaughter, from the Committee on Rules, submitted the following

                              R E P O R T

                       [To accompany H. Res. 903]

    The Committee on Rules, having had under consideration 
House Resolution 903, by a record vote of 6 to 4, report the 
same to the House with the recommendation that the resolution 
be adopted.

                SUMMARY OF PROVISIONS OF THE RESOLUTION

    The resolution provides for consideration of H.R. 3962, the 
Affordable Health Care for America Act, under a structured 
rule. The resolution provides four hours of debate in the House 
to be equally divided and controlled by the chair and ranking 
minority member of the Committee on Energy and Commerce, the 
chair and ranking minority member of the Committee on Ways and 
Means, and the chair and ranking minority member of the 
Committee on Education and Labor. The resolution waives all 
points of order against consideration of the bill except for 
clauses 9 and 10 of rule XXI.
    The resolution provides that the amendment printed in part 
A of this report, perfected by the modification printed in part 
B of this report, shall be considered as adopted. The 
resolution waives all points of order against provisions of the 
bill, as amended and provides that the bill, as amended, shall 
be considered as read.
    The resolution makes in order the further amendment printed 
in part C of this report if offered by Representative Stupak of 
Michigan or his designee, which shall be in order without 
intervention of any point of order except those arising under 
clause 9 of rule XXI, shall be considered as read, shall be 
separately debatable for 20 minutes equally divided and 
controlled by the proponent and an opponent, and shall not be 
subject to a demand for a division of the question. The 
resolution makes in order the further amendment in the nature 
of a substitute printed in part D of this report, if offered by 
Representative Boehner of Ohio or his designee, which shall be 
in order without intervention of any point of order, shall be 
considered as read, and shall be separately debatable for one 
hour equally divided and controlled by the proponent and an 
opponent. The resolution provides one motion to recommit with 
or without instructions, which shall be considered as read.
    The resolution provides that during consideration of an 
amendment printed in this report, the Chair may postpone the 
question of adoption as though under clause 8 of rule XX.
    The resolution also provides for consideration of H.R. 
3961, the Medicare Physician Payment Reform Act of 2009 under a 
closed rule. The rule provides one hour of debate equally 
divided and controlled by the chair and ranking minority member 
of the Committee on Energy and Commerce. The resolution waives 
all points of order against consideration of the bill except 
for clauses 9 and 10 of rule XXI, and provides that the bill 
shall be considered as read. The rule waives all points of 
order against provisions of the bill. The resolution provides 
one motion to recommit with or without instructions. The 
resolution provides that in the engrossment of H.R. 3961, the 
Clerk shall add the text of H.R. 2920, as passed by the House, 
as new matter at the end of H.R. 3961.

                         EXPLANATION OF WAIVERS

    Although the rule waives all points of order against 
consideration of H.R. 3962 (except for clauses 9 and 10 of rule 
XXI) and all points of order against provisions of H.R. 3962, 
as amended, the Committee is not aware of any points of order. 
The waivers of all points of order are prophylactic.
    Although the rule waives all points of order against 
consideration of H.R. 3961 (except for clauses 9 and 10 of rule 
XXI) and all points of order against H.R. 3961, the Committee 
is not aware of any points of order. The waivers of all points 
of order are prophylactic.

                            COMMITTEE VOTES

    The results of each record vote on an amendment or motion 
to report, together with the names of those voting for and 
against, are printed below:

Rules Committee record vote No. 264

    Date: November 7, 2009 (Legislative Day of November 6, 
2009).
    Measure: H.R. 3962.
    Motion by: Mr. Dreier.
    Summary of motion: To postpone vote on final passage on 
H.R. 3962 until 72 hours after the rule has been filed, so that 
Members have an opportunity to review last minute changes to 
the bill and Manager's Amendment.
    Results: Defeated 4-6.
    Vote by Members: McGovern--Nay; Hastings (FL)--Nay; 
Cardoza--Nay; Arcuri--Nay; Perlmutter--Nay; Polis--Nay; 
Dreier--Yea; Diaz-Balart, L.--Yea; Sessions--Yea; Foxx--Yea.

Rules Committee record vote No. 265

    Date: November 7, 2009 (Legislative Day of November 6, 
2009).
    Measure: H.R. 3962.
    Motion by: Mr. Dreier.
    Summary of motion: To double the amount of debate time to 8 
hours.
    Results: Defeated 4-6.
    Vote by Members: McGovern--Nay; Hastings (FL)--Nay; 
Cardoza--Nay; Arcuri--Nay; Perlmutter--Nay; Polis--Nay; 
Dreier--Yea; Diaz-Balart, L.--Yea; Sessions--Yea; Foxx--Yea.

Rules Committee record vote No. 266

    Date: November 7, 2009 (Legislative Day of November 6, 
2009).
    Measure: H.R. 3962.
    Motion by: Mr. Dreier.
    Summary of motion: To make in order all amendments 
submitted to the Rules Committee for H.R. 3962.
    Results: Defeated 4-6.
    Vote by Members: McGovern--Nay; Hastings (FL)--Nay; 
Cardoza--Nay; Arcuri--Nay; Perlmutter--Nay; Polis--Nay; 
Dreier--Yea; Diaz-Balart, L.--Yea; Sessions--Yea; Foxx--Yea.

Rules Committee record vote No. 267

    Date: November 7, 2009 (Legislative Day of November 6, 
2009).
    Measure: H.R. 3962.
    Motion by: Mr. Dreier.
    Summary of motion: To make in order and provide appropriate 
waivers for an amendment by Rep. Barton (TX), #67, which would 
add a group of amendments that were accepted at the Committee 
on Energy and Commerce's full committee markup and were 
stripped from H.R. 3962 and not included in the managers 
amendment to H.R. 3962.
    Results: Defeated 4-6.
    Vote by Members: McGovern--Nay; Hastings (FL)--Nay; 
Cardoza--Nay; Arcuri--Nay; Perlmutter--Nay; Polis--Nay; 
Dreier--Yea; Diaz-Balart, L.--Yea; Sessions--Yea; Foxx--Yea.

Rules Committee record vote No. 268

    Date: November 7, 2009 (Legislative Day of November 06, 
2009).
    Measure: H.R. 3962.
    Motion by: Mr. Lincoln Diaz-Balart of Florida.
    Summary of motion: To make in order and provide appropriate 
waivers for an amendment by Rep. Rogers (MI), #144, which would 
strike all the Medicare cuts contained in H.R. 3962.
    Results: Defeated 4-6.
    Vote by Members: McGovern--Nay; Hastings (FL)--Nay; 
Cardoza--Nay; Arcuri--Nay; Perlmutter--Nay; Polis--Nay; 
Dreier--Yea; Diaz-Balart, L.--Yea; Sessions--Yea; Foxx--Yea.

Rules Committee record vote No. 269

    Date: November 7, 2009 (Legislative Day of November 6, 
2009).
    Measure: H.R. 3962.
    Motion by: Mr. Lincoln Diaz-Balart of Florida.
    Summary of motion: To make in order and provide appropriate 
waivers for an amendment by Rep. Barrett (SC), #142, which 
would strike the section in the bill that eliminates the 
nontaxable reimbursements of over-the-counter medication from 
health savings accounts-HSAs, HRAs, and FSAs. Basically this 
bill weakens HSAs.
    Results: Defeated 4-6.
    Vote by Members: McGovern--Nay; Hastings (FL)--Nay; 
Cardoza--Nay; Arcuri--Nay; Perlmutter--Nay; Polis--Nay; 
Dreier--Yea; Diaz-Balart, L.--Yea; Sessions--Yea; Foxx--Yea.

Rules Committee record vote No. 270

    Date: November 7, 2009 (Legislative Day of November 6, 
2009).
    Measure: H.R. 3962.
    Motion by: Mr. Lincoln Diaz-Balart of Florida.
    Summary of motion: To make in order and provide appropriate 
waivers for an amendment by Rep. Brady (TX), #91, which would 
block the implementation of sections of HR 3962, including 
reductions to the Medicare program, in any geographic area 
unless the Secretary of HHS certifies that implementation will 
not result in: rationing of health care services; reduced 
health care services for seniors; longer patient wait times; or 
reduced availability of health care providers participating in 
the Medicare program.
    Results: Defeated 4-6.
    Vote by Members: McGovern--Nay; Hastings (FL)--Nay; 
Cardoza--Nay; Arcuri--Nay; Perlmutter--Nay; Polis--Nay; 
Dreier--Yea; Diaz-Balart, L.--Yea; Sessions--Yea; Foxx--Yea.

Rules Committee record vote No. 271

    Date: November 7, 2009 (Legislative Day of November 6, 
2009).
    Measure: H.R. 3962.
    Motion by: Mr. Lincoln Diaz-Balart of Florida.
    Summary of motion: To make in order and provide appropriate 
waivers for an amendment by Rep. Reichert (WA), #116, which 
this amendment would create a hardship exemption from the 
employer mandate if its compliance would result in the employer 
laying off employees, reducing employee wages, or prevent the 
hiring of new employees. The amendment requires the Treasury 
Department to establish documentation to verify such hardship.
    Results: Defeated 4-6.
    Vote by Members: McGovern--Nay; Hastings (FL)--Nay; 
Cardoza--Nay; Arcuri--Nay; Perlmutter--Nay; Polis--Nay; 
Dreier--Yea; Diaz-Balart, L.--Yea; Sessions--Yea; Foxx--Yea.

Rules Committee record vote No. 272

    Date: November 7, 2009 (Legislative Day of November 6, 
2009).
    Measure: H.R. 3962.
    Motion by: Mr. Sessions.
    Summary of motion: To make in order and provide appropriate 
waivers for an amendment by Rep. Fleming (LA) and Rep. Wilson 
(SC) and Rep. Scalise (LA) and Rep. Herger (CA) and Rep. 
Gingrey (GA), #1, which would automatically enroll all Members 
of Congress and all Senators in the public option.
    Results: Defeated 4-6.
    Vote by Members: McGovern--Nay; Hastings (FL)--Nay; 
Cardoza--Nay; Arcuri--Nay; Perlmutter--Nay; Polis--Nay; 
Dreier--Yea; Diaz-Balart, L.--Yea; Sessions--Yea; Foxx--Yea.

Rules Committee record vote No. 273

    Date: November 7, 2009 (Legislative Day of November 6, 
2009).
    Measure: H.R. 3962.
    Motion by: Mr. Sessions.
    Summary of motion: To make in order and provide appropriate 
waivers for an amendment by Rep. Hastings (WA), #34, which 
would strike Section 1156 of the bill, which prohibits the 
expansion of physician-owned hospitals.
    Results: Defeated 4-6.
    Vote by Members: McGovern--Nay; Hastings (FL)--Nay; 
Cardoza--Nay; Arcuri--Nay; Perlmutter--Nay; Polis--Nay; 
Dreier--Yea; Diaz-Balart, L.--Yea; Sessions--Yea; Foxx--Yea.

Rules Committee record vote No. 274

    Date: November 7, 2009 (Legislative Day of November 6, 
2009).
    Measure: H.R. 3962.
    Motion by: Mr. Sessions.
    Summary of motion: To make in order and provide appropriate 
waivers for an amendment by Rep. Price (GA), #115, which 
strikes Sec. 2401 and inserts language establishing best 
practice guidelines. It places limitations on noneconomic 
damages and punitive damages in a health care lawsuit in cases 
in which treatments are based on these practices.
    Results: Defeated 4-6.
    Vote by Members: McGovern--Nay; Hastings (FL)--Nay; 
Cardoza--Nay; Arcuri--Nay; Perlmutter--Nay; Polis--Nay; 
Dreier--Yea; Diaz-Balart, L.--Yea; Sessions--Yea; Foxx--Yea.

Rules Committee record vote No. 275

    Date: November 7, 2009 (Legislative Day of November 6, 
2009).
    Measure: H.R. 3962.
    Motion by: Mr. Sessions.
    Summary of motion: To make in order and provide appropriate 
waivers for an amendment by Rep. Sessions (TX), #190, which 
would not allow any of the provisions of this bill to be 
implemented if the OMB, in consultation with the Department of 
Labor find that 4 million jobs will be lost as a result of this 
bill.
    Results: Defeated 4-6.
    Vote by Members: McGovern--Nay; Hastings (FL)--Nay; 
Cardoza--Nay; Arcuri--Nay; Perlmutter--Nay; Polis--Nay; 
Dreier--Yea; Diaz-Balart, L.--Yea; Sessions--Yea; Foxx--Yea.

Rules Committee record vote No. 276

    Date: November 7, 2009 (Legislative Day of November 6, 
2009).
    Measure: H.R. 3962.
    Motion by: Mr. Sessions.
    Summary of motion: To make in order and provide the 
necessary waivers for an amendment that would prohibit the 
criminal penalties that provide a $25,000 fine and up to 1 year 
in prison to a $250,000 fine and up to 5 years in prison for 
not complying with the individual mandate if offered by Rep 
Sessions or a designee.
    Results: Defeated 4-6.
    Vote by Members: McGovern--Nay; Hastings (FL)--Nay; 
Cardoza--Nay; Arcuri--Nay; Perlmutter--Nay; Polis--Nay; 
Dreier--Yea; Diaz-Balart, L.--Yea; Sessions--Yea; Foxx--Yea.

Rules Committee record vote No. 277

    Date: November 7, 2009 (Legislative Day of November 6, 
2009).
    Measure: H.R. 3962.
    Motion by: Dr. Foxx.
    Summary of motion: To make in order and provide appropriate 
waivers for an amendment by Rep. Foxx (NC), #203, which would 
direct the Secretary of Health and Human Services to extend for 
two years the reclassification in effect during fiscal year 
2009 for hospitals whose Medicare Geographic Classification 
Review Board reclassification changed from fiscal year 2009 to 
fiscal year 2010 or ended as of September 30, 2009. The 
affected hospitals would have 20 days from enactment and 
publication of this provision to notify the Secretary of their 
decision to extend their fiscal 2009 reclassification. This is 
a temporary extension; any Medicare Geographic Classification 
Review Board reclassification that these hospitals have or will 
obtain for fiscal years beyond the two year extension will 
remain valid.
    Results: Defeated 4-6.
    Vote by Members: McGovern--Nay; Hastings (FL)--Nay; 
Cardoza--Nay; Arcuri--Nay; Perlmutter--Nay; Polis--Nay; 
Dreier--Yea; Diaz-Balart, L.--Yea; Sessions--Yea; Foxx--Yea.

Rules Committee record vote No. 278

    Date: November 7, 2009 (Legislative Day of November 6, 
2009).
    Measure: H.R. 3962.
    Motion by: Dr. Foxx.
    Summary of motion: To make in order and provide appropriate 
waivers for the following amendments to be considered and 
separately debatable for ten minutes: an amendment by Rep. Deal 
(GA) and Rep. Wilson (SC) and Rep. Johnson (TX) and Rep. Heller 
(NV), #56--since the operation of the Health Insurance Exchange 
will be funded with taxpayer dollars, this amendment will limit 
participation in the Exchange to U.S. citizens and members of 
one of the nine groups of qualified aliens that are eligible 
for Medicaid. To enforce this requirement, the Health Choices 
Commissioner must verify that all applicants to purchase an 
Exchange-participating plan are qualified based on citizenship 
or qualified alien status, and it requires the Commissioner to 
verify the identity of all applicants using the same process 
used in Medicaid. The amendment also incorporates the five-year 
waiting period for new legal permanent residents that was 
created by the welfare reform legislation in 1996; and an 
amendment by Rep. Deal (GA) and Rep. Wilson (SC) and Rep. 
Johnson (TX) and Rep. Heller (NV), #60, which would require the 
Health Choices Commissioner to verify that all applicants for 
Affordability Credits are U.S. citizens (or members of one of 
the nine groups of qualified aliens that are eligible for 
Medicaid) and would require the Commissioner to verify the 
applicant's identity using the same identity verification 
process the DRA required for Medicaid applicants. The amendment 
also would incorporate the five-year waiting period for new 
legal permanent residents that was created by the welfare 
reform legislation in 1996; and an amendment by Rep. King (IA), 
#130, which would require that beneficiaries of the insurance 
exchange provide proof of their citizenship.
    Results: Defeated 4-6.
    Vote by Members: McGovern--Nay; Hastings (FL)--Nay; 
Cardoza--Nay; Arcuri--Nay; Perlmutter--Nay; Polis--Nay; 
Dreier--Yea; Diaz-Balart, L.--Yea; Sessions--Yea; Foxx--Yea.

Rules Committee record vote No. 279

    Date: November 7, 2009 (Legislative Day of November 6, 
2009).
    Measure: H.R. 3962.
    Motion by: Dr. Foxx.
    Summary of motion: To make in order and provide appropriate 
waivers for an amendment by Rep. Price (GA), #114, which would 
add language protecting the private right to contract between 
individuals and health care providers.
    Results: Defeated 4-6.
    Vote by Members: McGovern--Nay; Hastings (FL)--Nay; 
Cardoza--Nay; Arcuri--Nay; Perlmutter--Nay; Polis--Nay; 
Dreier--Yea; Diaz-Balart, L.--Yea; Sessions--Yea; Foxx--Yea.

Rules Committee record vote No. 280

    Date: November 7, 2009 (Legislative Day of November 6, 
2009).
    Measure: H.R. 3962.
    Motion by: Dr. Foxx.
    Summary of motion: To make in order and provide appropriate 
waivers for an amendment by Rep. Paulsen (MN) and Rep. Lance 
(NJ) and Rep. Gerlach (PA), #35, which would remove the medical 
innovation tax and replaces it with unobligated stimulus funds.
    Results: Defeated 4-6.
    Vote by Members: McGovern--Nay; Hastings (FL)--Nay; 
Cardoza--Nay; Arcuri--Nay; Perlmutter--Nay; Polis--Nay; 
Dreier--Yea; Diaz-Balart, L.--Yea; Sessions--Yea; Foxx--Yea.

Rules Committee record vote No. 281

    Date: November 7, 2009 (Legislative Day of November 6, 
2009).
    Measure: H.R. 3962.
    Motion by: Mr. Hastings of Florida.
    Summary of motion: To report the rule.
    Results: Adopted 6-4.
    Vote by Members: McGovern--Yea; Hastings (FL)--Yea; 
Cardoza--Yea; Arcuri--Yea; Perlmutter--Yea; Polis--Yea; 
Dreier--Nay; Diaz-Balart, L.--Nay; Sessions--Nay; Foxx--Nay.

       SUMMARY OF AMENDMENT IN PART A TO BE CONSIDERED AS ADOPTED

    Dingell (MI)--Would allow the Secretary to work with states 
that have alternative programs to state high risk pools as a 
part of the new temporary insurance program. It would provide 
that if the premiums of a retiree increase by an excessive 
amount, as determined by the Secretary, on or before the bill's 
introduction date (October 29, 2009), then such retiree is 
eligible for the high-risk pool. It prohibits undocumented 
individuals from accessing assistance from the national high 
risk pool program with requirements for verification of 
citizenship or lawful presence. It establishes a process for 
the review and public disclosure of health insurance premium 
increases and justifications by the Secretary of Health and 
Human Services and states. It permits the Commissioner to take 
into consideration excessive and unjustified premium increases 
in making decisions regarding which insurance companies will be 
permitted into the exchange and how quickly to open the 
exchange to employers for the purchase of insurance for their 
employees and provides funding for states for this process. It 
clarifies that the consumer collaborative provided for in the 
early access health grants is a nonprofit business 
collaborative. It provides that the new Commissioner may permit 
a qualified health benefits plan to provide coverage through a 
qualified direct primary care medical home plan. The FTC may 
investigate insurance companies that are registered as not-for-
profit companies. It clarifies that nothing in the Act 
overrides a state law governing medical malpractice cases. It 
repeals the McCarran-Ferguson Act insurance antitrust exemption 
with respect to health insurers and medical malpractice 
insurance. It imposes performance assessment and accountability 
measures on the Health Choices Administration. It provides that 
those women receiving Medicaid assistance only for family 
planning services would be eligible for the Health Insurance 
Exchange. It ensures that the interstate insurance compacts do 
not override state laws governing rate review and fraud and 
that compacting states determine which of the compacting 
state's laws serve as primary for the insurance company. It 
extends the Maryland all-payor cost containment waiver to the 
public option. It delays by 2 years a provision of the bill 
that eliminates the deductibility of expenses that relate to 
retiree prescription drug benefits that are subsidized by the 
federal government. It replaces a provision in the bill that 
delays the application of worldwide allocation of interest with 
a provision that deletes the allocation rule. It closes a 
biofuel tax credit loophole. It changes from January 1, 2010, 
to April 1, 2010, the effective date for Skilled Nursing 
Facilities classification changes. It permits approval for 
expansion of certain hospitals that have a high percentage of 
Medicaid admissions. States may agree to reimburse long-term 
care facilities for costs incurred in conducting background 
checks. It imposes quality indicators for Alzheimer's care. It 
imposes a 90-day wait period for new durable medical equipment 
suppliers to be paid if the Secretary believes there is a risk 
for fraud. It requires that the Medicare fraud and abuse phone 
number be prominently displayed on Explanation of Benefits 
forms. It provides for Medicaid coverage of Compact of Free 
Association migrants. It includes a sense of Congress regarding 
Medicaid coverage of community-based attendant services and 
supports. It includes technical appropriations provisions. It 
provides that the medical malpractice demonstration projects do 
not preempt or modify state laws on attorneys' fee limits or 
damage caps. It provides for a new program on mental health and 
substance abuse screening, intervention, referral, and recovery 
services. It codifies the Office of Minority Health. It 
requires HHS to study and eliminate any duplicative programs. 
It provides for diabetes screening collaboration and outreach. 
It also includes changes to the Indian health provisions.

                 SUMMARY OF THE MODIFICATION IN PART B

    The revision modifies the biofuel tax credit provision in 
the manager's amendment. Second, it would authorize HHS grants 
to assist in acquiring or developing medical schools in areas 
in need of medical professionals. The recipient would have to 
prove it has substantial non-federal funds to develop the 
medical school. It authorizes $100 million a year for five 
years. Third, it would modify provisions relating to FTC 
enforcement authority in patent settlement cases. Finally, it 
authorizes HHS to establish a demonstration program to make 
incentive payments for public health workers to work in areas 
with health professional shortages. The revision would 
authorize such sums as are necessary for five years.

           SUMMARY OF AMENDMENT IN PART C TO BE MADE IN ORDER

    Stupak (MI), Ellsworth (IN), Pitts (PA), Smith, Christopher 
(NJ), Kaptur (OH), Dahlkemper (PA)--The amendment codifies the 
Hyde Amendment in H.R. 3962. The amendment will prohibit 
federal funds for abortion services in the public option. It 
also prohibits individuals who receive affordability credits 
from purchasing a plan that provides elective abortions. 
However, it allows individuals, both who receive affordability 
credits and who do not, to separately purchase with their own 
funds plans that cover elective abortions. It also clarifies 
that private plans may still offer elective abortions. (20 
minutes)

SUMMARY OF AMENDMENT IN THE NATURE OF A SUBSTITUTE IN PART D TO BE MADE 
                                IN ORDER

    Boehner (OH) Substitute--Creates Universal Access Programs 
that expand and reform high-risk pools and reinsurance programs 
to guarantee that all Americans, regardless of pre-existing 
conditions or past illnesses, have access to affordable care--
while lowering costs for all Americans. It prevents insurers 
from unjustly canceling a policy or instituting annual or 
lifetime spending caps. The amendment puts in place medical 
liability reforms and gives small businesses the power to pool 
together and offer health care at lower prices. In addition, 
the legislation provides incentive payments to states that 
reduce premiums and the number of uninsured. The bill allows 
Americans living in one state to shop for coverage and purchase 
insurance in another. The legislation explicitly prohibits all 
Federal funds, whether they are authorized funds or 
appropriated funds, from being used to pay for abortion. The 
amendment creates new incentives to save for future and long-
term care needs by allowing qualified participants to use HSAs 
to pay premiums. (one hour)

       PART A--TEXT OF THE AMENDMENT TO BE CONSIDERED AS ADOPTED

  Page 17, add at the end of line 10 the following: ``For a 
State without a high-risk pool program, the Secretary may work 
with the State to coordinate with other forms of coverage 
expansions, such as State public-private partnerships.''.
  Page 17, line 12, insert after ``means an individual'' the 
following: ``who meets the requirements of subsection (i)(1)''.
  Page 18, line 8, strike ``or''.
  Page 18, line 13, strike the period and insert ``; or''.
  Page 18, after line 13, insert the following:
          (4) who on or after October 29, 2009, had employment-
        based retiree health coverage (as defined in subsection 
        (i)) and the annual increase in premiums for such 
        individual under such coverage (for any coverage period 
        beginning on or after such date) exceeds such excessive 
        percentage as the Secretary shall specify.
  Page 19, line 23, insert ``, consistent with subsection 
(i)(2),'' after ``attest''.
  Page 26, after line 21, insert the following new subsections:
  (i) Application and Verification of Requirement of 
Citizenship or Lawful Presence in the United States.--
          (1) Requirement.--No individual shall be an eligible 
        individual under this section unless the individual is 
        a citizen or national of the United States or 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).
          (2) Application of verification process for 
        affordability credits.--The provisions of paragraphs 
        (4) (other than subparagraphs (F) and (H)(i)) and 
        (5)(A) of section 341(b), and of subsections (v) (other 
        than paragraph (3)) and (x) of section 205 of the 
        Social Security Act, shall apply to the verification of 
        eligibility of an eligible individual by the Secretary 
        (or by a State agency approved by the Secretary) for 
        benefits under this section in the same manner as such 
        provisions apply to the verification of eligibility of 
        an affordable credit eligible individual for 
        affordability credits by the Commissioner under section 
        341(b). The agreement referred to in section 
        205(v)(2)(A) of the Social Security Act (as applied 
        under this paragraph) shall also provide for funding, 
        to be payable from the amount made available under 
        subsection (h)(1), to the Commissioner of Social 
        Security in such amount as is agreed to by such 
        Commissioner and the Secretary.
  (j) Employment-based Retiree Health Coverage.--In this 
section, the term ``employment-based retiree health coverage'' 
means health insurance or other coverage of health care costs 
(whether provided by voluntary insurance coverage or pursuant 
to statutory or contractual obligation) for individuals (or for 
such individuals and their spouses and dependents) under a 
group health plan based on their status as retired participants 
in such plan.
  Page 31, strike lines 17 through 24 and insert the following:

SEC. 104. SUNSHINE ON PRICE GOUGING BY HEALTH INSURANCE ISSUERS.

  (a) Initial Premium Review Process.--
          (1) In general.--The Secretary of Health and Human 
        Services, in conjunction with States, shall establish a 
        process for the annual review, beginning with 2010 and 
        subject to subsection (c)(3)(A), of increases in 
        premiums for health insurance coverage.
          (2) Justification and disclosure.-- Such process 
        shall require health insurance issuers to submit a 
        justification for any premium increase prior to 
        implementation of the increase. Such issuers shall 
        prominently post such information on their websites. 
        The Secretary shall ensure the public disclosure of 
        information on such increases and justifications for 
        all health insurance issuers.
  (b) Continuing Premium Review Process.--
          (1) Informing commissioner of premium increase 
        patterns.--As a condition of receiving a grant under 
        subsection (c)(1), a State, through its Commissioner of 
        Insurance, shall--
                  (A) provide the Health Choices Commissioner 
                with information about trends in premium 
                increases in health insurance coverage in 
                premium rating areas in the State; and
                  (B) make recommendations, as appropriate, to 
                such Commissioner about whether particular 
                health insurance issuers should be excluded 
                from participation in the Health Insurance 
                Exchange based on a pattern of excessive or 
                unjustified premium increases.
          (2) Commissioner authority regarding exchange 
        participation.--In making determinations concerning 
        entering into contracts with QHBP offering entities for 
        the offering of Exchange-participating health plans 
        under section 304, the Commissioner shall take into 
        account the information and recommendations provided 
        under paragraph (1).
          (3) Monitoring by commissioner of premium 
        increases.--
                  (A) In general.--Beginning in 2014, the 
                Commissioner, in conjunction with the States 
                and in place of the monitoring by the Secretary 
                under subsection (a)(1) and consistent with the 
                provisions of subsection (a)(2), shall monitor 
                premium increases of health insurance coverage 
                offered inside the Health Insurance Exchange 
                under section 304 and outside of the Exchange.
                  (B) Consideration in opening exchange.--In 
                determining under section 302(e)(4) whether to 
                make additional larger employers eligible to 
                participate in the Health Insurance Exchange, 
                the Commissioner shall take into account any 
                excess of premium growth outside the Exchange 
                as compared to the rate of such growth inside 
                the Exchange, including information reported by 
                the States.
  (c) Grants in Support of Process.--
          (1) Premium review grants during 2010 through 2014.--
        The Secretary shall carry out a program of grants to 
        States during the 5-year period beginning with 2010 to 
        assist them in carrying out subsection (a), including--
                  (A) in reviewing and, if appropriate under 
                State law, approving premium increases for 
                health insurance coverage; and
                  (B) in providing information and 
                recommendations to the Commissioner under 
                subsection (b)(1).
          (2) Funding.--
                  (A) In general.--Out of any funds in the 
                Treasury not otherwise appropriated, there are 
                appropriated to the Secretary $1,000,000,000, 
                to be available for expenditure for grants 
                under paragraph (1) and subparagraph (B).
                  (B) Further availability for insurance reform 
                and consumer protection grants.--If the amounts 
                appropriated under subparagraph (A) are not 
                fully obligated under grants under paragraph 
                (1) by the end of 2014, any remaining funds 
                shall remain available to the Secretary for 
                grants to States for planning and implementing 
                the insurance reforms and consumer protections 
                under title II.
                  (C) Allocation.--The Secretary shall 
                establish a formula for determining the amount 
                of any grant to a State under this subsection. 
                Under such formula--
                          (i) the Secretary shall consider the 
                        number of plans of health insurance 
                        coverage offered in each State and the 
                        population of the State; and
                          (ii) no State qualifying for a grant 
                        under paragraph (1) shall receive less 
                        than $1,000,000, or more than 
                        $5,000,000 for a grant year.
  Page 39, line 4, insert ``Affordable Health Care for America 
Act'' after ``section 211 of the''.
  Page 52, line 20, strike ``annual or''.
  Page 74, line 3, strike ``Business'' and insert ``Not-for-
profit business''.
  Page 90, after line 22, insert the following:
  (d) Treatment of Qualified Direct Primary Care Medical Home 
Plans.--The Commissioner may permit a qualified health benefits 
plan to provide coverage through a qualified direct primary 
care medical home plan so long as the qualified health benefits 
plan meets all requirements that are otherwise applicable and 
the services covered by the medical home plan are coordinated 
with the QHBP offering entity.
  Page 97, line 19, strike ``222(d)(4)(A)'' and insert 
``222(e)(4)(A)''.
  Page 114, line 22 and page 118, line 21, strike ``subsection 
(d)'' and insert ``subsection (e)''.
  Page 149, lines 8 and 12, strike ``the business of'' each 
place it appears.
  Page 149, line 9, strike ``such authority'' and insert ``the 
Commission's authority''.
  Page 149, beginning on line 12, strike ``without regard to 
whether the entity or entities that is the subject of such 
studies, reports, or information is a for-profit or not-for-
profit entity'' and insert ``without regard to whether the 
subject of such studies, reports, or information is for-profit 
or not-for-profit''.
  Page 150, after line 17, insert the following:
  (c) Savings Clause for State Medical Malpractice Laws.--
Nothing in this Act or the amendments made by this Act shall be 
construed to modify or impair State law governing legal 
standards or procedures used in medical malpractice cases, 
including the authority of a State to make or implement such 
law.
  Page 150, strike line 20 and all that follows through page 
152, line 13, and insert the following:
  (a) Amendment to McCarran-Ferguson Act.--Section 3 of the Act 
of March 9, 1945 (15 U.S.C. 1013), commonly known as the 
McCarran-Ferguson Act, is amended by adding at the end the 
following:
  ``(c)(1) Except as provided in paragraph (2), nothing 
contained in this Act shall modify, impair, or supersede the 
operation of any of the antitrust laws with respect to the 
business of health insurance or the business of medical 
malpractice insurance.
  ``(2) Paragraph (1) shall not apply to--
          ``(A) collecting, compiling, classifying, or 
        disseminating historical loss data;
          ``(B) determining a loss development factor 
        applicable to historical loss data; or
          ``(C) performing actuarial services if doing so does 
        not involve a restraint of trade.
  ``(3) For purposes of this subsection--
          ``(A) the term `antitrust laws'' has the meaning 
        given it in subsection (a) of the first section of the 
        Clayton Act, except that such term includes section 5 
        of the Federal Trade Commission Act to the extent that 
        such section 5 applies to unfair methods of 
        competition;
          ``(B) the term `historical loss data' means 
        information respecting claims paid, or reserves held 
        for claims reported, by any person engaged in the 
        business of insurance; and
          ``(C) the term `loss development factor' means an 
        adjustment to be made to the aggregate of losses 
        incurred during a prior period of time that have been 
        paid, or for which claims have been received and 
        reserves are being held, in order to estimate the 
        aggregate of the losses incurred during such period 
        that will ultimately be paid.''.
  Page 154, after line 18, insert the following (and conform 
the table of contents of division A accordingly):

SEC. 264. PERFORMANCE ASSESSMENT AND ACCOUNTABILITY: APPLICATION OF 
                    GPRA.

  (a) Application of GPRA.--Section 306 of title 5, United 
States Code, and sections 1115, 1116, 1117, and 9703 of title 
31 of such Code (originally enacted by the Government 
Performance and Results Act of 1993, Public Law 103-62) apply 
to the executive agencies established by this Act, including 
the Health Choices Administration. Under such section 306, each 
such executive agency is required to provide for a strategic 
plan every 3 years.
  (b) Improving Consumer Service and Streamlining Procedures.--
Every 3 years each such executive agency shall--
          (1)(A) assess the quality of customer service 
        provided, (B) develop a strategy for improving such 
        service, and (C) establish standards for high-quality 
        customer service; and
          (2)(A) identify redundant rules, regulations, and 
        procedures, and(B) develop and implement a plan for 
        eliminating or streamlining such redundancies.
  Page 156, line 16, insert ``certain'' before ``other''.
  Page 159, line 22, strike ``or (aa)'' and insert ``(aa), or 
(hh)''.
  Page 171, line 10, strike ``plan'' and insert ``plans''.
  Page 171, line 15, strike ``222(d)(4)'' and insert 
``222(e)(4)''.
  Page 171, lines 19 and 21, strike ``222(d)(4)(A)'' and 
``222(d)(4)(B)'' and insert ``222(e)(4)(A)'' and 
``222(e)(4)(B)'', respectively.
  Page 171, line 24, strike ``222(d)(4)(A)'' and insert 
``222(e)(4)(A)''.
  Page 203, line 3, strike ``request'' and insert ``consult 
with''.
  Page 203, line 5, insert ``not later than January 1, 2014,'' 
after ``to develop''.
  Page 203, line 6, strike ``NAIC'' and insert ``Secretary''.
  Page 203, line 7, strike ``the Secretary,''.
  Page 203, line 13, strike ``health insurance issuer'' and 
insert ``compacting States''.
  Page 203, line 18, strike ``address'' and insert ``enforce 
law relating to''.
  Page 203, line 24, strike ``and''.
  Page 203, after line 25, insert the following:
                  (H) rate review; and
                  (I) fraud.
  Page 204, strike lines 10 through 16 and redesignate 
succeeding subsections accordingly.
  Page 217, after line 12, insert the following:
          (4) Treatment of certain state waivers.--In the case 
        of any State operating a cost-containment waiver for 
        health care providers in accordance with section 
        1814(b)(3) of the Social Security Act, the Secretary 
        shall provide for payment to such providers under the 
        public health insurance option consistent with the 
        provisions and requirements of that waiver.
  Page 242, line 15, insert ``program'' after ``save''.
   Page 243, line 3, strike ``though'' and insert ``through''.
  Page 246, line 14, strike ``222(d)(4)(A)'' and insert 
``222(e)(4)(A)''.
  Page 258, line 13, strike ``302(d)(2)'' and insert 
``302(d)(4)''.
  Page 281, line 8; page 286, line 25; and page 294, lines 3 
and 18, insert ``Affordable Health Care for America Act'' after 
``of the''.
  Page 301, line 16; page 303, lines 6 and 10; page 310, lines 
10 and 16; page 328, lines 3 and 9; page 329, line 14; page 
330, lines 18 and 23, insert ``Affordable Health Care for 
America Act'' after ``of the'' each place it appears.
  Page 327, line 13, strike ``December 31, 2010'' and insert 
``December 31, 2012''.
  Page 343, line 4, insert ``and'' after ``device,''.
  Page 345, strike line 20 and all that follows through page 
346, line 2, and insert the following (and conform the table of 
contents of division A accordingly):

SEC. 554. REPEAL OF WORLDWIDE ALLOCATION OF INTEREST.

  (a) In General.--Section 864 of the Internal Revenue Code of 
1986 is amended by striking subsection (f) and by redesignating 
subsection (g) as subsection (f).
  (b) Effective Date.--The amendments made by this section 
shall apply to taxable years beginning after December 31, 2010.
  Page 346, after line 2, add the following (and conform the 
table of contents of division A accordingly):

SEC. 555. SECOND GENERATION BIOFUEL PRODUCER CREDIT.

  (a) Credit Amount Determined Based on BTU Content of Fuel.--
Subparagraph (B) of section 40(b)(6) of the Internal Revenue 
Code of 1986 is amended to read as follows:
                  ``(B) Applicable amount.--For purposes of 
                this paragraph--
                          ``(i) In general.--The term 
                        `applicable amount' means, with respect 
                        to any type of second generation 
                        biofuel, the dollar amount which bears 
                        the same ratio to $1.01 as the BTU 
                        content of such type of fuel bears to 
                        the BTU content of ethanol. For 
                        purposes of the preceding sentence, the 
                        types of second generation biofuel and 
                        the BTU content of such types shall be 
                        determined in accordance with the table 
                        prescribed under clause (ii).
                          ``(ii) BTU content determined by 
                        secretary.--The Secretary, after 
                        consultation with the Secretary of 
                        Energy, shall prescribe a table which 
                        lists the types of second generation 
                        biofuel and the BTU content of each 
                        such type.
                          ``(iii) Coordination with alcohol 
                        credits.--In the case of second 
                        generation biofuel which is alcohol, 
                        the applicable amount determined under 
                        clause (i) shall be reduced by the sum 
                        of--
                                  ``(I) the amount of the 
                                credit in effect for such 
                                alcohol under subsection (b)(1) 
                                (without regard to subsection 
                                (b)(3)) at the time of the 
                                qualified second generation 
                                biofuel production, plus
                                  ``(II) in the case of 
                                ethanol, the amount of the 
                                credit in effect under 
                                subsection (b)(4) at the time 
                                of such production.''.
  (b) Expansion of Qualified Fuels.--
          (1) In general.--Subclause (I) of section 
        40(b)(6)(E)(i) of such Code is amended to read as 
        follows:
                                  ``(I) is derived solely from 
                                qualified feedstocks, and''.
          (2) Qualified feedstock.--Paragraph (6) of section 
        40(b) of such Code is amended by redesignating 
        subparagraphs (F), (G) and (H) as subparagraphs (G), 
        (H), and (I), respectively, and by inserting after 
        subparagraph (E) the following new subparagraph:
                  ``(F) Qualified feedstock.--For purposes of 
                this paragraph, the term `qualified feedstock' 
                means--
                          ``(i) any lignocellulosic or 
                        hemicellulosic matter that is available 
                        on a renewable or recurring basis, and
                          ``(ii) any cultivated algae, 
                        cyanobacteria, or lemna.''.
          (3) Conforming amendments.--
                  (A) Section 40 of such Code is amended--
                          (i) by striking ``cellulosic 
                        biofuel'' each place it appears in the 
                        text thereof and inserting ``second 
                        generation biofuel'',
                          (ii) by striking ``Cellulosic'' in 
                        the headings of subsections (b)(6), 
                        (b)(6)(E), and (d)(3)(D) and inserting 
                        ``Second generation'', and
                          (iii) by striking ``cellulosic'' in 
                        the headings of subsections (b)(6)(C), 
                        (b)(6)(D), (b)(6)(F), (d)(6), and 
                        (e)(3) and inserting ``second 
                        generation''.
                  (B) Clause (iii) of section 40(b)(6)(E) of 
                such Code, as redesignated by paragraph (2), is 
                amended by striking ``Such term shall not'' and 
                inserting ``The term `second generation 
                biofuel' shall not''.
                  (C) Paragraph (1) of section 4101(a) of such 
                Code is amended by striking ``cellulosic 
                biofuel'' and inserting ``second generation 
                biofuel''.
  (c) Exclusion of Fuels Produced From Coprocessing With 
Nonqualified Feedstocks.--Subparagraph (E) of section 40(b)(6) 
of such Code is amended by adding at the end the following new 
clause:
                          ``(iii) Exclusion of fuels produced 
                        from coprocessing with nonqualified 
                        feedstocks.--The term `second 
                        generation biofuel' shall not include 
                        any fuel derived from coprocessing a 
                        qualified feedstock with any feedstock 
                        which is not a qualified feedstock.''.
  (d) Exclusion of Unprocessed Fuels.--Subparagraph (E) of 
section 40(b)(6) of such Code, as amended by subsection (c), is 
amended by adding at the end the following new clause:
                          ``(iv) Exclusion of unprocessed 
                        fuels.--The term `second generation 
                        biofuel' shall not include any fuel 
                        if--
                                  ``(I) more than 4 percent of 
                                such fuel (determined by 
                                weight) is any combination of 
                                water and sediment, or
                                  ``(II) the ash content of 
                                such fuel is more than 1 
                                percent (determined by 
                                weight).''.
  (e) Liquid Fuel Defined.--
          (1) In general.--Paragraph (6) of section 40(b) of 
        such Code, as amended by subsection (b), is amended by 
        redesignating subparagraphs (G), (H), and (I) as 
        subparagraphs (H), (I), and (J), respectively, and by 
        inserting after subparagraph (F) the following new 
        subparagraph:
                  ``(G) Liquid fuel.--The term `liquid fuel' 
                shall not include any fuel unless such fuel 
                would be a liquid at room temperature after 
                extraction of all water from the fuel.''.
          (2) Application to alcohol mixture credit.--Paragraph 
        (2) of section 40(d) of such Code is amended by 
        inserting ``, within the meaning of subsection 
        (b)(6)(G),'' after ``liquid fuel (other than 
        gasoline)''.
          (3) Application to renewable diesel.--Paragraph (3) 
        of section 40A(f) of such Code is amended by inserting 
        ``(within the meaning of section 40(b)(6)(G))'' after 
        ``liquid fuel''.
  (f) Registration of Fuels.--Subparagraph (I) of section 
40(b)(6) of such Code, as redesignated by subsections (b) and 
(e), is amended to read as follows:
                  ``(I) Registration requirements.--No credit 
                shall be determined under this paragraph with 
                respect to any second generation biofuel 
                produced by the taxpayer unless--
                          ``(i) such taxpayer is registered 
                        with the Secretary as a producer of 
                        second generation biofuel under section 
                        4101, and
                          ``(ii) such taxpayer provides the 
                        Secretary such information with respect 
                        to such second generation biofuel as 
                        the Secretary may (after consultation 
                        with the Secretary of Energy and the 
                        Administrator of the Environmental 
                        Protection Agency) require, including--
                                  ``(I) the type of such second 
                                generation biofuel,
                                  ``(II) the feedstocks from 
                                which such second generation 
                                biofuel is derived, and
                                  ``(III) the BTU content of 
                                such second generation 
                                biofuel.''.
  (g) Application of Biofuel Reforms to Bonus Depreciation for 
Biofuel Plant Property.--
          (1) In general.--Subparagraph (A) of section 
        168(l)(2) of such Code is amended by striking ``solely 
        to produce cellulosic biofuel'' and inserting ``solely 
        to produce second generation biofuel (as defined in 
        section 40(b)(6)(E)''.
          (2) Conforming amendments.--Subsection (l) of section 
        168 of such Code is amended--
                  (A) by striking ``cellulosic biofuel'' each 
                place it appears in the text thereof and 
                inserting ``second generation biofuel'',
                  (B) by striking paragraph (3) and 
                redesignating paragraphs (4) through (8) as 
                paragraphs (3) through (7), respectively,
                  (C) by striking ``Cellulosic'' in the heading 
                of such subsection and inserting ``Second 
                Generation'', and
                  (D) by striking ``cellulosic'' in the heading 
                of paragraph (2) and inserting ``second 
                generation''.
  (h) Effective Date.--
          (1) In general.--Except as provided in paragraph (2), 
        the amendments made by this section shall apply to 
        fuels sold or used after the date of the enactment of 
        this Act.
          (2) Application to bonus depreciation.--The 
        amendments made by subsection (g) shall apply to 
        property placed in service after the date of the 
        enactment of this Act.
          (3) Temporary rule for determining credit amount 
        based on btu content of fuel.--With respect to any fuel 
        sold or used after the date of the enactment of this 
        Act and before the date on which the Secretary 
        prescribes the table described in clause (ii) of 
        section 40(b)(6)(B) of the Internal Revenue Code of 
        1986 (as amended by this Act), clause (i) of such 
        section shall be applied by treating all second 
        generation biofuel as though it were ethanol.
  Page 381, beginning on line 17, strike ``proposed rule'' and 
all that follows through ``(74 Federal Register 22214 et 
seq.)'' and insert ``final rule for Medicare skilled nursing 
facilities issued by such Secretary on August 11, 2009 (74 
Federal Register 40287 et seq.)''.
  Page 382, line 11, strike ``January 1, 2010'' and insert 
``April 1, 2010''.
  Page 493, line 1, insert ``a hospital described in 
subparagraph (F) or'' after ``only to''.
  Page 494, after line 8, insert the following subparagraph 
(and redesignate subparagraphs (F) through (H) as subparagraphs 
(G) through (I), respectively):
                  ``(F) Special rule for a high medicaid 
                facility.--A hospital described in this 
                subparagraph is a hospital that--
                          ``(i) with respect to each of the 3 
                        most recent cost reporting periods for 
                        which data are available, has an annual 
                        percent of total inpatient admissions 
                        that represent inpatient admissions 
                        under the program under title XIX that 
                        is determined by the Secretary to be 
                        greater than such percent with respect 
                        to such admissions for any other 
                        hospital located in the county in which 
                        the hospital is located; and
                          ``(ii) meets the conditions described 
                        in clauses (iii) and (vi) of 
                        subparagraph (E).
  Page 828, after and below line 3, insert the following: 
``Under such an agreement a State may agree to cover and 
reimburse each long-term care facility or provider for all 
costs attributable to conducting background checks and 
screening described in this subsection that were not otherwise 
required to be conducted by such long-term care facility or 
provider before the enactment of this subsection, except that 
Federal funding with respect to such reimbursement shall be 
limited to the amount made available to the State from funds 
under subsection (b)(1).''.
  Page 828, after and below line 15, insert the following: 
``Under such an agreement a State may agree to cover and 
reimburse each long-term care facility or provider for all 
costs attributable to conducting background checks and 
screening described in this subsection that were not otherwise 
required to be conducted by such long-term care facility or 
provider before the enactment of this subsection, except that 
Federal funding with respect to such reimbursement shall be 
limited to the amount made available to the State from funds 
under subsection (b)(1).''.
  Page 888, line 14, insert a period after the closing 
quotation marks.
  Page 888, after line 14, insert the following (and conform 
the table of contents of division B accordingly):

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

  (a) Quality Indicators.--The Secretary of Health and Human 
Services shall develop 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 appropriate providers of 
services and suppliers.
  (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, Labor, and Pensions of the 
United States Senate not later than 24 months after the date of 
the enactment of this Act setting forth the status of their 
efforts to implement the requirements of subsection (a).
  Page 970, after line 6, insert the following paragraph (and 
redesignate paragraph (5) as paragraph (6)):
          ``(5) 90-day period of enhanced oversight for initial 
        claims of dme suppliers.--For periods beginning after 
        January 1, 2011, if the Secretary determines under 
        paragraph (1) that there is a significant risk of 
        fraudulent activity among suppliers of durable medical 
        equipment, in the case of a supplier of durable medical 
        equipment who is within a category or geographic area 
        under title XVIII identified pursuant to such 
        determination and who is initially enrolling under such 
        title, the Secretary shall, notwithstanding section 
        1842(c)(2), withhold payment under such title with 
        respect to durable medical equipment furnished by such 
        supplier during the 90-day period beginning on the date 
        of the first submission of a claim under such title for 
        durable medical equipment furnished by such 
        supplier.''.
  Page 1010, after line 14, add the following new section:

SEC. 1654. DISCLOSURE OF MEDICARE FRAUD AND ABUSE HOTLINE NUMBER ON 
                    EXPLANATION OF BENEFITS.

  (a) In General.--Section 1804 of the Social Security Act (42 
U.S.C. 1395b-2) is amended by adding at the end the following 
new subsection:
  ``(d) Any statement or notice containing an explanation of 
the benefits available under this title, including the notice 
required by subsection (a), distributed for periods after July 
1, 2011, shall prominently display in a manner prescribed by 
the Secretary a separate toll-free telephone number maintained 
by the Secretary for the receipt of complaints and information 
about waste, fraud, and abuse in the provision or billing of 
services under this title.''.
  (b) Conforming Amendments.--Section 1804(c) of the Social 
Security Act (42 U.S.C. 1395b-2(c)) is amended--
          (1) in paragraph (2), by adding ``and'' at the end;
          (2) in paragraph (3), by striking ``; and'' and 
        inserting a period; and
          (3) by striking paragraph (4).
  Page 1010, strike line 16 and all that follows through page 
1012 before line 1 (and conform the table of contents of 
division B accordingly).
  Page 1017, line 6, strike ``subclause'' and insert 
``subclauses''.
  Page 1017, line 24, strike ``over 5, and''.
  Page 1018, line 2, insert ``, (IV) (insofar as it relates to 
subsection (l)(1)(B)), (VI),'' after ``(I)''.
  Page 1048, line 14, strike ``section'' before ``subsection''.
  Page 1082, line 25, insert after ``Palau'' the following: 
``and shall not apply, at the option of the Governor of Puerto 
Rico, the Virgin Islands, Guam, the Northern Mariana Islands, 
or American Samoa as communicated to the Secretary of Health 
and Human Services in writing, to any individual who lawfully 
resides in the respective territory in accordance with such 
Compacts''.
  Page 1092, after line 4, insert the following (and conform 
the table of contents of division B accordingly):

SEC. 1739A. SENSE OF CONGRESS REGARDING COMMUNITY FIRST CHOICE OPTION 
                    TO PROVIDE MEDICAID COVERAGE OF COMMUNITY-BASED 
                    ATTENDANT SERVICES AND SUPPORTS.

  It is the sense of Congress that States should be allowed to 
elect under their Medicaid State plans under title XIX of the 
Social Security Act to implement a Community First Choice 
Option under which--
          (1) coverage of community-based attendant services 
        and supports furnished in homes and communities is 
        available, at an individual's option, to individuals 
        who would otherwise qualify for Medicaid institutional 
        coverage under the respective State plan;
          (2) such supports and services include assistance to 
        individuals with disabilities in accomplishing 
        activities of daily living, instrumental activities of 
        daily living, and health-related tasks;
          (3) the Federal matching assistance percentage (FMAP) 
        under such title for medical assistance for such 
        supports and services is enhanced;
          (4) States, consistent with minimum federal 
        standards, ensure quality of such supports and 
        services; and
          (5) States collect and provide data to the Secretary 
        of Health and Human Services on the cost and 
        effectiveness and quality of supports and services 
        provided through such option.
  Page 1107, line 12, strike ``may payments'' and insert ``make 
payments''.
  Page 1215, line 18, through page 1216, line 18, amend 
subparagraph (A) to read as follows:
                  (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) 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.
  Page 1216, line 21, strike ``the amounts appropriated'' and 
insert ``the amounts appropriated (excluding any amounts in or 
appropriated from the Fund)''.
  Page 1218, lines 4 and 5, strike ``appropriated'' and insert 
``made available''.
  Page 1286, line 19, through page 1287, line 8, strike 
subsection (a) and insert the following:
  ``(a) Deposits Into Trust.--There is established a Prevention 
and Wellness Trust. There are authorized to be appropriated to 
the Trust, out of any monies in the Public Health Investment 
Fund--
          ``(1) for fiscal year 2011, $2,400,000,000;
          ``(2) for fiscal year 2012, $2,845,000,000;
          ``(3) for fiscal year 2013, $3,100,000,000;
          ``(4) for fiscal year 2014, $3,455,000,000; and
          ``(5) for fiscal year 2015, $3,600,000,000.
  Page 1287, line 14, strike ``subsection (a)(2)'' and insert 
``subsection (a)''.
  Page 1432, after line 15, insert the following:
          (5) No limitation on other state laws.--Nothing in 
        this section shall be construed to--
                  (A) preempt or modify the application of any 
                existing State law that limits attorneys' fees 
                or imposes caps on damages;
                  (B) impair the authority of a State to 
                establish or implement a law limiting 
                attorneys' fees or imposing caps on damages; or
                  (C) restrict the eligibility of a State for 
                an incentive payment under this section on the 
                basis of a law described in subparagraph (A) or 
                (B) so long as any such law is not established 
                or implemented as part of the law described in 
                paragraph (4), as determined by the Secretary.
  Page 1467, after line 6, insert the following (and conform 
the table of contents for division C accordingly):

SEC. 2538. SCREENING, BRIEF INTERVENTION, REFERRAL, AND TREATMENT FOR 
                    MENTAL HEALTH AND SUBSTANCE ABUSE DISORDERS.

  Part D of title V (42 U.S.C. 290dd et seq.) is amended by 
adding at the end the following:

``SEC. 544. SCREENING, BRIEF INTERVENTION, REFERRAL, AND TREATMENT FOR 
                    MENTAL HEALTH AND SUBSTANCE ABUSE DISORDERS.

  ``(a) Program.--The Secretary, acting through the 
Administrator, shall establish a program (consisting of 
awarding grants, contracts, and cooperative agreements under 
subsection (b)) on mental health and substance abuse screening, 
brief intervention, referral, and recovery services for 
individuals in primary health care settings.
  ``(b) Use of Funds.--The Secretary may award grants to, or 
enter into contracts or cooperative agreements with, entities--
          ``(1) to provide mental health and substance abuse 
        screening, brief interventions, referral, and recovery 
        services;
          ``(2) to coordinate these services with primary 
        health care services in the same program and setting;
          ``(3) to develop a network of facilities to which 
        patients may be referred if needed;
          ``(4) to purchase needed screening and other tools 
        that are--
                  ``(A) necessary for providing these services; 
                and
                  ``(B) supported by evidence-based research; 
                and
          ``(5) to maintain communication with appropriate 
        State mental health and substance abuse agencies.
  ``(c) Eligibility.--To be eligible for a grant, contract, or 
cooperative agreement under this section, an entity shall be a 
public or private nonprofit entity that--
          ``(1) provides primary health services;
          ``(2) seeks to integrate mental health and substance 
        abuse services into its service system;
          ``(3) has developed a working relationship with 
        providers of mental health and substance abuse 
        services;
          ``(4) demonstrates a need for the inclusion of mental 
        health and substance abuse services in its service 
        system; and
          ``(5) agrees--
                  ``(A) to prepare and submit to the Secretary 
                at the end of the grant, contract, or 
                cooperative agreement period an evaluation of 
                all activities funded through the grant, 
                contract, or cooperative agreement; and
                  ``(B) to use such performance measures as may 
                be stipulated by the Secretary for purposes of 
                such evaluation.
  ``(d) Preference.--In awarding grants, contracts, and 
cooperative agreements under this section, the Secretary shall 
give preference to entities that--
          ``(1) provide services in rural or frontier areas of 
        the Nation;
          ``(2) provide services to special needs populations, 
        including American Indian or Alaska Native populations; 
        or
          ``(3) provide services in school-based health clinics 
        or on university and college campuses.
  ``(e) Duration.--The period of a grant, contract, or 
cooperative agreement under this section may not exceed 5 
years.
  ``(f) Report.--Not later than 4 years after the first 
appropriation of funds to carry out this section, the Secretary 
shall submit a report to the Congress on the program under this 
section--
          ``(1) including an evaluation of the benefits of 
        integrating mental health and substance abuse care 
        within primary health care; and
          ``(2) focusing on the performance measures stipulated 
        by the Secretary under subsection (c)(5).
  ``(g) Authorization of Appropriations.--
          ``(1) In general.--To carry out this section, there 
        are authorized to be appropriated $30,000,000 for 
        fiscal year 2011 and such sums as may be necessary for 
        each of fiscal years 2012 through 2015.
          ``(2) Program management.--Of the funds appropriated 
        to carry out this section for a fiscal year, the 
        Secretary may use not more than 5 percent to manage the 
        program under this section.''.
  Page 1612, line 22, strike the close quotation marks and 
second period at the end of subsection (d) and insert the 
following:
  ``(e) References.--Except as otherwise specified, any 
reference in Federal law to an Office on Women's Health (in the 
Department of Health and Human Services) is deemed to be a 
reference to the Office on Women's Health in the Office of the 
Secretary.''.
  Page 1623, after line 10, insert the following (and conform 
the table of contents for division C accordingly):

SEC. 2588A. OFFICES OF MINORITY HEALTH.

  (a) Existing Office.--Section 1707(a) (42 U.S.C. 300u-6(a)) 
is amended by striking ``within the Office of Public Health and 
Science'' and inserting ``within the Office of the Secretary''.
  (b) Additional Offices.--Title XVII (42 U.S.C. 300u et seq.) 
is amended by inserting after section 1707 the following:

``SEC. 1707A. ADDITIONAL OFFICES OF MINORITY HEALTH.

  ``(a) Establishment.--In addition to the Office of Minority 
Health established within the Office of the Secretary under 
section 1707, the Secretary shall establish an Office of 
Minority Health in each of the following agencies:
          ``(1) The Centers for Disease Control and Prevention.
          ``(2) The Substance Abuse and Mental Health Services 
        Administration.
          ``(3) The Agency for Healthcare Research and Quality.
          ``(4) The Health Resources and Services 
        Administration.
          ``(5) The Food and Drug Administration.
  ``(b) Director; Appointment.--Each Office of Minority Health 
established in an agency listed in subsection (a) shall be 
headed by a director, who shall be appointed by and report 
directly to the head of such agency.
  ``(c) References.--Except as otherwise specified, any 
reference in Federal law to an Office of Minority Health (in 
the Department of Health and Human Services) is deemed to be a 
reference to the Office of Minority Health in the Office of the 
Secretary.''.
  (c) 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.
  (d) Limitation on Termination.--Notwithstanding any other 
provision of law, a Federal office of minority health or 
Federal appointive position with primary responsibility over 
minority health issues that is in existence in an office or 
agency of the Department of Health and Human Services on the 
date of enactment of this section shall not be terminated, 
reorganized, or have any of its powers or duties transferred 
unless such termination, reorganization, or transfer is 
approved by an Act of Congress.
  Page 1635, after line 19, insert the following (and conform 
the table of contents for division C accordingly):

SEC. 2593. 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 new division C grant program is 
duplicative of one or more other grant programs of the 
Department of Health and Human Services that--
          (1) are specifically authorized in the Public Health 
        Service Act (42 U.S.C. 201 et seq.); or
          (2) are receiving appropriations.
  (b) Duplicative Programs.--If the Secretary determines under 
subsection (a) that a new division C grant program is 
duplicative of one or more other grant programs described in 
such subsection, the Secretary shall--
          (1) attempt to integrate the new division C grant 
        program with the duplicative programs; and
          (2) if the Secretary determines that such integration 
        is not appropriate or has not been successful, 
        promulgate a rule eliminating the duplication, 
        including, if appropriate, by terminating one or more 
        programs.
  (c) Continued Availability of Funds.--Any funds appropriated 
to carry out a program that is terminated under subsection 
(b)(2) shall remain available for obligation for the one or 
more programs that--
          (1) were determined under subsection (a) to be 
        duplicative of such program; and
          (2) remain in effect.
  (d) Report.--Not later than 1 year after the date of the 
enactment of this Act, the Secretary shall submit to the 
Congress and make available to the public a report that 
contains the results of the study required under subsection 
(a).
  (e) Congressional Review.--Any rule under subsection (b)(2) 
terminating a program is deemed to be a major rule for purposes 
of chapter 8 of title 5, United States Code.
  (f) Definition.--In this section, the term ``new division C 
grant program''--
          (1) means a grant program first established by this 
        division; and
          (2) excludes any program whose statutory 
        authorization was in existence before the enactment of 
        this division.

SEC. 2594. DIABETES SCREENING COLLABORATION AND OUTREACH PROGRAM.

  (a) Establishment.--With respect to diabetes screening tests 
and for the purposes of reducing the number of undiagnosed 
seniors with diabetes or prediabetes, the Secretary of Health 
and Human Services (referred to in this section as the 
``Secretary''), in collaboration with the Director of the 
Centers for Disease Control and Prevention (referred to in this 
section as the ``Director''), shall--
          (1) review uptake and utilization of diabetes 
        screening benefits, consistent with recommendations of 
        the Task Force on Clinical Preventive Services 
        (established under section 3131 of the Public Health 
        Service Act, as added by section 2301 of this Act), to 
        identify and address any existing problems with regard 
        to uptake and utilization and related data collection 
        mechanisms; and
          (2) establish an outreach program to identify 
        existing efforts by agencies of the Department of 
        Health and Human Services and by the private and 
        nonprofit sectors to increase awareness among seniors 
        and providers of diabetes screening benefits.
  (b) Consultation.--The Secretary shall carry out this section 
in consultation with--
          (1) the heads of appropriate health agencies and 
        offices in the Department of Health and Human Services, 
        including the Office of Minority Health; and
          (2) entities with an interest in diabetes, including 
        industry, voluntary health organizations, trade 
        associations, and professional societies.
  (c) Report.--The Secretary shall submit an annual report to 
the Congress on the activities carried out under this section.

SEC. 2595. IMPROVEMENT OF VITAL STATISTICS COLLECTION.

  (a) In General.--The Secretary of Health and Human Services 
(in this section referred to as the ``Secretary''), acting 
through the Director of the Centers for Disease Control and 
Prevention and in collaboration with appropriate agencies and 
States, shall--
          (1) promote the education and training of physicians 
        on the importance of birth and death certificate data 
        and how to properly complete these documents in 
        accordance with State law, including the collection of 
        such data for diabetes and other chronic diseases as 
        appropriate;
          (2) encourage State adoption of the latest standard 
        revisions of birth and death certificates; and
          (3) work with States to re-engineer their vital 
        statistics systems in order to provide cost-effective, 
        timely, and accurate vital systems data.
  (b) Death Certificate Additional Language.--In carrying out 
this section, the Secretary may promote improvements to the 
collection of diabetes mortality data, including, as 
appropriate, the addition by States of a question for the 
individual certifying the cause of death regarding whether the 
deceased had diabetes.
  Page 1636, strike the heading for division D following line 
2.
  Page 1636, line 5, insert ``act'' after 
``improvement'' (and conform the table of contents 
of division D accordingly).
  Page 1760, lines 14 through 16, strike ``the California Rural 
Indian Health Board (hereafter in this section referred to as 
the `CRIHB')'' and insert ``an intertribal consortium''.
  Page 1760, line 20 and 21, strike ``the CRIHB'' each place it 
appears and insert ``the intertribal consortium''.
  Page 1761, lines 4, 6, 16, 18, and 21, strike ``the CRIHB'' 
each place it appears and insert ``the intertribal 
consortium''.
  Page 1950, strike line 16 and all that follows though page 
1951, line 3 (and redesignate succeeding sections, and any 
cross-references thereto, accordingly).
  Page 1965, strike lines 16 through 24 (and conform the table 
of contents of division D accordingly).
  Page 1966, line 1, strike ``3103'' and insert ``3102'' (and 
conform the table of contents of division D accordingly).
  Page 1977, line 1, strike ``3104'' and insert ``3103'' (and 
conform the table of contents of division D accordingly).
                              ----------                              


      PART B--TEXT OF THE MODIFICATION TO THE AMENDMENT IN PART A

  On page 14 of the Amendment offered by Mr. Dingell of 
Michigan, strike section 555, as proposed to be added by the 
Amendment, and insert the following:

SEC. 555. EXCLUSION OF UNPROCESSED FUELS FROM THE CELLULOSIC BIOFUEL 
                    PRODUCER CREDIT.

  (a) In General.--Subparagraph (E) of section 40(b)(6) of the 
Internal Revenue Code of 1986 is amended by adding at the end 
the following new clause:
                          ``(iii) Exclusion of unprocessed 
                        fuels.--The term `cellulosic biofuel' 
                        shall not include any fuel if--
                                  ``(I) more than 4 percent of 
                                such fuel (determined by 
                                weight) is any combination of 
                                water and sediment, or
                                  ``(II) the ash content of 
                                such fuel is more than 1 
                                percent (determined by 
                                weight).''.
  (b) Effective Date.--The amendment made by this section shall 
apply to fuels sold or used after the date of the enactment of 
this Act.
  On page 34 of the Amendment offered by Mr. Dingell of 
Michigan, after line 21, insert the following:

SEC. 2539. GRANTS TO ASSIST IN DEVELOPING MEDICAL SCHOOLS IN FEDERALLY-
                    DESIGNATED HEALTH PROFESSIONAL SHORTAGE AREAS.

  (a) Grants Authorized.--The Secretary of Health and Human 
Services may make grants to nonprofit organizations or 
institutions of higher education for the purpose of assisting 
the organization or institution involved to develop a medical 
school if--
          (1) the medical school will be located in an area 
        that is designated (under section 332 of the Public 
        Health Service Act (42 U.S.C. 254e)) as a health 
        professional shortage area;
          (2) the organization or institution provides 
        assurances satisfactory to the Secretary of substantial 
        private or public funding from non-Federal sources for 
        the development of the medical school; and
          (3) the organization or institution provides 
        assurances satisfactory to the Secretary that 
        accreditation will be achieved for the medical school.
  (b) Use of Grant Funds.--Grants awarded under this section 
may be used for the acquisition and building of the medical 
school campus in a health professional shortage area and the 
purchase of equipment, curriculum and faculty development, and 
general operations related to the development and establishment 
of the medical school.
  (c) Authorization of Appropriations.--For the purpose of 
carrying out this section, there is authorized to be 
appropriated $100,000,000 for each of fiscal years 2011 through 
2015.
  On page 34 of the Amendment offered by Mr. Dingell of 
Michigan, before the amendment to page 1612, line 22, insert 
the following:
  Page 1523, strike lines 5 through 17 and insert the 
following:
                          ``(i) In general.--A violation of 
                        subparagraph (A) shall be subject to 
                        enforcement by the Federal Trade 
                        Commission in the same manner, by the 
                        same means, and with the same 
                        jurisdiction as would an unfair and 
                        deceptive act or practice in or 
                        affecting interstate commerce or an 
                        unfair method of competition in or 
                        affecting interstate commerce 
                        prohibited under section 5 of the 
                        Federal Trade Commission Act, as though 
                        all applicable terms and provisions of 
                        the Federal Trade Commission Act were 
                        incorporated into and made a part of 
                        this subsection.
  Page 1525, lines 10 and 11, strike ``in furtherance of market 
competition and''.
  On page 41 of the Amendment offered by Mr. Dingell of 
Michigan, after line 12, insert the following section:

SEC. 2596. NATIONAL HEALTH SERVICES CORPS DEMONSTRATION ON INCENTIVE 
                    PAYMENTS.

  (a) In General.--The Secretary of Health and Human Services 
may establish a demonstration program under which, in addition 
to the salary and benefits otherwise owed to a member of the 
National Health Services Corps, incentive payments are awarded 
to any such member who is assigned to a health professional 
shortage area with extreme need.
  (b) Report.--The Secretary shall submit to the Congress an 
annual report on the demonstration program under subsection 
(a).
  (c) Definitions.--In this section:
          (1) The term ``health professional shortage area with 
        extreme need'' means a health professional shortage 
        area that--
                  (A) is described in section 333A(a)(1)(A) of 
                the Public Health Service Act (42 U.S.C. 254f-
                1(a)(1)(A));
                  (B) is described in section 
                333(a)(1)(D)(ii)(IV) of such Act (42 U.S.C. 
                254f(a)(1)(D)(ii)(IV)); and
                  (C) has high rates of untreated disease, 
                including chronic conditions.
          (3) The term ``Secretary'' means the Secretary of 
        Health and Human Services.
  (d) 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 2011 through 2015.
                              ----------                              


    PART C--TEXT OF THE AMENDMENT BY REP. STUPAK TO BE MADE IN ORDER

  Page 97, strike line 13 and all that follows through page 98, 
line 7.
  Page 110, strike lines 1 through 7.
  Page 114, line 21, strike ``consistent with subsection (e) of 
such section''.
  Page 118, line 21, strike ``(including subsection (e))''.
  Page 154, after line 18, insert the following new section 
(and conform the table of contents of division A accordingly):

SEC. 265. LIMITATION ON ABORTION FUNDING.

  (a) In General.--No funds authorized or appropriated by this 
Act (or an amendment made by this Act) may be used to pay for 
any abortion or to cover any part of the costs of any health 
plan that includes coverage of abortion, except in the case 
where a woman suffers from a physical disorder, physical 
injury, or physical illness that would, as certified by a 
physician, place the woman in danger of death unless an 
abortion is performed, including a life-endangering physical 
condition caused by or arising from the pregnancy itself, or 
unless the pregnancy is the result of an act of rape or incest.
  (b) Option to Purchase Separate Supplemental Coverage or 
Plan.--Nothing in this section shall be construed as 
prohibiting any nonfederal entity (including an individual or a 
State or local government) from purchasing separate 
supplemental coverage for abortions for which funding is 
prohibited under this section, or a plan that includes such 
abortions, so long as--
          (1) such coverage or plan is paid for entirely using 
        only funds not authorized or appropriated by this Act; 
        and
          (2) such coverage or plan is not purchased using--
                  (A) individual premium payments required for 
                a Exchange-participating health benefits plan 
                towards which an affordability credit is 
                applied; or
                  (B) other nonfederal funds required to 
                receive a federal payment, including a State's 
                or locality's contribution of Medicaid matching 
                funds.
  (c) Option to Offer Separate Supplemental Coverage or Plan.--
Notwithstanding section 303(b), nothing in this section shall 
restrict any nonfederal QHBP offering entity from offering 
separate supplemental coverage for abortions for which funding 
is prohibited under this section, or a plan that includes such 
abortions, so long as--
          (1) premiums for such separate supplemental coverage 
        or plan are paid for entirely with funds not authorized 
        or appropriated by this Act;
          (2) administrative costs and all services offered 
        through such supplemental coverage or plan are paid for 
        using only premiums collected for such coverage or 
        plan; and
          (3) any nonfederal QHBP offering entity that offers 
        an Exchange-participating health benefits plan that 
        includes coverage for abortions for which funding is 
        prohibited under this section also offers an Exchange-
        participating health benefits plan that is identical in 
        every respect except that it does not cover abortions 
        for which funding is prohibited under this section.
  Page 171, strike line 5 and all that follows through page 
172, line 8.
  Page 182, line 22, strike ``willingness or''.
  Page 246, strike lines 11 through 14.
                              ----------                              


  PART D--TEXT OF THE AMENDMENT IN THE NATURE OF A SUBSTITUTE BY REP. 
                      BOEHNER TO BE MADE IN ORDER

  Strike all after the enacting clause and insert the 
following:

SECTION 1. SHORT TITLE; PURPOSE; TABLE OF CONTENTS.

  (a) Short Title.--This Act may be cited as the ``Common Sense 
Health Care Reform and Affordability Act''.
  (b) Purpose.--The purpose of this Act is to take meaningful 
steps to lower health care costs and increase access to health 
insurance coverage (especially for individuals with preexisting 
conditions) without--
          (1) raising taxes;
          (2) cutting Medicare benefits for seniors;
          (3) adding to the national deficit;
          (4) intervening in the doctor-patient relationship; 
        or
          (5) instituting a government takeover of health care.
  (c) Table of Contents.--The table of contents of this Act is 
as follows:
Sec. 1. Short title; purpose; table of contents.

  DIVISION A--MAKING HEALTH CARE COVERAGE AFFORDABLE FOR EVERY AMERICAN

 TITLE I--ENSURING COVERAGE FOR INDIVIDUALS WITH PREEXISTING CONDITIONS 
                     AND MULTIPLE HEALTH CARE NEEDS

Sec. 101. Establish universal access programs to improve high risk pools 
          and reinsurance markets.
Sec. 102. Elimination of certain requirements for guaranteed 
          availability in individual market.
Sec. 103. No annual or lifetime spending caps.
Sec. 104. Preventing unjust cancellation of insurance coverage.

  TITLE II--REDUCING HEALTH CARE PREMIUMS AND THE NUMBER OF UNINSURED 
                                AMERICANS

Sec. 111. State innovation programs.
Sec. 112. Health plan finders.
Sec. 113. Administrative simplification.

               DIVISION B--IMPROVING ACCESS TO HEALTH CARE

    TITLE I--EXPANDING ACCESS AND LOWERING COSTS FOR SMALL BUSINESSES

Sec. 201. Rules governing association health plans.
Sec. 202. Clarification of treatment of single employer arrangements.
Sec. 203. Enforcement provisions relating to association health plans.
Sec. 204. Cooperation between Federal and State authorities.
Sec. 205. Effective date and transitional and other rules.

               TITLE II--TARGETED EFFORTS TO EXPAND ACCESS

Sec. 211. Extending coverage of dependents.
Sec. 212. Allowing auto-enrollment for employer sponsored coverage.

 TITLE III--EXPANDING CHOICES BY ALLOWING AMERICANS TO BUY HEALTH CARE 
                       COVERAGE ACROSS STATE LINES

Sec. 221. Interstate purchasing of Health Insurance.

               TITLE IV--IMPROVING HEALTH SAVINGS ACCOUNTS

Sec. 231. Saver's credit for contributions to health savings accounts.
Sec. 232. HSA funds for premiums for high deductible health plans.
Sec. 233. Requiring greater coordination between HDHP administrators and 
          HSA account administrators so that enrollees can enroll in 
          both at the same time.
Sec. 234. Special rule for certain medical expenses incurred before 
          establishment of account.

           DIVISION C--ENACTING REAL MEDICAL LIABILITY REFORM

Sec. 301. Encouraging speedy resolution of claims.
Sec. 302. Compensating patient injury.
Sec. 303. Maximizing patient recovery.
Sec. 304. Additional health benefits.
Sec. 305. Punitive damages.
Sec. 306. Authorization of payment of future damages to claimants in 
          health care lawsuits.
Sec. 307. Definitions.
Sec. 308. Effect on other laws.
Sec. 309. State flexibility and protection of states' rights.
Sec. 310. Applicability; effective date.

         DIVISION D--PROTECTING THE DOCTOR-PATIENT RELATIONSHIP

Sec. 401. Rule of construction.
Sec. 402. Repeal of Federal Coordinating Council for Comparative 
          Effectiveness Research.

       DIVISION E--INCENTIVIZING WELLNESS AND QUALITY IMPROVEMENTS

Sec. 501. Incentives for prevention and wellness programs.

                    DIVISION F--PROTECTING TAXPAYERS

Sec. 601. Provide full funding to HHS OIG and HCFAC.
Sec. 602. Prohibiting taxpayer funded abortions and conscience 
          protections.
Sec. 603. Improved enforcement of the Medicare and Medicaid secondary 
          payer provisions.
Sec. 604. Strengthen Medicare provider enrollment standards and 
          safeguards.
Sec. 605. Tracking banned providers across State lines.

         DIVISION G--PATHWAY FOR BIOSIMILAR BIOLOGICAL PRODUCTS

Sec. 701. Licensure pathway for biosimilar biological products.
Sec. 702. Fees relating to biosimilar biological products.
Sec. 703. Amendments to certain patent provisions.

 DIVISION A--MAKING HEALTH CARE COVERAGE AFFORDABLE FOR EVERY AMERICAN

TITLE I--ENSURING COVERAGE FOR INDIVIDUALS WITH PREEXISTING CONDITIONS 
                     AND MULTIPLE HEALTH CARE NEEDS

SEC. 101. ESTABLISH UNIVERSAL ACCESS PROGRAMS TO IMPROVE HIGH RISK 
                    POOLS AND REINSURANCE MARKETS.

  (a) State Requirement.--
          (1) In general.--Not later than January 1, 2010, each 
        State shall--
                  (A) subject to paragraph (3), operate--
                          (i) a qualified State reinsurance 
                        program described in subsection (b); or
                          (ii) qualifying State high risk pool 
                        described in subsection (c)(1); and
                  (B) subject to paragraph (3), apply to the 
                operation of such a program from State funds an 
                amount equivalent to the portion of State funds 
                derived from State premium assessments (as 
                defined by the Secretary) that are not 
                otherwise used on State health care programs.
          (2) Relation to current qualified high risk pool 
        program.--
                  (A) States not operating a qualified high 
                risk pool.--In the case of a State that is not 
                operating a current section 2745 qualified high 
                risk pool as of the date of the enactment of 
                this Act--
                          (i) the State may only meet the 
                        requirement of paragraph (1) through 
                        the operation of a qualified State 
                        reinsurance program described in 
                        subsection (b); and
                          (ii) the State's operation of such a 
                        reinsurance program shall be treated, 
                        for purposes of section 2745 of the 
                        Public Health Service Act, as the 
                        operation of a qualified high risk pool 
                        described in such section.
                  (B) State operating a qualified high risk 
                pool.--In the case of a State that is operating 
                a current section 2745 qualified high risk pool 
                as of the date of the enactment of this Act--
                          (i) as of January 1, 2010, such a 
                        pool shall not be treated as a 
                        qualified high risk pool under section 
                        2745 of the Public Health Service Act 
                        unless the pool is a qualifying State 
                        high risk pool described in subsection 
                        (c)(1); and
                          (ii) the State may use premium 
                        assessment funds described in paragraph 
                        (1)(B) to transition from operation of 
                        such a pool to operation of a qualified 
                        State reinsurance program described in 
                        subsection (b).
          (3) Application of funds.--If the program or pool 
        operated under paragraph (1)(A) is in strong fiscal 
        health, as determined in accordance with standards 
        established by the National Association of Insurance 
        Commissioners and as approved by the State Insurance 
        Commissioner involved, the requirement of paragraph 
        (1)(B) shall be deemed to be met.
  (b) Qualified State Reinsurance Program.--
          (1) In general.--For purposes of this section, a 
        ``qualified State reinsurance program'' means a program 
        operated by a State program that provides reinsurance 
        for health insurance coverage offered in the small 
        group market in accordance with the model for such a 
        program established (as of the date of the enactment of 
        this Act).
          (2) Form of program.--A qualified State reinsurance 
        program may provide reinsurance--
                  (A) on a prospective or retrospective basis; 
                and
                  (B) on a basis that protects health insurance 
                issuers against the annual aggregate spending 
                of their enrollees as well as purchase 
                protection against individual catastrophic 
                costs.
          (3) Satisfaction of hipaa requirement.--A qualified 
        State reinsurance program shall be deemed, for purposes 
        of section 2745 of the Public Health Service Act, to be 
        a qualified high-risk pool under such section.
  (c) Qualifying State High Risk Pool.--
          (1) In general.--A qualifying State high risk pool 
        described in this subsection means a current section 
        2745 qualified high risk pool that meets the following 
        requirements:
                  (A) The pool must provide at least two 
                coverage options, one of which must be a high 
                deductible health plan coupled with a health 
                savings account.
                  (B) The pool must be funded with a stable 
                funding source.
                  (C) The pool must eliminate any waiting lists 
                so that all eligible residents who are seeking 
                coverage through the pool should be allowed to 
                receive coverage through the pool.
                  (D) The pool must allow for coverage of 
                individuals who, but for the 24-month 
                disability waiting period under section 226(b) 
                of the Social Security Act, would be eligible 
                for Medicare during the period of such waiting 
                period.
                  (E) The pool must limit the pool premiums to 
                no more than 150 percent of the average premium 
                for applicable standard risk rates in that 
                State.
                  (F) The pool must conduct education and 
                outreach initiatives so that residents and 
                brokers understand that the pool is available 
                to eligible residents.
                  (G) The pool must provide coverage for 
                preventive services and disease management for 
                chronic diseases.
          (2) Verification of citizenship or alien 
        qualification.--
                  (A) In general.--Notwithstanding any other 
                provision of law, only citizens and nationals 
                of the United States shall be eligible to 
                participate in a qualifying State high risk 
                pool that receives funds under section 2745 of 
                the Public Health Service Act or this section.
                  (B) Condition of participation.--As a 
                condition of a State receiving such funds, the 
                Secretary shall require the State to certify, 
                to the satisfaction of the Secretary, that such 
                State requires all applicants for coverage in 
                the qualifying State high risk pool to provide 
                satisfactory documentation of citizenship or 
                nationality in a manner consistent with section 
                1903(x) of the Social Security Act.
                  (C) Records.--The Secretary shall keep 
                sufficient records such that a determination of 
                citizenship or nationality only has to be made 
                once for any individual under this paragraph.
          (3) Relation to section 2745.--As of January 1, 2010, 
        a pool shall not qualify as qualified high risk pool 
        under section 2745 of the Public Health Service Act 
        unless the pool is a qualifying State high risk pool 
        described in paragraph (1).
  (d) Waivers.--In order to accommodate new and innovative 
programs, the Secretary may waive such requirements of this 
section for qualified State reinsurance programs and for 
qualifying State high risk pools as the Secretary deems 
appropriate.
  (e) Funding.--In addition to any other amounts appropriated, 
there is appropriated to carry out section 2745 of the Public 
Health Service Act (including through a program or pool 
described in subsection (a)(1))--
          (1) $15,000,000,000 for the period of fiscal years 
        2010 through 2019; and
          (2) an additional $10,000,000,000 for the period of 
        fiscal years 2015 through 2019.
  (f) Definitions.--In this section:
          (1) 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.
          (2) Current section 2745 qualified high risk pool.--
        The term ``current section 2745 qualified high risk 
        pool'' has the meaning given the term ``qualified high 
        risk pool'' under section 2745(g) of the Public Health 
        Service Act as in effect as of the date of the 
        enactment of this Act.
          (3) Secretary.--The term ``Secretary'' means 
        Secretary of Health and Human Services.
          (4) Standard risk rate.--The term ``standard risk 
        rate'' means a rate that--
                  (A) is determined under the State high risk 
                pool by considering the premium rates charged 
                by other health insurance issuers offering 
                health insurance coverage to individuals in the 
                insurance market served;
                  (B) is established using reasonable actuarial 
                techniques; and
                  (C) reflects anticipated claims experience 
                and expenses for the coverage involved.
          (5) State.--The term ``State'' means any of the 50 
        States or the District of Columbia.

SEC. 102. ELIMINATION OF CERTAIN REQUIREMENTS FOR GUARANTEED 
                    AVAILABILITY IN INDIVIDUAL MARKET.

  (a) In General.--Section 2741(b) of the Public Health Service 
Act (42 U.S.C. 300gg-41(b)) is amended----
          (1) in paragraph (1)--
                  (A) by striking ``(1)(A)'' and inserting 
                ``(1)''; and
                  (B) by striking ``and (B)'' and all that 
                follows up to the semicolon at the end;
          (2) by adding ``and'' at the end of paragraph (2);
          (3) in paragraph (3)--
                  (A) by striking ``(1)(A)'' and inserting 
                ``(1)''; and
                  (B) by striking the semicolon at the end and 
                inserting a period; and
          (4) by striking paragraphs (4) and (5).
  (b) Effective Date.--The amendments made by subsection (a) 
shall take effect on the date of the enactment of this Act.

SEC. 103. NO ANNUAL OR LIFETIME SPENDING CAPS.

  Notwithstanding any other provision of law, a health 
insurance issuer (including an entity licensed to sell 
insurance with respect to a State or group health plan) may not 
apply an annual or lifetime aggregate spending cap on any 
health insurance coverage or plan offered by such issuer.

SEC. 104. PREVENTING UNJUST CANCELLATION OF INSURANCE COVERAGE.

  (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 ``, 
        continuation in force, including 
        prohibition of rescission,'' after 
        ``guaranteed renewability'';
          (2) in subsection (a), by inserting ``, including 
        without rescission,'' after ``continue in force''; and
          (3) in subsection (b)(2), by inserting before the 
        period at the end the following: ``, including 
        intentional concealment of material facts regarding a 
        health condition related to the condition for which 
        coverage is being claimed''.
  (b) Opportunity for Independent, External Third Party Review 
in Certain Cases.--Subpart 1 of part B of title XXVII of the 
Public Health Service Act is amended by adding at the end the 
following new section:

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

  ``(a) Notice and Review Right.--If a health insurance issuer 
determines to nonrenew or not continue in force, including 
rescind, health insurance coverage for an individual in the 
individual market on the basis described in section 2742(b)(2) 
before such nonrenewal, discontinuation, or rescission, may 
take effect the issuer shall provide the individual with notice 
of such proposed nonrenewal, discontinuation, or rescission and 
an opportunity for a review of such determination by an 
independent, external third party under procedures specified by 
the Secretary.
  ``(b) Independent Determination.--If the individual requests 
such review by an independent, external third party of a 
nonrenewal, discontinuation, or rescission of health insurance 
coverage, the coverage shall remain in effect until such third 
party determines that the coverage may be nonrenewed, 
discontinued, or rescinded under section 2742(b)(2).''.
  (c) Effective Date.--The amendments made by this section 
shall apply after the date of the enactment of this Act with 
respect to health insurance coverage issued before, on, or 
after such date.

  TITLE II--REDUCING HEALTH CARE PREMIUMS AND THE NUMBER OF UNINSURED 
                               AMERICANS

SEC. 111. STATE INNOVATION PROGRAMS.

  (a) Programs That Reduce the Cost of Health Insurance 
Premiums.--
          (1) Payments to states.--
                  (A) For premium reductions in the small group 
                market.--If the Secretary determines that a 
                State has reduced the average per capita 
                premium for health insurance coverage in the 
                small group market in year 3, in year 6, or 
                year 9 (as defined in subsection (c)) below the 
                premium baseline for such year (as defined 
                paragraph (2)), the Secretary shall pay the 
                State an amount equal to the product of--
                          (i) bonus premium percentage (as 
                        defined in paragraph (3)) for the 
                        State, market, and year; and
                          (ii) the maximum State premium 
                        payment amount (as defined in paragraph 
                        (4)) for the State, market, and year
                  (B) For premium reductions in the individual 
                market.--If the Secretary determines that a 
                State has reduced the average per capita 
                premium for health insurance coverage in the 
                individual market in year 3, in year 6, or in 
                year 9 below the premium baseline for such 
                year, the Secretary shall pay the State an 
                amount equal to the product of--
                          (i) bonus premium percentage for the 
                        State, market, and year; and
                          (ii) the maximum State premium 
                        payment amount for the State, market, 
                        and year.
          (2) Premium baseline.--For purposes of this 
        subsection, the term ``premium baseline'' means, for a 
        market in a State--
                  (A) for year 1, the average per capita 
                premiums for health insurance coverage in such 
                market in the State in such year; or
                  (B) for a subsequent year, the baseline for 
                the market in the State for the previous year 
                under this paragraph increased by a percentage 
                specified in accordance with a formula 
                established by the Secretary, in consultation 
                with the Congressional Budget Office and the 
                Bureau of the Census, that takes into account 
                at least the following:
                          (i) Growth factor.--The inflation in 
                        the costs of inputs to health care 
                        services in the year.
                          (ii) Historic premium growth rates.--
                        Historic growth rates, during the 10 
                        years before year 1, of per capita 
                        premiums for health insurance coverage.
                          (iii) Demographic considerations.--
                        Historic average changes in the 
                        demographics of the population covered 
                        that impact on the rate of growth of 
                        per capita health care costs.
          (3) Bonus premium percentage defined.--
                  (A) In general.--For purposes of this 
                subsection, the term ``bonus premium 
                percentage'' means, for the small group market 
                or individual market in a State for a year, 
                such percentage as determined in accordance 
                with the following table based on the State's 
                premium performance level (as defined in 
                subparagraph (B)) for such market and year:

----------------------------------------------------------------------------------------------------------------
   The bonus
    premium        For year 3 if the premium        For year 6 if the premium        For year 9 if the premium
percentage for   performance level of the State   performance level of the State  performance level of the State
 a State is--                 is--                             is--                            is--
----------------------------------------------------------------------------------------------------------------
  100 percent   at least 8.5%                    at least 11%                     at least 13.5%
----------------------------------------------------------------------------------------------------------------
   50 percent   at least 6.38%, but less than    at least 10.38%, but less than   at least 12.88%, but less than
                 8.5%                             11%                              13.5%
----------------------------------------------------------------------------------------------------------------
   25 percent   at least 4.25%, but less than     at least 9.75%, but less than   at least 12.25%, but less than
                 6.38%                            10.38%                           12.88%
----------------------------------------------------------------------------------------------------------------
    0 percent   less than 4.25%                  less than 9.75%                  less than 12.25%
----------------------------------------------------------------------------------------------------------------

                  (B) Premium performance level.--For purposes 
                of this subsection, the term ``premium 
                performance level'' means, for a State, market, 
                and year, the percentage reduction in the 
                average per capita premiums for health 
                insurance coverage for the State, market, and 
                year, as compared to the premium baseline for 
                such State, market, and year.
          (4) Maximum state premium payment amount defined.--
        For purposes of this subsection, the term ``maximum 
        State premium payment amount'' means, for a State for 
        the small group market or the individual market for a 
        year, the product of--
                  (A) the proportion (as determined by the 
                Secretary), of the number of nonelderly 
                individuals lawfully residing in all the States 
                who are enrolled in health insurance coverage 
                in the respective market in the year, who are 
                residents of the State; and
                  (B) the amount available for obligation from 
                amounts appropriated under subsection (d) for 
                such market with respect to performance in such 
                year.
          (5) Methodology for calculating average per capita 
        premiums.--
                  (A) Establishment.--The Secretary shall 
                establish, by rule and consistent with this 
                subsection, a methodology for computing the 
                average per capita premiums for health 
                insurance coverage for the small group market 
                and for the individual market in each State for 
                each year beginning with year 1.
                  (B) Adjustments.--Under such methodology, the 
                Secretary shall provide for the following 
                adjustments (in a manner determined appropriate 
                by the Secretary):
                          (i) Exclusion of illegal aliens.--An 
                        adjustment so as not to take into 
                        account enrollees who are not lawfully 
                        present in the United States and their 
                        premium costs.
                          (ii) Treating state premium subsidies 
                        as premium costs.--An adjustment so as 
                        to increase per capita premiums to 
                        remove the impact of premium subsidies 
                        made directly by a State to reduce 
                        health insurance premiums.
          (6) Conditions of payment.--As a condition of 
        receiving a payment under paragraph (1), a State must 
        agree to submit aggregate, non-individually 
        identifiable data to the Secretary, in a form and 
        manner specified by the Secretary, for use by the 
        Secretary to determine the State's premium baseline and 
        premium performance level for purposes of this 
        subsection.
  (b) Programs That Reduce the Number of Uninsured.--
          (1) In general.--If the Secretary determines that a 
        State has reduced the percentage of uninsured 
        nonelderly residents in year 5, year 7, or year 9, 
        below the uninsured baseline (as defined in paragraph 
        (2)) for the State for the year, the Secretary shall 
        pay the State an amount equal to the product of--
                  (A) bonus uninsured percentage (as defined in 
                paragraph (3)) for the State and year; and
                  (B) the maximum uninsured payment amount (as 
                defined in paragraph (4)) for the State and 
                year.
          (2) Uninsured baseline.--
                  (A) In general.--For purposes of this 
                subsection, and subject to subparagraph (B), 
                the term ``uninsured baseline'' means, for a 
                State, the percentage of nonelderly residents 
                in the State who are uninsured in year 1.
                  (B) Adjustment.--The Secretary may, at the 
                written request of a State, adjust the 
                uninsured baseline for States for a year to 
                take into account unanticipated and exceptional 
                changes, such as an unanticipated migration, of 
                nonelderly individuals into, or out of, States 
                in a manner that does not reflect substantially 
                the proportion of uninsured nonelderly 
                residents in the States involved in year 1. Any 
                such adjustment shall only be done in a manner 
                that does not result in the average of the 
                uninsured baselines for nonelderly residents 
                for all States being changed.
          (3) Bonus uninsured percentage.--
                  (A) Bonus uninsured percentage.--For purposes 
                of this subsection, the term ``bonus uninsured 
                percentage'' means, for a State for a year, 
                such percentage as determined in accordance 
                with the following table, based on the 
                uninsured performance level (as defined in 
                subparagraph (B)) for such State and year:

----------------------------------------------------------------------------------------------------------------
   The bonus
   uninsured      For year 5 if the uninsured      For year 7 if the uninsured      For year 9 if the uninsured
percentage for   performance level of the State   performance level of the State  performance level of the State
 a State is--                 is--                             is--                            is--
----------------------------------------------------------------------------------------------------------------
  100 percent   at least 10%                     at least 15%                     at least 20%
----------------------------------------------------------------------------------------------------------------
   50 percent   at least 7.5% but less than 10%  at least 13.75% but less than    at least 18.75% but less than
                                                  15%                              20%
----------------------------------------------------------------------------------------------------------------
   25 percent   at least 5% but less than 7.5%   at least 12.5% but less than     at least 17.5% but less than
                                                  13.75%                           18.75%
----------------------------------------------------------------------------------------------------------------
    0 percent   less than 5%                     less than 12.5%                  less than 17.5%
----------------------------------------------------------------------------------------------------------------

                  (B) Uninsured performance level.--For 
                purposes of this subsection, the term 
                ``uninsured performance level'' means, for a 
                State for a year, the reduction (expressed as a 
                percentage) in the percentage of uninsured 
                nonelderly residents in such State in the year 
                as compared to the uninsured baseline for such 
                State for such year.
          (4) Maximum state uninsured payment amount defined.--
        For purposes of this subsection, the term ``maximum 
        State uninsured payment amount'' means, for a State for 
        a year, the product of--
                  (A) the proportion (as determined by the 
                Secretary), of the number of uninsured 
                nonelderly individuals lawfully residing in all 
                the States in the year, who are residents of 
                the State; and
                  (B) the amount available for obligation under 
                this subsection from amounts appropriated under 
                subsection (d) with respect to performance in 
                such year.
          (5) Methodology for computing the percentage of 
        uninsured nonelderly residents in a state.--
                  (A) Establishment.--The Secretary shall 
                establish, by rule and consistent with this 
                subsection, a methodology for computing the 
                percentage of nonelderly residents in a State 
                who are uninsured in each year beginning with 
                year 1.
                  (B) Rules.--
                          (i) Treatment of uninsured.--Such 
                        methodology shall treat as uninsured 
                        those residents who do not have health 
                        insurance coverage or other creditable 
                        coverage (as defined in section 
                        9801(c)(1) of the Internal Revenue Code 
                        of 1986), except that such methodology 
                        shall rely upon data on the nonelderly 
                        and uninsured populations within each 
                        State in such year provided through 
                        population surveys conducted by federal 
                        agencies.
                          (ii) Limitation to nonelderly.--Such 
                        methodology shall exclude individuals 
                        who are 65 years of age or older.
                          (iii) Exclusion of illegal aliens.--
                        Such methodology shall exclude 
                        individuals not lawfully present in the 
                        United States.
          (6) Conditions of payment.--As a condition of 
        receiving a payment under paragraph (1), a State must 
        agree to submit aggregate, non-individually 
        identifiable data to the Secretary, in a form and 
        manner specified by the Secretary, for use by the 
        Secretary in determining the State's uninsured baseline 
        and uninsured performance level for purposes of this 
        subsection.
  (c) Definitions.--For purposes of this section:
          (1) Group health plan.--The term ``group health 
        plan'' has the meaning given such term in section 
        9832(a) of the Internal Revenue Code of 1986.
          (2) Health insurance coverage.--The term ``health 
        insurance coverage'' has the meaning given such term in 
        section 9832(b)(1) of the Internal Revenue Code of 
        1986.
          (3) Individual market.--Except as the Secretary may 
        otherwise provide in the case of group health plans 
        that have fewer than 2 participants as current 
        employees on the first day of a plan year, the term 
        ``individual market'' means the market for health 
        insurance coverage offered to individuals other than in 
        connection with a group health plan.
          (4) Secretary.--The term ``Secretary'' means the 
        Secretary of Health and Human Services.
          (5) Small group market.--The term ``small group 
        market'' means the market for health insurance coverage 
        under which individuals obtain health insurance 
        coverage (directly or through any arrangement) on 
        behalf of themselves (and their dependents) through a 
        group health plan maintained by an employer who 
        employed on average at least 2 but not more than 50 
        employees on business days during a calendar year.
          (6) State.--The term ``State'' means any of the 50 
        States and the District of Columbia.
          (7) Years.--The terms ``year 1'', ``year 2'', ``year 
        3'', and similar subsequently numbered years mean 2010, 
        2011, 2012, and subsequent sequentially numbered years.
  (d) Appropriations; Payments.--
          (1) Payments for reductions in cost of health 
        insurance coverage.--
                  (A) Small group market.--
                          (i) In general.--From any funds in 
                        the Treasury not otherwise 
                        appropriated, there is appropriated for 
                        payments under subsection (a)(1)(A)--
                                  (I) $18,000,000,000 with 
                                respect to performance in year 
                                3;
                                  (II) $5,000,000,000 with 
                                respect to performance in year 
                                6; and
                                  (III) $2,000,000,000 with 
                                respect to performance in year 
                                9.
                          (ii) Availability of appropriated 
                        funds.--Funds appropriated under clause 
                        (i) shall remain available until 
                        expended.
                  (B) Individual market.--
                          (i) In general.--Subject to clause 
                        (ii), from any funds in the Treasury 
                        not otherwise appropriated, there is 
                        appropriated for payments under 
                        subsection (a)(1)(B)--
                                  (I) $7,000,000,000 with 
                                respect to performance in year 
                                3;
                                  (II) $2,000,000,000 with 
                                respect to performance in year 
                                6; and
                                  (III) $1,000,000,000 with 
                                respect to performance in year 
                                9.
                          (ii) Availability of appropriated 
                        funds.--Of the funds appropriated under 
                        clause (i) that are not expended or 
                        obligated by the end of the year 
                        following the year for which the funds 
                        are appropriated--
                                  (I) 75 percent shall remain 
                                available until expended for 
                                payments under subsection 
                                (a)(1)(B); and
                                  (II) 25 percent shall remain 
                                available until expended for 
                                payments under subsection 
                                (a)(1)(A).
          (2) Payments for reductions in the percentage of 
        uninsured.--
                  (A) In general.--From any funds in the 
                Treasury not otherwise appropriated, there is 
                appropriated for payments under subsection 
                (b)(1)--
                          (i) $10,000,000,000 with respect to 
                        performance in year 5;
                          (ii) $3,000,000,000 with respect to 
                        performance in year 7; and
                          (iii) $2,000,000,000 with respect to 
                        performance in year 9
                  (B) Availability of appropriated funds.--
                Funds appropriated under subparagraph (A) shall 
                remain available until expended.
          (3) Payment timing.--Payments under this section 
        shall be made in a form and manner specified by the 
        Secretary in the year after the performance year 
        involved.

SEC. 112. HEALTH PLAN FINDERS.

  (a) State Plan Finders.--Not later than 12 months after the 
date of the enactment of this Act, each State may contract with 
a private entity to develop and operate a plan finder website 
(referred to in this section as a ``State plan finder'') which 
shall provide information to individuals in such State on plans 
of health insurance coverage that are available to individuals 
in such State (in this section referred to as a ``health 
insurance plan'') . Such State may not operate a plan finder 
itself.
  (b) Multi-State Plan Finders.--
          (1) In general.--A private entity may operate a 
        multi-State finder that operates under this section in 
        the States involved in the same manner as a State plan 
        finder would operate in a single State.
          (2) Sharing of information.--States shall regulate 
        the manner in which data is shared between plan finders 
        to ensure consistency and accuracy in the information 
        about health insurance plans contained in such finders.
  (c) Requirements for Plan Finders.--Each plan finder shall 
meet the following requirements:
          (1) The plan finder shall ensure that each health 
        insurance plan in the plan finder meets the 
        requirements for such plans under subsection (d).
          (2) The plan finder shall present complete 
        information on the costs and benefits of health 
        insurance plans (including information on monthly 
        premium, copayments, and deductibles) in a uniform 
        manner that--
                  (A) uses the standard definitions developed 
                under paragraph (3); and
                  (B) is designed to allow consumers to easily 
                compare such plans.
          (3) The plan finder shall be available on the 
        internet and accessible to all individuals in the State 
        or, in the case of a multi-State plan finder, in all 
        States covered by the multi-State plan finder.
          (4) The plan finder shall allow consumers to search 
        and sort data on the health insurance plans in the plan 
        finder on criteria such as coverage of specific 
        benefits (such as coverage of disease management 
        services or pediatric care services), as well as data 
        available on quality.
          (5) The plan finder shall meet all relevant State 
        laws and regulations, including laws and regulations 
        related to the marketing of insurance products. In the 
        case of a multi-State plan finder, the finder shall 
        meet such laws and regulations for all of the States 
        involved.
          (6) The plan finder shall meet solvency, financial, 
        and privacy requirements established by the State or 
        States in which the plan finder operates or the 
        Secretary for multi-State finders.
          (7) The plan finder and the employees of the plan 
        finder shall be appropriately licensed in the State or 
        States in which the plan finder operates, if such 
        licensure is required by such State or States.
          (8) Notwithstanding subsection (f)(1), the plan 
        finder shall assist individuals who are eligible for 
        the Medicaid program under title XIX of the Social 
        Security Act or State Children's Health Insurance 
        Program under title XXI of such Act by including 
        information on Medicaid options, eligibility, and how 
        to enroll.
  (d) Requirements for Plans Participating in a Plan Finder.--
          (1) In general.--Each State shall ensure that health 
        insurance plans participating in the State plan finder 
        or in a multi-State plan finder meet the requirements 
        of paragraph (2) (relating to adequacy of insurance 
        coverage, consumer protection, and financial strength).
          (2) Specific requirements.--In order to participate 
        in a plan finder, a health insurance plan must meet all 
        of the following requirements, as determined by each 
        State in which such plan operates:
                  (A) The health insurance plan shall be 
                actuarially sound.
                  (B) The health insurance plan may not have a 
                history of abusive policy rescissions.
                  (C) The health insurance plan shall meet 
                financial and solvency requirements.
                  (D) The health insurance plan shall 
                disclose--
                          (i) all financial arrangements 
                        involving the sale and purchase of 
                        health insurance, such as the payment 
                        of fees and commissions; and
                          (ii) such arrangements may not be 
                        abusive.
                  (E) The health insurance plan shall maintain 
                electronic health records that comply with the 
                requirements of the American Recovery and 
                Reinvestment Act of 2009 (Public Law 111-5) 
                related to electronic health records.
                  (F) The health insurance plan shall make 
                available to plan enrollees via the finder, 
                whether by information provided to the finder 
                or by a website link directing the enrollee 
                from the finder to the health insurance plan 
                website, data that includes the price and cost 
                to the individual of services offered by a 
                provider according to the terms and conditions 
                of the health plan. Data described in this 
                paragraph is not made public by the finder, 
                only made available to the individual once 
                enrolled in the health plan.
  (e) Prohibitions.--
          (1) Direct enrollment.--The State plan finder may not 
        directly enroll individuals in health insurance plans.
          (2 Conflicts of interest.--
                  (A) Companies.--A health insurance issuer 
                offering a health insurance plan through a plan 
                finder may not--
                          (i) be the private entity developing 
                        and maintaining a plan finder under 
                        subsections (a) and (b); or
                          (ii) have an ownership interest in 
                        such private entity or in the plan 
                        finder.
                  (B) Individuals.--An individual employed by a 
                health insurance issuer offering a health 
                insurance plan through a plan finder may not 
                serve as a director or officer for--
                          (i) the private entity developing and 
                        maintaining a plan finder under 
                        subsections (a) and (b); or
                          (ii) the plan finder.
  (f) Construction.--Nothing in this section shall be construed 
to allow the Secretary authority to regulate benefit packages 
or to prohibit health insurance brokers and agents from--
          (1) utilizing the plan finder for any purpose; or
          (2) marketing or offering health insurance products.
  (g) Plan Finder Defined.--For purposes of this section, the 
term ``plan finder'' means a State plan finder under subsection 
(a) or a multi-State plan finder under subsection (b).
  (h) State Defined.--In this section, the term ``State'' has 
the meaning given such term for purposes of title XIX of the 
Social Security Act.

SEC. 113. ADMINISTRATIVE SIMPLIFICATION.

  (a) Operating Rules for Health Information Transactions.--
          (1) Definition of operating rules.--Section 1171 of 
        the Social Security Act (42 U.S.C. 1320d) is amended by 
        adding at the end the following:
          ``(9) Operating rules.--The term `operating rules'' 
        means the necessary business rules and guidelines for 
        the electronic exchange of information that are not 
        defined by a standard or its implementation 
        specifications as adopted for purposes of this part.''.
          (2) Operating rules and compliance.--Section 1173 of 
        the Social Security Act (42 U.S.C. 1320d-2) is 
        amended--
                  (A) in subsection (a)(2), by adding at the 
                end the following new subparagraph:
                  ``(J) Electronic funds transfers.''; and
                  (B) by adding at the end the following new 
                subsections:
  ``(g) Operating Rules.--
          ``(1) In general.--The Secretary shall adopt a single 
        set of operating rules for each transaction described 
        in subsection (a)(2) with the goal of creating as much 
        uniformity in the implementation of the electronic 
        standards as possible. Such operating rules shall be 
        consensus-based and reflect the necessary business 
        rules affecting health plans and health care providers 
        and the manner in which they operate pursuant to 
        standards issued under Health Insurance Portability and 
        Accountability Act of 1996.
          ``(2) Operating rules development.--In adopting 
        operating rules under this subsection, the Secretary 
        shall rely on recommendations for operating rules 
        developed by a qualified nonprofit entity, as selected 
        by the Secretary, that meets the following 
        requirements:
                  ``(A) The entity focuses its mission on 
                administrative simplification.
                  ``(B) The entity demonstrates an established 
                multi-stakeholder and consensus-based process 
                for development of operating rules, including 
                representation by or participation from health 
                plans, health care providers, vendors, relevant 
                Federal agencies, and other standard 
                development organizations.
                  ``(C) The entity has established a public set 
                of guiding principles that ensure the operating 
                rules and process are open and transparent.
                  ``(D) The entity coordinates its activities 
                with the HIT Policy Committee and the HIT 
                Standards Committee (as 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.
                  ``(E) The entity incorporates national 
                standards, including the transaction standards 
                issued under Health Insurance Portability and 
                Accountability Act of 1996.
                  ``(F) The entity supports nondiscrimination 
                and conflict of interest policies that 
                demonstrate a commitment to open, fair, and 
                nondiscriminatory practices.
                  ``(G) The entity allows for public review and 
                updates of the operating rules.
          ``(3) Review and recommendations.--The National 
        Committee on Vital and Health Statistics shall--
                  ``(A) review the operating rules developed by 
                a nonprofit entity described under paragraph 
                (2);
                  ``(B) determine whether such rules represent 
                a consensus view of the health care industry 
                and are consistent with and do not alter 
                current standards;
                  ``(C) evaluate whether such rules are 
                consistent with electronic standards adopted 
                for health information technology; and
                  ``(D) submit to the Secretary a 
                recommendation as to whether the Secretary 
                should adopt such rules.
          ``(4) Implementation.--
                  ``(A) In general.--The Secretary shall adopt 
                operating rules under this subsection, by 
                regulation in accordance with subparagraph (C), 
                following consideration of the rules developed 
                by the non-profit entity described in paragraph 
                (2) and the recommendation submitted by the 
                National Committee on Vital and Health 
                Statistics under paragraph (3)(D) and having 
                ensured consultation with providers.
                  ``(B) Adoption requirements; effective 
                dates.--
                          ``(i) Eligibility for a health plan 
                        and health claim status.--The set of 
                        operating rules for transactions for 
                        eligibility for a health plan and 
                        health claim status shall be adopted 
                        not later than July 1, 2011, in a 
                        manner ensuring that such rules are 
                        effective not later than January 1, 
                        2013, and may allow for the use of a 
                        machine readable identification card.
                          ``(ii) Electronic funds transfers and 
                        health care payment and remittance 
                        advice.--The set of operating rules for 
                        electronic funds transfers and health 
                        care payment and remittance advice 
                        shall be adopted not later than July 1, 
                        2012, in a manner ensuring that such 
                        rules are effective not later than 
                        January 1, 2014.
                          ``(iii) Other completed 
                        transactions.--The set of operating 
                        rules for the remainder of the 
                        completed transactions described in 
                        subsection (a)(2), including health 
                        claims or equivalent encounter 
                        information, enrollment and 
                        disenrollment in a health plan, health 
                        plan premium payments, and referral 
                        certification and authorization, shall 
                        be adopted not later than July 1, 2014, 
                        in a manner ensuring that such rules 
                        are effective not later than January 1, 
                        2016.
                  ``(C) Expedited rulemaking.--The Secretary 
                shall promulgate an interim final rule applying 
                any standard or operating rule recommended by 
                the National Committee on Vital and Health 
                Statistics pursuant to paragraph (3). The 
                Secretary shall accept public comments on any 
                interim final rule published under this 
                subparagraph for 60 days after the date of such 
                publication.
  ``(h) Compliance.--
          ``(1) Health plan certification.--
                  ``(A) Eligibility for a health plan, health 
                claim status, electronic funds transfers, 
                health care payment and remittance advice.--Not 
                later than December 31, 2013, a health plan 
                shall file a statement with the Secretary, in 
                such form as the Secretary may require, 
                certifying that the data and information 
                systems for such plan are in compliance with 
                any applicable standards (as described under 
                paragraph (7) of section 1171) and operating 
                rules (as described under paragraph (9) of such 
                section) for electronic funds transfers, 
                eligibility for a health plan, health claim 
                status, and health care payment and remittance 
                advice, respectively.
                  ``(B) Other completed transactions.--Not 
                later than December 31, 2015, a health plan 
                shall file a statement with the Secretary, in 
                such form as the Secretary may require, 
                certifying that the data and information 
                systems for such plan are in compliance with 
                any applicable standards and operating rules 
                for the remainder of the completed transactions 
                described in subsection (a)(2), including 
                health claims or equivalent encounter 
                information, enrollment and disenrollment in a 
                health plan, health plan premium payments, and 
                referral certification and authorization, 
                respectively. A health plan shall provide the 
                same level of documentation to certify 
                compliance with such transactions as is 
                required to certify compliance with the 
                transactions specified in subparagraph (A).
          ``(2) Documentation of compliance.--A health plan 
        shall provide the Secretary, in such form as the 
        Secretary may require, with adequate documentation of 
        compliance with the standards and operating rules 
        described under paragraph (1). A health plan shall not 
        be considered to have provided adequate documentation 
        and shall not be certified as being in compliance with 
        such standards, unless the health plan--
                  ``(A) demonstrates to the Secretary that the 
                plan conducts the electronic transactions 
                specified in paragraph (1) in a manner that 
                fully complies with the regulations of the 
                Secretary; and
                  ``(B) provides documentation showing that the 
                plan has completed end-to-end testing for such 
                transactions with their partners, such as 
                hospitals and physicians.
          ``(3) Service contracts.--A health plan shall be 
        required to comply with any applicable certification 
        and compliance requirements (and provide the Secretary 
        with adequate documentation of such compliance) under 
        this subsection for any entities that provide services 
        pursuant to a contract with such health plan.
          ``(4) Certification by outside entity.--The Secretary 
        may contract with an independent, outside entity to 
        certify that a health plan has complied with the 
        requirements under this subsection, provided that the 
        certification standards employed by such entities are 
        in accordance with any standards or rules issued by the 
        Secretary.
          ``(5) Compliance with revised standards and rules.--A 
        health plan (including entities described under 
        paragraph (3)) shall comply with the certification and 
        documentation requirements under this subsection for 
        any interim final rule promulgated by the Secretary 
        under subsection (i) that amends any standard or 
        operating rule described under paragraph (1) of this 
        subsection. A health plan shall comply with such 
        requirements not later than the effective date of the 
        applicable interim final rule.
          ``(6) Audits of health plans.--The Secretary shall 
        conduct periodic audits to ensure that health plans 
        (including entities described under paragraph (3)) are 
        in compliance with any standards and operating rules 
        that are described under paragraph (1).
  ``(i) Review and Amendment of Standards and Rules.--
          ``(1) Establishment.--Not later than January 1, 2014, 
        the Secretary shall establish a review committee (as 
        described under paragraph (4)).
          ``(2) Evaluations and reports.--
                  ``(A) Hearings.--Not later than April 1, 
                2014, and not less than biennially thereafter, 
                the Secretary, acting through the review 
                committee, shall conduct hearings to evaluate 
                and review the existing standards and operating 
                rules established under this section.
                  ``(B) Report.--Not later than July 1, 2014, 
                and not less than biennially thereafter, the 
                review committee shall provide recommendations 
                for updating and improving such standards and 
                rules. The review committee shall recommend a 
                single set of operating rules per transaction 
                standard and maintain the goal of creating as 
                much uniformity as possible in the 
                implementation of the electronic standards.
          ``(3) Interim final rulemaking.--
                  ``(A) In general.--Any recommendations to 
                amend existing standards and operating rules 
                that have been approved by the review committee 
                and reported to the Secretary under paragraph 
                (2)(B) shall be adopted by the Secretary 
                through promulgation of an interim final rule 
                not later than 90 days after receipt of the 
                committee's report.
                  ``(B) Public comment.--
                          ``(i) Public comment period.--The 
                        Secretary shall accept public comments 
                        on any interim final rule published 
                        under this paragraph for 60 days after 
                        the date of such publication.
                          ``(ii) Effective date.--The effective 
                        date of any amendment to existing 
                        standards or operating rules that is 
                        adopted through an interim final rule 
                        published under this paragraph shall be 
                        25 months following the close of such 
                        public comment period.
          ``(4) Review committee.--
                  ``(A) Definition.--For the purposes of this 
                subsection, the term `review committee' means a 
                committee within the Department of Health and 
                Human services that has been designated by the 
                Secretary to carry out this subsection, 
                including--
                          ``(i) the National Committee on Vital 
                        and Health Statistics; or
                          ``(ii) any appropriate committee as 
                        determined by the Secretary.
                  ``(B) Coordination of hit standards.--In 
                developing recommendations under this 
                subsection, the review committee shall consider 
                the standards approved by the Office of the 
                National Coordinator for Health Information 
                Technology.
  ``(j) Penalties.--
          ``(1) Penalty fee.--
                  ``(A) In general.--Not later than April 1, 
                2014, and annually thereafter, the Secretary 
                shall assess a penalty fee (as determined under 
                subparagraph (B)) against a health plan that 
                has failed to meet the requirements under 
                subsection (h) with respect to certification 
                and documentation of compliance with the 
                standards (and their operating rules) as 
                described under paragraph (1) of such 
                subsection.
                  ``(B) Fee amount.--Subject to subparagraphs 
                (C), (D), and (E), the Secretary shall assess a 
                penalty fee against a health plan in the amount 
                of $1 per covered life until certification is 
                complete. The penalty shall be assessed per 
                person covered by the plan for which its data 
                systems for major medical policies are not in 
                compliance and shall be imposed against the 
                health plan for each day that the plan is not 
                in compliance with the requirements under 
                subsection (h).
                  ``(C) Additional penalty for 
                misrepresentation.--A health plan that 
                knowingly provides inaccurate or incomplete 
                information in a statement of certification or 
                documentation of compliance under subsection 
                (h) shall be subject to a penalty fee that is 
                double the amount that would otherwise be 
                imposed under this subsection.
                  ``(D) Annual fee increase.--The amount of the 
                penalty fee imposed under this subsection shall 
                be increased on an annual basis by the annual 
                percentage increase in total national health 
                care expenditures, as determined by the 
                Secretary.
                  ``(E) Penalty limit.--A penalty fee assessed 
                against a health plan under this subsection 
                shall not exceed, on an annual basis--
                          ``(i) an amount equal to $20 per 
                        covered life under such plan; or
                          ``(ii) an amount equal to $40 per 
                        covered life under the plan if such 
                        plan has knowingly provided inaccurate 
                        or incomplete information (as described 
                        under subparagraph (C)).
                  ``(F) Determination of covered individuals.--
                The Secretary shall determine the number of 
                covered lives under a health plan based upon 
                the most recent statements and filings that 
                have been submitted by such plan to the 
                Securities and Exchange Commission.
          ``(2) Notice and dispute procedure.--The Secretary 
        shall establish a procedure for assessment of penalty 
        fees under this subsection that provides a health plan 
        with reasonable notice and a dispute resolution 
        procedure prior to provision of a notice of assessment 
        by the Secretary of the Treasury (as described under 
        paragraph (4)(B)).
          ``(3) Penalty fee report.--Not later than May 1, 
        2014, and annually thereafter, the Secretary shall 
        provide the Secretary of the Treasury with a report 
        identifying those health plans that have been assessed 
        a penalty fee under this subsection.
          ``(4) Collection of penalty fee.--
                  ``(A) In general.--The Secretary of the 
                Treasury, acting through the Financial 
                Management Service, shall administer the 
                collection of penalty fees from health plans 
                that have been identified by the Secretary in 
                the penalty fee report provided under paragraph 
                (3).
                  ``(B) Notice.--Not later than August 1, 2014, 
                and annually thereafter, the Secretary of the 
                Treasury shall provide notice to each health 
                plan that has been assessed a penalty fee by 
                the Secretary under this subsection. Such 
                notice shall include the amount of the penalty 
                fee assessed by the Secretary and the due date 
                for payment of such fee to the Secretary of the 
                Treasury (as described in subparagraph (C)).
                  ``(C) Payment due date.--Payment by a health 
                plan for a penalty fee assessed under this 
                subsection shall be made to the Secretary of 
                the Treasury not later than November 1, 2014, 
                and annually thereafter.
                  ``(D) Unpaid penalty fees.--Any amount of a 
                penalty fee assessed against a health plan 
                under this subsection for which payment has not 
                been made by the due date provided under 
                subparagraph (C) shall be--
                          ``(i) increased by the interest 
                        accrued on such amount, as determined 
                        pursuant to the underpayment rate 
                        established under section 6601 of the 
                        Internal Revenue Code of 1986; and
                          ``(ii) treated as a past-due, legally 
                        enforceable debt owed to a Federal 
                        agency for purposes of section 6402(d) 
                        of the Internal Revenue Code of 1986.
                  ``(E) Administrative fees.--Any fee charged 
                or allocated for collection activities 
                conducted by the Financial Management Service 
                will be passed on to a health plan on a pro-
                rata basis and added to any penalty fee 
                collected from the plan.''.
  (b) Promulgation of Rules.--
          (1) Unique health plan identifier.--The Secretary 
        shall promulgate a final rule to establish a unique 
        health plan identifier (as described in section 1173(b) 
        of the Social Security Act (42 U.S.C. 1320d-2(b))) 
        based on the input of the National Committee of Vital 
        and Health Statistics. The Secretary may do so on an 
        interim final basis and such rule shall be effective 
        not later than October 1, 2012.
          (2) Electronic funds transfer.--The Secretary shall 
        promulgate a final rule to establish a standard for 
        electronic funds transfers (as described in section 
        1173(a)(2)(J) of the Social Security Act, as added by 
        subsection (a)(2)(A)). The Secretary may do so on an 
        interim final basis and shall adopt such standard not 
        later than January 1, 2012, in a manner ensuring that 
        such standard is effective not later than January 1, 
        2014.
  (c) Expansion of Electronic Transactions in Medicare.--
Section 1862(a) of the Social Security Act (42 U.S.C. 1395y(a)) 
is amended--
          (1) in paragraph (23), by striking the ``or'' at the 
        end;
          (2) in paragraph (24), by striking the period and 
        inserting ``; or''; and
          (3) by inserting after paragraph (24) the following 
        new paragraph:
          ``(25) not later than January 1, 2014, for which the 
        payment is other than by electronic funds transfer 
        (EFT) or an electronic remittance in a form as 
        specified in ASC X12 835 Health Care Payment and 
        Remittance Advice or subsequent standard.''.
  (d) Medicare and Medicaid Compliance Reports.--Not later than 
July 1, 2013, the Secretary of Health and Human Services shall 
submit a report to the Chairs and Ranking Members of the 
Committee on Ways and Means and the Committee on Energy and 
Commerce of the House of Representatives and the Chairs and 
Ranking Members of the Committee on Health, Education, Labor, 
and Pensions and the Committee on Finance of the Senate on the 
extent to which the Medicare program and providers that serve 
beneficiaries under that program, and State Medicaid programs 
and providers that serve beneficiaries under those programs, 
transact electronically in accordance with transaction 
standards issued under the Health Insurance Portability and 
Accountability Act of 1996, part C of title XI of the Social 
Security Act, and regulations promulgated under such Acts.

              DIVISION B--IMPROVING ACCESS TO HEALTH CARE

   TITLE I--EXPANDING ACCESS AND LOWERING COSTS FOR SMALL BUSINESSES

SEC. 201. RULES GOVERNING ASSOCIATION HEALTH PLANS.

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

           ``PART 8--RULES GOVERNING ASSOCIATION HEALTH PLANS

``SEC. 801. ASSOCIATION HEALTH PLANS.

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

``SEC. 802. CERTIFICATION OF ASSOCIATION HEALTH PLANS.

  ``(a) In General.--The applicable authority shall prescribe 
by regulation a procedure under which, subject to subsection 
(b), the applicable authority shall certify association health 
plans which apply for certification as meeting the requirements 
of this part.
  ``(b) Standards.--Under the procedure prescribed pursuant to 
subsection (a), in the case of an association health plan that 
provides at least one benefit option which does not consist of 
health insurance coverage, the applicable authority shall 
certify such plan as meeting the requirements of this part only 
if the applicable authority is satisfied that the applicable 
requirements of this part are met (or, upon the date on which 
the plan is to commence operations, will be met) with respect 
to the plan.
  ``(c) Requirements Applicable to Certified Plans.--An 
association health plan with respect to which certification 
under this part is in effect shall meet the applicable 
requirements of this part, effective on the date of 
certification (or, if later, on the date on which the plan is 
to commence operations).
  ``(d) Requirements for Continued Certification.--The 
applicable authority may provide by regulation for continued 
certification of association health plans under this part.
  ``(e) Class Certification for Fully Insured Plans.--The 
applicable authority shall establish a class certification 
procedure for association health plans under which all benefits 
consist of health insurance coverage. Under such procedure, the 
applicable authority shall provide for the granting of 
certification under this part to the plans in each class of 
such association health plans upon appropriate filing under 
such procedure in connection with plans in such class and 
payment of the prescribed fee under section 807(a).
  ``(f) Certification of Self-Insured Association Health 
Plans.--An association health plan which offers one or more 
benefit options which do not consist of health insurance 
coverage may be certified under this part only if such plan 
consists of any of the following:
          ``(1) a plan which offered such coverage on the date 
        of the enactment of the Small Business Health Fairness 
        Act of 2009,
          ``(2) a plan under which the sponsor does not 
        restrict membership to one or more trades and 
        businesses or industries and whose eligible 
        participating employers represent a broad cross-section 
        of trades and businesses or industries, or
          ``(3) a plan whose eligible participating employers 
        represent one or more trades or businesses, or one or 
        more industries, consisting of any of the following: 
        agriculture; equipment and automobile dealerships; 
        barbering and cosmetology; certified public accounting 
        practices; child care; construction; dance, theatrical 
        and orchestra productions; disinfecting and pest 
        control; financial services; fishing; food service 
        establishments; hospitals; labor organizations; 
        logging; manufacturing (metals); mining; medical and 
        dental practices; medical laboratories; professional 
        consulting services; sanitary services; transportation 
        (local and freight); warehousing; wholesaling/
        distributing; or any other trade or business or 
        industry which has been indicated as having average or 
        above-average risk or health claims experience by 
        reason of State rate filings, denials of coverage, 
        proposed premium rate levels, or other means 
        demonstrated by such plan in accordance with 
        regulations.

``SEC. 803. REQUIREMENTS RELATING TO SPONSORS AND BOARDS OF TRUSTEES.

  ``(a) Sponsor.--The requirements of this subsection are met 
with respect to an association health plan if the sponsor has 
met (or is deemed under this part to have met) the requirements 
of section 801(b) for a continuous period of not less than 3 
years ending with the date of the application for certification 
under this part.
  ``(b) Board of Trustees.--The requirements of this subsection 
are met with respect to an association health plan if the 
following requirements are met:
          ``(1) Fiscal control.--The plan is operated, pursuant 
        to a trust agreement, by a board of trustees which has 
        complete fiscal control over the plan and which is 
        responsible for all operations of the plan.
          ``(2) Rules of operation and financial controls.--The 
        board of trustees has in effect rules of operation and 
        financial controls, based on a 3-year plan of 
        operation, adequate to carry out the terms of the plan 
        and to meet all requirements of this title applicable 
        to the plan.
          ``(3) Rules governing relationship to participating 
        employers and to contractors.--
                  ``(A) Board membership.--
                          ``(i) In general.--Except as provided 
                        in clauses (ii) and (iii), the members 
                        of the board of trustees are 
                        individuals selected from individuals 
                        who are the owners, officers, 
                        directors, or employees of the 
                        participating employers or who are 
                        partners in the participating employers 
                        and actively participate in the 
                        business.
                          ``(ii) Limitation.--
                                  ``(I) General rule.--Except 
                                as provided in subclauses (II) 
                                and (III), no such member is an 
                                owner, officer, director, or 
                                employee of, or partner in, a 
                                contract administrator or other 
                                service provider to the plan.
                                  ``(II) Limited exception for 
                                providers of services solely on 
                                behalf of the sponsor.--
                                Officers or employees of a 
                                sponsor which is a service 
                                provider (other than a contract 
                                administrator) to the plan may 
                                be members of the board if they 
                                constitute not more than 25 
                                percent of the membership of 
                                the board and they do not 
                                provide services to the plan 
                                other than on behalf of the 
                                sponsor.
                                  ``(III) Treatment of 
                                providers of medical care.--In 
                                the case of a sponsor which is 
                                an association whose membership 
                                consists primarily of providers 
                                of medical care, subclause (I) 
                                shall not apply in the case of 
                                any service provider described 
                                in subclause (I) who is a 
                                provider of medical care under 
                                the plan.
                          ``(iii) Certain plans excluded.--
                        Clause (i) shall not apply to an 
                        association health plan which is in 
                        existence on the date of the enactment 
                        of the Small Business Health Fairness 
                        Act of 2009.
                  ``(B) Sole authority.--The board has sole 
                authority under the plan to approve 
                applications for participation in the plan and 
                to contract with a service provider to 
                administer the day-to-day affairs of the plan.
  ``(c) Treatment of Franchise Networks.--In the case of a 
group health plan which is established and maintained by a 
franchiser for a franchise network consisting of its 
franchisees--
          ``(1) the requirements of subsection (a) and section 
        801(a) shall be deemed met if such requirements would 
        otherwise be met if the franchiser were deemed to be 
        the sponsor referred to in section 801(b), such network 
        were deemed to be an association described in section 
        801(b), and each franchisee were deemed to be a member 
        (of the association and the sponsor) referred to in 
        section 801(b); and
          ``(2) the requirements of section 804(a)(1) shall be 
        deemed met.
The Secretary may by regulation define for purposes of this 
subsection the terms `franchiser', `franchise network', and 
`franchisee'.

``SEC. 804. PARTICIPATION AND COVERAGE REQUIREMENTS.

  ``(a) Covered Employers and Individuals.--The requirements of 
this subsection are met with respect to an association health 
plan if, under the terms of the plan--
          ``(1) each participating employer must be--
                  ``(A) a member of the sponsor,
                  ``(B) the sponsor, or
                  ``(C) an affiliated member of the sponsor 
                with respect to which the requirements of 
                subsection (b) are met,
        except that, in the case of a sponsor which is a 
        professional association or other individual-based 
        association, if at least one of the officers, 
        directors, or employees of an employer, or at least one 
        of the individuals who are partners in an employer and 
        who actively participates in the business, is a member 
        or such an affiliated member of the sponsor, 
        participating employers may also include such employer; 
        and
          ``(2) all individuals commencing coverage under the 
        plan after certification under this part must be--
                  ``(A) active or retired owners (including 
                self-employed individuals), officers, 
                directors, or employees of, or partners in, 
                participating employers; or
                  ``(B) the beneficiaries of individuals 
                described in subparagraph (A).
  ``(b) Coverage of Previously Uninsured Employees.--In the 
case of an association health plan in existence on the date of 
the enactment of the Small Business Health Fairness Act of 
2009, an affiliated member of the sponsor of the plan may be 
offered coverage under the plan as a participating employer 
only if--
          ``(1) the affiliated member was an affiliated member 
        on the date of certification under this part; or
          ``(2) during the 12-month period preceding the date 
        of the offering of such coverage, the affiliated member 
        has not maintained or contributed to a group health 
        plan with respect to any of its employees who would 
        otherwise be eligible to participate in such 
        association health plan.
  ``(c) Individual Market Unaffected.--The requirements of this 
subsection are met with respect to an association health plan 
if, under the terms of the plan, no participating employer may 
provide health insurance coverage in the individual market for 
any employee not covered under the plan which is similar to the 
coverage contemporaneously provided to employees of the 
employer under the plan, if such exclusion of the employee from 
coverage under the plan is based on a health status-related 
factor with respect to the employee and such employee would, 
but for such exclusion on such basis, be eligible for coverage 
under the plan.
  ``(d) Prohibition of Discrimination Against Employers and 
Employees Eligible To Participate.--The requirements of this 
subsection are met with respect to an association health plan 
if--
          ``(1) under the terms of the plan, all employers 
        meeting the preceding requirements of this section are 
        eligible to qualify as participating employers for all 
        geographically available coverage options, unless, in 
        the case of any such employer, participation or 
        contribution requirements of the type referred to in 
        section 2711 of the Public Health Service Act are not 
        met;
          ``(2) upon request, any employer eligible to 
        participate is furnished information regarding all 
        coverage options available under the plan; and
          ``(3) the applicable requirements of sections 701, 
        702, and 703 are met with respect to the plan.

``SEC. 805. OTHER REQUIREMENTS RELATING TO PLAN DOCUMENTS, CONTRIBUTION 
                    RATES, AND BENEFIT OPTIONS.

  ``(a) In General.--The requirements of this section are met 
with respect to an association health plan if the following 
requirements are met:
          ``(1) Contents of governing instruments.--The 
        instruments governing the plan include a written 
        instrument, meeting the requirements of an instrument 
        required under section 402(a)(1), which--
                  ``(A) provides that the board of trustees 
                serves as the named fiduciary required for 
                plans under section 402(a)(1) and serves in the 
                capacity of a plan administrator (referred to 
                in section 3(16)(A));
                  ``(B) provides that the sponsor of the plan 
                is to serve as plan sponsor (referred to in 
                section 3(16)(B)); and
                  ``(C) incorporates the requirements of 
                section 806.
          ``(2) Contribution rates must be nondiscriminatory.--
                  ``(A) The contribution rates for any 
                participating small employer do not vary on the 
                basis of any health status-related factor in 
                relation to employees of such employer or their 
                beneficiaries and do not vary on the basis of 
                the type of business or industry in which such 
                employer is engaged.
                  ``(B) Nothing in this title or any other 
                provision of law shall be construed to preclude 
                an association health plan, or a health 
                insurance issuer offering health insurance 
                coverage in connection with an association 
                health plan, from--
                          ``(i) setting contribution rates 
                        based on the claims experience of the 
                        plan; or
                          ``(ii) varying contribution rates for 
                        small employers in a State to the 
                        extent that such rates could vary using 
                        the same methodology employed in such 
                        State for regulating premium rates in 
                        the small group market with respect to 
                        health insurance coverage offered in 
                        connection with bona fide associations 
                        (within the meaning of section 
                        2791(d)(3) of the Public Health Service 
                        Act),
                subject to the requirements of section 702(b) 
                relating to contribution rates.
          ``(3) Floor for number of covered individuals with 
        respect to certain plans.--If any benefit option under 
        the plan does not consist of health insurance coverage, 
        the plan has as of the beginning of the plan year not 
        fewer than 1,000 participants and beneficiaries.
          ``(4) Marketing requirements.--
                  ``(A) In general.--If a benefit option which 
                consists of health insurance coverage is 
                offered under the plan, State-licensed 
                insurance agents shall be used to distribute to 
                small employers coverage which does not consist 
                of health insurance coverage in a manner 
                comparable to the manner in which such agents 
                are used to distribute health insurance 
                coverage.
                  ``(B) State-licensed insurance agents.--For 
                purposes of subparagraph (A), the term `State-
                licensed insurance agents' means one or more 
                agents who are licensed in a State and are 
                subject to the laws of such State relating to 
                licensure, qualification, testing, examination, 
                and continuing education of persons authorized 
                to offer, sell, or solicit health insurance 
                coverage in such State.
          ``(5) Regulatory requirements.--Such other 
        requirements as the applicable authority determines are 
        necessary to carry out the purposes of this part, which 
        shall be prescribed by the applicable authority by 
        regulation.
  ``(b) Ability of Association Health Plans To Design Benefit 
Options.--Subject to section 514(d), nothing in this part or 
any provision of State law (as defined in section 514(c)(1)) 
shall be construed to preclude an association health plan, or a 
health insurance issuer offering health insurance coverage in 
connection with an association health plan, from exercising its 
sole discretion in selecting the specific items and services 
consisting of medical care to be included as benefits under 
such plan or coverage, except (subject to section 514) in the 
case of (1) any law to the extent that it is not preempted 
under section 731(a)(1) with respect to matters governed by 
section 711, 712, or 713, or (2) any law of the State with 
which filing and approval of a policy type offered by the plan 
was initially obtained to the extent that such law prohibits an 
exclusion of a specific disease from such coverage.

``SEC. 806. MAINTENANCE OF RESERVES AND PROVISIONS FOR SOLVENCY FOR 
                    PLANS PROVIDING HEALTH BENEFITS IN ADDITION TO 
                    HEALTH INSURANCE COVERAGE.

  ``(a) In General.--The requirements of this section are met 
with respect to an association health plan if--
          ``(1) the benefits under the plan consist solely of 
        health insurance coverage; or
          ``(2) if the plan provides any additional benefit 
        options which do not consist of health insurance 
        coverage, the plan--
                  ``(A) establishes and maintains reserves with 
                respect to such additional benefit options, in 
                amounts recommended by the qualified actuary, 
                consisting of--
                          ``(i) a reserve sufficient for 
                        unearned contributions;
                          ``(ii) a reserve sufficient for 
                        benefit liabilities which have been 
                        incurred, which have not been 
                        satisfied, and for which risk of loss 
                        has not yet been transferred, and for 
                        expected administrative costs with 
                        respect to such benefit liabilities;
                          ``(iii) a reserve sufficient for any 
                        other obligations of the plan; and
                          ``(iv) a reserve sufficient for a 
                        margin of error and other fluctuations, 
                        taking into account the specific 
                        circumstances of the plan; and
                  ``(B) establishes and maintains aggregate and 
                specific excess/stop loss insurance and 
                solvency indemnification, with respect to such 
                additional benefit options for which risk of 
                loss has not yet been transferred, as follows:
                          ``(i) The plan shall secure aggregate 
                        excess/stop loss insurance for the plan 
                        with an attachment point which is not 
                        greater than 125 percent of expected 
                        gross annual claims. The applicable 
                        authority may by regulation provide for 
                        upward adjustments in the amount of 
                        such percentage in specified 
                        circumstances in which the plan 
                        specifically provides for and maintains 
                        reserves in excess of the amounts 
                        required under subparagraph (A).
                          ``(ii) The plan shall secure specific 
                        excess/stop loss insurance for the plan 
                        with an attachment point which is at 
                        least equal to an amount recommended by 
                        the plan's qualified actuary. The 
                        applicable authority may by regulation 
                        provide for adjustments in the amount 
                        of such insurance in specified 
                        circumstances in which the plan 
                        specifically provides for and maintains 
                        reserves in excess of the amounts 
                        required under subparagraph (A).
                          ``(iii) The plan shall secure 
                        indemnification insurance for any 
                        claims which the plan is unable to 
                        satisfy by reason of a plan 
                        termination.
Any person issuing to a plan insurance described in clause (i), 
(ii), or (iii) of subparagraph (B) shall notify the Secretary 
of any failure of premium payment meriting cancellation of the 
policy prior to undertaking such a cancellation. Any 
regulations prescribed by the applicable authority pursuant to 
clause (i) or (ii) of subparagraph (B) may allow for such 
adjustments in the required levels of excess/stop loss 
insurance as the qualified actuary may recommend, taking into 
account the specific circumstances of the plan.
  ``(b) Minimum Surplus in Addition to Claims Reserves.--In the 
case of any association health plan described in subsection 
(a)(2), the requirements of this subsection are met if the plan 
establishes and maintains surplus in an amount at least equal 
to--
          ``(1) $500,000, or
          ``(2) such greater amount (but not greater than 
        $2,000,000) as may be set forth in regulations 
        prescribed by the applicable authority, considering the 
        level of aggregate and specific excess/stop loss 
        insurance provided with respect to such plan and other 
        factors related to solvency risk, such as the plan's 
        projected levels of participation or claims, the nature 
        of the plan's liabilities, and the types of assets 
        available to assure that such liabilities are met.
  ``(c) Additional Requirements.--In the case of any 
association health plan described in subsection (a)(2), the 
applicable authority may provide such additional requirements 
relating to reserves, excess/stop loss insurance, and 
indemnification insurance as the applicable authority considers 
appropriate. Such requirements may be provided by regulation 
with respect to any such plan or any class of such plans.
  ``(d) Adjustments for Excess/Stop Loss Insurance.--The 
applicable authority may provide for adjustments to the levels 
of reserves otherwise required under subsections (a) and (b) 
with respect to any plan or class of plans to take into account 
excess/stop loss insurance provided with respect to such plan 
or plans.
  ``(e) Alternative Means of Compliance.--The applicable 
authority may permit an association health plan described in 
subsection (a)(2) to substitute, for all or part of the 
requirements of this section (except subsection 
(a)(2)(B)(iii)), such security, guarantee, hold-harmless 
arrangement, or other financial arrangement as the applicable 
authority determines to be adequate to enable the plan to fully 
meet all its financial obligations on a timely basis and is 
otherwise no less protective of the interests of participants 
and beneficiaries than the requirements for which it is 
substituted. The applicable authority may take into account, 
for purposes of this subsection, evidence provided by the plan 
or sponsor which demonstrates an assumption of liability with 
respect to the plan. Such evidence may be in the form of a 
contract of indemnification, lien, bonding, insurance, letter 
of credit, recourse under applicable terms of the plan in the 
form of assessments of participating employers, security, or 
other financial arrangement.
  ``(f) Measures To Ensure Continued Payment of Benefits by 
Certain Plans in Distress.--
          ``(1) Payments by certain plans to association health 
        plan fund.--
                  ``(A) In general.--In the case of an 
                association health plan described in subsection 
                (a)(2), the requirements of this subsection are 
                met if the plan makes payments into the 
                Association Health Plan Fund under this 
                subparagraph when they are due. Such payments 
                shall consist of annual payments in the amount 
                of $5,000, and, in addition to such annual 
                payments, such supplemental payments as the 
                Secretary may determine to be necessary under 
                paragraph (2). Payments under this paragraph 
                are payable to the Fund at the time determined 
                by the Secretary. Initial payments are due in 
                advance of certification under this part. 
                Payments shall continue to accrue until a 
                plan's assets are distributed pursuant to a 
                termination procedure.
                  ``(B) Penalties for failure to make 
                payments.--If any payment is not made by a plan 
                when it is due, a late payment charge of not 
                more than 100 percent of the payment which was 
                not timely paid shall be payable by the plan to 
                the Fund.
                  ``(C) Continued duty of the secretary.--The 
                Secretary shall not cease to carry out the 
                provisions of paragraph (2) on account of the 
                failure of a plan to pay any payment when due.
          ``(2) Payments by secretary to continue excess/stop 
        loss insurance coverage and indemnification insurance 
        coverage for certain plans.--In any case in which the 
        applicable authority determines that there is, or that 
        there is reason to believe that there will be: (A) a 
        failure to take necessary corrective actions under 
        section 809(a) with respect to an association health 
        plan described in subsection (a)(2); or (B) a 
        termination of such a plan under section 809(b) or 
        810(b)(8) (and, if the applicable authority is not the 
        Secretary, certifies such determination to the 
        Secretary), the Secretary shall determine the amounts 
        necessary to make payments to an insurer (designated by 
        the Secretary) to maintain in force excess/stop loss 
        insurance coverage or indemnification insurance 
        coverage for such plan, if the Secretary determines 
        that there is a reasonable expectation that, without 
        such payments, claims would not be satisfied by reason 
        of termination of such coverage. The Secretary shall, 
        to the extent provided in advance in appropriation 
        Acts, pay such amounts so determined to the insurer 
        designated by the Secretary.
          ``(3) Association health plan fund.--
                  ``(A) In general.--There is established on 
                the books of the Treasury a fund to be known as 
                the `Association Health Plan Fund'. The Fund 
                shall be available for making payments pursuant 
                to paragraph (2). The Fund shall be credited 
                with payments received pursuant to paragraph 
                (1)(A), penalties received pursuant to 
                paragraph (1)(B); and earnings on investments 
                of amounts of the Fund under subparagraph (B).
                  ``(B) Investment.--Whenever the Secretary 
                determines that the moneys of the fund are in 
                excess of current needs, the Secretary may 
                request the investment of such amounts as the 
                Secretary determines advisable by the Secretary 
                of the Treasury in obligations issued or 
                guaranteed by the United States.
  ``(g) Excess/Stop Loss Insurance.--For purposes of this 
section--
          ``(1) Aggregate excess/stop loss insurance.--The term 
        `aggregate excess/stop loss insurance' means, in 
        connection with an association health plan, a 
        contract--
                  ``(A) under which an insurer (meeting such 
                minimum standards as the applicable authority 
                may prescribe by regulation) provides for 
                payment to the plan with respect to aggregate 
                claims under the plan in excess of an amount or 
                amounts specified in such contract;
                  ``(B) which is guaranteed renewable; and
                  ``(C) which allows for payment of premiums by 
                any third party on behalf of the insured plan.
          ``(2) Specific excess/stop loss insurance.--The term 
        `specific excess/stop loss insurance' means, in 
        connection with an association health plan, a 
        contract--
                  ``(A) under which an insurer (meeting such 
                minimum standards as the applicable authority 
                may prescribe by regulation) provides for 
                payment to the plan with respect to claims 
                under the plan in connection with a covered 
                individual in excess of an amount or amounts 
                specified in such contract in connection with 
                such covered individual;
                  ``(B) which is guaranteed renewable; and
                  ``(C) which allows for payment of premiums by 
                any third party on behalf of the insured plan.
  ``(h) Indemnification Insurance.--For purposes of this 
section, the term `indemnification insurance' means, in 
connection with an association health plan, a contract--
          ``(1) under which an insurer (meeting such minimum 
        standards as the applicable authority may prescribe by 
        regulation) provides for payment to the plan with 
        respect to claims under the plan which the plan is 
        unable to satisfy by reason of a termination pursuant 
        to section 809(b) (relating to mandatory termination);
          ``(2) which is guaranteed renewable and 
        noncancellable for any reason (except as the applicable 
        authority may prescribe by regulation); and
          ``(3) which allows for payment of premiums by any 
        third party on behalf of the insured plan.
  ``(i) Reserves.--For purposes of this section, the term 
`reserves'' means, in connection with an association health 
plan, plan assets which meet the fiduciary standards under part 
4 and such additional requirements regarding liquidity as the 
applicable authority may prescribe by regulation.
  ``(j) Solvency Standards Working Group.--
          ``(1) In general.--Within 90 days after the date of 
        the enactment of the Small Business Health Fairness Act 
        of 2009, the applicable authority shall establish a 
        Solvency Standards Working Group. In prescribing the 
        initial regulations under this section, the applicable 
        authority shall take into account the recommendations 
        of such Working Group.
          ``(2) Membership.--The Working Group shall consist of 
        not more than 15 members appointed by the applicable 
        authority. The applicable authority shall include among 
        persons invited to membership on the Working Group at 
        least one of each of the following:
                  ``(A) a representative of the National 
                Association of Insurance Commissioners;
                  ``(B) a representative of the American 
                Academy of Actuaries;
                  ``(C) a representative of the State 
                governments, or their interests;
                  ``(D) a representative of existing self-
                insured arrangements, or their interests;
                  ``(E) a representative of associations of the 
                type referred to in section 801(b)(1), or their 
                interests; and
                  ``(F) a representative of multiemployer plans 
                that are group health plans, or their 
                interests.

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

  ``(a) Filing Fee.--Under the procedure prescribed pursuant to 
section 802(a), an association health plan shall pay to the 
applicable authority at the time of filing an application for 
certification under this part a filing fee in the amount of 
$5,000, which shall be available in the case of the Secretary, 
to the extent provided in appropriation Acts, for the sole 
purpose of administering the certification procedures 
applicable with respect to association health plans.
  ``(b) Information To Be Included in Application for 
Certification.--An application for certification under this 
part meets the requirements of this section only if it 
includes, in a manner and form which shall be prescribed by the 
applicable authority by regulation, at least the following 
information:
          ``(1) Identifying information.--The names and 
        addresses of--
                  ``(A) the sponsor; and
                  ``(B) the members of the board of trustees of 
                the plan.
          ``(2) States in which plan intends to do business.--
        The States in which participants and beneficiaries 
        under the plan are to be located and the number of them 
        expected to be located in each such State.
          ``(3) Bonding requirements.--Evidence provided by the 
        board of trustees that the bonding requirements of 
        section 412 will be met as of the date of the 
        application or (if later) commencement of operations.
          ``(4) Plan documents.--A copy of the documents 
        governing the plan (including any bylaws and trust 
        agreements), the summary plan description, and other 
        material describing the benefits that will be provided 
        to participants and beneficiaries under the plan.
          ``(5) Agreements with service providers.--A copy of 
        any agreements between the plan and contract 
        administrators and other service providers.
          ``(6) Funding report.--In the case of association 
        health plans providing benefits options in addition to 
        health insurance coverage, a report setting forth 
        information with respect to such additional benefit 
        options determined as of a date within the 120-day 
        period ending with the date of the application, 
        including the following:
                  ``(A) Reserves.--A statement, certified by 
                the board of trustees of the plan, and a 
                statement of actuarial opinion, signed by a 
                qualified actuary, that all applicable 
                requirements of section 806 are or will be met 
                in accordance with regulations which the 
                applicable authority shall prescribe.
                  ``(B) Adequacy of contribution rates.--A 
                statement of actuarial opinion, signed by a 
                qualified actuary, which sets forth a 
                description of the extent to which contribution 
                rates are adequate to provide for the payment 
                of all obligations and the maintenance of 
                required reserves under the plan for the 12-
                month period beginning with such date within 
                such 120-day period, taking into account the 
                expected coverage and experience of the plan. 
                If the contribution rates are not fully 
                adequate, the statement of actuarial opinion 
                shall indicate the extent to which the rates 
                are inadequate and the changes needed to ensure 
                adequacy.
                  ``(C) Current and projected value of assets 
                and liabilities.--A statement of actuarial 
                opinion signed by a qualified actuary, which 
                sets forth the current value of the assets and 
                liabilities accumulated under the plan and a 
                projection of the assets, liabilities, income, 
                and expenses of the plan for the 12-month 
                period referred to in subparagraph (B). The 
                income statement shall identify separately the 
                plan's administrative expenses and claims.
                  ``(D) Costs of coverage to be charged and 
                other expenses.--A statement of the costs of 
                coverage to be charged, including an 
                itemization of amounts for administration, 
                reserves, and other expenses associated with 
                the operation of the plan.
                  ``(E) Other information.--Any other 
                information as may be determined by the 
                applicable authority, by regulation, as 
                necessary to carry out the purposes of this 
                part.
  ``(c) Filing Notice of Certification With States.--A 
certification granted under this part to an association health 
plan shall not be effective unless written notice of such 
certification is filed with the applicable State authority of 
each State in which at least 25 percent of the participants and 
beneficiaries under the plan are located. For purposes of this 
subsection, an individual shall be considered to be located in 
the State in which a known address of such individual is 
located or in which such individual is employed.
  ``(d) Notice of Material Changes.--In the case of any 
association health plan certified under this part, descriptions 
of material changes in any information which was required to be 
submitted with the application for the certification under this 
part shall be filed in such form and manner as shall be 
prescribed by the applicable authority by regulation. The 
applicable authority may require by regulation prior notice of 
material changes with respect to specified matters which might 
serve as the basis for suspension or revocation of the 
certification.
  ``(e) Reporting Requirements for Certain Association Health 
Plans.--An association health plan certified under this part 
which provides benefit options in addition to health insurance 
coverage for such plan year shall meet the requirements of 
section 103 by filing an annual report under such section which 
shall include information described in subsection (b)(6) with 
respect to the plan year and, notwithstanding section 
104(a)(1)(A), shall be filed with the applicable authority not 
later than 90 days after the close of the plan year (or on such 
later date as may be prescribed by the applicable authority). 
The applicable authority may require by regulation such interim 
reports as it considers appropriate.
  ``(f) Engagement of Qualified Actuary.--The board of trustees 
of each association health plan which provides benefits options 
in addition to health insurance coverage and which is applying 
for certification under this part or is certified under this 
part shall engage, on behalf of all participants and 
beneficiaries, a qualified actuary who shall be responsible for 
the preparation of the materials comprising information 
necessary to be submitted by a qualified actuary under this 
part. The qualified actuary shall utilize such assumptions and 
techniques as are necessary to enable such actuary to form an 
opinion as to whether the contents of the matters reported 
under this part--
          ``(1) are in the aggregate reasonably related to the 
        experience of the plan and to reasonable expectations; 
        and
          ``(2) represent such actuary's best estimate of 
        anticipated experience under the plan.
The opinion by the qualified actuary shall be made with respect 
to, and shall be made a part of, the annual report.

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

  ``Except as provided in section 809(b), an association health 
plan which is or has been certified under this part may 
terminate (upon or at any time after cessation of accruals in 
benefit liabilities) only if the board of trustees, not less 
than 60 days before the proposed termination date--
          ``(1) provides to the participants and beneficiaries 
        a written notice of intent to terminate stating that 
        such termination is intended and the proposed 
        termination date;
          ``(2) develops a plan for winding up the affairs of 
        the plan in connection with such termination in a 
        manner which will result in timely payment of all 
        benefits for which the plan is obligated; and
          ``(3) submits such plan in writing to the applicable 
        authority.
Actions required under this section shall be taken in such form 
and manner as may be prescribed by the applicable authority by 
regulation.

``SEC. 809. CORRECTIVE ACTIONS AND MANDATORY TERMINATION.

  ``(a) Actions To Avoid Depletion of Reserves.--An association 
health plan which is certified under this part and which 
provides benefits other than health insurance coverage shall 
continue to meet the requirements of section 806, irrespective 
of whether such certification continues in effect. The board of 
trustees of such plan shall determine quarterly whether the 
requirements of section 806 are met. In any case in which the 
board determines that there is reason to believe that there is 
or will be a failure to meet such requirements, or the 
applicable authority makes such a determination and so notifies 
the board, the board shall immediately notify the qualified 
actuary engaged by the plan, and such actuary shall, not later 
than the end of the next following month, make such 
recommendations to the board for corrective action as the 
actuary determines necessary to ensure compliance with section 
806. Not later than 30 days after receiving from the actuary 
recommendations for corrective actions, the board shall notify 
the applicable authority (in such form and manner as the 
applicable authority may prescribe by regulation) of such 
recommendations of the actuary for corrective action, together 
with a description of the actions (if any) that the board has 
taken or plans to take in response to such recommendations. The 
board shall thereafter report to the applicable authority, in 
such form and frequency as the applicable authority may specify 
to the board, regarding corrective action taken by the board 
until the requirements of section 806 are met.
  ``(b) Mandatory Termination.--In any case in which--
          ``(1) the applicable authority has been notified 
        under subsection (a) (or by an issuer of excess/stop 
        loss insurance or indemnity insurance pursuant to 
        section 806(a)) of a failure of an association health 
        plan which is or has been certified under this part and 
        is described in section 806(a)(2) to meet the 
        requirements of section 806 and has not been notified 
        by the board of trustees of the plan that corrective 
        action has restored compliance with such requirements; 
        and
          ``(2) the applicable authority determines that there 
        is a reasonable expectation that the plan will continue 
        to fail to meet the requirements of section 806,
the board of trustees of the plan shall, at the direction of 
the applicable authority, terminate the plan and, in the course 
of the termination, take such actions as the applicable 
authority may require, including satisfying any claims referred 
to in section 806(a)(2)(B)(iii) and recovering for the plan any 
liability under subsection (a)(2)(B)(iii) or (e) of section 
806, as necessary to ensure that the affairs of the plan will 
be, to the maximum extent possible, wound up in a manner which 
will result in timely provision of all benefits for which the 
plan is obligated.

``SEC. 810. TRUSTEESHIP BY THE SECRETARY OF INSOLVENT ASSOCIATION 
                    HEALTH PLANS PROVIDING HEALTH BENEFITS IN ADDITION 
                    TO HEALTH INSURANCE COVERAGE.

  ``(a) Appointment of Secretary as Trustee for Insolvent 
Plans.--Whenever the Secretary determines that an association 
health plan which is or has been certified under this part and 
which is described in section 806(a)(2) will be unable to 
provide benefits when due or is otherwise in a financially 
hazardous condition, as shall be defined by the Secretary by 
regulation, the Secretary shall, upon notice to the plan, apply 
to the appropriate United States district court for appointment 
of the Secretary as trustee to administer the plan for the 
duration of the insolvency. The plan may appear as a party and 
other interested persons may intervene in the proceedings at 
the discretion of the court. The court shall appoint such 
Secretary trustee if the court determines that the trusteeship 
is necessary to protect the interests of the participants and 
beneficiaries or providers of medical care or to avoid any 
unreasonable deterioration of the financial condition of the 
plan. The trusteeship of such Secretary shall continue until 
the conditions described in the first sentence of this 
subsection are remedied or the plan is terminated.
  ``(b) Powers as Trustee.--The Secretary, upon appointment as 
trustee under subsection (a), shall have the power--
          ``(1) to do any act authorized by the plan, this 
        title, or other applicable provisions of law to be done 
        by the plan administrator or any trustee of the plan;
          ``(2) to require the transfer of all (or any part) of 
        the assets and records of the plan to the Secretary as 
        trustee;
          ``(3) to invest any assets of the plan which the 
        Secretary holds in accordance with the provisions of 
        the plan, regulations prescribed by the Secretary, and 
        applicable provisions of law;
          ``(4) to require the sponsor, the plan administrator, 
        any participating employer, and any employee 
        organization representing plan participants to furnish 
        any information with respect to the plan which the 
        Secretary as trustee may reasonably need in order to 
        administer the plan;
          ``(5) to collect for the plan any amounts due the 
        plan and to recover reasonable expenses of the 
        trusteeship;
          ``(6) to commence, prosecute, or defend on behalf of 
        the plan any suit or proceeding involving the plan;
          ``(7) to issue, publish, or file such notices, 
        statements, and reports as may be required by the 
        Secretary by regulation or required by any order of the 
        court;
          ``(8) to terminate the plan (or provide for its 
        termination in accordance with section 809(b)) and 
        liquidate the plan assets, to restore the plan to the 
        responsibility of the sponsor, or to continue the 
        trusteeship;
          ``(9) to provide for the enrollment of plan 
        participants and beneficiaries under appropriate 
        coverage options; and
          ``(10) to do such other acts as may be necessary to 
        comply with this title or any order of the court and to 
        protect the interests of plan participants and 
        beneficiaries and providers of medical care.
  ``(c) Notice of Appointment.--As soon as practicable after 
the Secretary's appointment as trustee, the Secretary shall 
give notice of such appointment to--
          ``(1) the sponsor and plan administrator;
          ``(2) each participant;
          ``(3) each participating employer; and
          ``(4) if applicable, each employee organization 
        which, for purposes of collective bargaining, 
        represents plan participants.
  ``(d) Additional Duties.--Except to the extent inconsistent 
with the provisions of this title, or as may be otherwise 
ordered by the court, the Secretary, upon appointment as 
trustee under this section, shall be subject to the same duties 
as those of a trustee under section 704 of title 11, United 
States Code, and shall have the duties of a fiduciary for 
purposes of this title.
  ``(e) Other Proceedings.--An application by the Secretary 
under this subsection may be filed notwithstanding the pendency 
in the same or any other court of any bankruptcy, mortgage 
foreclosure, or equity receivership proceeding, or any 
proceeding to reorganize, conserve, or liquidate such plan or 
its property, or any proceeding to enforce a lien against 
property of the plan.
  ``(f) Jurisdiction of Court.--
          ``(1) In general.--Upon the filing of an application 
        for the appointment as trustee or the issuance of a 
        decree under this section, the court to which the 
        application is made shall have exclusive jurisdiction 
        of the plan involved and its property wherever located 
        with the powers, to the extent consistent with the 
        purposes of this section, of a court of the United 
        States having jurisdiction over cases under chapter 11 
        of title 11, United States Code. Pending an 
        adjudication under this section such court shall stay, 
        and upon appointment by it of the Secretary as trustee, 
        such court shall continue the stay of, any pending 
        mortgage foreclosure, equity receivership, or other 
        proceeding to reorganize, conserve, or liquidate the 
        plan, the sponsor, or property of such plan or sponsor, 
        and any other suit against any receiver, conservator, 
        or trustee of the plan, the sponsor, or property of the 
        plan or sponsor. Pending such adjudication and upon the 
        appointment by it of the Secretary as trustee, the 
        court may stay any proceeding to enforce a lien against 
        property of the plan or the sponsor or any other suit 
        against the plan or the sponsor.
          ``(2) Venue.--An action under this section may be 
        brought in the judicial district where the sponsor or 
        the plan administrator resides or does business or 
        where any asset of the plan is situated. A district 
        court in which such action is brought may issue process 
        with respect to such action in any other judicial 
        district.
  ``(g) Personnel.--In accordance with regulations which shall 
be prescribed by the Secretary, the Secretary shall appoint, 
retain, and compensate accountants, actuaries, and other 
professional service personnel as may be necessary in 
connection with the Secretary's service as trustee under this 
section.

``SEC. 811. STATE ASSESSMENT AUTHORITY.

  ``(a) In General.--Notwithstanding section 514, a State may 
impose by law a contribution tax on an association health plan 
described in section 806(a)(2), if the plan commenced 
operations in such State after the date of the enactment of the 
Small Business Health Fairness Act of 2009.
  ``(b) Contribution Tax.--For purposes of this section, the 
term `contribution tax' imposed by a State on an association 
health plan means any tax imposed by such State if--
          ``(1) such tax is computed by applying a rate to the 
        amount of premiums or contributions, with respect to 
        individuals covered under the plan who are residents of 
        such State, which are received by the plan from 
        participating employers located in such State or from 
        such individuals;
          ``(2) the rate of such tax does not exceed the rate 
        of any tax imposed by such State on premiums or 
        contributions received by insurers or health 
        maintenance organizations for health insurance coverage 
        offered in such State in connection with a group health 
        plan;
          ``(3) such tax is otherwise nondiscriminatory; and
          ``(4) the amount of any such tax assessed on the plan 
        is reduced by the amount of any tax or assessment 
        otherwise imposed by the State on premiums, 
        contributions, or both received by insurers or health 
        maintenance organizations for health insurance 
        coverage, aggregate excess/stop loss insurance (as 
        defined in section 806(g)(1)), specific excess/stop 
        loss insurance (as defined in section 806(g)(2)), other 
        insurance related to the provision of medical care 
        under the plan, or any combination thereof provided by 
        such insurers or health maintenance organizations in 
        such State in connection with such plan.

``SEC. 812. DEFINITIONS AND RULES OF CONSTRUCTION.

  ``(a) Definitions.--For purposes of this part--
          ``(1) Group health plan.--The term `group health 
        plan' has the meaning provided in section 733(a)(1) 
        (after applying subsection (b) of this section).
          ``(2) Medical care.--The term `medical care' has the 
        meaning provided in section 733(a)(2).
          ``(3) Health insurance coverage.--The term `health 
        insurance coverage' has the meaning provided in section 
        733(b)(1).
          ``(4) Health insurance issuer.--The term `health 
        insurance issuer' has the meaning provided in section 
        733(b)(2).
          ``(5) Applicable authority.--The term `applicable 
        authority' means the Secretary, except that, in 
        connection with any exercise of the Secretary's 
        authority regarding which the Secretary is required 
        under section 506(d) to consult with a State, such term 
        means the Secretary, in consultation with such State.
          ``(6) Health status-related factor.--The term `health 
        status-related factor' has the meaning provided in 
        section 733(d)(2).
          ``(7) Individual market.--
                  ``(A) In general.--The term `individual 
                market' means the market for health insurance 
                coverage offered to individuals other than in 
                connection with a group health plan.
                  ``(B) Treatment of very small groups.--
                          ``(i) In general.--Subject to clause 
                        (ii), such term includes coverage 
                        offered in connection with a group 
                        health plan that has fewer than 2 
                        participants as current employees or 
                        participants described in section 
                        732(d)(3) on the first day of the plan 
                        year.
                          ``(ii) State exception.--Clause (i) 
                        shall not apply in the case of health 
                        insurance coverage offered in a State 
                        if such State regulates the coverage 
                        described in such clause in the same 
                        manner and to the same extent as 
                        coverage in the small group market (as 
                        defined in section 2791(e)(5) of the 
                        Public Health Service Act) is regulated 
                        by such State.
          ``(8) Participating employer.--The term 
        `participating employer' means, in connection with an 
        association health plan, any employer, if any 
        individual who is an employee of such employer, a 
        partner in such employer, or a self-employed individual 
        who is such employer (or any dependent, as defined 
        under the terms of the plan, of such individual) is or 
        was covered under such plan in connection with the 
        status of such individual as such an employee, partner, 
        or self-employed individual in relation to the plan.
          ``(9) Applicable state authority.--The term 
        `applicable State authority' means, with respect to a 
        health insurance issuer in a State, the State insurance 
        commissioner or official or officials designated by the 
        State to enforce the requirements of title XXVII of the 
        Public Health Service Act for the State involved with 
        respect to such issuer.
          ``(10) Qualified actuary.--The term `qualified 
        actuary' means an individual who is a member of the 
        American Academy of Actuaries.
          ``(11) Affiliated member.--The term `affiliated 
        member' means, in connection with a sponsor--
                  ``(A) a person who is otherwise eligible to 
                be a member of the sponsor but who elects an 
                affiliated status with the sponsor,
                  ``(B) in the case of a sponsor with members 
                which consist of associations, a person who is 
                a member of any such association and elects an 
                affiliated status with the sponsor, or
                  ``(C) in the case of an association health 
                plan in existence on the date of the enactment 
                of the Small Business Health Fairness Act of 
                2009, a person eligible to be a member of the 
                sponsor or one of its member associations.
          ``(12) Large employer.--The term `large employer' 
        means, in connection with a group health plan with 
        respect to a plan year, an employer who employed an 
        average of at least 51 employees on business days 
        during the preceding calendar year and who employs at 
        least 2 employees on the first day of the plan year.
          ``(13) Small employer.--The term `small employer' 
        means, in connection with a group health plan with 
        respect to a plan year, an employer who is not a large 
        employer.
  ``(b) Rules of Construction.--
          ``(1) Employers and employees.--For purposes of 
        determining whether a plan, fund, or program is an 
        employee welfare benefit plan which is an association 
        health plan, and for purposes of applying this title in 
        connection with such plan, fund, or program so 
        determined to be such an employee welfare benefit 
        plan--
                  ``(A) in the case of a partnership, the term 
                `employer' (as defined in section 3(5)) 
                includes the partnership in relation to the 
                partners, and the term `employee' (as defined 
                in section 3(6)) includes any partner in 
                relation to the partnership; and
                  ``(B) in the case of a self-employed 
                individual, the term `employer' (as defined in 
                section 3(5)) and the term `employee' (as 
                defined in section 3(6)) shall include such 
                individual.
          ``(2) Plans, funds, and programs treated as employee 
        welfare benefit plans.--In the case of any plan, fund, 
        or program which was established or is maintained for 
        the purpose of providing medical care (through the 
        purchase of insurance or otherwise) for employees (or 
        their dependents) covered thereunder and which 
        demonstrates to the Secretary that all requirements for 
        certification under this part would be met with respect 
        to such plan, fund, or program if such plan, fund, or 
        program were a group health plan, such plan, fund, or 
        program shall be treated for purposes of this title as 
        an employee welfare benefit plan on and after the date 
        of such demonstration.''.
  (b) Conforming Amendments to Preemption Rules.--
          (1) Section 514(b)(6) of such Act (29 U.S.C. 
        1144(b)(6)) is amended by adding at the end the 
        following new subparagraph:
  ``(E) The preceding subparagraphs of this paragraph do not 
apply with respect to any State law in the case of an 
association health plan which is certified under part 8.''.
          (2) Section 514 of such Act (29 U.S.C. 1144) is 
        amended--
                  (A) in subsection (b)(4), by striking 
                ``Subsection (a)'' and inserting ``Subsections 
                (a) and (d)'';
                  (B) in subsection (b)(5), by striking 
                ``subsection (a)'' in subparagraph (A) and 
                inserting ``subsection (a) of this section and 
                subsections (a)(2)(B) and (b) of section 805'', 
                and by striking ``subsection (a)'' in 
                subparagraph (B) and inserting ``subsection (a) 
                of this section or subsection (a)(2)(B) or (b) 
                of section 805'';
                  (C) by redesignating subsections (d) and (e) 
                as subsections (e) and (f), respectively; and
                  (D) by inserting after subsection (c) the 
                following new subsection:
  ``(d)(1) Except as provided in subsection (b)(4), the 
provisions of this title shall supersede any and all State laws 
insofar as they may now or hereafter preclude, or have the 
effect of precluding, a health insurance issuer from offering 
health insurance coverage in connection with an association 
health plan which is certified under part 8.
  ``(2) Except as provided in paragraphs (4) and (5) of 
subsection (b) of this section--
          ``(A) In any case in which health insurance coverage 
        of any policy type is offered under an association 
        health plan certified under part 8 to a participating 
        employer operating in such State, the provisions of 
        this title shall supersede any and all laws of such 
        State insofar as they may preclude a health insurance 
        issuer from offering health insurance coverage of the 
        same policy type to other employers operating in the 
        State which are eligible for coverage under such 
        association health plan, whether or not such other 
        employers are participating employers in such plan.
          ``(B) In any case in which health insurance coverage 
        of any policy type is offered in a State under an 
        association health plan certified under part 8 and the 
        filing, with the applicable State authority (as defined 
        in section 812(a)(9)), of the policy form in connection 
        with such policy type is approved by such State 
        authority, the provisions of this title shall supersede 
        any and all laws of any other State in which health 
        insurance coverage of such type is offered, insofar as 
        they may preclude, upon the filing in the same form and 
        manner of such policy form with the applicable State 
        authority in such other State, the approval of the 
        filing in such other State.
  ``(3) Nothing in subsection (b)(6)(E) or the preceding 
provisions of this subsection shall be construed, with respect 
to health insurance issuers or health insurance coverage, to 
supersede or impair the law of any State--
          ``(A) providing solvency standards or similar 
        standards regarding the adequacy of insurer capital, 
        surplus, reserves, or contributions, or
          ``(B) relating to prompt payment of claims.
  ``(4) For additional provisions relating to association 
health plans, see subsections (a)(2)(B) and (b) of section 805.
  ``(5) For purposes of this subsection, the term `association 
health plan' has the meaning provided in section 801(a), and 
the terms `health insurance coverage', `participating 
employer', and `health insurance issuer' have the meanings 
provided such terms in section 812, respectively.''.
          (3) Section 514(b)(6)(A) of such Act (29 U.S.C. 
        1144(b)(6)(A)) is amended--
                  (A) in clause (i)(II), by striking ``and'' at 
                the end;
                  (B) in clause (ii), by inserting ``and which 
                does not provide medical care (within the 
                meaning of section 733(a)(2)),'' after 
                ``arrangement,'', and by striking ``title.'' 
                and inserting ``title, and''; and
                  (C) by adding at the end the following new 
                clause:
          ``(iii) subject to subparagraph (E), in the case of 
        any other employee welfare benefit plan which is a 
        multiple employer welfare arrangement and which 
        provides medical care (within the meaning of section 
        733(a)(2)), any law of any State which regulates 
        insurance may apply.''.
          (4) Section 514(e) of such Act (as redesignated by 
        paragraph (2)(C)) is amended--
                  (A) by striking ``Nothing'' and inserting 
                ``(1) Except as provided in paragraph (2), 
                nothing''; and
                  (B) by adding at the end the following new 
                paragraph:
  ``(2) Nothing in any other provision of law enacted on or 
after the date of the enactment of the Small Business Health 
Fairness Act of 2009 shall be construed to alter, amend, 
modify, invalidate, impair, or supersede any provision of this 
title, except by specific cross-reference to the affected 
section.''.
  (c) Plan Sponsor.--Section 3(16)(B) of such Act (29 U.S.C. 
102(16)(B)) is amended by adding at the end the following new 
sentence: ``Such term also includes a person serving as the 
sponsor of an association health plan under part 8.''.
  (d) Disclosure of Solvency Protections Related to Self-
Insured and Fully Insured Options Under Association Health 
Plans.--Section 102(b) of such Act (29 U.S.C. 102(b)) is 
amended by adding at the end the following: ``An association 
health plan shall include in its summary plan description, in 
connection with each benefit option, a description of the form 
of solvency or guarantee fund protection secured pursuant to 
this Act or applicable State law, if any.''.
  (e) Savings Clause.--Section 731(c) of such Act is amended by 
inserting ``or part 8'' after ``this part''.
  (f) Report to the Congress Regarding Certification of Self-
Insured Association Health Plans.--Not later than January 1, 
2012, the Secretary of Labor shall report to the Committee on 
Education and the Workforce of the House of Representatives and 
the Committee on Health, Education, Labor, and Pensions of the 
Senate the effect association health plans have had, if any, on 
reducing the number of uninsured individuals.
  (g) Clerical Amendment.--The table of contents in section 1 
of the Employee Retirement Income Security Act of 1974 is 
amended by inserting after the item relating to section 734 the 
following new items:

           ``Part 8--Rules Governing Association Health Plans

``801. Association health plans.
``802. Certification of association health plans.
``803. Requirements relating to sponsors and boards of trustees.
``804. Participation and coverage requirements.
``805. Other requirements relating to plan documents, contribution 
          rates, and benefit options.
``806. Maintenance of reserves and provisions for solvency for plans 
          providing health benefits in addition to health insurance 
          coverage.
``807. Requirements for application and related requirements.
``808. Notice requirements for voluntary termination.
``809. Corrective actions and mandatory termination.
``810. Trusteeship by the Secretary of insolvent association health 
          plans providing health benefits in addition to health 
          insurance coverage.
``811. State assessment authority.
``812. Definitions and rules of construction.''.

SEC. 202. CLARIFICATION OF TREATMENT OF SINGLE EMPLOYER ARRANGEMENTS.

  Section 3(40)(B) of the Employee Retirement Income Security 
Act of 1974 (29 U.S.C. 1002(40)(B)) is amended--
          (1) in clause (i), by inserting after ``control 
        group,'' the following: ``except that, in any case in 
        which the benefit referred to in subparagraph (A) 
        consists of medical care (as defined in section 
        812(a)(2)), two or more trades or businesses, whether 
        or not incorporated, shall be deemed a single employer 
        for any plan year of such plan, or any fiscal year of 
        such other arrangement, if such trades or businesses 
        are within the same control group during such year or 
        at any time during the preceding 1-year period,'';
          (2) in clause (iii), by striking ``(iii) the 
        determination'' and inserting the following:
          ``(iii)(I) in any case in which the benefit referred 
        to in subparagraph (A) consists of medical care (as 
        defined in section 812(a)(2)), the determination of 
        whether a trade or business is under `common control' 
        with another trade or business shall be determined 
        under regulations of the Secretary applying principles 
        consistent and coextensive with the principles applied 
        in determining whether employees of two or more trades 
        or businesses are treated as employed by a single 
        employer under section 4001(b), except that, for 
        purposes of this paragraph, an interest of greater than 
        25 percent may not be required as the minimum interest 
        necessary for common control, or
          ``(II) in any other case, the determination'';
          (3) by redesignating clauses (iv) and (v) as clauses 
        (v) and (vi), respectively; and
          (4) by inserting after clause (iii) the following new 
        clause:
          ``(iv) in any case in which the benefit referred to 
        in subparagraph (A) consists of medical care (as 
        defined in section 812(a)(2)), in determining, after 
        the application of clause (i), whether benefits are 
        provided to employees of two or more employers, the 
        arrangement shall be treated as having only one 
        participating employer if, after the application of 
        clause (i), the number of individuals who are employees 
        and former employees of any one participating employer 
        and who are covered under the arrangement is greater 
        than 75 percent of the aggregate number of all 
        individuals who are employees or former employees of 
        participating employers and who are covered under the 
        arrangement,''.

SEC. 203. ENFORCEMENT PROVISIONS RELATING TO ASSOCIATION HEALTH PLANS.

  (a) Criminal Penalties for Certain Willful 
Misrepresentations.--Section 501 of the Employee Retirement 
Income Security Act of 1974 (29 U.S.C. 1131) is amended--
          (1) by inserting ``(a)'' after ``Sec. 501.''; and
          (2) by adding at the end the following new 
        subsection:
  ``(b) Any person who willfully falsely represents, to any 
employee, any employee's beneficiary, any employer, the 
Secretary, or any State, a plan or other arrangement 
established or maintained for the purpose of offering or 
providing any benefit described in section 3(1) to employees or 
their beneficiaries as--
          ``(1) being an association health plan which has been 
        certified under part 8;
          ``(2) having been established or maintained under or 
        pursuant to one or more collective bargaining 
        agreements which are reached pursuant to collective 
        bargaining described in section 8(d) of the National 
        Labor Relations Act (29 U.S.C. 158(d)) or paragraph 
        Fourth of section 2 of the Railway Labor Act (45 U.S.C. 
        152, paragraph Fourth) or which are reached pursuant to 
        labor-management negotiations under similar provisions 
        of State public employee relations laws; or
          ``(3) being a plan or arrangement described in 
        section 3(40)(A)(i),
shall, upon conviction, be imprisoned not more than 5 years, be 
fined under title 18, United States Code, or both.''.
  (b) Cease Activities Orders.--Section 502 of such Act (29 
U.S.C. 1132) is amended by adding at the end the following new 
subsection:
  ``(n) Association Health Plan Cease and Desist Orders.--
          ``(1) In general.--Subject to paragraph (2), upon 
        application by the Secretary showing the operation, 
        promotion, or marketing of an association health plan 
        (or similar arrangement providing benefits consisting 
        of medical care (as defined in section 733(a)(2))) 
        that--
                  ``(A) is not certified under part 8, is 
                subject under section 514(b)(6) to the 
                insurance laws of any State in which the plan 
                or arrangement offers or provides benefits, and 
                is not licensed, registered, or otherwise 
                approved under the insurance laws of such 
                State; or
                  ``(B) is an association health plan certified 
                under part 8 and is not operating in accordance 
                with the requirements under part 8 for such 
                certification,
        a district court of the United States shall enter an 
        order requiring that the plan or arrangement cease 
        activities.
          ``(2) Exception.--Paragraph (1) shall not apply in 
        the case of an association health plan or other 
        arrangement if the plan or arrangement shows that--
                  ``(A) all benefits under it referred to in 
                paragraph (1) consist of health insurance 
                coverage; and
                  ``(B) with respect to each State in which the 
                plan or arrangement offers or provides 
                benefits, the plan or arrangement is operating 
                in accordance with applicable State laws that 
                are not superseded under section 514.
          ``(3) Additional equitable relief.--The court may 
        grant such additional equitable relief, including any 
        relief available under this title, as it deems 
        necessary to protect the interests of the public and of 
        persons having claims for benefits against the plan.''.
  (c) Responsibility for Claims Procedure.--Section 503 of such 
Act (29 U.S.C. 1133) is amended by inserting ``(a) In 
General.--'' before ``In accordance'', and by adding at the end 
the following new subsection:
  ``(b) Association Health Plans.--The terms of each 
association health plan which is or has been certified under 
part 8 shall require the board of trustees or the named 
fiduciary (as applicable) to ensure that the requirements of 
this section are met in connection with claims filed under the 
plan.''.

SEC. 204. COOPERATION BETWEEN FEDERAL AND STATE AUTHORITIES.

  Section 506 of the Employee Retirement Income Security Act of 
1974 (29 U.S.C. 1136) is amended by adding at the end the 
following new subsection:
  ``(d) Consultation With States With Respect to Association 
Health Plans.--
          ``(1) Agreements with states.--The Secretary shall 
        consult with the State recognized under paragraph (2) 
        with respect to an association health plan regarding 
        the exercise of--
                  ``(A) the Secretary's authority under 
                sections 502 and 504 to enforce the 
                requirements for certification under part 8; 
                and
                  ``(B) the Secretary's authority to certify 
                association health plans under part 8 in 
                accordance with regulations of the Secretary 
                applicable to certification under part 8.
          ``(2) Recognition of primary domicile state.--In 
        carrying out paragraph (1), the Secretary shall ensure 
        that only one State will be recognized, with respect to 
        any particular association health plan, as the State 
        with which consultation is required. In carrying out 
        this paragraph--
                  ``(A) in the case of a plan which provides 
                health insurance coverage (as defined in 
                section 812(a)(3)), such State shall be the 
                State with which filing and approval of a 
                policy type offered by the plan was initially 
                obtained, and
                  ``(B) in any other case, the Secretary shall 
                take into account the places of residence of 
                the participants and beneficiaries under the 
                plan and the State in which the trust is 
                maintained.''.

SEC. 205. EFFECTIVE DATE AND TRANSITIONAL AND OTHER RULES.

  (a) Effective Date.--The amendments made by this title shall 
take effect 1 year after the date of the enactment of this Act. 
The Secretary of Labor shall first issue all regulations 
necessary to carry out the amendments made by this title within 
1 year after the date of the enactment of this Act.
  (b) Treatment of Certain Existing Health Benefits Programs.--
          (1) In general.--In any case in which, as of the date 
        of the enactment of this Act, an arrangement is 
        maintained in a State for the purpose of providing 
        benefits consisting of medical care for the employees 
        and beneficiaries of its participating employers, at 
        least 200 participating employers make contributions to 
        such arrangement, such arrangement has been in 
        existence for at least 10 years, and such arrangement 
        is licensed under the laws of one or more States to 
        provide such benefits to its participating employers, 
        upon the filing with the applicable authority (as 
        defined in section 812(a)(5) of the Employee Retirement 
        Income Security Act of 1974 (as amended by this 
        subtitle)) by the arrangement of an application for 
        certification of the arrangement under part 8 of 
        subtitle B of title I of such Act--
                  (A) such arrangement shall be deemed to be a 
                group health plan for purposes of title I of 
                such Act;
                  (B) the requirements of sections 801(a) and 
                803(a) of the Employee Retirement Income 
                Security Act of 1974 shall be deemed met with 
                respect to such arrangement;
                  (C) the requirements of section 803(b) of 
                such Act shall be deemed met, if the 
                arrangement is operated by a board of directors 
                which--
                          (i) is elected by the participating 
                        employers, with each employer having 
                        one vote; and
                          (ii) has complete fiscal control over 
                        the arrangement and which is 
                        responsible for all operations of the 
                        arrangement;
                  (D) the requirements of section 804(a) of 
                such Act shall be deemed met with respect to 
                such arrangement; and
                  (E) the arrangement may be certified by any 
                applicable authority with respect to its 
                operations in any State only if it operates in 
                such State on the date of certification.
        The provisions of this subsection shall cease to apply 
        with respect to any such arrangement at such time after 
        the date of the enactment of this Act as the applicable 
        requirements of this subsection are not met with 
        respect to such arrangement.
          (2) Definitions.--For purposes of this subsection, 
        the terms ``group health plan'', ``medical care'', and 
        ``participating employer'' shall have the meanings 
        provided in section 812 of the Employee Retirement 
        Income Security Act of 1974, except that the reference 
        in paragraph (7) of such section to an ``association 
        health plan'' shall be deemed a reference to an 
        arrangement referred to in this subsection.

              TITLE II--TARGETED EFFORTS TO EXPAND ACCESS

SEC. 211. EXTENDING COVERAGE OF DEPENDENTS.

  (a) Employee Retirement Income Security Act of 1974.--
          (1) In general.--Part 7 of subtitle B of title I of 
        the Employee Retirement Income Security Act of 1974 is 
        amended by inserting after section 2714 the following 
        new section:

``SEC. 715. EXTENDING COVERAGE OF DEPENDENTS.

  ``(a) In General.--In the case of a group health plan, or 
health insurance coverage offered in connection with a group 
health plan, that treats as a beneficiary under the plan an 
individual who is a dependent child of a participant or 
beneficiary under the plan, the plan or coverage shall continue 
to treat the individual as a dependent child without regard to 
the individual's age through at least the end of the plan year 
in which the individual turns an age specified in the plan, but 
not less than 25 years of age.
  ``(b) Construction.--Nothing in this section shall be 
construed as requiring a group health plan to provide benefits 
for dependent children as beneficiaries under the plan or to 
require a participant to elect coverage of dependent 
children.''.
          (2) Clerical amendment.--The table of contents of 
        such Act is amended by inserting after the item 
        relating to section 714 the following new item:

``Sec. 715. Extending coverage of dependents through plan year that 
          includes 25th birthday.''.

  (b) PHSA.--Title XXVII of the Public Health Service Act is 
amended by inserting after section 2707 the following new 
section:

``SEC. 2708. EXTENDING COVERAGE OF DEPENDENTS.

  ``(a) In General.--In the case of a group health plan, or 
health insurance coverage offered in connection with a group 
health plan, that treats as a beneficiary under the plan an 
individual who is a dependent child of a participant or 
beneficiary under the plan, the plan or coverage shall continue 
to treat the individual as a dependent child without regard to 
the individual's age through at least the end of the plan year 
in which the individual turns an age specified in the plan, but 
not less than 25 years of age..
  ``(b) Construction.--Nothing in this section shall be 
construed as requiring a group health plan to provide benefits 
for dependent children as beneficiaries under the plan or to 
require a participant to elect coverage of dependent 
children.''.
(c) IRC.--
        (1) In general.--Subchapter B of chapter 100 of the 
        Internal Revenue Code of 1986 is amended by adding at 
        the end the following new section:

``SEC. 9814. EXTENDING COVERAGE OF DEPENDENTS.

``(a) In General.--In the case of a group health plan that 
treats as a beneficiary under the plan an individual who is a 
dependent child of a participant or beneficiary under the plan, 
the plan shall continue to treat the individual as a dependent 
child without regard to the individual's age through at least 
the end of the plan year in which the individual turns an age 
specified in the plan, but not less than 25 years of age.
``(b) Construction.--Nothing in this section shall be construed 
as requiring a group health plan to provide coverage for 
dependent children as beneficiaries under the plan or to 
require a participant to elect coverage of dependent 
children.''.
        (2) Clerical amendment.--The table of sections in such 
        subchapter is amended by adding at the end the 
        following new item:

``Sec. 9814. Extending coverage of dependents through plan year that 
          includes 25th birthday.''.
(d) Effective Date.--The amendments made by this section shall 
apply to group health plans for plan years beginning more than 
3 months after the date of the enactment of this Act and shall 
apply to individuals who are dependent children under a group 
health plan, or health insurance coverage offered in connection 
with such a plan, on or after such date.

SEC. 212. ALLOWING AUTO-ENROLLMENT FOR EMPLOYER SPONSORED COVERAGE.

(a) In General.--No State shall establish a law that prevents 
an employer from instituting auto-enrollment for coverage of a 
participant or beneficiary, including current employees, under 
a group health plan, or health insurance coverage offered in 
connection with such a plan, so long as the participant or 
beneficiary has the option of declining such coverage.
(b) Autoenrollment.--
        (1) Notice required.--Employers with auto-enrollment 
        under a group health plan or health insurance coverage 
        shall provide annual notification, within a reasonable 
        period before the beginning of each plan year, to each 
        employee eligible to participate in the plan. The 
        notice shall explain the employee contribution to such 
        plan and the employee's right to decline coverage.
        (2) Treatment of non-action.--After a reasonable period 
        of time after receipt of the notice, if an employee 
        fails to make an affirmative declaration declining 
        coverage, then such an employee may be enrolled in the 
        group health plan or health insurance coverage offered 
        in connection with such a plan.''
(c) Construction.--Nothing in this section shall be construed 
to supersede State law which establishes, implements, or 
continues in effect any standard or requirement relating to 
employers in connection with payroll or the sponsoring of 
employer sponsored health insurance coverage except to the 
extent that such standard or requirement prevents an employer 
from instituting the auto-enrollment described in subsection 
(a).

 TITLE III--EXPANDING CHOICES BY ALLOWING AMERICANS TO BUY HEALTH CARE 
                      COVERAGE ACROSS STATE LINES

SEC. 221. INTERSTATE PURCHASING OF HEALTH INSURANCE.

(a) In General.--Title XXVII of the Public Health Service Act 
(42 U.S.C. 300gg et seq.) is amended by adding at the end the 
following new part:

``PART D--COOPERATIVE GOVERNING OF INDIVIDUAL HEALTH INSURANCE COVERAGE

``SEC. 2795. DEFINITIONS.

``In this part:
        ``(1) Primary state.--The term `primary State' means, 
        with respect to individual health insurance coverage 
        offered by a health insurance issuer, the State 
        designated by the issuer as the State whose covered 
        laws shall govern the health insurance issuer in the 
        sale of such coverage under this part. An issuer, with 
        respect to a particular policy, may only designate one 
        such State as its primary State with respect to all 
        such coverage it offers. Such an issuer may not change 
        the designated primary State with respect to individual 
        health insurance coverage once the policy is issued, 
        except that such a change may be made upon renewal of 
        the policy. With respect to such designated State, the 
        issuer is deemed to be doing business in that State.
        ``(2) Secondary state.--The term `secondary State' 
        means, with respect to individual health insurance 
        coverage offered by a health insurance issuer, any 
        State that is not the primary State. In the case of a 
        health insurance issuer that is selling a policy in, or 
        to a resident of, a secondary State, the issuer is 
        deemed to be doing business in that secondary State.
        ``(3) Health insurance issuer.--The term `health 
        insurance issuer' has the meaning given such term in 
        section 2791(b)(2), except that such an issuer must be 
        licensed in the primary State and be qualified to sell 
        individual health insurance coverage in that State.
        ``(4) Individual health insurance coverage.--The term 
        `individual health insurance coverage' means health 
        insurance coverage offered in the individual market, as 
        defined in section 2791(e)(1).
        ``(5) Applicable state authority.--The term `applicable 
        State authority' means, with respect to a health 
        insurance issuer in a State, the State insurance 
        commissioner or official or officials designated by the 
        State to enforce the requirements of this title for the 
        State with respect to the issuer.
        ``(6) Hazardous financial condition.--The term 
        `hazardous financial condition' means that, based on 
        its present or reasonably anticipated financial 
        condition, a health insurance issuer is unlikely to be 
        able--
                ``(A) to meet obligations to policyholders with 
                respect to known claims and reasonably 
                anticipated claims; or
                ``(B) to pay other obligations in the normal 
                course of business.
        ``(7) Covered laws.--
                ``(A) In general.--The term `covered laws'' 
                means the laws, rules, regulations, agreements, 
                and orders governing the insurance business 
                pertaining to--
                        ``(i) individual health insurance 
                        coverage issued by a health insurance 
                        issuer;
                        ``(ii) the offer, sale, rating 
                        (including medical underwriting), 
                        renewal, and issuance of individual 
                        health insurance coverage to an 
                        individual;
                        ``(iii) the provision to an individual 
                        in relation to individual health 
                        insurance coverage of health care and 
                        insurance related services;
                        ``(iv) the provision to an individual 
                        in relation to individual health 
                        insurance coverage of management, 
                        operations, and investment activities 
                        of a health insurance issuer; and
                        ``(v) the provision to an individual in 
                        relation to individual health insurance 
                        coverage of loss control and claims 
                        administration for a health insurance 
                        issuer with respect to liability for 
                        which the issuer provides insurance.
                ``(B) Exception.--Such term does not include 
                any law, rule, regulation, agreement, or order 
                governing the use of care or cost management 
                techniques, including any requirement related 
                to provider contracting, network access or 
                adequacy, health care data collection, or 
                quality assurance.
        ``(8) State.--The term `State' means the 50 States and 
        includes the District of Columbia, Puerto Rico, the 
        Virgin Islands, Guam, American Samoa, and the Northern 
        Mariana Islands.
        ``(9) Unfair claims settlement practices.--The term 
        `unfair claims settlement practices' means only the 
        following practices:
                ``(A) Knowingly misrepresenting to claimants 
                and insured individuals relevant facts or 
                policy provisions relating to coverage at 
                issue.
                ``(B) Failing to acknowledge with reasonable 
                promptness pertinent communications with 
                respect to claims arising under policies.
                ``(C) Failing to adopt and implement reasonable 
                standards for the prompt investigation and 
                settlement of claims arising under policies.
                ``(D) Failing to effectuate prompt, fair, and 
                equitable settlement of claims submitted in 
                which liability has become reasonably clear.
                ``(E) Refusing to pay claims without conducting 
                a reasonable investigation.
                ``(F) Failing to affirm or deny coverage of 
                claims within a reasonable period of time after 
                having completed an investigation related to 
                those claims.
                ``(G) A pattern or practice of compelling 
                insured individuals or their beneficiaries to 
                institute suits to recover amounts due under 
                its policies by offering substantially less 
                than the amounts ultimately recovered in suits 
                brought by them.
                ``(H) A pattern or practice of attempting to 
                settle or settling claims for less than the 
                amount that a reasonable person would believe 
                the insured individual or his or her 
                beneficiary was entitled by reference to 
                written or printed advertising material 
                accompanying or made part of an application.
                ``(I) Attempting to settle or settling claims 
                on the basis of an application that was 
                materially altered without notice to, or 
                knowledge or consent of, the insured.
                ``(J) Failing to provide forms necessary to 
                present claims within 15 calendar days of a 
                requests with reasonable explanations regarding 
                their use.
                ``(K) Attempting to cancel a policy in less 
                time than that prescribed in the policy or by 
                the law of the primary State.
        ``(10) Fraud and abuse.--The term `fraud and abuse' 
        means an act or omission committed by a person who, 
        knowingly and with intent to defraud, commits, or 
        conceals any material information concerning, one or 
        more of the following:
                ``(A) Presenting, causing to be presented or 
                preparing with knowledge or belief that it will 
                be presented to or by an insurer, a reinsurer, 
                broker or its agent, false information as part 
                of, in support of or concerning a fact material 
                to one or more of the following:
                        ``(i) An application for the issuance 
                        or renewal of an insurance policy or 
                        reinsurance contract.
                        ``(ii) The rating of an insurance 
                        policy or reinsurance contract.
                        ``(iii) A claim for payment or benefit 
                        pursuant to an insurance policy or 
                        reinsurance contract.
                        ``(iv) Premiums paid on an insurance 
                        policy or reinsurance contract.
                        ``(v) Payments made in accordance with 
                        the terms of an insurance policy or 
                        reinsurance contract.
                        ``(vi) A document filed with the 
                        commissioner or the chief insurance 
                        regulatory official of another 
                        jurisdiction.
                        ``(vii) The financial condition of an 
                        insurer or reinsurer.
                        ``(viii) The formation, acquisition, 
                        merger, reconsolidation, dissolution or 
                        withdrawal from one or more lines of 
                        insurance or reinsurance in all or part 
                        of a State by an insurer or reinsurer.
                        ``(ix) The issuance of written evidence 
                        of insurance.
                        ``(x) The reinstatement of an insurance 
                        policy.
                ``(B) Solicitation or acceptance of new or 
                renewal insurance risks on behalf of an insurer 
                reinsurer or other person engaged in the 
                business of insurance by a person who knows or 
                should know that the insurer or other person 
                responsible for the risk is insolvent at the 
                time of the transaction.
                ``(C) Transaction of the business of insurance 
                in violation of laws requiring a license, 
                certificate of authority or other legal 
                authority for the transaction of the business 
                of insurance.
                ``(D) Attempt to commit, aiding or abetting in 
                the commission of, or conspiracy to commit the 
                acts or omissions specified in this paragraph.

``SEC. 2796. APPLICATION OF LAW.

``(a) In General.--The covered laws of the primary State shall 
apply to individual health insurance coverage offered by a 
health insurance issuer in the primary State and in any 
secondary State, but only if the coverage and issuer comply 
with the conditions of this section with respect to the 
offering of coverage in any secondary State.
``(b) Exemptions From Covered Laws in a Secondary State.--
Except as provided in this section, a health insurance issuer 
with respect to its offer, sale, rating (including medical 
underwriting), renewal, and issuance of individual health 
insurance coverage in any secondary State is exempt from any 
covered laws of the secondary State (and any rules, 
regulations, agreements, or orders sought or issued by such 
State under or related to such covered laws) to the extent that 
such laws would--
        ``(1) make unlawful, or regulate, directly or 
        indirectly, the operation of the health insurance 
        issuer operating in the secondary State, except that 
        any secondary State may require such an issuer--
                ``(A) to pay, on a nondiscriminatory basis, 
                applicable premium and other taxes (including 
                high risk pool assessments) which are levied on 
                insurers and surplus lines insurers, brokers, 
                or policyholders under the laws of the State;
                ``(B) to register with and designate the State 
                insurance commissioner as its agent solely for 
                the purpose of receiving service of legal 
                documents or process;
                ``(C) to submit to an examination of its 
                financial condition by the State insurance 
                commissioner in any State in which the issuer 
                is doing business to determine the issuer's 
                financial condition, if--
                        ``(i) the State insurance commissioner 
                        of the primary State has not done an 
                        examination within the period 
                        recommended by the National Association 
                        of Insurance Commissioners; and
                        ``(ii) any such examination is 
                        conducted in accordance with the 
                        examiners'' handbook of the National 
                        Association of Insurance Commissioners 
                        and is coordinated to avoid unjustified 
                        duplication and unjustified repetition;
                ``(D) to comply with a lawful order issued--
                        ``(i) in a delinquency proceeding 
                        commenced by the State insurance 
                        commissioner if there has been a 
                        finding of financial impairment under 
                        subparagraph (C); or
                        ``(ii) in a voluntary dissolution 
                        proceeding;
                ``(E) to comply with an injunction issued by a 
                court of competent jurisdiction, upon a 
                petition by the State insurance commissioner 
                alleging that the issuer is in hazardous 
                financial condition;
                ``(F) to participate, on a nondiscriminatory 
                basis, in any insurance insolvency guaranty 
                association or similar association to which a 
                health insurance issuer in the State is 
                required to belong;
                ``(G) to comply with any State law regarding 
                fraud and abuse (as defined in section 
                2795(10)), except that if the State seeks an 
                injunction regarding the conduct described in 
                this subparagraph, such injunction must be 
                obtained from a court of competent 
                jurisdiction;
                ``(H) to comply with any State law regarding 
                unfair claims settlement practices (as defined 
                in section 2795(9)); or
                ``(I) to comply with the applicable 
                requirements for independent review under 
                section 2798 with respect to coverage offered 
                in the State;
        ``(2) require any individual health insurance coverage 
        issued by the issuer to be countersigned by an 
        insurance agent or broker residing in that Secondary 
        State; or
        ``(3) otherwise discriminate against the issuer issuing 
        insurance in both the primary State and in any 
        secondary State.
``(c) Clear and Conspicuous Disclosure.--A health insurance 
issuer shall provide the following notice, in 12-point bold 
type, in any insurance coverage offered in a secondary State 
under this part by such a health insurance issuer and at 
renewal of the policy, with the 5 blank spaces therein being 
appropriately filled with the name of the health insurance 
issuer, the name of primary State, the name of the secondary 
State, the name of the secondary State, and the name of the 
secondary State, respectively, for the coverage concerned:
this policy is issued by _____ AND IS GOVERNED BY THE LAWS AND 
REGULATIONS OF THE STATE OF _____, AND IT HAS MET ALL THE LAWS 
OF THAT STATE AS DETERMINED BY THAT STATE'S DEPARTMENT OF 
INSURANCE. THIS POLICY MAY BE LESS EXPENSIVE THAN OTHERS 
BECAUSE IT IS NOT SUBJECT TO ALL OF THE INSURANCE LAWS AND 
REGULATIONS OF THE STATE OF _____, INCLUDING COVERAGE OF SOME 
SERVICES OR BENEFITS MANDATED BY THE LAW OF THE STATE OF _____. 
ADDITIONALLY, THIS POLICY IS NOT SUBJECT TO ALL OF THE CONSUMER 
PROTECTION LAWS OR RESTRICTIONS ON RATE CHANGES OF THE STATE OF 
_____. AS WITH ALL INSURANCE PRODUCTS, BEFORE PURCHASING THIS 
POLICY, YOU SHOULD CAREFULLY REVIEW THE POLICY AND DETERMINE 
WHAT HEALTH CARE SERVICES THE POLICY COVERS AND WHAT BENEFITS 
IT PROVIDES, INCLUDING ANY EXCLUSIONS, LIMITATIONS, OR 
CONDITIONS FOR SUCH SERVICES OR BENEFITS.''.
``(d) Prohibition on Certain Reclassifications and Premium 
Increases.--
        ``(1) In general.--For purposes of this section, a 
        health insurance issuer that provides individual health 
        insurance coverage to an individual under this part in 
        a primary or secondary State may not upon renewal--
                ``(A) move or reclassify the individual insured 
                under the health insurance coverage from the 
                class such individual is in at the time of 
                issue of the contract based on the health-
                status related factors of the individual; or
                ``(B) increase the premiums assessed the 
                individual for such coverage based on a health 
                status-related factor or change of a health 
                status-related factor or the past or 
                prospective claim experience of the insured 
                individual.
        ``(2) Construction.--Nothing in paragraph (1) shall be 
        construed to prohibit a health insurance issuer--
                ``(A) from terminating or discontinuing 
                coverage or a class of coverage in accordance 
                with subsections (b) and (c) of section 2742;
                ``(B) from raising premium rates for all policy 
                holders within a class based on claims 
                experience;
                ``(C) from changing premiums or offering 
                discounted premiums to individuals who engage 
                in wellness activities at intervals prescribed 
                by the issuer, if such premium changes or 
                incentives--
                        ``(i) are disclosed to the consumer in 
                        the insurance contract;
                        ``(ii) are based on specific wellness 
                        activities that are not applicable to 
                        all individuals; and
                        ``(iii) are not obtainable by all 
                        individuals to whom coverage is 
                        offered;
                ``(D) from reinstating lapsed coverage; or
                ``(E) from retroactively adjusting the rates 
                charged an insured individual if the initial 
                rates were set based on material 
                misrepresentation by the individual at the time 
                of issue.
``(e) Prior Offering of Policy in Primary State.--A health 
insurance issuer may not offer for sale individual health 
insurance coverage in a secondary State unless that coverage is 
currently offered for sale in the primary State.
``(f) Licensing of Agents or Brokers for Health Insurance 
Issuers.--Any State may require that a person acting, or 
offering to act, as an agent or broker for a health insurance 
issuer with respect to the offering of individual health 
insurance coverage obtain a license from that State, with 
commissions or other compensation subject to the provisions of 
the laws of that State, except that a State may not impose any 
qualification or requirement which discriminates against a 
nonresident agent or broker.
``(g) Documents for Submission to State Insurance 
Commissioner.--Each health insurance issuer issuing individual 
health insurance coverage in both primary and secondary States 
shall submit--
        ``(1) to the insurance commissioner of each State in 
        which it intends to offer such coverage, before it may 
        offer individual health insurance coverage in such 
        State--
                ``(A) a copy of the plan of operation or 
                feasibility study or any similar statement of 
                the policy being offered and its coverage 
                (which shall include the name of its primary 
                State and its principal place of business);
                ``(B) written notice of any change in its 
                designation of its primary State; and
                ``(C) written notice from the issuer of the 
                issuer's compliance with all the laws of the 
                primary State; and
        ``(2) to the insurance commissioner of each secondary 
        State in which it offers individual health insurance 
        coverage, a copy of the issuer's quarterly financial 
        statement submitted to the primary State, which 
        statement shall be certified by an independent public 
        accountant and contain a statement of opinion on loss 
        and loss adjustment expense reserves made by--
                ``(A) a member of the American Academy of 
                Actuaries; or
                ``(B) a qualified loss reserve specialist.
``(h) Power of Courts To Enjoin Conduct.--Nothing in this 
section shall be construed to affect the authority of any 
Federal or State court to enjoin--
        ``(1) the solicitation or sale of individual health 
        insurance coverage by a health insurance issuer to any 
        person or group who is not eligible for such insurance; 
        or
        ``(2) the solicitation or sale of individual health 
        insurance coverage that violates the requirements of 
        the law of a secondary State which are described in 
        subparagraphs (A) through (H) of section 2796(b)(1).
``(i) Power of Secondary States To Take Administrative 
Action.--Nothing in this section shall be construed to affect 
the authority of any State to enjoin conduct in violation of 
that State's laws described in section 2796(b)(1).
``(j) State Powers To Enforce State Laws.--
        ``(1) In general.--Subject to the provisions of 
        subsection (b)(1)(G) (relating to injunctions) and 
        paragraph (2), nothing in this section shall be 
        construed to affect the authority of any State to make 
        use of any of its powers to enforce the laws of such 
        State with respect to which a health insurance issuer 
        is not exempt under subsection (b).
        ``(2) Courts of competent jurisdiction.--If a State 
        seeks an injunction regarding the conduct described in 
        paragraphs (1) and (2) of subsection (h), such 
        injunction must be obtained from a Federal or State 
        court of competent jurisdiction.
``(k) States' Authority To Sue.--Nothing in this section shall 
affect the authority of any State to bring action in any 
Federal or State court.
``(l) Generally Applicable Laws.--Nothing in this section shall 
be construed to affect the applicability of State laws 
generally applicable to persons or corporations.
``(m) Guaranteed Availability of Coverage to HIPAA Eligible 
Individuals.--To the extent that a health insurance issuer is 
offering coverage in a primary State that does not accommodate 
residents of secondary States or does not provide a working 
mechanism for residents of a secondary State, and the issuer is 
offering coverage under this part in such secondary State which 
has not adopted a qualified high risk pool as its acceptable 
alternative mechanism (as defined in section 2744(c)(2)), the 
issuer shall, with respect to any individual health insurance 
coverage offered in a secondary State under this part, comply 
with the guaranteed availability requirements for eligible 
individuals in section 2741.

``SEC. 2797. PRIMARY STATE MUST MEET FEDERAL FLOOR BEFORE ISSUER MAY 
                    SELL INTO SECONDARY STATES.

``A health insurance issuer may not offer, sell, or issue 
individual health insurance coverage in a secondary State if 
the State insurance commissioner does not use a risk-based 
capital formula for the determination of capital and surplus 
requirements for all health insurance issuers.

``SEC. 2798. INDEPENDENT EXTERNAL APPEALS PROCEDURES.

``(a) Right to External Appeal.--A health insurance issuer may 
not offer, sell, or issue individual health insurance coverage 
in a secondary State under the provisions of this title 
unless--
        ``(1) both the secondary State and the primary State 
        have legislation or regulations in place establishing 
        an independent review process for individuals who are 
        covered by individual health insurance coverage, or
        ``(2) in any case in which the requirements of 
        subparagraph (A) are not met with respect to the either 
        of such States, the issuer provides an independent 
        review mechanism substantially identical (as determined 
        by the applicable State authority of such State) to 
        that prescribed in the `Health Carrier External Review 
        Model Act' of the National Association of Insurance 
        Commissioners for all individuals who purchase 
        insurance coverage under the terms of this part, except 
        that, under such mechanism, the review is conducted by 
        an independent medical reviewer, or a panel of such 
        reviewers, with respect to whom the requirements of 
        subsection (b) are met.
``(b) Qualifications of Independent Medical Reviewers.--In the 
case of any independent review mechanism referred to in 
subsection (a)(2)--
        ``(1) In general.--In referring a denial of a claim to 
        an independent medical reviewer, or to any panel of 
        such reviewers, to conduct independent medical review, 
        the issuer shall ensure that--
                ``(A) each independent medical reviewer meets 
                the qualifications described in paragraphs (2) 
                and (3);
                ``(B) with respect to each review, each 
                reviewer meets the requirements of paragraph 
                (4) and the reviewer, or at least 1 reviewer on 
                the panel, meets the requirements described in 
                paragraph (5); and
                ``(C) compensation provided by the issuer to 
                each reviewer is consistent with paragraph (6).
        ``(2) Licensure and expertise.--Each independent 
        medical reviewer shall be a physician (allopathic or 
        osteopathic) or health care professional who--
                ``(A) is appropriately credentialed or licensed 
                in 1 or more States to deliver health care 
                services; and
                ``(B) typically treats the condition, makes the 
                diagnosis, or provides the type of treatment 
                under review.
        ``(3) Independence.--
                ``(A) In general.--Subject to subparagraph (B), 
                each independent medical reviewer in a case 
                shall--
                        ``(i) not be a related party (as 
                        defined in paragraph (7));
                        ``(ii) not have a material familial, 
                        financial, or professional relationship 
                        with such a party; and
                        ``(iii) not otherwise have a conflict 
                        of interest with such a party (as 
                        determined under regulations).
                ``(B) Exception.--Nothing in subparagraph (A) 
                shall be construed to--
                        ``(i) prohibit an individual, solely on 
                        the basis of affiliation with the 
                        issuer, from serving as an independent 
                        medical reviewer if--
                                ``(I) a non-affiliated 
                                individual is not reasonably 
                                available;
                                ``(II) the affiliated 
                                individual is not involved in 
                                the provision of items or 
                                services in the case under 
                                review;
                                ``(III) the fact of such an 
                                affiliation is disclosed to the 
                                issuer and the enrollee (or 
                                authorized representative) and 
                                neither party objects; and
                                ``(IV) the affiliated 
                                individual is not an employee 
                                of the issuer and does not 
                                provide services exclusively or 
                                primarily to or on behalf of 
                                the issuer;
                        ``(ii) prohibit an individual who has 
                        staff privileges at the institution 
                        where the treatment involved takes 
                        place from serving as an independent 
                        medical reviewer merely on the basis of 
                        such affiliation if the affiliation is 
                        disclosed to the issuer and the 
                        enrollee (or authorized 
                        representative), and neither party 
                        objects; or
                        ``(iii) prohibit receipt of 
                        compensation by an independent medical 
                        reviewer from an entity if the 
                        compensation is provided consistent 
                        with paragraph (6).
        ``(4) Practicing health care professional in same 
        field.--
                ``(A) In general.--In a case involving 
                treatment, or the provision of items or 
                services--
                        ``(i) by a physician, a reviewer shall 
                        be a practicing physician (allopathic 
                        or osteopathic) of the same or similar 
                        specialty, as a physician who, acting 
                        within the appropriate scope of 
                        practice within the State in which the 
                        service is provided or rendered, 
                        typically treats the condition, makes 
                        the diagnosis, or provides the type of 
                        treatment under review; or
                        ``(ii) by a non-physician health care 
                        professional, the reviewer, or at least 
                        1 member of the review panel, shall be 
                        a practicing non-physician health care 
                        professional of the same or similar 
                        specialty as the non-physician health 
                        care professional who, acting within 
                        the appropriate scope of practice 
                        within the State in which the service 
                        is provided or rendered, typically 
                        treats the condition, makes the 
                        diagnosis, or provides the type of 
                        treatment under review.
                ``(B) Practicing defined.--For purposes of this 
                paragraph, the term `practicing' means, with 
                respect to an individual who is a physician or 
                other health care professional, that the 
                individual provides health care services to 
                individual patients on average at least 2 days 
                per week.
        ``(5) Pediatric expertise.--In the case of an external 
        review relating to a child, a reviewer shall have 
        expertise under paragraph (2) in pediatrics.
        ``(6) Limitations on reviewer compensation.--
        Compensation provided by the issuer to an independent 
        medical reviewer in connection with a review under this 
        section shall--
                ``(A) not exceed a reasonable level; and
                ``(B) not be contingent on the decision 
                rendered by the reviewer.
        ``(7) Related party defined.--For purposes of this 
        section, the term `related party' means, with respect 
        to a denial of a claim under a coverage relating to an 
        enrollee, any of the following:
                ``(A) The issuer involved, or any fiduciary, 
                officer, director, or employee of the issuer.
                ``(B) The enrollee (or authorized 
                representative).
                ``(C) The health care professional that 
                provides the items or services involved in the 
                denial.
                ``(D) The institution at which the items or 
                services (or treatment) involved in the denial 
                are provided.
                ``(E) The manufacturer of any drug or other 
                item that is included in the items or services 
                involved in the denial.
                ``(F) Any other party determined under any 
                regulations to have a substantial interest in 
                the denial involved.
        ``(8) Definitions.--For purposes of this subsection:
                ``(A) Enrollee.--The term `enrollee' means, 
                with respect to health insurance coverage 
                offered by a health insurance issuer, an 
                individual enrolled with the issuer to receive 
                such coverage.
                ``(B) Health care professional.--The term 
                `health care professional' means an individual 
                who is licensed, accredited, or certified under 
                State law to provide specified health care 
                services and who is operating within the scope 
                of such licensure, accreditation, or 
                certification.

``SEC. 2799. ENFORCEMENT.

``(a) In General.--Subject to subsection (b), with respect to 
specific individual health insurance coverage the primary State 
for such coverage has sole jurisdiction to enforce the primary 
State's covered laws in the primary State and any secondary 
State.
``(b) Secondary State's Authority.--Nothing in subsection (a) 
shall be construed to affect the authority of a secondary State 
to enforce its laws as set forth in the exception specified in 
section 2796(b)(1).
``(c) Court Interpretation.--In reviewing action initiated by 
the applicable secondary State authority, the court of 
competent jurisdiction shall apply the covered laws of the 
primary State.
``(d) Notice of Compliance Failure.--In the case of individual 
health insurance coverage offered in a secondary State that 
fails to comply with the covered laws of the primary State, the 
applicable State authority of the secondary State may notify 
the applicable State authority of the primary State.''.
(b) Effective Date.--The amendment made by subsection (a) shall 
apply to individual health insurance coverage offered, issued, 
or sold after the date that is one year after the date of the 
enactment of this Act.
(c) GAO Ongoing Study and Reports.--
        (1) Study.--The Comptroller General of the United 
        States shall conduct an ongoing study concerning the 
        effect of the amendment made by subsection (a) on--
                (A) the number of uninsured and under-insured;
                (B) the availability and cost of health 
                insurance policies for individuals with 
                preexisting medical conditions;
                (C) the availability and cost of health 
                insurance policies generally;
                (D) the elimination or reduction of different 
                types of benefits under health insurance 
                policies offered in different States; and
                (E) cases of fraud or abuse relating to health 
                insurance coverage offered under such amendment 
                and the resolution of such cases.
          (2) Annual reports.--The Comptroller General shall 
        submit to Congress an annual report, after the end of 
        each of the 5 years following the effective date of the 
        amendment made by subsection (a), on the ongoing study 
        conducted under paragraph (1).

              TITLE IV--IMPROVING HEALTH SAVINGS ACCOUNTS

SEC. 231. SAVER'S CREDIT FOR CONTRIBUTIONS TO HEALTH SAVINGS ACCOUNTS.

  (a) Allowance of Credit.--Subsection (a) of section 25B of 
the Internal Revenue Code of 1986 is amended by inserting 
``aggregate qualified HSA contributions and'' after ``so much 
of the''.
  (b) Qualified HSA Contributions.--Subsection (d) of section 
25B of such Code is amended by redesignating paragraph (2) as 
paragraph (3) and by inserting after paragraph (1) the 
following new paragraph:
          ``(2) Qualified hsa contributions.--The term 
        `qualified HSA contribution' means, with respect to any 
        taxable year, a contribution of the eligible individual 
        to a health savings account (as defined in section 
        223(d)(1)) for which a deduction is allowable under 
        section 223(a) for such taxable year.''.
  (c) Conforming Amendment.--The first sentence of section 
25B(d)(3)(A) of such Code (as redesignated by subsection (b)) 
is amended to read as follows: ``The aggregate qualified 
retirement savings contributions determined under paragraph (1) 
and qualified HSA contributions determined under paragraph (2) 
shall be reduced (but not below zero) by the aggregate 
distributions received by the individual during the testing 
period from any entity of a type to which contributions under 
paragraph (1) or paragraph (2) (as the case may be) may be 
made.''.
  (d) Effective Date.--The amendments made by this section 
shall apply to contributions made after December 31, 2009.

SEC. 232. HSA FUNDS FOR PREMIUMS FOR HIGH DEDUCTIBLE HEALTH PLANS.

  (a) In General.--Subparagraph (C) of section 223(d)(2) of the 
Internal Revenue Code of 1986 is amended by striking ``or'' at 
the end of clause (iii), by striking the period at the end of 
clause (iv) and inserting ``, or'', and by adding at the end 
the following:
                          ``(v) a high deductible health plan 
                        if--
                                  ``(I) such plan is not 
                                offered in connection with a 
                                group health plan,
                                  ``(II) no portion of any 
                                premium (within the meaning of 
                                applicable premium under 
                                section 4980B(f)(4)) for such 
                                plan is excludable from gross 
                                income under section 106, and
                                  ``(III) the account 
                                beneficiary demonstrates, using 
                                procedures deemed appropriate 
                                by the Secretary, that after 
                                payment of the premium for such 
                                insurance the balance in the 
                                health savings account is at 
                                least twice the minimum 
                                deductible in effect under 
                                subsection (c)(2)(A)(i) which 
                                is applicable to such plan.''.
  (b) Effective Date.--The amendment made by subsection (a) 
shall apply to premiums for a high deductible health plan for 
periods beginning after December 31, 2009.

SEC. 233. REQUIRING GREATER COORDINATION BETWEEN HDHP ADMINISTRATORS 
                    AND HSA ACCOUNT ADMINISTRATORS SO THAT ENROLLEES 
                    CAN ENROLL IN BOTH AT THE SAME TIME.

  The Secretary of the Treasury, through the issuance of 
regulations or other guidance, shall encourage administrators 
of health plans and trustees of health savings accounts to 
provide for simultaneous enrollment in high deductible health 
plans and setup of health savings accounts.

SEC. 234. SPECIAL RULE FOR CERTAIN MEDICAL EXPENSES INCURRED BEFORE 
                    ESTABLISHMENT OF ACCOUNT.

  (a) In General.--Subsection (d) of section 223 of the 
Internal Revenue Code of 1986 is amended by redesignating 
paragraph (4) as paragraph (5) and by inserting after paragraph 
(3) the following new paragraph:
          ``(4) Certain medical expenses incurred before 
        establishment of account treated as qualified.--
                  ``(A) In general.--For purposes of paragraph 
                (2), an expense shall not fail to be treated as 
                a qualified medical expense solely because such 
                expense was incurred before the establishment 
                of the health savings account if such expense 
                was incurred during the 60-day period beginning 
                on the date on which the high deductible health 
                plan is first effective.
                  ``(B) Special rules.--For purposes of 
                subparagraph (A)--
                          ``(i) an individual shall be treated 
                        as an eligible individual for any 
                        portion of a month for which the 
                        individual is described in subsection 
                        (c)(1), determined without regard to 
                        whether the individual is covered under 
                        a high deductible health plan on the 
                        1st day of such month, and
                          ``(ii) the effective date of the 
                        health savings account is deemed to be 
                        the date on which the high deductible 
                        health plan is first effective after 
                        the date of the enactment of this 
                        paragraph.''.
  (b) Effective Date.--The amendment made by this section shall 
apply with respect to insurance purchased after the date of the 
enactment of this Act in taxable years beginning after such 
date.

           DIVISION C--ENACTING REAL MEDICAL LIABILITY REFORM

SEC. 301. ENCOURAGING SPEEDY RESOLUTION OF CLAIMS.

  The time for the commencement of a health care lawsuit shall 
be 3 years after the date of manifestation of injury or 1 year 
after the claimant discovers, or through the use of reasonable 
diligence should have discovered, the injury, whichever occurs 
first. In no event shall the time for commencement of a health 
care lawsuit exceed 3 years after the date of manifestation of 
injury unless tolled for any of the following--
          (1) upon proof of fraud;
          (2) intentional concealment; or
          (3) the presence of a foreign body, which has no 
        therapeutic or diagnostic purpose or effect, in the 
        person of the injured person.
Actions by a minor shall be commenced within 3 years from the 
date of the alleged manifestation of injury except that actions 
by a minor under the full age of 6 years shall be commenced 
within 3 years of manifestation of injury or prior to the 
minor's 8th birthday, whichever provides a longer period. Such 
time limitation shall be tolled for minors for any period 
during which a parent or guardian and a health care provider or 
health care organization have committed fraud or collusion in 
the failure to bring an action on behalf of the injured minor.

SEC. 302. COMPENSATING PATIENT INJURY.

  (a) Unlimited Amount of Damages for Actual Economic Losses in 
Health Care Lawsuits.--In any health care lawsuit, nothing in 
this title shall limit a claimant's recovery of the full amount 
of the available economic damages, notwithstanding the 
limitation in subsection (b).
  (b) Additional Noneconomic Damages.--In any health care 
lawsuit, the amount of noneconomic damages, if available, may 
be as much as $250,000, regardless of the number of parties 
against whom the action is brought or the number of separate 
claims or actions brought with respect to the same injury.
  (c) No Discount of Award for Noneconomic Damages.--For 
purposes of applying the limitation in subsection (b), future 
noneconomic damages shall not be discounted to present value. 
The jury shall not be informed about the maximum award for 
noneconomic damages. An award for noneconomic damages in excess 
of $250,000 shall be reduced either before the entry of 
judgment, or by amendment of the judgment after entry of 
judgment, and such reduction shall be made before accounting 
for any other reduction in damages required by law. If separate 
awards are rendered for past and future noneconomic damages and 
the combined awards exceed $250,000, the future noneconomic 
damages shall be reduced first.
  (d) Fair Share Rule.--In any health care lawsuit, each party 
shall be liable for that party's several share of any damages 
only and not for the share of any other person. Each party 
shall be liable only for the amount of damages allocated to 
such party in direct proportion to such party's percentage of 
responsibility. Whenever a judgment of liability is rendered as 
to any party, a separate judgment shall be rendered against 
each such party for the amount allocated to such party. For 
purposes of this section, the trier of fact shall determine the 
proportion of responsibility of each party for the claimant's 
harm.

SEC. 303. MAXIMIZING PATIENT RECOVERY.

  (a) Court Supervision of Share of Damages Actually Paid to 
Claimants.--In any health care lawsuit, the court shall 
supervise the arrangements for payment of damages to protect 
against conflicts of interest that may have the effect of 
reducing the amount of damages awarded that are actually paid 
to claimants. In particular, in any health care lawsuit in 
which the attorney for a party claims a financial stake in the 
outcome by virtue of a contingent fee, the court shall have the 
power to restrict the payment of a claimant's damage recovery 
to such attorney, and to redirect such damages to the claimant 
based upon the interests of justice and principles of equity. 
In no event shall the total of all contingent fees for 
representing all claimants in a health care lawsuit exceed the 
following limits:
          (1) 40 percent of the first $50,000 recovered by the 
        claimant(s).
          (2) 33\1/3\ percent of the next $50,000 recovered by 
        the claimant(s).
          (3) 25 percent of the next $500,000 recovered by the 
        claimant(s).
          (4) 15 percent of any amount by which the recovery by 
        the claimant(s) is in excess of $600,000.
  (b) Applicability.--The limitations in this section shall 
apply whether the recovery is by judgment, settlement, 
mediation, arbitration, or any other form of alternative 
dispute resolution. In a health care lawsuit involving a minor 
or incompetent person, a court retains the authority to 
authorize or approve a fee that is less than the maximum 
permitted under this section. The requirement for court 
supervision in the first two sentences of subsection (a) 
applies only in civil actions.

SEC. 304. ADDITIONAL HEALTH BENEFITS.

  In any health care lawsuit involving injury or wrongful 
death, any party may introduce evidence of collateral source 
benefits. If a party elects to introduce such evidence, any 
opposing party may introduce evidence of any amount paid or 
contributed or reasonably likely to be paid or contributed in 
the future by or on behalf of the opposing party to secure the 
right to such collateral source benefits. No provider of 
collateral source benefits shall recover any amount against the 
claimant or receive any lien or credit against the claimant's 
recovery or be equitably or legally subrogated to the right of 
the claimant in a health care lawsuit involving injury or 
wrongful death. This section shall apply to any health care 
lawsuit that is settled as well as a health care lawsuit that 
is resolved by a fact finder. This section shall not apply to 
section 1862(b) (42 U.S.C. 1395y(b)) or section 1902(a)(25) (42 
U.S.C. 1396a(a)(25)) of the Social Security Act.

SEC. 305. PUNITIVE DAMAGES.

  (a) In General.--Punitive damages may, if otherwise permitted 
by applicable State or Federal law, be awarded against any 
person in a health care lawsuit only if it is proven by clear 
and convincing evidence that such person acted with malicious 
intent to injure the claimant, or that such person deliberately 
failed to avoid unnecessary injury that such person knew the 
claimant was substantially certain to suffer. In any health 
care lawsuit where no judgment for compensatory damages is 
rendered against such person, no punitive damages may be 
awarded with respect to the claim in such lawsuit. No demand 
for punitive damages shall be included in a health care lawsuit 
as initially filed. A court may allow a claimant to file an 
amended pleading for punitive damages only upon a motion by the 
claimant and after a finding by the court, upon review of 
supporting and opposing affidavits or after a hearing, after 
weighing the evidence, that the claimant has established by a 
substantial probability that the claimant will prevail on the 
claim for punitive damages. At the request of any party in a 
health care lawsuit, the trier of fact shall consider in a 
separate proceeding--
          (1) whether punitive damages are to be awarded and 
        the amount of such award; and
          (2) the amount of punitive damages following a 
        determination of punitive liability.
If a separate proceeding is requested, evidence relevant only 
to the claim for punitive damages, as determined by applicable 
State law, shall be inadmissible in any proceeding to determine 
whether compensatory damages are to be awarded.
  (b) Determining Amount of Punitive Damages.--
          (1) Factors considered.--In determining the amount of 
        punitive damages, if awarded, in a health care lawsuit, 
        the trier of fact shall consider only the following--
                  (A) the severity of the harm caused by the 
                conduct of such party;
                  (B) the duration of the conduct or any 
                concealment of it by such party;
                  (C) the profitability of the conduct to such 
                party;
                  (D) the number of products sold or medical 
                procedures rendered for compensation, as the 
                case may be, by such party, of the kind causing 
                the harm complained of by the claimant;
                  (E) any criminal penalties imposed on such 
                party, as a result of the conduct complained of 
                by the claimant; and
                  (F) the amount of any civil fines assessed 
                against such party as a result of the conduct 
                complained of by the claimant.
          (2) Maximum award.--The amount of punitive damages, 
        if awarded, in a health care lawsuit may be as much as 
        $250,000 or as much as two times the amount of economic 
        damages awarded, whichever is greater. The jury shall 
        not be informed of this limitation.

SEC. 306. AUTHORIZATION OF PAYMENT OF FUTURE DAMAGES TO CLAIMANTS IN 
                    HEALTH CARE LAWSUITS.

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

SEC. 307. DEFINITIONS.

  In this title:
          (1) Alternative dispute resolution system; adr.--The 
        term ``alternative dispute resolution system'' or 
        ``ADR'' means a system that provides for the resolution 
        of health care lawsuits in a manner other than through 
        a civil action brought in a State or Federal court.
          (2) Claimant.--The term ``claimant'' means any person 
        who brings a health care lawsuit, including a person 
        who asserts or claims a right to legal or equitable 
        contribution, indemnity, or subrogation, arising out of 
        a health care liability claim or action, and any person 
        on whose behalf such a claim is asserted or such an 
        action is brought, whether deceased, incompetent, or a 
        minor.
          (3) Collateral source benefits.--The term 
        ``collateral source benefits'' means any amount paid or 
        reasonably likely to be paid in the future to or on 
        behalf of the claimant, or any service, product, or 
        other benefit provided or reasonably likely to be 
        provided in the future to or on behalf of the claimant, 
        as a result of the injury or wrongful death, pursuant 
        to--
                  (A) any State or Federal health, sickness, 
                income-disability, accident, or workers' 
                compensation law;
                  (B) any health, sickness, income-disability, 
                or accident insurance that provides health 
                benefits or income-disability coverage;
                  (C) any contract or agreement of any group, 
                organization, partnership, or corporation to 
                provide, pay for, or reimburse the cost of 
                medical, hospital, dental, or income-disability 
                benefits; and
                  (D) any other publicly or privately funded 
                program.
          (4) Compensatory damages.--The term ``compensatory 
        damages'' means objectively verifiable monetary losses 
        incurred as a result of the provision of, use of, or 
        payment for (or failure to provide, use, or pay for) 
        health care services or medical products, such as past 
        and future medical expenses, loss of past and future 
        earnings, cost of obtaining domestic services, loss of 
        employment, and loss of business or employment 
        opportunities, damages for physical and emotional pain, 
        suffering, inconvenience, physical impairment, mental 
        anguish, disfigurement, loss of enjoyment of life, loss 
        of society and companionship, loss of consortium (other 
        than loss of domestic service), hedonic damages, injury 
        to reputation, and all other nonpecuniary losses of any 
        kind or nature. The term ``compensatory damages'' 
        includes economic damages and noneconomic damages, as 
        such terms are defined in this section.
          (5) Contingent fee.--The term ``contingent fee'' 
        includes all compensation to any person or persons 
        which is payable only if a recovery is effected on 
        behalf of one or more claimants.
          (6) Economic damages.--The term ``economic damages'' 
        means objectively verifiable monetary losses incurred 
        as a result of the provision of, use of, or payment for 
        (or failure to provide, use, or pay for) health care 
        services or medical products, such as past and future 
        medical expenses, loss of past and future earnings, 
        cost of obtaining domestic services, loss of 
        employment, and loss of business or employment 
        opportunities.
          (7) Health care lawsuit.--The term ``health care 
        lawsuit'' means any health care liability claim 
        concerning the provision of health care goods or 
        services or any medical product affecting interstate 
        commerce, or any health care liability action 
        concerning the provision of health care goods or 
        services or any medical product affecting interstate 
        commerce, brought in a State or Federal court or 
        pursuant to an alternative dispute resolution system, 
        against a health care provider, a health care 
        organization, or the manufacturer, distributor, 
        supplier, marketer, promoter, or seller of a medical 
        product, regardless of the theory of liability on which 
        the claim is based, or the number of claimants, 
        plaintiffs, defendants, or other parties, or the number 
        of claims or causes of action, in which the claimant 
        alleges a health care liability claim. Such term does 
        not include a claim or action which is based on 
        criminal liability; which seeks civil fines or 
        penalties paid to Federal, State, or local government; 
        or which is grounded in antitrust.
          (8) Health care liability action.--The term ``health 
        care liability action'' means a civil action brought in 
        a State or Federal court or pursuant to an alternative 
        dispute resolution system, against a health care 
        provider, a health care organization, or the 
        manufacturer, distributor, supplier, marketer, 
        promoter, or seller of a medical product, regardless of 
        the theory of liability on which the claim is based, or 
        the number of plaintiffs, defendants, or other parties, 
        or the number of causes of action, in which the 
        claimant alleges a health care liability claim.
          (9) Health care liability claim.--The term ``health 
        care liability claim'' means a demand by any person, 
        whether or not pursuant to ADR, against a health care 
        provider, health care organization, or the 
        manufacturer, distributor, supplier, marketer, 
        promoter, or seller of a medical product, including, 
        but not limited to, third-party claims, cross-claims, 
        counter-claims, or contribution claims, which are based 
        upon the provision of, use of, or payment for (or the 
        failure to provide, use, or pay for) health care 
        services or medical products, regardless of the theory 
        of liability on which the claim is based, or the number 
        of plaintiffs, defendants, or other parties, or the 
        number of causes of action.
          (10) Health care organization.--The term ``health 
        care organization'' means any person or entity which is 
        obligated to provide or pay for health benefits under 
        any health plan, including any person or entity acting 
        under a contract or arrangement with a health care 
        organization to provide or administer any health 
        benefit.
          (11) Health care provider.--The term ``health care 
        provider'' means any person or entity required by State 
        or Federal laws or regulations to be licensed, 
        registered, or certified to provide health care 
        services, and being either so licensed, registered, or 
        certified, or exempted from such requirement by other 
        statute or regulation.
          (12) Health care goods or services.--The term 
        ``health care goods or services'' means any goods or 
        services provided by a health care organization, 
        provider, or by any individual working under the 
        supervision of a health care provider, that relates to 
        the diagnosis, prevention, or treatment of any human 
        disease or impairment, or the assessment or care of the 
        health of human beings.
          (13) Malicious intent to injure.--The term 
        ``malicious intent to injure'' means intentionally 
        causing or attempting to cause physical injury other 
        than providing health care goods or services.
          (14) Medical product.--The term ``medical product'' 
        means a drug, device, or biological product intended 
        for humans, and the terms ``drug'', ``device'', and 
        ``biological product'' have the meanings given such 
        terms in sections 201(g)(1) and 201(h) of the Federal 
        Food, Drug and Cosmetic Act (21 U.S.C. 321(g)(1) and 
        (h)) and section 351(a) of the Public Health Service 
        Act (42 U.S.C. 262(a)), respectively, including any 
        component or raw material used therein, but excluding 
        health care services.
          (15) Noneconomic damages.--The term ``noneconomic 
        damages'' means damages for physical and emotional 
        pain, suffering, inconvenience, physical impairment, 
        mental anguish, disfigurement, loss of enjoyment of 
        life, loss of society and companionship, loss of 
        consortium (other than loss of domestic service), 
        hedonic damages, injury to reputation, and all other 
        nonpecuniary losses of any kind or nature.
          (16) Punitive damages.--The term ``punitive damages'' 
        means damages awarded, for the purpose of punishment or 
        deterrence, and not solely for compensatory purposes, 
        against a health care provider, health care 
        organization, or a manufacturer, distributor, or 
        supplier of a medical product. Punitive damages are 
        neither economic nor noneconomic damages.
          (17) Recovery.--The term ``recovery'' means the net 
        sum recovered after deducting any disbursements or 
        costs incurred in connection with prosecution or 
        settlement of the claim, including all costs paid or 
        advanced by any person. Costs of health care incurred 
        by the plaintiff and the attorneys' office overhead 
        costs or charges for legal services are not deductible 
        disbursements or costs for such purpose.
          (18) State.--The term ``State'' means each of the 
        several States, the District of Columbia, the 
        Commonwealth of Puerto Rico, the Virgin Islands, Guam, 
        American Samoa, the Northern Mariana Islands, the Trust 
        Territory of the Pacific Islands, and any other 
        territory or possession of the United States, or any 
        political subdivision thereof.

SEC. 308. EFFECT ON OTHER LAWS.

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

SEC. 309. STATE FLEXIBILITY AND PROTECTION OF STATES' RIGHTS.

  (a) Health Care Lawsuits.--The provisions governing health 
care lawsuits set forth in this title preempt, subject to 
subsections (b) and (c), State law to the extent that State law 
prevents the application of any provisions of law established 
by or under this title. The provisions governing health care 
lawsuits set forth in this title supersede chapter 171 of title 
28, United States Code, to the extent that such chapter--
          (1) provides for a greater amount of damages or 
        contingent fees, a longer period in which a health care 
        lawsuit may be commenced, or a reduced applicability or 
        scope of periodic payment of future damages, than 
        provided in this title; or
          (2) prohibits the introduction of evidence regarding 
        collateral source benefits, or mandates or permits 
        subrogation or a lien on collateral source benefits.
  (b) Protection of States' Rights and Other Laws.--(1) Any 
issue that is not governed by any provision of law established 
by or under this title (including State standards of 
negligence) shall be governed by otherwise applicable State or 
Federal law.
  (2) This title shall not preempt or supersede any State or 
Federal law that imposes greater procedural or substantive 
protections for health care providers and health care 
organizations from liability, loss, or damages than those 
provided by this title or create a cause of action.
  (c) State Flexibility.--No provision of this title shall be 
construed to preempt--
          (1) any State law (whether effective before, on, or 
        after the date of the enactment of this Act) that 
        specifies a particular monetary amount of compensatory 
        or punitive damages (or the total amount of damages) 
        that may be awarded in a health care lawsuit, 
        regardless of whether such monetary amount is greater 
        or lesser than is provided for under this title, 
        notwithstanding section 302(a); or
          (2) any defense available to a party in a health care 
        lawsuit under any other provision of State or Federal 
        law.

SEC. 310. APPLICABILITY; EFFECTIVE DATE.

  This title shall apply to any health care lawsuit brought in 
a Federal or State court, or subject to an alternative dispute 
resolution system, that is initiated on or after the date of 
the enactment of this Act, except that any health care lawsuit 
arising from an injury occurring prior to the date of the 
enactment of this Act shall be governed by the applicable 
statute of limitations provisions in effect at the time the 
injury occurred.

         DIVISION D--PROTECTING THE DOCTOR-PATIENT RELATIONSHIP

SEC. 401. RULE OF CONSTRUCTION.

  Nothing in this Act shall be construed to interfere with the 
doctor-patient relationship or the practice of medicine.

SEC. 402. REPEAL OF FEDERAL COORDINATING COUNCIL FOR COMPARATIVE 
                    EFFECTIVENESS RESEARCH.

  Effective on the date of the enactment of this Act, section 
804 of the American Recovery and Reinvestment Act of 2009 is 
repealed.

      DIVISION E--INCENTIVIZING WELLNESS AND QUALITY IMPROVEMENTS

SEC. 501. INCENTIVES FOR PREVENTION AND WELLNESS PROGRAMS.

  (a) EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974 
Limitation on Exception for Wellness Programs Under HIPAA 
Discrimination Rules.--
          (1) In general.--Section 702(b)(2) of the Employee 
        Retirement Income Security Act of 1974 (29 U.S.C. 
        1182(b)(2)) is amended by adding after and below 
        subparagraph (B) the following:
        ``In applying subparagraph (B), a group health plan (or 
        a health insurance issuer with respect to health 
        insurance coverage) may vary premiums and cost-sharing 
        by up to 50 percent of the value of the benefits under 
        the plan (or coverage) based on participation in a 
        standards-based wellness program.''.
          (2) Effective date.--The amendment made by paragraph 
        (1) shall apply to plan years beginning more than 1 
        year after the date of the enactment of this Act.
  (b) Conforming Amendments to PHSA.--
          (1) Group market rules.--
                  (A) In general.--Section 2702(b)(2) of the 
                Public Health Service Act (42 U.S.C. 300gg-
                1(b)(2)) is amended by adding after and below 
                subparagraph (B) the following:
        ``In applying subparagraph (B), a group health plan (or 
        a health insurance issuer with respect to health 
        insurance coverage) may vary premiums and cost-sharing 
        by up to 50 percent of the value of the benefits under 
        the plan (or coverage) based on participation in a 
        standards-based wellness program.''.
                  (B) Effective date.--The amendment made by 
                subparagraph (A) shall apply to plan years 
                beginning more than 1 year after the date of 
                the enactment of this Act.
          (2) Individual market rules relating to guaranteed 
        availability.--
                  (A) In general.--Section 2741(f) of the 
                Public Health Service Act (42 U.S.C. 300gg-
                1(b)(2)) is amended by adding after and below 
                paragraph (1) the following:
``In applying paragraph (2), a health insurance issuer may vary 
premiums and cost-sharing under health insurance coverage by up 
to 50 percent of the value of the benefits under the coverage 
based on participation in a standards-based wellness 
program.''.
                  (B) Effective date.--The amendment made by 
                paragraph (1) shall apply to health insurance 
                coverage offered or renewed on and after the 
                date that is 1 year after the date of the 
                enactment of this Act.
  (c) Conforming Amendments to IRC.--
          (1) In general.--Section 9802(b)(2) of the Internal 
        Revenue Code of 1986 is amended by adding after and 
        below subparagraph (B) the following:
        ``In applying subparagraph (B), a group health plan (or 
        a health insurance issuer with respect to health 
        insurance coverage) may vary premiums and cost-sharing 
        by up to 50 percent of the value of the benefits under 
        the plan (or coverage) based on participation in a 
        standards-based wellness program.''.
          (2) Effective date.--The amendment made by paragraph 
        (1) shall apply to plan years beginning more than 1 
        year after the date of the enactment of this Act.

                    DIVISION F--PROTECTING TAXPAYERS

SEC. 601. PROVIDE FULL FUNDING TO HHS OIG AND HCFAC.

  (a) HCFAC Funding.-- Section 1817(k)(3)(A) of the Social 
Security Act (42 U.S.C. 1395i(k)(3)(A)) is amended--
          (1) in clause (i)--
                  (A) in subclause (IV), by striking ``2009, 
                and 2010'' and inserting ``and 2009''; and
                  (B) by amending subclause (V) to read as 
                follows:
                                  ``(V) for each fiscal year 
                                after fiscal year 2009, 
                                $300,000,000.''; and
          (2) in clause (ii)--
                  (A) in subclause (IX), by striking ``2009, 
                and 2010'' and inserting ``and 2009''; and
                  (B) in subclause (X), by striking ``2010'' 
                and inserting ``2009'' and by inserting before 
                the period at the end the following: ``, plus 
                the amount by which the amount made available 
                under clause (i)(V) for fiscal year 2010 
                exceeds the amount made available under clause 
                (i)(IV) for 2009''.
  (b) OIG Funding.--There are authorized to be appropriated for 
each of fiscal years 2010 through 2019 $100,000,000 for the 
Office of the Inspector General of the Department of Health and 
Human Services for fraud prevention activities under the 
Medicare and Medicaid programs.

SEC. 602. PROHIBITING TAXPAYER FUNDED ABORTIONS AND CONSCIENCE 
                    PROTECTIONS.

  Title 1 of the United States Code is amended by adding at the 
end the following new chapter:

   ``CHAPTER 4--PROHIBITING TAXPAYER FUNDED ABORTIONS AND CONSCIENCE 
                              PROTECTIONS


``SEC. 301. PROHIBITION ON FUNDING FOR ABORTIONS.

  ``No funds authorized or appropriated by federal law, and 
none of the funds in any trust fund to which funds are 
authorized or appropriated by federal law, shall be expended 
for any abortion.

``SEC. 302. PROHIBITION ON FUNDING FOR HEALTH BENEFITS PLANS THAT COVER 
                    ABORTION.

  ``None of the funds authorized or appropriated by federal 
law, and none of the funds in any trust fund to which funds are 
authorized or appropriated by federal law, shall be expended 
for a health benefits plan that includes coverage of abortion.

``SEC. 303. TREATMENT OF ABORTIONS RELATED TO RAPE, INCEST, OR 
                    PRESERVING THE LIFE OF THE MOTHER.

  ``The limitations established in sections 301 and 302 shall 
not apply to an abortion--
          ``(1) if the pregnancy is the result of an act of 
        rape or incest; or
          ``(2) in the case where a woman suffers from a 
        physical disorder, physical injury, or physical illness 
        that would, as certified by a physician, place the 
        woman in danger of death unless an abortion is 
        performed, including a life-endangering physical 
        condition caused by or arising from the pregnancy 
        itself.

``SEC. 304. CONSTRUCTION RELATING TO SUPPLEMENTAL COVERAGE.

  ``Nothing in this chapter shall be construed as prohibiting 
any individual, entity, or State or locality from purchasing 
separate supplemental abortion plan or coverage that includes 
abortion so long as such plan or coverage is paid for entirely 
using only funds not authorized or appropriated by federal law 
and such plan or coverage shall not be purchased using matching 
funds required for a federally subsidized program, including a 
State's or locality's contribution of Medicaid matching funds.

``SEC. 305. CONSTRUCTION RELATING TO THE USE OF NON-FEDERAL FUNDS FOR 
                    HEALTH COVERAGE.

  ``Nothing in this chapter shall be construed as restricting 
the ability of any managed care provider or other organization 
from offering abortion coverage or the ability of a State to 
contract separately with such a provider or organization for 
such coverage with funds not authorized or appropriated by 
federal law and such plan or coverage shall not be purchased 
using matching funds required for a federally subsidized 
program, including a State's or locality's contribution of 
Medicaid matching funds.

``SEC. 306. NO GOVERNMENT DISCRIMINATION AGAINST CERTAIN HEALTH CARE 
                    ENTITIES.

  ``(a) In General.--No funds authorized or appropriated by 
federal law may be made available to a Federal agency or 
program, or to a State or local government, if such agency, 
program, or government subjects any institutional or individual 
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) Health Care Entity Defined.--For purposes of 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.''.

SEC. 603. IMPROVED ENFORCEMENT OF THE MEDICARE AND MEDICAID SECONDARY 
                    PAYER PROVISIONS.

  (a) Medicare.--
          (1) In general.--The Secretary, in coordination with 
        the Inspector General of the Department of Health and 
        Human Services, shall provide through the Coordination 
        of Benefits Contractor for the identification of 
        instances where the Medicare program should be, but is 
        not, acting as a secondary payer to an individual's 
        private health benefits coverage under section 1862(b) 
        of the Social Security Act (42 U.S.C. 1395y(b)).
          (2) Updating procedures.--The Secretary shall update 
        procedures for identifying and resolving credit balance 
        situations which occur under the Medicare program when 
        payment under such title and from other health benefit 
        plans exceed the providers' charges or the allowed 
        amount.
          (3) Report on improved enforcement.--Not later than 1 
        year after the date of the enactment of this Act, the 
        Secretary shall submit a report to Congress on progress 
        made in improved enforcement of the Medicare secondary 
        payer provisions, including recoupment of credit 
        balances.
  (b) Medicaid.--Section 1903 of the Social Security Act (42 
U.S.C. 1396b) is amended by adding at the end the following new 
subsection:
  ``(aa) Enforcement of Payer of Last Resort Provisions.--
          ``(1) Submission of state plan amendment.--Each State 
        shall submit, not later than 1 year after the date of 
        the enactment of this subsection, a State plan 
        amendment that details how the State will become fully 
        compliant with the requirements of section 1902(a)(25).
          ``(2) Bonus for compliance.--If a State submits a 
        timely State plan amendment under paragraph (1) that 
        the Secretary determines provides for full compliance 
        of the State with the requirements of section 
        1902(a)(25), the Secretary shall provide for an 
        additional payment to the State of $1,000,000. If a 
        State certifies, to the Secretary's satisfaction, that 
        it is already fully compliant with such requirements, 
        such amount shall be increased to $2,000,000.
          ``(3) Reduction for noncompliance.--If a State does 
        not submit such an amendment, the Secretary shall 
        reduce the Federal medical assistance percentage 
        otherwise applicable under this title by 1 percentage 
        point until the State submits such an amendment.
          ``(4) Ongoing reduction.--If at any time the 
        Secretary determines that a State is not in compliance 
        with section 1902(a)(25), regardless of the status of 
        the State's submission of a State plan amendment under 
        this subsection or previous determinations of 
        compliance such requirements, the Secretary shall 
        reduce the Federal medical assistance percentage 
        otherwise applicable under this title for the State by 
        1 percentage point during the period of non-compliance 
        as determined by the Secretary.''.

SEC. 604. STRENGTHEN MEDICARE PROVIDER ENROLLMENT STANDARDS AND 
                    SAFEGUARDS.

  (a) Protecting Against the Fraudulent Use of Medicare 
Provider Numbers.--Subject to subsection (c)(2)--
          (1) Screening new providers.--As a condition of a 
        provider of services or a supplier, including durable 
        medical equipment suppliers and home health agencies, 
        applying for the first time for a provider number under 
        the Medicare program and before granting billing 
        privileges under such title, the Secretary shall screen 
        the provider or supplier for a criminal background or 
        other financial or operational irregularities through 
        fingerprinting, licensure checks, site-visits, other 
        database checks.
          (2) Application fees.--The Secretary shall impose an 
        application charge on such a provider or supplier in 
        order to cover the Secretary's costs in performing the 
        screening required under paragraph (1) and that is 
        revenue neutral to the Federal government.
          (3) Provisional approval.--During an initial, 
        provisional period (specified by the Secretary) In 
        which such a provider or supplier has been issued such 
        a number, the Secretary shall provide enhanced 
        oversight of the activities of such provider or 
        supplier under the Medicare program, such as through 
        prepayment review and payment limitations.
          (4) Penalties for false statements.--In the case of a 
        provider or supplier that makes a false statement in an 
        application for such a number, the Secretary may 
        exclude the provider or supplier from participation 
        under the Medicare program, or may impose a civil money 
        penalty (in the amount described in section 1128A(a)(4) 
        of the Social Security Act), in the same manner as the 
        Secretary may impose such an exclusion or penalty under 
        sections 1128 and 1128A, respectively, of such Act in 
        the case of knowing presentation of a false claim 
        described in section 1128A(a)(1)(A) of such Act.
          (5) Disclosure requirements.--With respect to 
        approval of such an application, the Secretary--
                  (A) shall require applicants to disclose 
                previous affiliation with enrolled entities 
                that have uncollected debt related to the 
                Medicare or Medicaid programs;
                  (B) may deny approval if the Secretary 
                determines that these affiliations pose undue 
                risk to the Medicare or Medicaid program, 
                subject to an appeals process for the applicant 
                as determined by the Secretary; and
                  (C) may implement enhanced safeguards (such 
                as surety bonds).
  (b) Moratoria.--The Secretary may impose moratoria on 
approval of provider and supplier numbers under the Medicare 
program for new providers of services and suppliers as 
determined necessary to prevent or combat fraud a period of 
delay for any one applicant cannot exceed 30 days unless cause 
is shown by the Secretary.
  (c) Funding.--
          (1) In general.--There are authorized to be 
        appropriated to carry out this section such sums as may 
        be necessary.
          (2) Condition.--The provisions of paragraphs (1) and 
        (2) of subsection (a) shall not apply unless and until 
        funds are appropriated to carry out such provisions

SEC. 605. TRACKING BANNED PROVIDERS ACROSS STATE LINES.

   (a) Greater Coordination.--The Secretary of Health and Human 
Services shall provide for increased coordination between the 
Administrator of the Centers for Medicare & Medicaid Services 
(in this section referred to as ``CMS'') and its regional 
offices to ensure that providers of services and suppliers that 
have operated in one State and are excluded from participation 
in the Medicare program are unable to begin operation and 
participation in the Medicare program in another State.
  (b) Improved Information Systems.--
          (1) In general.--The Secretary shall improve 
        information systems to allow greater integration 
        between databases under the Medicare program so that--
                  (A) medicare administrative contractors, 
                fiscal intermediaries, and carriers have 
                immediate access to information identifying 
                providers and suppliers excluded from 
                participation in the Medicare and Medicaid 
                program and other Federal health care programs; 
                and
                  (B) such information can be shared across 
                Federal health care programs and agencies, 
                including between the Departments of Health and 
                Human Services, the Social Security 
                Administration, the Department of Veterans 
                Affairs, the Department of Defense, the 
                Department of Justice, and the Office of 
                Personnel Management.
  (c) Medicare/Medicaid ``One PI'' Database.--The Secretary 
shall implement a database that includes claims and payment 
data for all components of the Medicare program and the 
Medicaid program.
  (d) Authorizing Expanded Data Matching.--Notwithstanding any 
provision of the Computer Matching and Privacy Protection Act 
of 1988 to the contrary--
          (1) the Secretary and the Inspector General in the 
        Department of Health and Human Services may perform 
        data matching of data from the Medicare program with 
        data from the Medicaid program; and
          (2) the Commissioner of Social Security and the 
        Secretary may perform data matching of data of the 
        Social Security Administration with data from the 
        Medicare and Medicaid programs.
  (e) Consolidation of Data Bases.--The Secretary shall 
consolidate and expand into a centralized data base for 
individuals and entities that have been excluded from Federal 
health care programs the Healthcare Integrity and Protection 
Data Bank, the National Practitioner Data Bank, the List of 
Excluded Individuals/Entities, and a national patient abuse/
neglect registry.
  (f) Comprehensive Provider Database.--
          (1) Establishment.--The Secretary shall establish a 
        comprehensive database that includes information on 
        providers of services, suppliers, and related entities 
        participating in the Medicare program, the Medicaid 
        program, or both. Such database shall include, 
        information on ownership and business relationships, 
        history of adverse actions, results of site visits or 
        other monitoring by any program.
          (2) Use.--Prior to issuing a provider or supplier 
        number for an entity under the Medicare program, the 
        Secretary shall obtain information on the entity from 
        such database to assure the entity qualifies for the 
        issuance of such a number.
  (g) Comprehensive Sanctions Database.--The Secretary shall 
establish a comprehensive sanctions database on sanctions 
imposed on providers of services, suppliers, and related 
entities. Such database shall be overseen by the Inspector 
General of the Department of Health and Human Services and 
shall be linked to related databases maintained by State 
licensure boards and by Federal or State law enforcement 
agencies.
  (h) Access to Claims and Payment Databases.--The Secretary 
shall ensure that the Inspector General of the Department of 
Health and Human Services and Federal law enforcement agencies 
have direct access to all claims and payment databases of the 
Secretary under the Medicare or Medicaid programs.
  (i) Civil Money Penalties for Submission of Erroneous 
Information.--In the case of a provider of services, supplier, 
or other entity that submits erroneous information that serves 
as a basis for payment of any entity under the Medicare or 
Medicaid program, the Secretary may impose a civil money 
penalty of not to exceed $50,000 for each such erroneous 
submission. A civil money penalty under this subsection shall 
be imposed and collected in the same manner as a civil money 
penalty under subsection (a) of section 1128A of the Social 
Security Act is imposed and collected under that section.

         DIVISION G--PATHWAY FOR BIOSIMILAR BIOLOGICAL PRODUCTS

SEC. 701. 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.
          ``(6) Notification of agreements.--
                  ``(A) Requirements.--
                          ``(i) Agreement between biosimilar 
                        product applicant and reference product 
                        sponsor.--If a biosimilar product 
                        applicant under subsection (k) and the 
                        reference product sponsor enter into an 
                        agreement described in subparagraph 
                        (B), the applicant and sponsor shall 
                        each file the agreement in accordance 
                        with subparagraph (C).
                          ``(ii) Agreement between biosimilar 
                        product applicants.--If 2 or more 
                        biosimilar product applicants submit an 
                        application under subsection (k) for 
                        biosimilar products with the same 
                        reference product and enter into an 
                        agreement described in subparagraph 
                        (B), the applicants shall each file the 
                        agreement in accordance with 
                        subparagraph (C).
                  ``(B) Subject matter of agreement.--An 
                agreement described in this subparagraph--
                          ``(i) is an agreement between the 
                        biosimilar product applicant under 
                        subsection (k) and the reference 
                        product sponsor or between 2 or more 
                        biosimilar product applicants under 
                        subsection (k) regarding the 
                        manufacture, marketing, or sale of--
                                  ``(I) the biosimilar product 
                                (or biosimilar products) for 
                                which an application was 
                                submitted; or
                                  ``(II) the reference product;
                          ``(ii) includes any agreement between 
                        the biosimilar product applicant under 
                        subsection (k) and the reference 
                        product sponsor or between 2 or more 
                        biosimilar product applicants under 
                        subsection (k) that is contingent upon, 
                        provides a contingent condition for, or 
                        otherwise relates to an agreement 
                        described in clause (i); and
                          ``(iii) excludes any agreement that 
                        solely concerns--
                                  ``(I) purchase orders for raw 
                                material supplies;
                                  ``(II) equipment and facility 
                                contracts;
                                  ``(III) employment or 
                                consulting contracts; or
                                  ``(IV) packaging and labeling 
                                contracts.
                  ``(C) Filing.--
                          ``(i) In general.--The text of an 
                        agreement required to be filed by 
                        subparagraph (A) shall be filed with 
                        the Assistant Attorney General and the 
                        Federal Trade Commission not later 
                        than--
                                  ``(I) 10 business days after 
                                the date on which the agreement 
                                is executed; and
                                  ``(II) prior to the date of 
                                the first commercial marketing 
                                of, for agreements described in 
                                subparagraph (A)(i), the 
                                biosimilar product that is the 
                                subject of the application or, 
                                for agreements described in 
                                subparagraph (A)(ii), any 
                                biosimilar product that is the 
                                subject of an application 
                                described in such subparagraph.
                          ``(ii) If agreement not reduced to 
                        text.--If an agreement required to be 
                        filed by subparagraph (A) has not been 
                        reduced to text, the persons required 
                        to file the agreement shall each file 
                        written descriptions of the agreement 
                        that are sufficient to disclose all the 
                        terms and conditions of the agreement.
                          ``(iii) Certification.--The chief 
                        executive officer or the company 
                        official responsible for negotiating 
                        any agreement required to be filed by 
                        subparagraph (A) shall include in any 
                        filing under this paragraph 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 351(l)(6) of the 
                        Public Health Service Act, 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 such section and have not 
                        been reduced to writing.'.
                  ``(D) Disclosure exemption.--Any information 
                or documentary material filed with the 
                Assistant Attorney General or the Federal Trade 
                Commission pursuant to this paragraph shall be 
                exempt from disclosure under section 552 of 
                title 5, United States Code, and no such 
                information or documentary material may be made 
                public, except as may be relevant to any 
                administrative or judicial action or 
                proceeding. Nothing in this subparagraph 
                prevents disclosure of information or 
                documentary material to either body of the 
                Congress or to any duly authorized committee or 
                subcommittee of the Congress.
                  ``(E) Enforcement.--
                          ``(i) Civil penalty.--Any person that 
                        violates a provision of this paragraph 
                        shall be liable for a civil penalty of 
                        not more than $11,000 for each day on 
                        which the violation occurs. Such 
                        penalty may be recovered in a civil 
                        action--
                                  ``(I) brought by the United 
                                States; or
                                  ``(II) brought by the Federal 
                                Trade Commission in accordance 
                                with the procedures established 
                                in section 16(a)(1) of the 
                                Federal Trade Commission Act.
                          ``(ii) Compliance and equitable 
                        relief.--If any person violates any 
                        provision of this paragraph, the United 
                        States district court may order 
                        compliance, and may grant such other 
                        equitable relief as the court in its 
                        discretion determines necessary or 
                        appropriate, upon application of the 
                        Assistant Attorney General or the 
                        Federal Trade Commission.
                  ``(F) Rulemaking.--The Federal Trade 
                Commission, with the concurrence of the 
                Assistant Attorney General and by rule in 
                accordance with section 553 of title 5, United 
                States Code, consistent with the purposes of 
                this paragraph--
                          ``(i) may define the terms used in 
                        this paragraph;
                          ``(ii) may exempt classes of persons 
                        or agreements from the requirements of 
                        this paragraph; and
                          ``(iii) may prescribe such other 
                        rules as may be necessary and 
                        appropriate to carry out the purposes 
                        of this paragraph.
                  ``(G) Savings clause.--Any action taken by 
                the Assistant Attorney General or the Federal 
                Trade Commission, or any failure of the 
                Assistant Attorney General or the Commission to 
                take action, under this paragraph shall not at 
                any time bar any proceeding or any action with 
                respect to any agreement between a biosimilar 
                product applicant under subsection (k) and the 
                reference product sponsor, or any agreement 
                between biosimilar product applicants under 
                subsection (k), under any other provision of 
                law, nor shall any filing under this paragraph 
                constitute or create a presumption of any 
                violation of any competition laws.''.
  (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. 702. 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.

SEC. 703. AMENDMENTS TO CERTAIN PATENT PROVISIONS.

  (a) Section 271(e)(2) of title 35, United States Code is 
amended--
          (1) in subparagraph (A), by striking ``or'' after 
        ``patent,'';
          (2) in subparagraph (B), by adding ``or'' after the 
        comma at the end;
          (3) by inserting the following after subparagraph 
        (B):
                  ``(C) a statement under section 
                351(l)(4)(D)(ii) of the Public Health Service 
                Act,''; and
          (4) in the matter following subparagraph (C) (as 
        added by paragraph (3)), by inserting before the period 
        the following: ``, or if the statement described in 
        subparagraph (C) is provided in connection with an 
        application to obtain a license to engage in the 
        commercial manufacture, use, or sale of a biological 
        product claimed in a patent or the use of which is 
        claimed in a patent before the expiration of such 
        patent''.
  (b) Section 271(e)(4) of title 35, United States Code, is 
amended by striking ``in paragraph (2)'' in both places it 
appears and inserting ``in paragraph (2)(A) or (2)(B)''.

                                  
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