[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)''.